10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended October 31, 2014
	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 1-6089

H&R Block, Inc.

(Exact name of registrant as specified in its charter)

MISSOURI	44-0607856
(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)

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer þ          Accelerated filer ¨        Non-accelerated filer ¨        Smaller reporting company ¨

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No  þ

The number of shares outstanding of the registrant's Common Stock, without par value, at the close of business on November 30, 2014: 275,168,156 shares.

Form 10-Q for the Period Ended October 31, 2014

Table of Contents

	PART I
Item 1.	Consolidated Statements of Operations and Comprehensive Income (Loss)
	Three and six months ended October 31, 2014 and 2013	1
	Consolidated Balance Sheets
	As of October 31, 2014, October 31, 2013 and April 30, 2014	2
	Condensed Consolidated Statements of Cash Flows
	Six months ended October 31, 2014 and 2013	3
	Notes to Consolidated Financial Statements	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43
	PART II
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	44
	Signatures	45

PART I    FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)							(unaudited, in 000s, except  per share amounts)
	Three months ended October 31,						Six months ended October 31,
	2014			2013			2014			2013
REVENUES:
Service revenues	$	115,442		$	112,432		$	230,915		$	220,232
Royalty, product and other revenues	9,756			11,282			18,570			19,480
Interest income	9,430			10,626			18,729			21,823
	134,628			134,340			268,214			261,535
OPERATING EXPENSES:
Cost of revenues:
Compensation and benefits	69,381			60,526			121,236			106,838
Occupancy and equipment	87,626			82,358			170,932			161,094
Provision for bad debt and loan losses	385			2,849			4,749			14,340
Depreciation and amortization	28,429			22,095			53,514			40,715
Other	35,876			39,235			68,992			80,326
	221,697			207,063			419,423			403,313
Selling, general and administrative:
Marketing and advertising	12,513			13,601			20,658			20,724
Compensation and benefits	54,353			54,818			115,317			107,865
Depreciation and amortization	10,500			4,573			19,101			8,827
Other selling, general and administrative	20,013			21,100			39,503			53,373
	97,379			94,092			194,579			190,789
Total operating expenses	319,076			301,155			614,002			594,102
Other income (expense), net	(2,282		)	1,254			(2,963		)	(3,685		)
Interest expense on borrowings	13,843			13,801			27,638			27,604
Loss from continuing operations before income tax benefit	(200,573		)	(179,362		)	(376,389		)	(363,856		)
Income tax benefit	(87,346		)	(76,347		)	(154,311		)	(147,571		)
Net loss from continuing operations	(113,227		)	(103,015		)	(222,078		)	(216,285		)
Net income (loss) from discontinued operations, net of tax (benefits) of $766 and ($1,218), ($3,798) and $(2,427)	1,229			(1,928		)	(6,152		)	(3,845		)
NET LOSS	$	(111,998	)	$	(104,943	)	$	(228,230	)	$	(220,130	)
BASIC AND DILUTED LOSS PER SHARE:
Continuing operations	$	(0.41	)	$	(0.38	)	$	(0.81	)	$	(0.79	)
Discontinued operations	—			(0.01		)	(0.02		)	(0.01		)
Consolidated	$	(0.41	)	$	(0.39	)	$	(0.83	)	$	(0.80	)
DIVIDENDS DECLARED PER SHARE	$	0.20		$	0.20		$	0.40		$	0.40
COMPREHENSIVE INCOME (LOSS):
Net loss	$	(111,998	)	$	(104,943	)	$	(228,230	)	$	(220,130	)
Unrealized gains (losses) on securities, net of taxes:
Unrealized holding gains (losses) arising during the period	5,493			1,138			4,770			(6,577		)
Reclassification adjustment for gains included in income	(589		)	—			(15		)	—
Change in foreign currency translation adjustments	(3,810		)	582			(3,355		)	(2,510		)
Other comprehensive income (loss)	1,094			1,720			1,400			(9,087		)
Comprehensive loss	$	(110,904	)	$	(103,223	)	$	(226,830	)	$	(229,217	)

See accompanying notes to consolidated financial statements.

H&R Block, Inc. | Q2 FY2015 Form 10-Q 1

CONSOLIDATED BALANCE SHEETS	(unaudited, in 000s, except  share and per share amounts)
As of	October 31, 2014			October 31, 2013			April 30, 2014
ASSETS
Cash and cash equivalents	$	627,490		$	790,772		$	2,185,307
Cash and cash equivalents - restricted	55,543			47,521			115,319
Receivables, less allowance for doubtful accounts of $51,746, $52,969 and $52,578	107,705			131,701			191,618
Prepaid expenses and other current assets	285,463			225,660			198,267
Investments in available-for-sale securities	381,180			—			423,495
Total current assets	1,457,381			1,195,654			3,114,006
Mortgage loans held for investment, less allowance for loan losses of $9,761, $12,704 and $11,272	251,092			295,907			268,428
Investments in available-for-sale securities	9,774			465,344			4,329
Property and equipment, at cost less accumulated depreciation and amortization of $491,153, $449,738 and $446,049	318,225			311,157			304,911
Intangible assets, net	414,045			296,213			355,622
Goodwill	464,182			442,812			436,117
Other assets	176,591			267,426			210,116
Total assets	$	3,091,290		$	3,274,513		$	4,693,529
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Customer banking deposits	$	454,860		$	655,129		$	769,785
Accounts payable, accrued expenses and other current liabilities	436,830			426,994			569,007
Accrued salaries, wages and payroll taxes	36,215			41,584			167,032
Accrued income taxes	147,000			22,475			406,655
Current portion of long-term debt	772			400,503			400,637
Total current liabilities	1,075,677			1,546,685			2,313,116
Long-term debt	505,588			506,078			505,837
Other noncurrent liabilities	271,349			266,775			318,027
Total liabilities	1,852,614			2,319,538			3,136,980
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, stated value $.01 per share, 800,000,000 shares authorized, shares issued of 316,628,110	3,166			3,166			3,166
Convertible preferred stock, no par, stated value $0.01 per share, 500,000 shares authorized	—			—			—
Additional paid-in capital	772,662			757,828			766,654
Accumulated other comprehensive income	6,577			1,463			5,177
Retained earnings	1,250,465			1,003,842			1,589,297
Less treasury shares, at cost	(794,194		)	(811,324		)	(807,745		)
Total stockholders' equity	1,238,676			954,975			1,556,549
Total liabilities and stockholders' equity	$	3,091,290		$	3,274,513		$	4,693,529

See accompanying notes to consolidated financial statements.

2 Q2 FY2015 Form 10-Q | H&R Block, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	(unaudited, in 000s)
Six months ended October 31,	2014			2013
NET CASH USED IN OPERATING ACTIVITIES	$	(627,577	)	$	(492,373	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale securities	(100		)	(45,158		)
Maturities of and payments received on available-for-sale securities	49,013			55,615
Principal payments on mortgage loans held for investment, net	13,451			24,340
Capital expenditures	(70,927		)	(86,926		)
Payments made for business acquisitions, net of cash acquired	(94,230		)	(20,927		)
Franchise loans:
Loans funded	(18,251		)	(22,114		)
Payments received	29,637			15,883
Other, net	10,685			15,255
Net cash used in investing activities	(80,722		)	(64,032		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt	(400,000		)	—
Customer banking deposits, net	(316,269		)	(275,800		)
Dividends paid	(109,871		)	(109,324		)
Proceeds from exercise of stock options	14,477			24,536
Other, net	(33,639		)	(31,948		)
Net cash used in financing activities	(845,302		)	(392,536		)
Effects of exchange rate changes on cash	(4,216		)	(7,871		)
Net decrease in cash and cash equivalents	(1,557,817		)	(956,812		)
Cash and cash equivalents at beginning of the period	2,185,307			1,747,584
Cash and cash equivalents at end of the period	$	627,490		$	790,772
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net of refunds received	$	157,680		$	116,099
Interest paid on borrowings	27,379			27,804
Interest paid on deposits	341			1,180
Transfers of foreclosed loans to other assets	3,155			3,889
Accrued additions to property and equipment	3,243			6,729
Conversion of investment in preferred stock to available-for-sale common stock	5,000			—
Transfer of mortgage loans held for investment to held for sale	—			7,608

See accompanying notes to consolidated financial statements.

H&R Block, Inc. | Q2 FY2015 Form 10-Q 3

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                  (unaudited)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION –The consolidated balance sheets as of October 31, 2014 and 2013, the consolidated statements of operations and comprehensive income (loss) for the three and six months ended October 31, 2014 and 2013, and the condensed consolidated statements of cash flows for the six months ended October 31, 2014 and 2013 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, 2014 and 2013 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, 2014 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2014 or for the year then ended are derived from our April 30, 2014 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 February 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 13 and 14 for additional information on litigation, claims and other loss contingencies related to our discontinued operations.

NOTE 2: H&R BLOCK BANK

In April 2014, our subsidiaries, H&R Block Bank (HRB Bank) and Block Financial LLC, the sole shareholder of HRB Bank (Block Financial), entered into a definitive Purchase and Assumption Agreement (P&A Agreement) with BofI Federal Bank, a federal savings bank (BofI). The P&A Agreement is subject to various closing conditions, including the receipt of certain required approvals, entry into certain additional agreements, and the fulfillment of various other customary conditions. If the closing conditions (including regulatory approvals) are satisfied, we will complete a transaction in which we will sell assets and assign certain liabilities, including all of HRB Bank's deposit liabilities, to BofI (P&A Transaction). The parties to the P&A Agreement entered into a Letter Agreement, effective October 23, 2014 (Letter Agreement), which, among other things, extended the date after which any party is permitted to terminate the P&A Agreement from October 31, 2014 to May 31, 2015. The Letter Agreement was filed as an exhibit to our current report on Form 8-K on October 23, 2014.

Due to the lack of regulatory approval, we do not expect to consummate the P&A Transaction this calendar year. Therefore, we will continue offering financial services products to our clients through HRB Bank for the upcoming tax season.

If a closing had occurred as of October 31, 2014, we would have made a cash payment to BofI for the difference in the carrying value of assets sold and the carrying value of liabilities (including deposit liabilities) transferred of approximately $437 million. The amount of the cash payment made at closing will primarily be equal to the carrying value of the liabilities to be transferred since the carrying value of the assets to be transferred is immaterial. Due to

4 Q2 FY2015 Form 10-Q | H&R Block, Inc.

the seasonality of our business, the timing of any closing of the P&A Transaction will impact the amount of deposit liabilities transferred. In connection with the closing we intend to liquidate the available-for-sale (AFS) securities held by HRB Bank, which totaled $381 million at October 31, 2014.

In connection with the additional agreements expected to be entered into upon the closing of the P&A Transaction, BofI would offer H&R Block-branded financial products distributed by the Company to the Company's clients. An operating subsidiary of the Company would provide certain marketing, servicing and operational support to BofI with respect to such financial products.

The P&A Transaction is part of a three-step transaction pursuant to which the Company plans to divest HRB Bank (Divestiture Transaction), including: (1) the conversion of HRB Bank from a federal savings bank to a national bank; (2) the sale of certain HRB Bank assets to and assignment of certain liabilities (including all deposit liabilities) to BofI in the P&A Transaction; and (3) the merger of HRB Bank with and into Block Financial.

H&R Block, Inc., H&R Block Group, Inc. and Block Financial (our Holding Companies) are savings and loan holding companies (SLHCs) because they control HRB Bank. By consummating the Divestiture Transaction, our Holding Companies would cease to be SLHCs and would no longer be subject to regulation by the Board of Governors of the Federal Reserve System (Federal Reserve) as SLHCs or to the regulatory capital requirements applicable to SLHCs.

The obligations of the parties to complete the P&A Transaction are subject to the fulfillment of numerous conditions, including regulatory approval. We cannot be certain when or if the conditions to the P&A Transaction will be satisfied, or whether the P&A Transaction will be completed. In addition, there may be changes to the terms and conditions of the P&A Agreement and other contemplated agreements as part of the regulatory approval process.

NOTE 3: LOSS PER SHARE AND STOCKHOLDERS' EQUITY

LOSS PER SHARE – Basic and diluted loss per share is computed using the two-class method. The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income from continuing operations attributable to common shareholders by the weighted average shares outstanding during each period. The dilutive effect of potential common shares is included in diluted earnings per share except in those periods with a loss from continuing operations. Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain restrictions or the exercise of options to purchase 5.4 million shares for the three and six months ended October 31, 2014, and 6.0 million shares for the three and six months ended October 31, 2013, 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 October 31,						Six months ended October 31,
	2014			2013			2014			2013
Net loss from continuing operations attributable to shareholders	$	(113,227	)	$	(103,015	)	$	(222,078	)	$	(216,285	)
Amounts allocated to participating securities	(97		)	(92		)	(186		)	(154		)
Net loss from continuing operations attributable to common shareholders	$	(113,324	)	$	(103,107	)	$	(222,264	)	$	(216,439	)
Basic weighted average common shares	275,106			273,907			274,841			273,494
Potential dilutive shares	—			—			—			—
Dilutive weighted average common shares	275,106			273,907			274,841			273,494
Loss per share from continuing operations attributable to common shareholders:
Basic	$	(0.41	)	$	(0.38	)	$	(0.81	)	$	(0.79	)
Diluted	(0.41		)	(0.38		)	(0.81		)	(0.79		)

H&R Block, Inc. | Q2 FY2015 Form 10-Q 5

STOCK-BASED COMPENSATION – During the six months ended October 31, 2014, we acquired 0.3 million shares of our common stock at an aggregate cost of $10.2 million. These shares represent shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards. During the six months ended October 31, 2013, we acquired 0.2 million shares at an aggregate cost of $5.3 million for similar purposes.

During the six months ended October 31, 2014 and 2013, we issued 1.2 million and 1.6 million shares of common stock, respectively, due to the vesting or exercise of stock-based awards.

During the six months ended October 31, 2014, we granted equity awards equivalent to 1.0 million shares under our stock-based compensation plans, consisting primarily of nonvested units. Nonvested units generally either vest over a three-year period with one-third vesting each year or cliff vest at the end of a three-year period. Stock-based compensation expense of our continuing operations totaled $7.1 million and $14.6 million for the three and six months ended October 31, 2014, respectively, and $6.2 million and $10.8 million for the three and six months ended October 31, 2013, respectively. As of October 31, 2014, unrecognized compensation cost for stock options totaled $0.4 million, and for nonvested shares and units totaled $43.2 million.

OTHER COMPREHENSIVE INCOME –Components of other comprehensive income include foreign currency translation adjustments and the change in net unrealized gains or losses on AFS marketable securities, and are as follows:

(in 000s)
	Foreign Currency Translation Adjustments			Unrealized Gain (Loss) on AFS Securities			Total
Balances as of May 1, 2014	$	3,334		$	1,843		$	5,177
Other comprehensive income (loss) before reclassifications:
Gross gains (losses) arising during the year	(3,355		)	7,483			4,128
Income taxes	—			2,713			2,713
	(3,355		)	4,770			1,415
Amounts reclassified to net income:
Gross amount reclassified	—			(24		)	(24		)
Income taxes	—			(9		)	(9		)
	—			(15		)	(15		)
Net other comprehensive income (loss)	(3,355		)	4,755			1,400
Balances as of October 31, 2014	$	(21	)	$	6,598		$	6,577
Balances as of May 1, 2013	$	6,809		$	3,741		$	10,550
Other comprehensive income (loss) before reclassifications:
Gross losses arising during the year	(2,510		)	(10,914		)	(13,424		)
Income taxes	—			(4,337		)	(4,337		)
Net other comprehensive loss	(2,510		)	(6,577		)	(9,087		)
Balances as of October 31, 2013	$	4,299		$	(2,836	)	$	1,463

Gross amounts reclassified out of accumulated other comprehensive income are included in other income (expense), net in the consolidated statements of operations.

6 Q2 FY2015 Form 10-Q | H&R Block, Inc.

NOTE 4: RECEIVABLES

Receivables consist of the following:

(in 000s)
As of	October 31, 2014					October 31, 2013						April 30, 2014
	Short-term			Long-term		Short-term			Long-term			Short-term			Long-term
Loans to franchisees	$	62,568		$	84,462	$	70,390		$	108,874		$	63,716		$	90,747
Receivables for tax preparation and related fees	36,369			—		35,927			—			45,619			—
Cash Back® receivables	1,955			—		2,036			—			48,812			—
Emerald Advance lines of credit	20,073			2,778		21,692			6,161			20,577			3,862
Royalties from franchisees	10,060			—		10,732			—			9,978			—
Note receivable	—			—		—			62,786			—			—
Other	28,426			14,565		43,893			23,868			55,494			17,186
	159,451			101,805		184,670			201,689			244,196			111,795
Allowance for doubtful accounts	(51,746		)	—		(52,969		)	(3,092		)	(52,578		)	—
	$	107,705		$	101,805	$	131,701		$	198,597		$	191,618		$	111,795

Balances presented above as short-term are included in receivables, while the long-term portions are included in other assets in the consolidated balance sheets.

LOANS TO FRANCHISEES –Franchisee loan balances as of October 31, 2014 and 2013 and April 30, 2014, consisted of $100.6 million, $126.3 million and $109.1 million, respectively, in term loans made primarily to finance the purchase of franchises and $46.4 million, $53.0 million and $45.4 million, respectively, in revolving lines of credit primarily for the purpose of funding off-season working capital needs.

As of October 31, 2014 and 2013, loans with a principal balance of $2.4 million and $0.1 million, respectively, were more than 30 days past due, while we had no loans more than 30 days past due at April 30, 2014. 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 October 31, 2014 and 2013 and April 30, 2014, $27 thousand, $0.1 million and $1.9 million of Cash Back balances were more than 60 days old, respectively.

H&R BLOCK EMERALD ADVANCE® LINES OF CREDIT –We review the credit quality of our H&R Block Emerald Advance® lines of credit (EA) receivables based on pools, which are segregated by the year of origination, with older years being deemed more unlikely to be repaid. These amounts as of October 31, 2014, by year of origination, are as follows:

(in 000s)
Credit Quality Indicator – Year of origination:
2014	$	3,802
2013	1,553
2012 and prior	4,412
Revolving loans	13,084
	$	22,851

As of October 31, 2014 and 2013 and April 30, 2014, $20.0 million, $26.2 million and $20.7 million of EAs were on non-accrual status and classified as impaired, or more than 60 days past due, respectively.

H&R Block, Inc. | Q2 FY2015 Form 10-Q 7

ALLOWANCE FOR DOUBTFUL ACCOUNTS –Activity in the allowance for doubtful accounts for our short-term and long-term receivables for the six months ended October 31, 2014 and 2013 is as follows:

(in 000s)
	EAs		Loans to  Franchisees		Cash Back ®			All Other			Total
Balances as of May 1, 2014	$	7,530	$	—	$	3,002		$	42,046		$	52,578
Provision	380		—		149			2,195			2,724
Charge-offs	—		—		(1,074		)	(2,482		)	(3,556		)
Balances as of October 31, 2014	$	7,910	$	—	$	2,077		$	41,759		$	51,746
Balances as of May 1, 2013	$	7,390	$	—	$	2,769		$	47,544		$	57,703
Provision	—		—		188			5,923			6,111
Charge-offs	—		—		(479		)	(7,274		)	(7,753		)
Balances as of October 31, 2013	$	7,390	$	—	$	2,478		$	46,193		$	56,061

NOTE 5: MORTGAGE LOANS HELD FOR INVESTMENT

The composition of our mortgage loan portfolio is as follows:

(dollars in 000s)
As of	October 31, 2014					October 31, 2013					April 30, 2014
	Amount			% of Total		Amount			% of Total		Amount			% of Total
Adjustable-rate loans	$	138,808		54	%	$	165,289		54	%	$	149,480		54	%
Fixed-rate loans	119,920			46	%	140,814			46	%	127,943			46	%
	258,728			100	%	306,103			100	%	277,423			100	%
Unamortized deferred fees and costs	2,125					2,508					2,277
Less: Allowance for loan losses	(9,761		)			(12,704		)			(11,272		)
	$	251,092				$	295,907				$	268,428

Our loan loss allowance as a percent of mortgage loans was 3.8% as of October 31, 2014, compared to 4.2% as of October 31, 2013 and 4.1% as of April 30, 2014.

Activity in the allowance for loan losses for the six months ended October 31, 2014 and 2013 is as follows:

(in 000s)
Six months ended October 31,	2014			2013
Balance at beginning of the period	$	11,272		$	14,314
Provision	735			7,224
Recoveries	911			2,409
Charge-offs	(3,157		)	(11,243		)
Balance at end of the period	$	9,761		$	12,704

8 Q2 FY2015 Form 10-Q | H&R Block, Inc.

When determining our allowance for loan losses, we evaluate loans less than 60 days past due on a pooled basis, while loans we consider impaired, including those loans more than 60 days past due or modified as a troubled debt restructuring (TDR), are evaluated individually. The balance of these loans and the related allowance is as follows:

(in 000s)
As of	October 31, 2014				October 31, 2013				April 30, 2014
	Portfolio  Balance		Related  Allowance		Portfolio  Balance		Related  Allowance		Portfolio  Balance		Related  Allowance
Pooled (less than 60 days past due)	$	147,614	$	3,768	$	178,497	$	5,523	$	158,496	$	4,508
Impaired:
Individually (TDRs)	40,201		4,237		47,011		4,598		43,865		4,346
Individually (60 days or more past due)	70,913		1,756		80,595		2,583		75,062		2,418
	$	258,728	$	9,761	$	306,103	$	12,704	$	277,423	$	11,272

Detail of our mortgage loans held for investment and the related allowance as of October 31, 2014 is as follows:

(dollars in 000s)
	Outstanding Principal Balance		Loan Loss Allowance				% 30+ Days Past Due
			Amount		% of Principal
Purchased from SCC	$	148,833	$	7,847	5.3	%	27.9	%
All other	109,895		1,914		1.7	%	6.9	%
	$	258,728	$	9,761	3.8	%	19.0	%

Credit quality indicators as of October 31, 2014 include the following:

(in 000s)
Credit Quality Indicators	Purchased from SCC		All Other		Total Portfolio
Occupancy status:
Owner occupied	$	109,069	$	72,767	$	181,836
Non-owner occupied	39,764		37,128		76,892
	$	148,833	$	109,895	$	258,728
Documentation level:
Full documentation	$	49,157	$	77,974	$	127,131
Limited documentation	4,676		12,114		16,790
Stated income	83,074		12,305		95,379
No documentation	11,926		7,502		19,428
	$	148,833	$	109,895	$	258,728
Internal risk rating:
High	$	41,758	$	—	$	41,758
Medium	107,075		—		107,075
Low	—		109,895		109,895
	$	148,833	$	109,895	$	258,728

Loans given our internal risk rating of "high" generally had no documentation or were based on stated income. Loans given our internal risk rating of "medium" generally had full documentation or were based on stated income, with loan-to-value ratios at origination of more than 80%, and were made to borrowers with credit scores below 700 at origination. Loans given our internal risk rating of "low" generally had loan-to-value ratios at origination of less than 80% and were made to borrowers with credit scores greater than 700 at origination.

Our mortgage loans held for investment include concentrations of loans to borrowers in certain states, which may result in increased exposure to loss as a result of changes in real estate values and underlying economic or market

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conditions related to a particular geographical location. Approximately 52% of our mortgage loan portfolio consists of loans to borrowers located in the states of Florida, California and New York.

Detail of the aging of the mortgage loans in our portfolio as of October 31, 2014 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	$	11,199	$	324	$	47,514	$	59,037	$	89,796	$	148,833
All other	4,613		78		7,530		12,221		97,674		109,895
	$	15,812	$	402	$	55,044	$	71,258	$	187,470	$	258,728

⁽¹⁾  We do not accrue interest on loans past due 90 days or more.

Information related to our non-accrual loans is as follows:

(in 000s)
As of	October 31, 2014		October 31, 2013		April 30, 2014
Loans:
Purchased from SCC	$	60,254	$	67,641	$	61,767
Other	11,439		12,723		12,528
	71,693		80,364		74,295
TDRs:
Purchased from SCC	5,059		3,832		4,648
Other	940		881		951
	5,999		4,713		5,599
Total non-accrual loans	$	77,692	$	85,077	$	79,894

Information related to impaired loans is as follows:

(in 000s)
	Balance With Allowance		Balance With No Allowance		Total Impaired Loans		Related Allowance
As of October 31, 2014:
Purchased from SCC	$	25,494	$	68,138	$	93,632	$	4,984
Other	3,732		13,750		17,482		1,009
	$	29,226	$	81,888	$	111,114	$	5,993
As of October 31, 2013:
Purchased from SCC	$	30,100	$	77,052	$	107,152	$	5,762
Other	5,196		15,258		20,454		1,419
	$	35,296	$	92,310	$	127,606	$	7,181
As of April 30, 2014:
Purchased from SCC	$	27,924	$	71,075	$	98,999	$	3,239
Other	5,176		14,752		19,928		3,525
	$	33,100	$	85,827	$	118,927	$	6,764

10 Q2 FY2015 Form 10-Q | H&R Block, Inc.

Information related to the allowance for impaired loans is as follows:

(in 000s)
As of	October 31, 2014		October 31, 2013		April 30, 2014
Portion of total allowance for loan losses allocated to impaired loans and TDR loans:
Based on collateral value method	$	1,756	$	2,583	$	2,418
Based on discounted cash flow method	4,237		4,598		4,346
	$	5,993	$	7,181	$	6,764

Information related to activities of our non-performing assets is as follows:

(in 000s)
Six months ended October 31,	2014		2013
Average impaired loans:
Purchased from SCC	$	99,706	$	121,532
All other	19,404		23,646
	$	119,110	$	145,178

NOTE 6: INVESTMENTS

The amortized cost and fair value of securities classified as AFS are summarized below:

(in 000s)
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
As of October 31, 2014:
Mortgage-backed securities	$	371,297	$	9,783	$	—		$	381,080
Municipal bonds	4,091		151		—			4,242
Common stock	5,000		532		—			5,532
U.S. treasury bills	100		—		—			100
	$	380,488	$	10,466	$	—		$	390,954
As of October 31, 2013:
Mortgage-backed securities	465,861		4,422		(9,348		)	460,935
Municipal bonds	4,149		260		—			4,409
	$	470,010	$	4,682	$	(9,348	)	$	465,344
As of April 30, 2014:
Mortgage-backed securities	$	420,697	$	2,798	$	—		$	423,495
Municipal bonds	4,120		209		—			4,329
	$	424,817	$	3,007	$	—		$	427,824

Substantially all AFS debt securities held as of October 31, 2014 mature after five years.

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NOTE 7: GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill of our Tax Services segment for the six months ended October 31, 2014 and 2013 are as follows:

(in 000s)
	Goodwill			Accumulated Impairment Losses			Net
Balances as of April 30, 2014	$	468,414		$	(32,297	)	$	436,117
Acquisitions	28,378			—			28,378
Disposals and foreign currency changes, net	(313		)	—			(313		)
Impairments	—			—			—
Balances as of October 31, 2014	$	496,479		$	(32,297	)	$	464,182
Balances as of April 30, 2013	$	467,079		$	(32,297	)	$	434,782
Acquisitions	9,207			—			9,207
Disposals and foreign currency changes, net	(1,177		)	—			(1,177		)
Impairments	—			—			—
Balances as of October 31, 2013	$	475,109		$	(32,297	)	$	442,812

The increase in goodwill resulted from acquired franchisee and competitor businesses during the period.

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.

12 Q2 FY2015 Form 10-Q | H&R Block, Inc.

Components of the intangible assets of our Tax Services segment are as follows:

(in 000s)
	Gross Carrying Amount		Accumulated Amortization			Net
As of October 31, 2014:
Reacquired franchise rights	$	278,159	$	(33,721	)	$	244,438
Customer relationships	148,407		(66,714		)	81,693
Internally-developed software	110,140		(77,925		)	32,215
Noncompete agreements	28,960		(22,774		)	6,186
Franchise agreements	19,201		(7,574		)	11,627
Purchased technology	54,700		(16,814		)	37,886
	$	639,567	$	(225,522	)	$	414,045
As of October 31, 2013:
Reacquired franchise rights	$	222,371	$	(20,414	)	$	201,957
Customer relationships	109,237		(53,501		)	55,736
Internally-developed software	98,738		(76,517		)	22,221
Noncompete agreements	23,659		(21,898		)	1,761
Franchise agreements	19,201		(6,294		)	12,907
Purchased technology	14,800		(13,169		)	1,631
	$	488,006	$	(191,793	)	$	296,213
As of April 30, 2014:
Reacquired franchise rights	$	233,749	$	(26,136	)	$	207,613
Customer relationships	123,110		(59,521		)	63,589
Internally-developed software	101,162		(72,598		)	28,564
Noncompete agreements	24,694		(22,223		)	2,471
Franchise agreements	19,201		(6,934		)	12,267
Purchased technology	54,900		(13,782		)	41,118
	$	556,816	$	(201,194	)	$	355,622

Amortization of intangible assets for the three and six months ended October 31, 2014 was $13.2 million and $24.5 million, respectively. Amortization of intangible assets for the three and six months ended October 31, 2013 was $6.5 million and $12.6 million, respectively. Estimated amortization of intangible assets for fiscal years 2015, 2016, 2017, 2018 and 2019 is $52.0 million, $48.1 million, $40.6 million, $35.8 million and $31.5 million, respectively.

The increase in intangible assets resulted primarily from acquired franchisee and competitor businesses during the period. The weighted-average life of the acquired assets is as follows:

Assets acquired	Weighted-Average Life (in years)
Reacquired franchise rights	6
Customer relationships	5
Internally-developed software	5
Noncompete agreements	5
Total	6

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NOTE 8: LONG-TERM DEBT

The components of long-term debt are as follows:

(in 000s)
As of	October 31, 2014			October 31, 2013			April 30, 2014
Senior Notes, 5.500%, due November 2022	$	497,753		$	497,471		$	497,612
Senior Notes, 5.125%, due October 2014	—			399,765			399,882
Capital lease obligation	8,607			9,345			8,980
	506,360			906,581			906,474
Less: Current portion	(772		)	(400,503		)	(400,637		)
	$	505,588		$	506,078		$	505,837

Our 5.125% Senior Notes with a principal balance of $400 million matured in October 2014 and, utilizing available cash on hand, we repaid them according to their terms.

NOTE 9: FAIR VALUE

FAIR VALUE MEASUREMENT

Assets measured on a recurring basis are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Our investments in AFS securities are carried at fair value on a recurring basis with gains and losses reported as a component of other comprehensive income, except for losses assessed to be other than temporary. Our AFS securities include certain agency and agency-sponsored mortgage-backed securities and municipal bonds. Quoted market prices are not available for these securities, as they are not actively traded and have fewer observable transactions. As a result, we use third-party pricing services to determine fair value and classify the securities as Level 2. The third-party pricing services' models are based on market data and utilize available trade, bid and other market information for similar securities. There were no transfers of AFS securities between hierarchy levels during the six months ended October 31, 2014 and 2013. See note 6 for details of our AFS securities that were remeasured at fair value on a recurring basis during the six months ended October 31, 2014 and 2013 and the unrealized gains or losses on those remeasurements.

The following table presents the assets that were remeasured at fair value on a non-recurring basis during the six months ended October 31, 2014 and 2013 and the losses on those remeasurements:

(dollars in 000s)
	Total			Level 1			Level 2			Level 3			Losses
As of October 31, 2014:
Impaired mortgage loans held for investment	$	62,300		$	—		$	—		$	62,300		$	(1,440	)
As a percentage of total assets	2.0		%	—		%	—		%	2.0		%
As of October 31, 2013:
Impaired mortgage loans held for investment	$	76,148		$	—		$	—		$	76,148		$	(2,353	)
As a percentage of total assets	2.3		%	—		%	—		%	2.3		%

The fair value of impaired mortgage loans held for investment is generally based on the net present value of discounted cash flows for TDR loans or the appraised value of the underlying collateral for all other loans. Impaired and TDR loans are required to be remeasured at least annually, based on HRB Bank's loan policy. These loans are classified as Level 3.

We have established various controls and procedures to ensure that the unobservable inputs used in the fair value measurement of these instruments are appropriate. Appraisals are obtained from certified appraisers and reviewed internally by HRB Bank's asset management group. The inputs and assumptions used in our discounted cash flow model for TDRs are reviewed and approved by HRB Bank management each time the balances are remeasured.

14 Q2 FY2015 Form 10-Q | H&R Block, Inc.

Significant changes in fair value from the previous measurement are presented to HRB Bank management for approval. There were no changes to the unobservable inputs used in determining the fair values of our Level 3 financial assets.

The following table presents the quantitative information about our Level 3 fair value measurements, which utilize significant unobservable internally-developed inputs:

(in 000s)
	Fair Value as of October 31, 2014		Valuation Technique	Unobservable Input	Range (Weighted Average)
Impaired mortgage loans held for investment – non TDRs	$	69,157	Collateral- based	Cost to list/sell Time to sell (months) Collateral depreciation Loss severity	0% – 190%(9%) 24 (24) (166%) – 100%(39%) 0% – 100%(61%)
Impaired mortgage loans held for investment – TDRs	$	35,964	Discounted cash flow	Aged default performance Loss severity	24% – 38%(31%) 0% – 22%(7%)

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of our financial instruments are as follows:

(in 000s)
As of	October 31, 2014				October 31, 2013				April 30, 2014
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Cash and cash equivalents	$	627,490	$	627,490	$	790,772	$	790,772	$	2,185,307	$	2,185,307
Cash and cash equivalents - restricted	55,543		55,543		47,521		47,521		115,319		115,319
Receivables, net - short-term	107,705		107,705		131,701		133,884		191,618		191,618
Mortgage loans held for investment, net	251,092		192,411		295,907		211,690		268,428		192,281
Investments in AFS securities	390,954		390,954		465,344		465,344		427,824		427,824
Receivables, net - long-term	101,805		101,805		198,597		206,481		111,795		111,795
Liabilities:
Customer banking deposits	455,308		452,351		656,305		656,300		770,288		765,376
Long-term debt	506,360		550,332		906,581		947,350		906,474		955,050
Contingent consideration payments	10,555		10,555		12,454		12,454		9,206		9,206

Fair value estimates, methods and assumptions are set forth below. The fair value was not estimated for assets and liabilities that are not considered financial instruments.

▪ Cash and cash equivalents, including restricted - Fair value approximates the carrying amount (Level 1).

▪ Receivables, net - short-term - For short-term balances the carrying values reported in the balance sheet approximate fair market value due to the relative short-term nature of the respective instruments (Level 1).

▪ Mortgage loans held for investment, net - The fair value of mortgage loans held for investment is determined using market pricing sources based on projected future cash flows of each individual asset, and loan characteristics including channel and performance characteristics (Level 3).

▪ Investments in AFS securities - For mortgage-backed securities, we use a third-party pricing service to determine fair value. The service's pricing model is based on market data and utilizes available trade, bid and other market information for similar securities (Level 2). The fair value of our investment in common stock is determined based on quoted market prices (Level 1).

▪ Receivables, net - long-term - The carrying values for the long-term portion of loans to franchisees approximate fair market value due to variable interest rates, low historical delinquency rates and franchise territories serving as collateral (Level 1). Long-term EA receivables are carried at net realizable value which approximates fair value (Level 3). Net realizable value is determined based on historical collection rates.

H&R Block, Inc. | Q2 FY2015 Form 10-Q 15

▪ Customer banking deposits - The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, checking, money market and savings accounts, is equal to the amount payable on demand (Level 1). The fair value of IRAs and other time deposits is estimated by discounting the future cash flows using the rates currently offered by HRB Bank for products with similar remaining maturities (Level 3).

▪ Long-term debt - The fair value of our Senior Notes is based on quotes from multiple banks (Level 2).

▪ Contingent consideration payments - Fair value approximates the carrying amount (Level 3).

NOTE 10: 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's U.S. federal consolidated tax returns for 2011 and 2012 are currently under examination.

We had gross unrecognized tax benefits of $112.9 million, $129.8 million and $111.5 million as of October 31, 2014 and 2013 and April 30, 2014, respectively. The gross unrecognized tax benefits increased $1.4 million and decreased $16.6 million during the six months ended October 31, 2014 and 2013, respectively. The increase in unrecognized tax benefits during the six months ending October 31, 2014 is related to various current year federal and state tax positions offset by benefits from tax positions expiring due to statutes of limitations. We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease by approximately $18 million within the next twelve months. The anticipated decrease is due to the expiration of statutes of limitations and anticipated settlements of federal and state audit issues. The portion of unrecognized benefits expected to be cash settled within the next twelve months amounts to $11.6 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 six months ended October 31, 2014 is expected to be offset by income in the fourth quarter due to the established pattern of seasonality in our primary business operations. As such, management has determined that it is more-likely-than-not that realization of tax benefits recorded in our financial statements will occur in 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.

Excluding discrete items, management's estimate of the annualized effective tax rate for the six months ended October 31, 2014 and 2013 was 37.8% and 38.7%, respectively. Our effective tax rate for continuing operations, including the effects of discrete income tax items was 41.0% and 40.6% for the six months ended October 31, 2014 and 2013, 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. During the six months ended October 31, 2014, a net discrete tax benefit of $12.1 million was recorded compared to a net discrete tax benefit of $6.9 million in the same period of the prior year. Virtually all of the $12.1 million current year discrete tax benefit was recorded in the second quarter. This benefit was due largely to tax reserves released resulting from tax positions expiring due to statutes of limitations. Due to the seasonal nature of our business, the effective tax rate through our second quarter may not be indicative of the rate for our full fiscal year.

16 Q2 FY2015 Form 10-Q | H&R Block, Inc.

NOTE 11: INTEREST INCOME AND INTEREST EXPENSE

The following table shows the components of interest income and expense:

(in 000s)
	Three months ended October 31,				Six months ended October 31,
	2014		2013		2014		2013
Interest income:
Mortgage loans, net	2,989		3,631		$	5,967	$	7,173
Loans to franchisees	1,890		2,384		3,961		4,673
AFS securities	2,133		2,513		4,403		4,854
Other	2,418		2,098		4,398		5,123
	$	9,430	$	10,626	$	18,729	$	21,823
Interest expense:
Borrowings	$	13,843	$	13,801	$	27,638	$	27,604
Deposits	140		513		285		1,156
	$	13,983	$	14,314	$	27,923	$	28,760

The presentation of interest expense from borrowings in the amount of $13.8 million and $27.6 million for the three and six months ended October 31, 2013, respectively, has been restated to correct errors in presentation. We reclassified such interest expense from cost of revenues to a separate caption.

NOTE 12: COMMITMENTS AND CONTINGENCIES

Changes in deferred revenue balances related to our Peace of Mind® (POM) program, the current portion of which is included in accounts payable, accrued expenses and other current liabilities and the long-term portion of which is included in other noncurrent liabilities in the consolidated balance sheets, are as follows:

(in 000s)
Six months ended October 31,	2014			2013
Balance, beginning of the period	$	145,237		$	146,286
Amounts deferred for new guarantees issued	2,104			1,840
Revenue recognized on previous deferrals	(40,816		)	(46,977		)
Balance, end of the period	$	106,525		$	101,149

We accrued $10.7 million, $16.7 million and $11.4 million as of October 31, 2014 and 2013 and April 30, 2014, respectively, related to estimated losses under our standard guarantee, which is included with our standard in-office tax preparation services. The current portion of this liability is included in accounts payable, accrued expenses and other current liabilities and the long-term portion is included in other noncurrent liabilities in the consolidated balance sheets.

We have accrued estimated contingent consideration payments totaling $10.6 million, $12.5 million and $9.2 million as of October 31, 2014 and 2013 and April 30, 2014, respectively, related to acquisitions, with the short-term amount recorded in accounts payable, accrued expenses and other current liabilities and the long-term portion included in other noncurrent 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 $81.0 million at October 31, 2014, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $34.5 million.

We maintain compensating balances with certain financial institutions that are creditors in our $1.5 billion unsecured committed line of credit governed by a Credit and Guarantee Agreement (2012 CLOC), which are not legally

H&R Block, Inc. | Q2 FY2015 Form 10-Q 17

restricted as to withdrawal. We had no material compensating balances as of October 31, 2014. These balances may fluctuate significantly over the course of any fiscal year.

NOTE 13: 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 October 31, 2014. 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 October 31, 2014 and 2013 and April 30, 2014, we accrued liabilities of $10.3 million, $20.6 million and $23.7 million, respectively, for matters other than those described in note 14.

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 October 31, 2014, 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.

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On a quarterly and annual basis, we review relevant information with respect to litigation and other loss contingencies and update our accruals, disclosures and estimates of reasonably possible loss or range of loss based on such reviews. Costs incurred with defending matters are expensed as incurred. Any receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously, but there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our business and consolidated financial position, results of operations and cash flows.

LITIGATION, CLAIMS, INCLUDING INDEMNIFICATION CLAIMS, OR OTHER LOSS CONTINGENCIES PERTAINING TO DISCONTINUED MORTGAGE OPERATIONS – Although SCC ceased its mortgage loan origination activities in December 2007 and sold its loan servicing business in April 2008, SCC or the Company have been, remain, or may in the future be subject to litigation, claims, including indemnification claims, and other loss contingencies pertaining to SCC's mortgage business activities that occurred prior to such termination and sale. These contingencies, claims and lawsuits include actions by regulators, third parties seeking indemnification, including depositors and underwriters, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others alleged to be similarly situated. Among other things, these contingencies, claims and lawsuits allege or may allege discriminatory or unfair and deceptive loan origination and servicing (including debt collection, foreclosure and eviction) practices, other common law torts, rights to indemnification and contribution, breach of contract, violations of securities laws and a variety of federal statutes, including the Truth in Lending Act (TILA), Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement Procedures Act (RESPA), Home Ownership & Equity Protection Act (HOEPA), as well as similar state statutes. Given the impact of the financial crisis on the non-prime mortgage environment, the aggregate volume of these matters is substantial although it is difficult to predict either the likelihood of new matters being initiated or the outcome of existing matters. In many of these matters, including certain of the lawsuits and claims described below, it is not possible to estimate a reasonably possible loss or range of loss due to, among other things, the inherent uncertainties involved in these matters, some of which are beyond the Company's control, and the indeterminate damages sought in some of these matters.

On October 15, 2010, the Federal Home Loan Bank of Chicago (FHLB-Chicago) filed a lawsuit in the Circuit Court of Cook County, Illinois (Case No. 10CH45033) styled Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al. against multiple defendants, including various SCC-related entities, H&R Block, Inc. and other entities, arising out of FHLB-Chicago's purchase of residential mortgage-backed securities (RMBSs). The plaintiff seeks rescission and damages under state securities law and for common law negligent misrepresentation in connection with its purchase of two securities collateralized by loans originated and securitized by SCC. These two securities had a total initial principal amount of approximately $50 million, of which approximately $34 million remains outstanding. The plaintiff agreed to voluntarily dismiss H&R Block, Inc. from the suit. The remaining defendants, including SCC, filed motions to dismiss, which the court denied. The defendants moved for leave to appeal and the circuit court denied the motion. A portion of our loss contingency accrual is related to this matter for the amount of loss that we consider probable and reasonably estimable.

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.

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On September 28, 2012, a second lawsuit was filed by Homeward in the 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 and repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter.

On April 5, 2013, a third lawsuit was filed by Homeward in the 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 and repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter.

Underwriters and depositors are, or have been, involved in multiple lawsuits related to securitization transactions in which SCC participated. These lawsuits allege or alleged a variety of claims, including violations of federal and state securities laws and common law fraud, based on alleged materially inaccurate or misleading disclosures. Based on information currently available to SCC, it believes that the 19 lawsuits in which SCC received notice of a claim for indemnification of losses and expenses, involved 38 securitization transactions with original investments of approximately $14 billion (of which the outstanding principal amount is approximately $4 billion). Because SCC has not been a party to these lawsuits (with the exception of the Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation case discussed above) 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 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 is probable, nor have we accrued a liability related to any of these claims.

LITIGATION, CLAIMS OR OTHER LOSS CONTINGENCIES PERTAINING TO CONTINUING OPERATIONS –

RAL and RAC Litigation. A series of putative class action lawsuits were filed against us in various federal courts beginning on November 17, 2011 concerning the refund anticipation loan (RAL) and refund anticipation check (RAC) products. The plaintiffs generally allege we engaged in unfair, deceptive or fraudulent acts in violation of various state consumer protection laws by facilitating RALs that were accompanied by allegedly inaccurate TILA disclosures, and by offering RACs without any TILA disclosures. Certain plaintiffs also allege violation of disclosure requirements of various state statutes expressly governing RALs and provisions of those statutes prohibiting tax preparers from charging or retaining certain fees. Collectively, the plaintiffs seek to represent clients who purchased RAL or RAC products in up to forty-two states and the District of Columbia during timeframes ranging from 2007 to the present. The plaintiffs seek equitable relief, disgorgement of profits, compensatory and statutory damages, restitution, civil penalties, attorneys' fees and costs. These cases were consolidated by the Judicial Panel on Multidistrict Litigation into a single proceeding in the United States District Court for the Northern District of Illinois for coordinated pretrial proceedings, styled IN RE: H&R Block Refund Anticipation Loan Litigation (MDL No. 2373/No: 1:12-CV-02973-JBG ). On July 23, 2014, the MDL court granted our motion to compel arbitration of the claims of the named plaintiffs and stayed the

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cases pending arbitration. The MDL court subsequently certified its July 23 order for interlocutory appeal. On October 16, 2014, Plaintiffs filed a petition for permission to appeal with the Seventh 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.

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. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

On April 19, 2012, a putative class action lawsuit was filed against us in the United States District Court for the Western District of Missouri styled Ronald Perras v. H&R Block, Inc., et al. (Case No. 4:12-cv-00450-DGK)concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff seeks to represent all persons nationwide (excluding citizens of Missouri) who were charged the compliance fee, and asserts claims of violation of various state consumer laws, money had and received, and unjust enrichment. In November 2013, the court compelled arbitration of the 2011 claims and stayed all proceedings with respect to those claims. On June 20, 2014, the court denied class certification of the remaining 2012 claims. Plaintiff filed an appeal of the denial of class certification to 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.

Form 8863 Litigation. A series of putative class action lawsuits were filed against us in various federal courts and one state court beginning on March 13, 2013. Taken together, the plaintiffs in these lawsuits purport to represent certain clients nationwide who filed Form 8863 during tax season 2013 through an H&R Block office or using H&R Block At Home® online tax services or tax preparation software, and allege breach of contract, negligence and violation of state consumer laws in connection with transmission of the form. The plaintiffs seek damages, pre-judgment interest, attorneys' fees and costs. In August 2013, the plaintiff in the state court action voluntarily dismissed her case without prejudice. On October 10, 2013, the Judicial Panel on Multidistrict Litigation granted our petition to consolidate the remaining federal lawsuits for coordinated pretrial proceedings in the United States District Court for the Western District of Missouri in a proceeding styled IN RE: H&R BLOCK IRS FORM 8863 LITIGATION (MDL No. 2474/Case No. 4:13-MD-02474-FJG). On July 11, 2014, the MDL court granted our motion to compel arbitration for those named plaintiffs who agreed to arbitrate their claims. Plaintiffs filed a consolidated class action complaint in October 2014. We filed a motion to strike class allegations in the consolidated complaint relating to clients who agreed to arbitration, which remains pending. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability 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.

Although we sold H&R Block Financial Advisors, Inc. (HRBFA) effective November 1, 2008, we remain responsible for any liabilities relating to the Express IRA litigation, among other things, through an indemnification agreement. A portion of our accrual is related to these indemnity obligations.

RSM McGladrey and Related Businesses. On April 17, 2009, a shareholder derivative complaint was filed by Brian Menezes, derivatively and on behalf of nominal defendant International Textile Group, Inc. against McGladrey Capital Markets LLC (MCM) and others in the Court of Common Pleas, Greenville County, South Carolina (C.A. No. 2009-CP-23-3346) styled Brian P. Menezes, Derivatively on Behalf of Nominal Defendant, International Textile Group, Inc.

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(f/k/a Safety Components International, Inc.) v.McGladrey Capital Markets, LLC (f/k/a RSM EquiCo Capital Markets, LLC), et al. The plaintiffs filed an amended complaint in October 2011 styled In re International Textile Group Merger Litigation, adding a putative class action claim. The plaintiffs allege claims of aiding and abetting, civil conspiracy, gross negligence and breach of fiduciary duty against MCM in connection with a fairness opinion MCM provided to the Special Committee of Safety Components International, Inc. (SCI) in 2006 regarding the merger between International Textile Group, Inc. and SCI. The plaintiffs seek actual and punitive damages, pre-judgment interest, attorneys' fees and costs. On February 8, 2012, the court dismissed the plaintiffs' civil conspiracy claim against all defendants. A class was certified on the remaining claims on November 20, 2012. The court granted summary judgment in favor of MCM on June 3, 2013 on the breach of fiduciary duty claim. To avoid the cost and inherent risk associated with litigation, the parties signed a memorandum of understanding to resolve the case, which was subject to approval by the court. The court granted preliminary approval of the settlement on February 19, 2014 and final approval on September 2, 2014. We previously recorded a liability for our estimate of the expected loss. The amount we paid under the settlement did not exceed the amount we previously accrued.

In connection with the sale of RSM McGladrey, Inc. (RSM) and MCM, we indemnified the buyers against certain litigation matters. The indemnities are not subject to a stated term or limit. A portion of our accrual is related to these indemnity obligations.

OTHER – We are from time to time a party to litigation, claims and other loss contingencies not discussed herein arising out of our business operations. These matters may include actions by state attorneys general, other state regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others similarly situated.

While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on our business or our consolidated financial position, results of operations and cash flows.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our consolidated financial position, results of operations and cash flows.

NOTE 14: LOSS CONTINGENCIES ARISING FROM REPRESENTATIONS AND WARRANTIES OF OUR DISCONTINUED MORTGAGE OPERATIONS

SCC ceased originating mortgage loans in December 2007 and, in April 2008, sold its servicing assets and discontinued its remaining operations.

Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers, who generally securitized such loans, or in the form of RMBSs. In connection with the sale of loans and/or RMBSs, SCC made certain representations and warranties. 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, represented approximately 68% of the disposal of loans originated in calendar years 2005, 2006 and 2007, included a "knowledge qualifier" limiting SCC's liability to those instances where SCC had knowledge of the fraud at the time the loans were sold. Representations and warranties made in other sale transactions effectively did not include a knowledge qualifier as to borrower fraud. SCC believes it would have an obligation to repurchase a loan only if it breached a representation and warranty and such breach materially and adversely affects the value of the mortgage loan or certificate holder's interest in the mortgage loan. SCC also would assert that it has no liability for the failure to repurchase any mortgage loan that has been liquidated prior to a repurchase demand, although there is conflicting case law on the liquidated loan defense issue. These decisions are from lower courts, are inconsistent in their analysis and receptivity to this

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defense, and are subject to appeal. Such claims together with any settlement arrangements related to these losses are collectively referred to as "representation and warranty claims."

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 $2.1 billion since May 1, 2008, of which $1.8 billion were received prior to fiscal year 2013.

SETTLEMENT ACTIONS –SCC has entered into tolling agreements with the counterparties that have made and are expected to assert a significant majority of previously denied and possible future representation and warranty claims. These tolling agreements toll the running of any applicable statute of limitations related to potential lawsuits regarding representation and warranty claims and other claims against SCC.

Beginning in the fourth quarter of fiscal year 2013 and continuing through the second quarter of fiscal year 2015, SCC has been engaged in discussions with these counterparties regarding the bulk settlement of previously denied and potential future claims. Based on settlement discussions with these counterparties, SCC believes a bulk settlement approach, rather than the loan-by-loan resolution process, will be needed to resolve all of the representation and warranty and other claims that are the subject of these discussions. On December 5, 2014, SCC entered into a settlement agreement to resolve certain of these claims. The amount to be paid under the settlement agreement is 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 October 31, 2014 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 accounts payable, accrued expenses 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)
Six months ended October 31,	2014		2013
Balance, beginning of the period	$	183,765	$	158,765
Provisions	10,000		—
Payments	—		—
Balance, end of the period	$	193,765	$	158,765

In December 2013, a decision by the New York intermediate appellate court, ACE Securities Corp. v. DB Structured Products, Inc., held that, under New York law, which governs many RMBS transactions into which SCC entered, the

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six-year statute of limitations starts to run at the time the representations and warranties are made, not the date when the repurchase demand was denied. That decision has been applied by the state and federal courts in several RMBS lawsuits not involving SCC, resulting in the dismissal of claims involving representations and warranties made more than six years prior to the initiation of the lawsuit. Unless overturned by New York's highest appellate court, which has taken the case for review, this decision would apply to claims and lawsuits brought against SCC where New York law governs. 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. In addition, if the ACE decision is overturned, it could result in representation and warranty claims being asserted that were previously thought to be time-barred. It is also possible that in response to the statute of limitations rulings, parties seeking to pursue representation and warranty claims or lawsuits with respect to trusts where the statute of limitations for representation and warranty claims against the originator has run, may pursue alternate legal theories of recovery or assert claims against other contractual parties. SCC has not accrued liabilities for claims not subject to a tolling arrangement or not asserted prior to the expiration of the applicable statute of limitations. The impact on SCC, if any, of the ACE decision being overturned or from alternative legal theories or assertions is unclear.

SCC is taking the legal position, where appropriate, for both contractual representation and warranty claims and similar claims in litigation, that a valid representation and warranty claim cannot be made with respect to a mortgage loan that has been liquidated. There is conflicting case law on this issue. These decisions are from lower courts, are inconsistent in their analysis and receptivity to this defense, and are subject to appeal. It is anticipated that the liquidated mortgage loan defense will be the subject of future judicial decisions. In the event the liquidated loan defense is further clarified by the courts or other developments occur, the liquidated loan defense may be a factor in SCC's estimated accrual for representation and warranty claims where such defense may be applicable.

SCC believes it is reasonably possible that future representation and warranty losses may vary from amounts accrued for these exposures. SCC currently believes the aggregate range of reasonably possible losses in excess of amounts accrued is not material. This estimated range is based on the best information currently available, significant management judgment and a number of factors that are subject to change, including developments in case law and the factors mentioned above. The actual loss that may be incurred could differ materially from our accrual or the estimate of reasonably possible losses.

As described more fully in note 13, losses may also be incurred with respect to various indemnification claims by underwriters and depositors in securitization transactions in which SCC participated. Losses from these indemnification claims are frequently not subject to a stated term or limit. We have not concluded that a loss related to any of these indemnification claims is probable, have not accrued a liability for these claims and are not able to estimate a reasonably possible loss or range of loss for these claims. Accordingly, neither the accrued liability described above totaling $193.8 million, nor the estimated range of reasonably possible losses in excess of the amount accrued described above, includes any possible losses which may arise from these indemnification claims. There can be no assurances as to the outcome or impact of these indemnification claims. In the event of unfavorable outcomes on these claims, 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. SCC's principal assets, as of October 31, 2014, total approximately $520 million and consist primarily of an intercompany note receivable and a deferred tax asset. We believe our legal position is strong on any potential corporate veil-piercing arguments; however, if this position is challenged and not upheld, it could have a material adverse effect on our business and our consolidated financial position, results of operations and cash flows.

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NOTE 15: REGULATORY CAPITAL REQUIREMENTS

The following table sets forth HRB Bank's regulatory capital requirements calculated in its Call Report, as filed with the Federal Financial Institutions Examination Council (FFIEC):

(dollars in 000s)
	Actual				Minimum Capital Requirement					Minimum to be Well Capitalized
	Amount		Ratio		Amount		Ratio			Amount		Ratio
As of September 30, 2014:
Total risk-based capital ratio (1)	$	595,148	199.4	%	$	23,877	8.0	%		$	29,846	10.0	%
Tier 1 risk-based capital ratio (2)	591,293		198.1	%	N/A		N/A			17,908		6.0	%
Tier 1 capital ratio (leverage) (3)	591,293		54.3	%	130,689		12.0	%	(5)	54,454		5.0	%
Tangible equity ratio (4)	591,293		54.3	%	16,336		1.5	%		N/A		N/A
As of September 30, 2013:
Total risk-based capital ratio (1)	$	506,449	140.0	%	$	28,950	8.0	%		$	36,188	10.0	%
Tier 1 risk-based capital ratio (2)	501,720		138.6	%	N/A		N/A			21,713		6.0	%
Tier 1 capital ratio (leverage) (3)	501,720		40.4	%	148,869		12.0	%	(5)	62,029		5.0	%
Tangible equity ratio (4)	501,720		40.4	%	18,609		1.5	%		N/A		N/A
As of March 31, 2014:
Total risk-based capital ratio (1)	$	563,899	168.5	%	$	26,771	8.0	%		$	33,464	10.0	%
Tier 1 risk-based capital ratio (2)	559,572		167.2	%	N/A		N/A			20,079		6.0	%
Tier 1 capital ratio (leverage) (3)	559,572		32.1	%	209,041		12.0	%	(5)	87,101		5.0	%
Tangible equity ratio (4)	559,572		32.1	%	26,130		1.5	%		N/A		N/A

⁽¹⁾  Total risk-based capital divided by risk-weighted assets.

⁽²⁾  Tier 1 (core) capital less deduction for low-level recourse and residual interest divided by risk-weighted assets.

⁽³⁾  Tier 1 (core) capital divided by adjusted total assets.

⁽⁴⁾  Tangible capital divided by tangible assets.

⁽⁵⁾  Effective April 5, 2012, the minimum capital requirement was changed to 4% by the OCC, although HRB Bank plans to maintain a minimum of 12.0% leverage capital at the end of each calendar quarter.

Quantitative measures established by regulation to ensure capital adequacy require HRB Bank to maintain minimum amounts and ratios of tangible equity, total risk-based capital and Tier 1 capital, as set forth in the table above. As of October 31, 2014, HRB Bank's leverage ratio was 53.8%.

NOTE 16: SEGMENT INFORMATION

Results of our continuing operations by reportable segment are as follows:

(in 000s)
	Three months ended October 31,						Six months ended October 31,
	2014			2013			2014			2013
REVENUES :
Tax Services	$	128,683		$	128,040		$	257,763		$	249,731
Corporate and eliminations	5,945			6,300			10,451			11,804
	$	134,628		$	134,340		$	268,214		$	261,535
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES :
Tax Services	$	(176,642	)	$	(159,314	)	$	(327,202	)	$	(303,708	)
Corporate and eliminations	(23,931		)	(20,048		)	(49,187		)	(60,148		)
	$	(200,573	)	$	(179,362	)	$	(376,389	)	$	(363,856	)

H&R Block, Inc. | Q2 FY2015 Form 10-Q 25

NOTE 17: CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Block Financial is a 100% owned subsidiary of the Company. Block Financial is the Issuer and the Company is the full and unconditional Guarantor of the Senior Notes issued on October 25, 2012, our 2012 CLOC, and other indebtedness issued from time to time. These condensed consolidating financial statements have been prepared using the equity method of accounting. Earnings of subsidiaries are, therefore, reflected in the Company's investment in subsidiaries account. The elimination entries eliminate investments in subsidiaries, related stockholders' equity and other intercompany balances and transactions.

Certain amounts included in the following statements of operations for the three and six months ended October 31, 2013, the statements of cash flows for the six months ended October 31, 2013, and the balance sheet as of October 31, 2013 have been restated to correct errors in presentation. The statements of operations have been corrected to properly reflect equity earnings in subsidiaries of H&R Block, Inc. (Guarantor) in "Other income (expense), net" to include income taxes and discontinued operations which were previously shown on separate lines. The balance sheet has been corrected to properly reflect a classified balance sheet and to show the investment in Block Financial by Other Subsidiaries. The statements of cash flows have been corrected to properly reflect intercompany borrowings and payments as either investing or financing activities, as appropriate. These restatements impacted disclosures required by this note, but had no impact on the consolidated financial statements as of and for the three and six months ended October 31, 2013.

Additionally, as discussed in note 11, the presentation of interest expense on borrowings for the three and six months ended October 31, 2013 has been restated to correct errors in presentation. We reclassified such interest expense from cost of revenues to a separate caption.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS													(in 000s)
Three months ended October 31, 2014	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	20,891		$	113,747		$	(10	)	$	134,628
Cost of revenues	—			10,851			210,854			(8		)	221,697
Selling, general and administrative	—			5,854			91,527			(2		)	97,379
Total operating expenses	—			16,705			302,381			(10		)	319,076
Other income (expense), net	(114,653		)	2,232			(18,005		)	128,144			(2,282		)
Interest expense on borrowings	—			13,742			101			—			13,843
Loss from continuing operations before tax benefit	(114,653		)	(7,324		)	(206,740		)	128,144			(200,573		)
Income tax benefit	(2,655		)	(7,020		)	(77,671		)	—			(87,346		)
Net loss from continuing operations	(111,998		)	(304		)	(129,069		)	128,144			(113,227		)
Net income (loss) from discontinued operations	—			(1,634		)	2,863			—			1,229
Net loss	(111,998		)	(1,938		)	(126,206		)	128,144			(111,998		)
Other comprehensive income	1,094			4,382			1,094			(5,476		)	1,094
Comprehensive income (loss)	$	(110,904	)	$	2,444		$	(125,112	)	$	122,668		$	(110,904	)

26 Q2 FY2015 Form 10-Q | H&R Block, Inc.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS													(in 000s)
Three months ended October 31, 2013	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	21,170		$	113,204		$	(34	)	$	134,340
Cost of revenues	—			13,240			193,857			(34		)	207,063
Selling, general and administrative	—			1,369			92,723			—			94,092
Total operating expenses	—			14,609			286,580			(34		)	301,155
Other income (expense), net (1)	(104,943		)	1,662			(408		)	104,943			1,254
Interest expense on borrowings (1)	—			13,692			109			—			13,801
Loss from continuing operations before tax benefit	(104,943		)	(5,469		)	(173,893		)	104,943			(179,362		)
Income tax benefit (1)	—			(2,203		)	(74,144		)	—			(76,347		)
Net loss from continuing operations	(104,943		)	(3,266		)	(99,749		)	104,943			(103,015		)
Net loss from discontinued operations (1)	—			(1,553		)	(375		)	—			(1,928		)
Net loss	(104,943		)	(4,819		)	(100,124		)	104,943			(104,943		)
Other comprehensive income	1,720			1,108			612			(1,720		)	1,720
Comprehensive loss	$	(103,223	)	$	(3,711	)	$	(99,512	)	$	103,223		$	(103,223	)

⁽¹⁾  Amounts have been restated, including the presentation of interest expense on borrowings, and equity in earnings of subsidiaries net of income taxes and discontinued operations.

Six months ended October 31, 2014	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	44,751		$	223,556		$	(93	)	$	268,214
Cost of revenues	—			22,658			396,853			(88		)	419,423
Selling, general and administrative	—			9,197			185,387			(5		)	194,579
Total operating expenses	—			31,855			582,240			(93		)	614,002
Other income (expense), net	(233,646		)	1,396			(19,076		)	248,363			(2,963		)
Interest expense on borrowings	—			27,436			202			—			27,638
Loss from continuing operations before tax benefit	(233,646		)	(13,144		)	(377,962		)	248,363			(376,389		)
Income tax benefit	(5,416		)	(9,663		)	(139,232		)	—			(154,311		)
Net loss from continuing operations	(228,230		)	(3,481		)	(238,730		)	248,363			(222,078		)
Net income (loss) from discontinued operations	—			(8,843		)	2,691			—			(6,152		)
Net loss	(228,230		)	(12,324		)	(236,039		)	248,363			(228,230		)
Other comprehensive income	1,400			4,261			1,400			(5,661		)	1,400
Comprehensive loss	$	(226,830	)	$	(8,063	)	$	(234,639	)	$	242,702		$	(226,830	)

H&R Block, Inc. | Q2 FY2015 Form 10-Q 27

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS													(in 000s)
Six months ended October 31, 2013	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	48,385		$	213,340		$	(190	)	$	261,535
Cost of revenues	—			38,906			364,597			(190		)	403,313
Selling, general and administrative	—			15,407			175,382			—			190,789
Total operating expenses	—			54,313			539,979			(190		)	594,102
Other income (expense), net (1)	(220,130		)	1,706			(5,391		)	220,130			(3,685		)
Interest expense on borrowings (1)	—			27,385			219			—			27,604
Loss from continuing operations before tax benefit	(220,130		)	(31,607		)	(332,249		)	220,130			(363,856		)
Income tax benefit (1)	—			(11,601		)	(135,970		)	—			(147,571		)
Net loss from continuing operations	(220,130		)	(20,006		)	(196,279		)	220,130			(216,285		)
Net loss from discontinued operations (1)	—			(2,716		)	(1,129		)	—			(3,845		)
Net loss	(220,130		)	(22,722		)	(197,408		)	220,130			(220,130		)
Other comprehensive loss	(9,087		)	(6,616		)	(2,471		)	9,087			(9,087		)
Comprehensive loss	$	(229,217	)	$	(29,338	)	$	(199,879	)	$	229,217		$	(229,217	)

⁽¹⁾  Amounts have been restated, including the presentation of interest expense on borrowings, and equity in earnings of subsidiaries net of income taxes and discontinued operations.

28 Q2 FY2015 Form 10-Q | H&R Block, Inc.

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of October 31, 2014	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	432,224	$	195,540	$	(274	)	$	627,490
Cash & cash equivalents - restricted	—		5,431		50,112		—			55,543
Receivables, net	79		84,196		23,430		—			107,705
Prepaid expenses and other current assets	—		113,571		171,892		—			285,463
Investments in AFS securities	—		381,080		100		—			381,180
Total current assets	79		1,016,502		441,074		(274		)	1,457,381
Mortgage loans held for investment, net	—		251,092		—		—			251,092
Investments in AFS securities	—		—		9,774		—			9,774
Property and equipment, net	—		157		318,068		—			318,225
Intangible assets, net	—		—		414,045		—			414,045
Goodwill	—		—		464,182		—			464,182
Investments in subsidiaries	675,218		—		53,769		(728,987		)	—
Amounts due from affiliates	565,387		10		92,974		(658,371		)	—
Other assets	—		157,472		19,119		—			176,591
Total assets	$	1,240,684	$	1,425,233	$	1,813,005	$	(1,387,632	)	$	3,091,290
Customer banking deposits	$	—	$	455,134	$	—	$	(274	)	$	454,860
Accounts payable, accrued expenses and other current liabilities	943		229,262		206,625		—			436,830
Accrued salaries, wages and payroll taxes	—		2,197		34,018		—			36,215
Accrued income taxes	—		47,732		99,268		—			147,000
Current portion of long-term debt	—		—		772		—			772
Total current liabilities	943		734,325		340,683		(274		)	1,075,677
Long-term debt	—		497,753		7,835		—			505,588
Other noncurrent liabilities	—		47,477		223,872		—			271,349
Amounts due to affiliates	1,065		91,909		565,397		(658,371		)	—
Total liabilities	2,008		1,371,464		1,137,787		(658,645		)	1,852,614
Stockholders' equity	1,238,676		53,769		675,218		(728,987		)	1,238,676
Total liabilities and stockholders' equity	$	1,240,684	$	1,425,233	$	1,813,005	$	(1,387,632	)	$	3,091,290

H&R Block, Inc. | Q2 FY2015 Form 10-Q 29

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of October 31, 2013	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	389,915	$	401,303	$	(446	)	$	790,772
Cash & cash equivalents - restricted	—		6,795		40,726		—			47,521
Receivables, net	—		99,867		31,834		—			131,701
Prepaid expenses and other current assets	—		14,543		217,662		(6,545		)	225,660
Total current assets	—		511,120		691,525		(6,991		)	1,195,654
Mortgage loans held for investment, net	—		295,907		—		—			295,907
Investments in AFS securities	—		460,935		4,409		—			465,344
Property and equipment, net	—		145		311,012		—			311,157
Intangible assets, net	—		—		296,213		—			296,213
Goodwill	—		—		442,812		—			442,812
Investments in subsidiaries (1)	3,114,988		—		26,962		(3,141,950		)	—
Amounts due from affiliates	—		397,526		2,167,944		(2,565,470		)	—
Other assets	8,512		140,811		118,103		—			267,426
Total assets	$	3,123,500	$	1,806,444	$	4,058,980	$	(5,714,411	)	$	3,274,513
Customer banking deposits	$	—	$	655,575	$	—	$	(446	)	$	655,129
Accounts payable, accrued expenses and other current liabilities	581		183,342		243,071		—			426,994
Accrued salaries, wages and payroll taxes	—		1,881		39,703		—			41,584
Accrued income taxes	—		29,020		—		(6,545		)	22,475
Current portion of long-term debt	—		399,765		738		—			400,503
Total current liabilities	581		1,269,583		283,512		(6,991		)	1,546,685
Long-term debt	—		497,471		8,607		—			506,078
Other noncurrent liabilities	—		12,428		254,347		—			266,775
Amounts due to affiliates	2,167,944		—		397,526		(2,565,470		)	—
Total liabilities	2,168,525		1,779,482		943,992		(2,572,461		)	2,319,538
Stockholders' equity (1)	954,975		26,962		3,114,988		(3,141,950		)	954,975
Total liabilities and stockholders' equity	$	3,123,500	$	1,806,444	$	4,058,980	$	(5,714,411	)	$	3,274,513

Note: Amounts have been restated to include the presentation of a classified balance sheet.

⁽¹⁾  Amounts have been restated, including the presentation of the investment of Other Subsidiaries in Block Financial.

30 Q2 FY2015 Form 10-Q | H&R Block, Inc.

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of April 30, 2014	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	612,376	$	1,574,031	$	(1,100	)	$	2,185,307
Cash & cash equivalents - restricted	—		67,463		47,856		—			115,319
Receivables, net	—		89,975		101,643		—			191,618
Prepaid expenses and other current assets	—		10,202		188,065		—			198,267
Investments in AFS securities	—		423,495		—		—			423,495
Total current assets	—		1,203,511		1,911,595		(1,100		)	3,114,006
Mortgage loans held for investment, net	—		268,428		—		—			268,428
Investments in AFS securities	—		—		4,329		—			4,329
Property and equipment, net	—		121		304,790		—			304,911
Intangible assets, net	—		—		355,622		—			355,622
Goodwill	—		—		436,117		—			436,117
Investments in subsidiaries	904,331		—		60,902		(965,233		)	—
Amounts due from affiliates	642,101		386,818		397		(1,029,316		)	—
Other assets	11,271		173,168		25,677		—			210,116
Total assets	$	1,557,703	$	2,032,046	$	3,099,429	$	(1,995,649	)	$	4,693,529
Customer banking deposits	$	—	$	770,885	$	—	$	(1,100	)	$	769,785
Accounts payable, accrued expenses and other current liabilities	757		223,677		344,573		—			569,007
Accrued salaries, wages and payroll taxes	—		2,190		164,842		—			167,032
Accrued income taxes	—		71,132		335,523		—			406,655
Current portion of long-term debt	—		399,882		755		—			400,637
Total current liabilities	757		1,467,766		845,693		(1,100		)	2,313,116
Long-term debt	—		497,612		8,225		—			505,837
Other noncurrent liabilities	—		5,766		312,261		—			318,027
Amounts due to affiliates	397		—		1,028,919		(1,029,316		)	—
Total liabilities	1,154		1,971,144		2,195,098		(1,030,416		)	3,136,980
Stockholders' equity	1,556,549		60,902		904,331		(965,233		)	1,556,549
Total liabilities and stockholders' equity	$	1,557,703	$	2,032,046	$	3,099,429	$	(1,995,649	)	$	4,693,529

H&R Block, Inc. | Q2 FY2015 Form 10-Q 31

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Six months ended October 31, 2014	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by (used in) operating activities:	$	—		$	55,612		$	(683,189	)	$	—		$	(627,577	)
Cash flows from investing:
Purchases of AFS securities	—			—			(100		)	—			(100		)
Maturities of and payments received on AFS securities	—			49,013			—			—			49,013
Principal payments on mortgage loans held for investment, net	—			13,451			—			—			13,451
Capital expenditures	—			(119		)	(70,808		)	—			(70,927		)
Payments made for business acquisitions, net of cash acquired	—			—			(94,230		)	—			(94,230		)
Loans made to franchisees	—			(18,180		)	(71		)	—			(18,251		)
Repayments from franchisees	—			29,404			233			—			29,637
Intercompany payments/investments in subsidiaries	—			400,000			(109,031		)	(290,969		)	—
Other, net	—			4,372			6,313			—			10,685
Net cash provided by (used in) investing activities	—			477,941			(267,694		)	(290,969		)	(80,722		)
Cash flows from financing:
Repayments of long-term debt	—			(400,000		)	—			—			(400,000		)
Customer banking deposits, net	—			(317,095		)	—			826			(316,269		)
Dividends paid	(109,871		)	—			—			—			(109,871		)
Proceeds from exercise of stock options	14,477			—			—			—			14,477
Intercompany borrowings (repayments)	105,641			3,390			(400,000		)	290,969			—
Other, net	(10,247		)	—			(23,392		)	—			(33,639		)
Net cash used in financing activities	—			(713,705		)	(423,392		)	291,795			(845,302		)
Effects of exchange rates on cash	—			—			(4,216		)	—			(4,216		)
Net decrease in cash and cash equivalents	—			(180,152		)	(1,378,491		)	826			(1,557,817		)
Cash and cash equivalents at beginning of the period	—			612,376			1,574,031			(1,100		)	2,185,307
Cash and cash equivalents at end of the period	$	—		$	432,224		$	195,540		$	(274	)	$	627,490

32 Q2 FY2015 Form 10-Q | H&R Block, Inc.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Six months ended October 31, 2013	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by (used in) operating activities:	$	799		$	46,969		$	(540,141	)	$	—		$	(492,373	)
Cash flows from investing:
Purchases of AFS securities	—			(45,158		)	—			—			(45,158		)
Maturities of and payments received on AFS securities	—			55,615			—			—			55,615
Principal payments on mortgage loans held for investment, net	—			24,340			—			—			24,340
Capital expenditures	—			(57		)	(86,869		)	—			(86,926		)
Payments made for business acquisitions, net of cash acquired	—			—			(20,927		)	—			(20,927		)
Loans made to franchisees	—			(22,114		)	—			—			(22,114		)
Repayments from franchisees	—			15,883			—			—			15,883
Intercompany payments/investments in subsidiaries (1)	—			23,036			(89,318		)	66,282			—
Other, net	—			11,368			3,887			—			15,255
Net cash provided by (used in) investing activities	—			62,913			(193,227		)	66,282			(64,032		)
Cash flows from financing:
Customer banking deposits, net	—			(278,077		)	—			2,277			(275,800		)
Dividends paid	(109,324		)	—			—			—			(109,324		)
Proceeds from exercise of stock options	24,536			—			—			—			24,536
Intercompany borrowings (repayments) (1)	89,318			—			(23,036		)	(66,282		)	—
Other, net	(5,329		)	—			(26,619		)	—			(31,948		)
Net cash used in financing activities	(799		)	(278,077		)	(49,655		)	(64,005		)	(392,536		)
Effects of exchange rates on cash	—			—			(7,871		)	—			(7,871		)
Net decrease in cash and cash equivalents	—			(168,195		)	(790,894		)	2,277			(956,812		)
Cash and cash equivalents at beginning of the period	—			558,110			1,192,197			(2,723		)	1,747,584
Cash and cash equivalents at end of the period	$	—		$	389,915		$	401,303		$	(446	)	$	790,772

⁽¹⁾ Amounts have been restated, including the presentation of intercompany borrowings (payments) as either investing or financing activities.

H&R Block, Inc. | Q2 FY2015 Form 10-Q 33

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our subsidiaries provide tax preparation, retail banking services and other services. Tax returns are either prepared by H&R Block tax professionals (in company-owned or franchise offices or virtually via the internet) or prepared and filed by our clients through H&R Block tax software, either online or using our software or mobile applications.

RECENT DEVELOPMENTS

In April 2014, our subsidiaries, HRB Bank and Block Financial, entered into a P&A Agreement with BofI, which was amended in October 2014 as described in Item 1, note 2 to the consolidated financial statements above. Pursuant to the P&A Agreement, HRB Bank will sell certain assets and assign certain liabilities, including all of HRB Bank's deposit liabilities, to BofI, subject to various closing conditions, including the receipt of certain required regulatory approvals, entry into certain additional agreements, and the fulfillment of various other customary conditions. See below under "Financial Condition - HRB Bank" for additional information.

Due to the lack of regulatory approval, we do not expect to consummate the P&A Transaction this calendar year. Therefore, we will continue offering financial services products to our clients through HRB Bank for the upcoming tax season.

The obligations of the parties to complete the P&A Transaction are subject to the fulfillment of numerous conditions including regulatory approval. We cannot be certain when or if the conditions to and other components of the P&A Transaction will be satisfied, or whether the P&A Transaction will be completed. In addition, there may be changes to the terms and conditions of the P&A Agreement and other contemplated agreements as part of the regulatory approval process.

In connection with additional agreements expected to be entered into upon the closing of the P&A Transaction, BofI would offer H&R Block-branded financial products distributed by the Company to the Company's clients. An operating subsidiary of the Company would provide certain marketing, servicing and operational support to BofI for such financial services and products. We expect the net, ongoing annual financial impact of these agreements to be dilutive by approximately $0.07 to $0.09 per share beginning in fiscal year 2016, based on current fully diluted shares outstanding. Results will vary based upon the volume of financial services products sold and the actual closing date.

Because we will not close the P&A Transaction before the end of this calendar year, H&R Block, Inc. will be subject to the new SLHC regulatory capital requirements when they go into effect on January 1, 2015. Based upon current projections, we expect that H&R Block, Inc. will exceed the minimum regulatory capital requirements on January 1, 2015. H&R Block, Inc. must continue to meet the minimum regulatory capital requirements until we divest HRB Bank and cease to be an SLHC, which will restrict the capital allocation strategies available to us.

RESULTS OF OPERATIONS

TAX SERVICES –This segment consists primarily of our assisted and DIY income tax preparation offerings - in-person, online, software and mobile applications - including tax operations primarily in the U.S. and its territories, Canada, and Australia. This segment also includes the activities of HRB Bank that support our U.S. tax preparation business.

CORPORATE AND ELIMINATIONS –Corporate operating results include net interest income and gains or losses relating to mortgage loans held for investment and residual interests in securitizations, interest expense on borrowings, other corporate expenses, and eliminations of intercompany activities.

34 Q2 FY2015 Form 10-Q | H&R Block, Inc.

A summary of the financial results for our operations is as follows:

Consolidated – Financial Results													(in 000s)
Three months ended October 31,	2014									2013
	Tax Services			Corporate and Eliminations			Total			Tax Services			Corporate and Eliminations			Total
Tax preparation fees:
U.S.	$	31,926		$	—		$	31,926		$	29,011		$	—		$	29,011
International	42,831			—			42,831			41,568			—			41,568
	74,757			—			74,757			70,579			—			70,579
Royalties	8,582			—			8,582			9,527			—			9,527
Revenues from Emerald Card®	11,524			—			11,524			9,999			—			9,999
Revenues from Peace of Mind® guarantees	16,563			—			16,563			19,151			—			19,151
Other	17,257			5,945			23,202			18,784			6,300			25,084
Total revenues	128,683			5,945			134,628			128,040			6,300			134,340
Compensation and benefits:
Field wages	56,904			—			56,904			49,531			—			49,531
Other wages	37,724			4,644			42,368			35,665			4,327			39,992
Benefits and other compensation	19,902			4,560			24,462			22,178			3,643			25,821
	114,530			9,204			123,734			107,374			7,970			115,344
Occupancy and equipment	84,218			49			84,267			83,634			212			83,846
Marketing and advertising	11,521			992			12,513			12,566			1,035			13,601
Depreciation and amortization	38,926			3			38,929			26,632			36			26,668
Other	53,223			6,410			59,633			54,958			6,738			61,696
Total operating expenses	302,418			16,658			319,076			285,164			15,991			301,155
Other income (expense), net	(2,381		)	99			(2,282		)	(1,655		)	2,909			1,254
Interest expense on borrowings	526			13,317			13,843			535			13,266			13,801
Pretax loss	$	(176,642	)	$	(23,931	)	(200,573		)	$	(159,314	)	$	(20,048	)	$	(179,362	)
Income tax benefit							(87,346		)							(76,347		)
Net loss from continuing operations							(113,227		)							(103,015		)
Net income (loss) from discontinued operations							1,229									(1,928		)
Net loss							$	(111,998	)							$	(104,943	)
Basic and diluted loss per share:
Continuing operations							$	(0.41	)							$	(0.38	)
Discontinued operations							—									(0.01		)
Consolidated							$	(0.41	)							$	(0.39	)
EBITDA from continuing operations (1)							$	(147,661	)							$	(138,380	)
EBITDA from continuing operations - adjusted (1)							(149,154		)							(142,018		)

⁽¹⁾  See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP measures.

Three months ended October 31, 2014 compared to October 31, 2013

Tax Services – Revenues were essentially flat compared to the prior year. Total operating expenses of our Tax Services segment increased$17.3 million, or 6.1%, from the prior year. Total compensation and benefits increased$7.2 million due to higher off-season labor in our U.S. operations primarily related to training and field wages. Depreciation and amortization expense increased$12.3 million, or 46.2%, due primarily to acquisitions of franchisee and competitor businesses and, to a lesser extent, improvements to existing offices.

H&R Block, Inc. | Q2 FY2015 Form 10-Q 35

Corporate and Eliminations – Other income declined $2.8 million primarily due to the gain on sale of mortgage loans recorded in the prior year.

Consolidated – Financial Results													(in 000s)
Six months ended October 31,	2014									2013
	Tax Services			Corporate and Eliminations			Total			Tax Services			Corporate and Eliminations			Total
Tax preparation fees:
U.S.	$	57,415		$	—		$	57,415		$	51,037		$	—		$	51,037
International	84,287			—			84,287			73,662			—			73,662
	141,702			—			141,702			124,699			—			124,699
Royalties	16,224			—			16,224			16,089			—			16,089
Revenues from Emerald Card®	25,569			—			25,569			24,610			—			24,610
Revenues from Peace of Mind® guarantees	40,816			—			40,816			46,977			—			46,977
Other	33,452			10,451			43,903			37,356			11,804			49,160
Total revenues	257,763			10,451			268,214			249,731			11,804			261,535
Compensation and benefits:
Field wages	102,901			—			102,901			89,435			—			89,435
Other wages	76,441			9,120			85,561			70,400			9,538			79,938
Benefits and other compensation	38,724			9,367			48,091			38,115			7,215			45,330
	218,066			18,487			236,553			197,950			16,753			214,703
Occupancy and equipment	167,316			60			167,376			162,184			821			163,005
Marketing and advertising	18,908			1,750			20,658			19,583			1,141			20,724
Depreciation and amortization	72,609			6			72,615			49,434			108			49,542
Other	103,777			13,023			116,800			115,606			30,522			146,128
Total operating expenses	580,676			33,326			614,002			544,757			49,345			594,102
Other income (expense), net	(3,235		)	272			(2,963		)	(7,610		)	3,925			(3,685		)
Interest expense on borrowings	1,054			26,584			27,638			1,072			26,532			27,604
Pretax loss	$	(327,202	)	$	(49,187	)	$	(376,389	)	$	(303,708	)	$	(60,148	)	$	(363,856	)
Income tax benefit							(154,311		)							(147,571		)
Net loss from continuing operations							(222,078		)							(216,285		)
Net loss from discontinued operations							(6,152		)							(3,845		)
Net loss							$	(228,230	)							$	(220,130	)
Basic and diluted loss per share:
Continuing operations							$	(0.81	)							$	(0.79	)
Discontinued operations							(0.02		)							(0.01		)
Consolidated							$	(0.83	)							$	(0.80	)
EBITDA from continuing operations (1)							$	(275,851	)							$	(285,554	)
EBITDA from continuing operations - adjusted (1)							(275,337		)							(280,690		)

⁽¹⁾  See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP measures.

Six months ended October 31, 2014 compared to October 31, 2013

Tax Services – Revenues increased$8.0 million, or 3.2%, from the prior year, due primarily to the extension of the Canadian tax season until May 5 and higher off-season returns in our U.S. operations.

Total operating expenses increased$35.9 million, or 6.6%, from the prior year. Total compensation and benefits increased$20.1 million due to higher off-season and training labor in our U.S. operations and the extension of the Canadian tax season mentioned above. Occupancy costs increased$5.1 million, or 3.2%, and depreciation and

36 Q2 FY2015 Form 10-Q | H&R Block, Inc.

amortization expense increased$23.2 million, due primarily to acquisitions of franchisee and competitor businesses and, to a lesser extent, improvements to existing offices. Other expenses decreased$11.8 million from the prior year, primarily due to lower legal expenses, coupled with lower loss provisions and processing costs from our pilot credit card program incurred in the prior year.

Other income (expense), net improved $4.4 million primarily due to foreign currency losses recorded in the prior year.

Corporate and Eliminations – Other expenses declined $17.5 million from the prior year primarily due to a $6.5 million decline in the provision for loan losses and lower legal settlements and expenses. Other income declined $3.7 million primarily due to prior year interest income recorded on a note receivable which has since been repaid and gain on sale of mortgage loans.

DISCONTINUED OPERATIONS

Discontinued operations include our discontinued mortgage operations.

CONTINGENT LOSSES –SCC has accrued a liability as of October 31, 2014 for estimated contingent losses arising from representation and warranty claims of $193.8 million. See note 14 for changes in this accrual. The estimate of accrued loss 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 other factors. Changes in any one of these factors could significantly impact the estimate.

Losses may also be incurred with respect to various indemnification claims by underwriters and depositors in securitization transactions in which SCC participated. SCC has not concluded that a loss is probable or reasonably estimable related to these indemnification claims, therefore there is no accrued liability for these contingent losses as of October 31, 2014.

See additional discussion of risks and sensitivity of estimates in Item 1A, "Risk Factors" and Item 7, under "Critical Accounting Estimates" in our Annual Report on Form 10-K.

FINANCIAL CONDITION

These comments should be read in conjunction with the consolidated balance sheets and consolidated statements of cash flows included in Part 1, Item 1.

CAPITAL RESOURCES AND LIQUIDITY – OVERVIEW – Our primary sources of capital and liquidity include cash from operations (including changes in working capital) and issuances of debt. We use our sources of liquidity primarily to fund working capital, service and repay debt, pay dividends, repurchase shares of our common stock, and acquire businesses.

Our operations are highly seasonal and substantially all of our revenues and cash flow are generated during the period from February through April. Therefore, we require the use of cash to fund losses from May through January, and typically rely on available cash balances from the prior tax season and short-term borrowings to meet our off-season liquidity needs.

Given the likely availability of a number of liquidity options discussed herein, including borrowing capacity under the 2012 CLOC or the issuance of commercial paper, we believe that, in the absence of any unexpected developments, our existing sources of capital as of October 31, 2014 are sufficient to meet our operating and financing needs.

H&R Block, Inc. | Q2 FY2015 Form 10-Q 37

DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS – The following table summarizes our statements of cash flows for the six months ended October 31, 2014 and 2013. See Item 1 for the complete statements of cash flows for these periods.

	(in 000s)
Six months ended October 31,	2014			2013
Net cash used in:
Operating activities	$	(627,577	)	$	(492,373	)
Investing activities	(80,722		)	(64,032		)
Financing activities	(845,302		)	(392,536		)
Effects of exchange rates on cash	(4,216		)	(7,871		)
Net change in cash and cash equivalents	$	(1,557,817	)	$	(956,812	)

Operating Activities. Cash used in operations increased$135.2 million from the prior year period primarily due to higher income tax payments, along with higher payments for bonuses and related payroll taxes.

Investing Activities. Cash used in investing activities totaled $80.7 million for the six months ended October 31, 2014 compared to $64.0 million in the prior year period. An increase of $73.3 million in payments for business acquisitions was partially offset by a decline of $45.1 million in purchases of available for sale securities.

Financing Activities. Cash used in financing activities totaled $845.3 million for the six months ended October 31, 2014 compared to $392.5 million in the prior year period. The increase over the prior year period resulted from the repayment of $400.0 million of our 5.125% Senior Notes and the closing of broker and time deposit accounts due to the pending P&A Transaction.

CASH REQUIREMENTS –

Dividends and Share Repurchase. Returning capital to shareholders in the form of dividends and the repurchase of outstanding shares has historically been a significant component of our capital allocation plan.

We have consistently paid quarterly dividends. Dividends paid totaled $109.9 million and $109.3 million for the six months ended October 31, 2014 and 2013, respectively. Although we have historically paid dividends and plan to continue to do so, there can be no assurances that circumstances will not change in the future that could affect our ability or decisions to pay dividends.

Although we did not repurchase any shares during the current period, we currently have Board of Directors' authorization to purchase up to $2.0 billion of our common stock through June 2015. There was $857.5 million remaining under this authorization as of October 31, 2014. Although we have historically from time to time repurchased common stock, there can be no assurances that circumstances will allow us to continue to repurchase common stock in the future. As long as we remain subject to regulatory supervision of the Federal Reserve, our share repurchase program will be closely supervised and we will likely be restricted from repurchasing outstanding shares.

HRB Bank. In April 2014, we entered into the P&A Agreement with BofI, which was amended in October 2014 as described in Item 1, note 2 to the consolidated financial statements above. The P&A Agreement is subject to various closing conditions, including the receipt of certain required approvals, entry into certain additional agreements, and the fulfillment of various other customary conditions. If the closing conditions (including regulatory approvals) are satisfied, we will complete a closing of the P&A Transaction, including the sale of certain assets and transfer of certain liabilities (principally deposit liabilities) to BofI.

Due to the lack of regulatory approval, we do not expect to consummate the P&A Transaction this calendar year. Therefore, we will continue offering financial services products to our clients through HRB Bank for the upcoming tax season.

If a closing had occurred as of October 31, 2014, we would have made a cash payment to BofI for the difference in the carrying value of assets sold and the carrying value of liabilities (including deposit liabilities) transferred of approximately $437 million. The amount of the cash payment made at closing will primarily be equal to the carrying value of the liabilities to be transferred since the carrying value of the assets to be transferred is immaterial. Due to the seasonality of our business, the timing of any closing will impact the amount of deposit liabilities transferred. In

38 Q2 FY2015 Form 10-Q | H&R Block, Inc.

connection with the closing we intend to liquidate the AFS securities held by HRB Bank, which totaled $381 million as of October 31, 2014.

See additional discussion in Item 1, note 2 to the consolidated financial statements, and below under "Regulatory Environment."

Capital Investment. Our business is not capital intensive. Capital expenditures totaled $70.9 million and $86.9 million for the six months ended October 31, 2014 and 2013, respectively. Our capital expenditures relate primarily to recurring improvements to retail offices, as well as investments in computers, software and related assets. We also made payments to acquire franchisee and competitor businesses totaling $94.2 million and $20.9 million for the six months ended October 31, 2014 and 2013, respectively.

FINANCING RESOURCES – Our 2012 CLOC has capacity up to $1.5 billion, and is scheduled to expire in August 2017.

Our 5.125% Senior Notes with a principal amount of $400 million matured in October 2014 and, utilizing available cash on hand, we repaid them according to their terms.

The following table provides ratings for debt issued by Block Financial as of October 31, 2014 and April 30, 2014:

	Short-term	Long-term	Outlook
Moody's	P-2	Baa2	Stable
S&P	A-2	BBB	Negative

There have been no other material changes in our borrowings from those reported as of April 30, 2014 in our Annual Report on Form 10-K.

CASH AND INVESTMENT SECURITIES – As of October 31, 2014, we held cash and cash equivalents of $627.5 million, including $430.0 million held by HRB Bank and $162.5 million held by our foreign subsidiaries.

Dividends of cash balances held by HRB Bank would be subject to regulatory approval and are therefore not available for general corporate purposes.

As of October 31, 2014, we also held investments, primarily mortgage backed securities, with a carrying value of $391.0 million which we classified as available for sale. As discussed above, it is our intent (subject to market conditions) to liquidate the majority of these securities in connection with a closing of the P&A Transaction.

Foreign Operations. Seasonal borrowing needs of our Canadian operations are typically funded by our U.S. operations. To mitigate foreign currency exchange rate risk, we sometimes enter into foreign exchange forward contracts. There were no forward contracts outstanding as of October 31, 2014.

As of October 31, 2014, our Canadian operations had approximately $52 million of U.S. dollar denominated borrowings owed to various U.S. subsidiaries. These borrowings may be repaid in full or in part at any time. Non-borrowed funds would have to be repatriated to be available to fund domestic operations, and in certain circumstances this would trigger additional income taxes on those amounts. We do not currently intend to repatriate any non-borrowed funds held by our foreign subsidiaries.

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in a decrease of $4.2 million during the six months ended October 31, 2014 compared to $7.9 million in the prior year.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – There have been no material changes in our contractual obligations and commercial commitments from those reported as of April 30, 2014 in our Annual Report on Form 10-K.

REGULATORY ENVIRONMENT

Because we will not close the P&A Transaction before the end of this calendar year, H&R Block, Inc. will be subject to the new SLHC regulatory capital requirements when they go into effect on January 1, 2015. Based upon current projections, we expect that H&R Block, Inc. will exceed the minimum regulatory capital requirements on January 1, 2015. H&R Block, Inc. must continue to meet the minimum regulatory capital requirements until we divest HRB Bank and cease to be an SLHC, which will restrict the capital allocation strategies available to us.

H&R Block, Inc. | Q2 FY2015 Form 10-Q 39

There have been no other material changes in our regulatory environment from those reported at April 30, 2014 in our Annual Report on Form 10-K.

NON-GAAP FINANCIAL INFORMATION

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.

We consider non-GAAP financial measures to be a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business on a consistent basis across reporting periods, as it eliminates the effect of items that are not indicative of our core operating performance.

The following are descriptions of adjustments we make for our non-GAAP financial measures:

▪ We exclude losses from settlements and estimated contingent losses from litigation and favorable reserve adjustments. This does not include legal defense costs.

▪ We exclude non-cash charges to adjust the carrying values of goodwill, intangible assets, other long-lived assets and investments to their estimated fair values.

▪ We exclude severance and other restructuring charges in connection with the termination of personnel, closure of offices and related costs.

▪ We exclude the gains and losses on business dispositions, including investment banking, legal and accounting fees from both business dispositions and acquisitions.

▪ We exclude the gains and losses on extinguishment of debt.

▪ We exclude the effects of discrete income tax reserve and related adjustments recorded in a specific quarter.

We may consider whether other significant items that arise in the future should also be excluded from our non-GAAP financial measures.

We measure the performance of our business using a variety of metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA and other adjusted financial metrics as identified in the table below. The adjusted financial metrics eliminate the impact of items that we do not consider indicative of our core operating performance and, we believe, provide meaningful information to assist in understanding our financial results, analyzing trends in our underlying business, and assessing our prospects for future performance. Additionally, we use EBITDA and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.

40 Q2 FY2015 Form 10-Q | H&R Block, Inc.

The following is a reconciliation of our reported results from continuing operations to our adjusted results from continuing operations, which are non-GAAP financial measures:

				(in 000s)
	Three months ended October 31, 2014
	EBITDA			Pretax loss			Net loss			Diluted EPS
As reported - from continuing operations	$	(147,661	)	$	(200,573	)	$	(113,227	)	$	(0.41	)
Adjustments:
Loss contingencies - litigation	44			44			28			—
Severance	238			238			150			—
Professional fees related to HRB Bank transaction	89			89			56			—
Asset impairments	433			433			272			—
Gain on sales of AFS securities	(1,398		)	(1,398		)	(870		)	—
Gain on sales of tax offices/businesses	(899		)	(899		)	(559		)	—
Discrete tax items	—			—			(12,100		)	(0.04		)
	(1,493		)	(1,493		)	(13,023		)	(0.04		)
As adjusted - from continuing operations	$	(149,154	)	$	(202,066	)	$	(126,250	)	$	(0.45	)

				(in 000s)
	Three months ended October 31, 2013
	EBITDA			Pretax loss			Net loss			Diluted EPS
As reported - from continuing operations	$	(138,380	)	$	(179,362	)	$	(103,015	)	$	(0.38	)
Adjustments:
Loss contingencies - litigation	350			350			214			—
Severance	1,828			1,828			1,122			—
Professional fees related to HRB Bank transaction	(5,217		)	(5,217		)	(3,198		)	(0.01		)
Gain on sales of tax offices/businesses	(599		)	(599		)	(367		)	—
Discrete tax items	—			—			(7,061		)	(0.03		)
	(3,638		)	(3,638		)	(9,290		)	(0.04		)
As adjusted - from continuing operations	$	(142,018	)	$	(183,000	)	$	(112,305	)	$	(0.42	)

				(in 000s)
	Six months ended October 31, 2014
	EBITDA			Pretax loss			Net loss			Diluted EPS
As reported - from continuing operations	$	(275,851	)	$	(376,389	)	$	(222,078	)	$	(0.81	)
Adjustments:
Loss contingencies - litigation	272			272			169			—
Severance	1,051			1,051			654			—
Professional fees related to HRB Bank transaction	114			114			71			—
Asset impairments	1,374			1,374			855			—
Gain on sales of AFS securities	(1,398		)	(1,398		)	(870		)	—
Gain on sales of tax offices/businesses	(899		)	(899		)	(559		)	—
Discrete tax items	—			—			(12,149		)	(0.04		)
	514			514			(11,829		)	(0.04		)
As adjusted - from continuing operations	$	(275,337	)	$	(375,875	)	$	(233,907	)	$	(0.85	)

H&R Block, Inc. | Q2 FY2015 Form 10-Q 41

				(in 000s)
	Six months ended October 31, 2013
	EBITDA			Pretax loss			Net loss			Diluted EPS
As reported - from continuing operations	$	(285,554	)	$	(363,856	)	$	(216,285	)	$	(0.79	)
Adjustments:
Loss contingencies - litigation	723			723			443			—
Severance	2,933			2,933			1,799			0.01
Professional fees related to HRB Bank transaction	1,807			1,807			1,108			—
Gain on sales of tax offices/businesses	(599		)	(599		)	(367		)	—
Discrete tax items	—			—			(6,904		)	(0.03		)
	4,864			4,864			(3,921		)	(0.02		)
As adjusted - from continuing operations	$	(280,690	)	$	(358,992	)	$	(220,206	)	$	(0.81	)

The following is a reconciliation of EBITDA:

										(in 000s)
	Three months ended October 31,						Six months ended October 31,
	2014			2013			2014			2013
Net loss - as reported	$	(111,998	)	$	(104,943	)	$	(228,230	)	$	(220,130	)
Add back:
Discontinued operations	(1,229		)	1,928			6,152			3,845
Income taxes of continuing operations	(87,346		)	(76,347		)	(154,311		)	(147,571		)
Interest expense of continuing operations	13,983			14,314			27,923			28,760
Depreciation and amortization of continuing operations	38,929			26,668			72,615			49,542
	(35,663		)	(33,437		)	(47,621		)	(65,424		)
EBITDA from continuing operations	$	(147,661	)	$	(138,380	)	$	(275,851	)	$	(285,554	)

FORWARD-LOOKING INFORMATION

This report and other documents filed with the Securities and Exchange Commission (SEC) may contain forward-looking statements. In addition, our senior management may make forward-looking statements orally to analysts, investors, the media and others. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "could," "may" or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, income, earnings per share, capital expenditures, dividends, stock repurchase, liquidity, capital structure or other financial items, descriptions of management's plans or objectives for future operations, services or products, or descriptions of assumptions underlying any of the above. All forward-looking statements speak only as of the date they are made and reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law.

By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, a variety of economic, competitive, operational and regulatory factors, many of which are beyond the Company's control. Investors should understand that it is not possible to predict or identify all such factors and, consequently, should not consider any such list to be a complete set of all potential risks or uncertainties.

42 Q2 FY2015 Form 10-Q | H&R Block, Inc.

Details about risks, uncertainties and assumptions that could affect various aspects of our business are included throughout our Annual Report on Form 10-K for the fiscal year ended April 30, 2014 and are also described from time to time in other filings with the SEC. Investors should carefully consider all of these risks, and should pay particular attention to Item 1A, "Risk Factors," and Item 7 under "Critical Accounting Policies" of our Annual Report on Form 10-K for the fiscal year ended April 30, 2014.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risks from those reported at April 30, 2014 in our Annual Report on Form 10-K.

ITEM 4.     CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES – As of the end of the period covered by this Form 10-Q, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). The controls evaluation was done under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING – There were no changes during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II    OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, see discussion in Part I, Item 1, note 13 to the consolidated financial statements.

ITEM 1A.    RISK FACTORS

We face substantial litigation in connection with our various business activities, and such litigation may damage our reputation, impair our product offerings or result in material liabilities and losses.

We have been named and from time to time will likely continue to be named, as a defendant in various legal actions, including arbitrations, class actions, actions or inquiries by state attorneys general, and other litigation arising in connection with our various business activities, including relating to our various service and product offerings. We also grant our franchisees a limited license to use our registered trademarks and, accordingly, there is risk that one or more of the franchisees may be identified as being controlled by us. Third parties, regulators or courts may seek to hold us responsible for the actions or failures to act by our franchisees. Adverse outcomes related to litigation could result in substantial damages and could cause our earnings to decline. Negative public opinion could also result from our subsidiaries' actual or alleged conduct in such claims, possibly damaging our reputation, which, in turn, could adversely affect our business prospects and cause the market price of our securities to decline.

In addition, we have been sued, and certain of our competitors have been sued, in connection with the offering of different types of refund transfer products. Further, we have received an inquiry from the California Attorney General requesting information regarding our refund transfer product, the RAC. In a case involving one of our competitors, a California appellate court affirmed a trial court's ruling that the competitor's specific version of a refund transfer product was subject to truth-in-lending and other related laws. Following the appellate court's ruling, the case was denied further appellate review. We believe there are differences that distinguish our RAC product from the product that was the subject of the competitor's case described above. Revenues from our RAC product totaled $181 million in fiscal year 2014; any requirement that materially alters our offering of RACs, including limitations on the fees we charge or disclosure requirements that could reduce the demand for these products, could have a material adverse impact on our business and our consolidated financial position, results of operations and cash flows.

There have been no other material changes in our risk factors from those reported at April 30, 2014 in our Annual Report on Form 10-K.

H&R Block, Inc. | Q2 FY2015 Form 10-Q 43

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

A summary of our purchases of H&R Block common stock during the second quarter of fiscal year 2015 is as follows:

(in 000s, except per share amounts)
	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans  or Programs (2)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans  or Programs (2)
August 1 – August 31	—	$	32.01	—	$	857,504
September 1 – September 30	1	$	33.52	—	$	857,504
October 1 – October 31	27	$	30.54	—	$	857,504
	28	$	30.62

⁽¹⁾  We purchased approximately 28 thousand shares in connection with funding employee income tax withholding obligations arising upon the lapse of restrictions on restricted shares and restricted share units. There were no open-market repurchases.

⁽²⁾  In June 2008, our Board of Directors approved an authorization to purchase up to $2.0 billion of our common stock through June 2012. In June 2012, our Board of Directors extended this authorization through June 2015.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.    OTHER INFORMATION

None.

ITEM 6.     EXHIBITS

The following exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K:

10.1 Amended and Restated H&R Block Executive Performance Plan, filed as Exhibit 10.1 to the Company's current report on Form 8-K filed September 12, 2014, file number 1-6089, is incorporated herein by reference.

10.2 Letter Agreement among H&R Block Bank, Block Financial LLC, and BofI Federal Bank, effective October 23, 2014, filed as Exhibit 10.1 to the Company's current report on Form 8-K filed October 23, 2014, file number 1-6089, is incorporated herein by reference.

31.1 Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification by Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification by Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema

101.CAL XBRL Extension Calculation Linkbase

101.LAB XBRL Taxonomy Extension Label Linkbase

101.PRE XBRL Taxonomy Extension Presentation Linkbase

101.DEF XBRL Taxonomy Extension Definition Linkbase

44 Q2 FY2015 Form 10-Q | H&R Block, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

H&R BLOCK, INC.

/s/ William C. Cobb

William C. Cobb

President and Chief Executive Officer

December 9, 2014

/s/ Gregory J. Macfarlane

Gregory J. Macfarlane

Chief Financial Officer

December 9, 2014

/s/ Jeffrey T. Brown

Jeffrey T. Brown

Chief Accounting and Risk Officer

December 9, 2014

H&R Block, Inc. | Q2 FY2015 Form 10-Q 45

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William C. Cobb, Chief Executive Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of H&R Block, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	December 9, 2014	/s/ William C. Cobb
		William C. Cobb
		Chief Executive Officer H&R Block, Inc.

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory J. Macfarlane, Chief Financial Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of H&R Block, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	December 9, 2014	/s/ Gregory J. Macfarlane
		Gregory J. Macfarlane
		Chief Financial Officer H&R Block, Inc.

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of H&R Block, Inc. (the “Company”) on Form 10‑Q for the fiscal quarter ending October 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William C. Cobb, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ William C. Cobb

William C. Cobb

Chief Executive Officer

H&R Block, Inc.

December 9, 2014

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of H&R Block, Inc. (the “Company”) on Form 10‑Q for the fiscal quarter ending October 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregory J. Macfarlane, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Gregory J. Macfarlane

Gregory J. Macfarlane

Chief Financial Officer

H&R Block, Inc.

December 9, 2014

XML

Loss Per Share and Stockholders' Equity (Details) (USD $)	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014		Oct. 31, 2013	Apr. 30, 2014	Apr. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax	$ (21,000)	$ 4,299,000	$ (21,000)		$ 4,299,000	$ 3,334,000	$ 6,809,000
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	6,598,000	(2,836,000)	6,598,000		(2,836,000)	1,843,000	3,741,000
Accumulated other comprehensive income	6,577,000	1,463,000	6,577,000		1,463,000	5,177,000	10,550,000
Other Comprehensive Income (Loss), before Reclassifications, before Tax			4,128,000		(13,424,000)
Other Comprehensive Income (Loss), Before Reclassifications, Tax			2,713,000		(4,337,000)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			1,415,000
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, before Tax			0	[1]
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax			(24,000)	[1]
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Tax			0
Tax effect of reclassification adjustment for gains included in income			(9,000)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Net of Tax			0
Reclassification adjustment for gains included in income	(589,000)	0	(15,000)		0
Change in foreign currency translation adjustments	(3,810,000)	582,000	(3,355,000)		(2,510,000)
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax			4,755,000		(6,577,000)
Other Comprehensive Income (Loss), Net of Tax			1,400,000		(9,087,000)
Net loss from continuing operations attributable to shareholders	(113,227,000)	(103,015,000)	(222,078,000)		(216,285,000)
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic	97,000	92,000	186,000		154,000
Net loss from continuing operations attributable to common shareholders	(113,324,000)	(103,107,000)	(222,264,000)		(216,439,000)
Basic weighted average common shares (in shares)	275,106,000	273,907,000	274,841,000		273,494,000
Potential dilutive shares (in shares)	0	0	0		0
Weighted Average Number of Shares Outstanding, Diluted	275,106,000	273,907,000	274,841,000		273,494,000
Basic (in usd per share)	$ (0.41)	$ (0.38)	$ (0.81)		$ (0.79)
Narrative Details [Abstract]
Antidilutive securities excluded from computation of earnings per share, amount (in shares)			5,400,000		6,000,000
Shares repurchased during the period, (in shares)			300,000		200,000
Shares repurchased during the period, Value			10,200,000		5,300,000
Shares issued during period (in shares)			1,200,000		1,600,000
Nonvested units granted			1,000,000
Stock-based compensation	7,100,000	6,200,000	14,600,000		10,800,000
Unrecognized compensation costs, options	400,000		400,000
Unrecognized compensation costs, nonvested shares and units	43,200,000		43,200,000
Accumulated Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), before Reclassifications, before Tax			(3,355,000)		(2,510,000)
Other Comprehensive Income (Loss), Before Reclassifications, Tax			0		0
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			(3,355,000)
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), before Reclassifications, before Tax			7,483,000		(10,914,000)
Other Comprehensive Income (Loss), Before Reclassifications, Tax			2,713,000		(4,337,000)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			$ 4,770,000

[1] {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmExNzg1MjZhOTY3YzQyMzFhZjAxYmRhZTc0YTAyMDBhfFRleHRTZWxlY3Rpb246M0RBQzc5NzdBNUQ3QzJBOUJDNzE0MjVERjY0OTgwRUMM}

XML

Mortgage Loans Held For Investment And Related Assets (Schedule Of Allowance For Impaired Loans) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Mortgage Loans Held For Investment And Related Assets [Abstract]
Based on collateral value method	$ 1,756	$ 2,418	$ 2,583
Based on discounted cash flow method	4,237	4,346	4,598
Total allowance for loans	$ 5,993	$ 6,764	$ 7,181

XML

Mortgage Loans Held For Investment And Related Assets (Schedule Of Portfolio Balance And Related Allowance) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Mortgage Loans Held For Investment And Related Assets [Line Items]
Portfolio Balance	$ 258,728	$ 277,423	$ 306,103
Related Allowance	9,761	11,272	12,704
Pooled (less than 60 days past due)
Mortgage Loans Held For Investment And Related Assets [Line Items]
Portfolio Balance	147,614	158,496	178,497
Related Allowance	3,768	4,508	5,523
Individually (TDRs)
Mortgage Loans Held For Investment And Related Assets [Line Items]
Portfolio Balance	40,201	43,865	47,011
Related Allowance	4,237	4,346	4,598
Individually (60 days or more past due)
Mortgage Loans Held For Investment And Related Assets [Line Items]
Portfolio Balance	70,913	75,062	80,595
Related Allowance	$ 1,756	$ 2,418	$ 2,583

XML

Loss Contingencies Arising From Representations and Warranties of Our Discontinued Mortgage Operations (Narrative) (Details) (USD $)	36 Months Ended	48 Months Ended	60 Months Ended
	Apr. 30, 2007	Apr. 30, 2012	Apr. 30, 2013	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Loss Contingencies [Line Items]
Percentage of fraud on originated loans	68.00%
Claims received for loans		$ 1,800,000,000	$ 2,100,000,000
Loss Contingency Accrual				10,300,000	23,700,000	20,600,000
Principal Assets of SCC				520,000,000
SCC [Member]
Loss Contingencies [Line Items]
Loss Contingency Accrual, Product Liability, Gross			$ 158,765,000	$ 193,765,000	$ 183,765,000	$ 158,765,000

XML

Mortgage Loans Held For Investment And Related Assets (Information Related To Activities Of Non-Performing Assets) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Mortgage Loans Held For Investment And Related Assets [Line Items]
Average impaired loans	$ 119,110	$ 145,178
Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Average impaired loans	99,706	121,532
All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Average impaired loans	$ 19,404	$ 23,646

XML

Mortgage Loans Held For Investment And Related Assets (Schedule Of Mortgage Loan Portfolio) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013	Apr. 30, 2013
Mortgage Loans Held For Investment And Related Assets [Abstract]
Adjustable-rate loans	$ 138,808	$ 149,480	$ 165,289
Adjustable-rate loans, percent of total loans	54.00%	54.00%	54.00%
Fixed-rate loans	119,920	127,943	140,814
Fixed-rate loans, percent of Total loans	46.00%	46.00%	46.00%
Total loans	258,728	277,423	306,103
Total loans, percent of Total loans	100.00%	100.00%	100.00%
Unamortized deferred fees and costs	2,125	2,277	2,508
Less: Allowance for loan losses	(9,761)	(11,272)	(12,704)	(14,314)
Total	$ 251,092	$ 268,428	$ 295,907

XML

Commitments And Contingencies (Tables)

6 Months Ended

Oct. 31, 2014

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® (POM) program, the current portion of which is included in accounts payable, accrued expenses and other current liabilities and the long-term portion of which is included in other noncurrent liabilities in the consolidated balance sheets, are as follows:

(in 000s)
Six months ended October 31,	2014			2013
Balance, beginning of the period	$	145,237		$	146,286
Amounts deferred for new guarantees issued	2,104			1,840
Revenue recognized on previous deferrals	(40,816		)	(46,977		)
Balance, end of the period	$	106,525		$	101,149

XML

Regulatory Capital Requirements (HRB Bank's Regulatory Capital Requirements) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Sep. 30, 2014		Apr. 30, 2014	Mar. 31, 2014		Sep. 30, 2013
Banking and Thrift [Abstract]
Total risk-based capital ratio, Amount		$ 595,148	[1]		$ 563,899	[1]	$ 506,449	[1]
Total risk-based capital ratio		199.40%	[1]		168.50%	[1]	140.00%	[1]
Total risk-based capital ratio, Minimum Capital Requirement, Amount		23,877	[1]		26,771	[1]	28,950	[1]
Total risk-based capital ratio, Minimum Capital Requirement, Ratio		8.00%	[1]		8.00%	[1]	8.00%	[1]
Total risk-based capital ratio, Minimum to be Well Capitalized, Amount		29,846	[1]		33,464	[1]	36,188	[1]
Total risk-based capital ratio, Minimum to be Well Capitalized, Ratio		10.00%	[1]		10.00%	[1]	10.00%	[1]
Tier 1 risk-based capital ratio, Amount		591,293	[2]		559,572	[2]	501,720	[2]
Tier 1 risk-based capital ratio		198.10%	[2]		167.20%	[2]	138.60%	[2]
Tier 1 risk-based capital ratio, Minimum to be Well Capitalized, Amount		17,908	[2]		20,079	[2]	21,713	[2]
Tier 1 risk-based capital ratio, Minimum to be Well Capitalized, Ratio		6.00%	[2]		6.00%	[2]	6.00%	[2]
Tier 1 capital ratio (leverage), Amount		591,293	[3]		559,572	[3]	501,720	[3]
Tier 1 capital ratio (leverage)		54.30%	[3]		32.10%	[3]	40.40%	[3]
Tier 1 capital ratio (leverage), Minimum Capital Requirement, Amount		130,689	[3]		209,041	[3]	148,869	[3]
Tier 1 capital ratio (leverage), Minimum Capital Requirement, Ratio		12.00%	[3],[4]	4.00%	12.00%	[3],[4]	12.00%	[3]
Tier 1 capital ratio (leverage), Minimum to be Well Capitalized, Amount		54,454	[3]		87,101	[3]	62,029	[3]
Tier 1 capital ratio (leverage), Minimum to be Well Capitalized, Ratio		5.00%	[3]		5.00%	[3]	5.00%	[3]
Tangible equity ratio, Amount		591,293	[5]		559,572	[5]	501,720	[5]
Tangible equity ratio		54.30%	[5]		32.10%	[5]	40.40%	[5]
Tangible equity ratio, Minimum Capital Requirement, Amount		$ 16,336	[5]		$ 26,130	[5]	$ 18,609	[5]
Tangible equity ratio, Minimum Capital Requirement, Ratio		1.50%	[5]		1.50%	[5]	1.50%	[5]
Minimum leverage capital per calendar quarter	12.00%

[1] Total risk-based capital divided by risk-weighted assets.

[2] Tier 1 (core) capital less deduction for low-level recourse and residual interest divided by risk-weighted assets.

[3] Tier 1 (core) capital divided by adjusted total assets.

[4] Effective April 5, 2012, the minimum capital requirement was changed to 4% by the OCC, although HRB Bank plans to maintain a minimum of 12.0% leverage capital at the end of each calendar quarter.

[5] Tangible capital divided by tangible assets.

XML

Goodwill And Intangible Assets (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization	$ 13.2	$ 6.5	$ 24.5	$ 12.6
Estimated amortization, 2015	52.0		52.0
Estimated amortization, 2016	48.1		48.1
Estimated amortization, 2017	40.6		40.6
Estimated amortization, 2018	35.8		35.8
Estimated amortization, 2019	$ 31.5		$ 31.5

XML

Condensed Consolidating Financial Statements (Balance Sheets) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013	Apr. 30, 2013
Condensed Financial Statements, Captions [Line Items]
Cash & cash equivalents	$ 627,490	$ 2,185,307	$ 790,772	$ 1,747,584
Cash and cash equivalents - restricted	55,543	115,319	47,521
Receivables, net - short-term, Carrying Amount	107,705	191,618	131,701
Prepaid expenses and other current assets	285,463	198,267	225,660
Investments in available-for-sale securities	381,180	423,495
Total current assets	1,457,381	3,114,006	1,195,654
Mortgage loans held for investment, net	251,092	268,428	295,907
Investments in available-for-sale securities	9,774	4,329	465,344
Property and equipment, at cost less accumulated depreciation and amortization of $491,153, $449,738 and $446,049	318,225	304,911	311,157
Intangible assets, net	414,045	355,622	296,213
Goodwill	464,182	436,117	442,812	434,782
Investments in subsidiaries
Amounts due from affiliates	0	0	0
Other assets	176,591	210,116	267,426
Total assets	3,091,290	4,693,529	3,274,513
Customer deposits	454,860	769,785	655,129
Accounts payable, accrued expenses and other current liabilities	436,830	569,007	426,994
Accrued salaries, wages and payroll taxes	36,215	167,032	41,584
Accrued income taxes	147,000	406,655	22,475
Current portion of long-term debt	772	400,637	400,503
Total current liabilities	1,075,677	2,313,116	1,546,685
Long-term debt	505,588	505,837	506,078
Other noncurrent liabilities	271,349	318,027	266,775
Amounts due to affiliates
Total liabilities	1,852,614	3,136,980	2,319,538
Stockholders’ equity	1,238,676	1,556,549	954,975
Total liabilities and stockholders' equity	3,091,290	4,693,529	3,274,513
Block Financial Issuer [Member]
Condensed Financial Statements, Captions [Line Items]
Cash & cash equivalents	432,224	612,376	389,915	558,110
Cash and cash equivalents - restricted	5,431	67,463	6,795
Receivables, net - short-term, Carrying Amount	84,196	89,975	99,867
Prepaid expenses and other current assets	113,571	10,202	14,543
Investments in available-for-sale securities	381,080	423,495
Total current assets	1,016,502	1,203,511	511,120
Mortgage loans held for investment, net	251,092	268,428	295,907
Investments in available-for-sale securities			460,935
Property and equipment, at cost less accumulated depreciation and amortization of $491,153, $449,738 and $446,049	157	121	145
Intangible assets, net
Goodwill
Investments in subsidiaries
Amounts due from affiliates	10	386,818	397,526
Other assets	157,472	173,168	140,811
Total assets	1,425,233	2,032,046	1,806,444
Customer deposits	455,134	770,885	655,575
Accounts payable, accrued expenses and other current liabilities	229,262	223,677	183,342
Accrued salaries, wages and payroll taxes	2,197	2,190	1,881
Accrued income taxes	47,732	71,132	29,020
Current portion of long-term debt		399,882	399,765
Total current liabilities	734,325	1,467,766	1,269,583
Long-term debt	497,753	497,612	497,471
Other noncurrent liabilities	47,477	5,766	12,428
Amounts due to affiliates	91,909
Total liabilities	1,371,464	1,971,144	1,779,482
Stockholders’ equity	53,769	60,902	26,962
Total liabilities and stockholders' equity	1,425,233	2,032,046	1,806,444
Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Cash & cash equivalents	195,540	1,574,031	401,303	1,192,197
Cash and cash equivalents - restricted	50,112	47,856	40,726
Receivables, net - short-term, Carrying Amount	23,430	101,643	31,834
Prepaid expenses and other current assets	171,892	188,065	217,662
Investments in available-for-sale securities	100
Total current assets	441,074	1,911,595	691,525
Mortgage loans held for investment, net
Investments in available-for-sale securities	9,774	4,329	4,409
Property and equipment, at cost less accumulated depreciation and amortization of $491,153, $449,738 and $446,049	318,068	304,790	311,012
Intangible assets, net	414,045	355,622	296,213
Goodwill	464,182	436,117	442,812
Investments in subsidiaries	53,769	60,902	26,962
Amounts due from affiliates	92,974	397	2,167,944
Other assets	19,119	25,677	118,103
Total assets	1,813,005	3,099,429	4,058,980
Customer deposits
Accounts payable, accrued expenses and other current liabilities	206,625	344,573	243,071
Accrued salaries, wages and payroll taxes	34,018	164,842	39,703
Accrued income taxes	99,268	335,523
Current portion of long-term debt	772	755	738
Total current liabilities	340,683	845,693	283,512
Long-term debt	7,835	8,225	8,607
Other noncurrent liabilities	223,872	312,261	254,347
Amounts due to affiliates	565,397	1,028,919	397,526
Total liabilities	1,137,787	2,195,098	943,992
Stockholders’ equity	675,218	904,331	3,114,988
Total liabilities and stockholders' equity	1,813,005	3,099,429	4,058,980
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Cash & cash equivalents
Cash and cash equivalents - restricted
Receivables, net - short-term, Carrying Amount	79
Prepaid expenses and other current assets
Investments in available-for-sale securities
Total current assets	79
Mortgage loans held for investment, net
Investments in available-for-sale securities
Property and equipment, at cost less accumulated depreciation and amortization of $491,153, $449,738 and $446,049
Intangible assets, net
Goodwill
Investments in subsidiaries	675,218	904,331	3,114,988
Amounts due from affiliates	565,387	642,101	0
Other assets		11,271	8,512
Total assets	1,240,684	1,557,703	3,123,500
Customer deposits
Accounts payable, accrued expenses and other current liabilities	943	757	581
Accrued salaries, wages and payroll taxes
Accrued income taxes
Current portion of long-term debt
Total current liabilities	943	757	581
Long-term debt
Other noncurrent liabilities
Amounts due to affiliates	1,065	397	2,167,944
Total liabilities	2,008	1,154	2,168,525
Stockholders’ equity	1,238,676	1,556,549	954,975
Total liabilities and stockholders' equity	1,240,684	1,557,703	3,123,500
Intersegment Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
Cash & cash equivalents	(274)	(1,100)	(446)	(2,723)
Cash and cash equivalents - restricted
Receivables, net - short-term, Carrying Amount
Prepaid expenses and other current assets			(6,545)
Investments in available-for-sale securities
Total current assets	(274)	(1,100)	(6,991)
Mortgage loans held for investment, net
Investments in available-for-sale securities
Property and equipment, at cost less accumulated depreciation and amortization of $491,153, $449,738 and $446,049
Intangible assets, net
Goodwill
Investments in subsidiaries	(728,987)	(965,233)	(3,141,950)
Amounts due from affiliates	(658,371)	(1,029,316)	(2,565,470)
Other assets
Total assets	(1,387,632)	(1,995,649)	(5,714,411)
Customer deposits	(274)	(1,100)	(446)
Accounts payable, accrued expenses and other current liabilities
Accrued salaries, wages and payroll taxes
Accrued income taxes			(6,545)
Current portion of long-term debt
Total current liabilities	(274)	(1,100)	(6,991)
Long-term debt
Other noncurrent liabilities
Amounts due to affiliates	(658,371)	(1,029,316)	(2,565,470)
Total liabilities	(658,645)	(1,030,416)	(2,572,461)
Stockholders’ equity	(728,987)	(965,233)	(3,141,950)
Total liabilities and stockholders' equity	$ (1,387,632)	$ (1,995,649)	$ (5,714,411)

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Condensed Consolidating Financial Statements (Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Condensed Financial Statements, Captions [Line Items]
Repayments of Long-term Debt	$ 400,000	$ 0
Net cash provided by (used in) operating activities:	(627,577)	(492,373)
Purchases of AFS securities	(100)	(45,158)
Maturities of and payments received on AFS securities	49,013	55,615
Principal payments on mortgage loans held for investment, net	13,451	24,340
Capital expenditures	(70,927)	(86,926)
Payments made for business acquisitions, net of cash acquired	94,230	20,927
Loans made to franchisees	(18,251)	(22,114)
Repayments from franchisees	29,637	15,883
Intercompany payments/investments in subsidiaries
Other, net	10,685	15,255
Net cash provided by (used in) investing activities	(80,722)	(64,032)
Customer banking deposits, net	(316,269)	(275,800)
Dividends paid	(109,871)	(109,324)
Proceeds from exercise of stock options	14,477	24,536
Intercompany borrowings (repayments)
Other, net	(33,639)	(31,948)
Net cash used in financing activities	(845,302)	(392,536)
Effects of exchange rates on cash	(4,216)	(7,871)
Net decrease in cash and cash equivalents	(1,557,817)	(956,812)
Cash & cash equivalents	627,490	790,772
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Repayments of Long-term Debt
Net cash provided by (used in) operating activities:		799
Purchases of AFS securities
Maturities of and payments received on AFS securities
Principal payments on mortgage loans held for investment, net
Capital expenditures
Payments made for business acquisitions, net of cash acquired
Loans made to franchisees
Repayments from franchisees
Intercompany payments/investments in subsidiaries
Other, net
Net cash provided by (used in) investing activities
Customer banking deposits, net
Dividends paid	(109,871)	(109,324)
Proceeds from exercise of stock options	14,477	24,536
Intercompany borrowings (repayments)	105,641	89,318
Other, net	(10,247)	(5,329)
Net cash used in financing activities		(799)
Effects of exchange rates on cash
Net decrease in cash and cash equivalents
Cash & cash equivalents
Block Financial Issuer [Member]
Condensed Financial Statements, Captions [Line Items]
Repayments of Long-term Debt	400,000
Net cash provided by (used in) operating activities:	55,612	46,969
Purchases of AFS securities		(45,158)
Maturities of and payments received on AFS securities	49,013	55,615
Principal payments on mortgage loans held for investment, net	13,451	24,340
Capital expenditures	(119)	(57)
Payments made for business acquisitions, net of cash acquired
Loans made to franchisees	(18,180)	(22,114)
Repayments from franchisees	29,404	15,883
Intercompany payments/investments in subsidiaries	400,000	23,036
Other, net	4,372	11,368
Net cash provided by (used in) investing activities	477,941	62,913
Customer banking deposits, net	(317,095)	(278,077)
Dividends paid
Proceeds from exercise of stock options
Intercompany borrowings (repayments)	3,390
Other, net
Net cash used in financing activities	(713,705)	(278,077)
Effects of exchange rates on cash
Net decrease in cash and cash equivalents	(180,152)	(168,195)
Cash & cash equivalents	432,224	389,915
Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Repayments of Long-term Debt
Net cash provided by (used in) operating activities:	(683,189)	(540,141)
Purchases of AFS securities	(100)
Maturities of and payments received on AFS securities
Principal payments on mortgage loans held for investment, net
Capital expenditures	(70,808)	(86,869)
Payments made for business acquisitions, net of cash acquired	94,230	20,927
Loans made to franchisees	(71)
Repayments from franchisees	233
Intercompany payments/investments in subsidiaries	(109,031)	(89,318)
Other, net	6,313	3,887
Net cash provided by (used in) investing activities	(267,694)	(193,227)
Customer banking deposits, net
Dividends paid
Proceeds from exercise of stock options
Intercompany borrowings (repayments)	(400,000)	(23,036)
Other, net	(23,392)	(26,619)
Net cash used in financing activities	(423,392)	(49,655)
Effects of exchange rates on cash	(4,216)	(7,871)
Net decrease in cash and cash equivalents	(1,378,491)	(790,894)
Cash & cash equivalents	195,540	401,303
Intersegment Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
Repayments of Long-term Debt
Net cash provided by (used in) operating activities:
Purchases of AFS securities
Maturities of and payments received on AFS securities
Principal payments on mortgage loans held for investment, net
Capital expenditures
Payments made for business acquisitions, net of cash acquired
Loans made to franchisees
Repayments from franchisees
Intercompany payments/investments in subsidiaries	(290,969)	66,282
Other, net
Net cash provided by (used in) investing activities	(290,969)	66,282
Customer banking deposits, net	826	2,277
Dividends paid
Proceeds from exercise of stock options
Intercompany borrowings (repayments)	290,969	(66,282)
Other, net
Net cash used in financing activities	291,795	(64,005)
Effects of exchange rates on cash
Net decrease in cash and cash equivalents	826	2,277
Cash & cash equivalents	$ (274)	$ (446)

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Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations (Details) (USD $)	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014	Apr. 30, 2013
Loss Contingency Accrual [Roll Forward]
Provisions	$ 10,300,000	$ 20,600,000	$ 23,700,000
SCC [Member]
Loss Contingencies [Line Items]
Loss Contingency Accrual, Product Liability, Gross	193,765,000	158,765,000	183,765,000	158,765,000
Loss Contingency Accrual [Roll Forward]
Payments	0	0
Balance, end of the period	$ 10,000,000	$ 0

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Loss Per Share and Stockholders' Equity (Tables)

6 Months Ended

Oct. 31, 2014

Earnings Per Share [Abstract]

Computations Of Basic And Diluted Earnings Per Share

The computations of basic and diluted earnings per share from continuing operations are as follows:

(in 000s, except per share amounts)
	Three months ended October 31,						Six months ended October 31,
	2014			2013			2014			2013
Net loss from continuing operations attributable to shareholders	$	(113,227	)	$	(103,015	)	$	(222,078	)	$	(216,285	)
Amounts allocated to participating securities	(97		)	(92		)	(186		)	(154		)
Net loss from continuing operations attributable to common shareholders	$	(113,324	)	$	(103,107	)	$	(222,264	)	$	(216,439	)
Basic weighted average common shares	275,106			273,907			274,841			273,494
Potential dilutive shares	—			—			—			—
Dilutive weighted average common shares	275,106			273,907			274,841			273,494
Loss per share from continuing operations attributable to common shareholders:
Basic	$	(0.41	)	$	(0.38	)	$	(0.81	)	$	(0.79	)
Diluted	(0.41		)	(0.38		)	(0.81		)	(0.79		)

Schedule of Comprehensive Income (Loss)

OTHER COMPREHENSIVE INCOME –Components of other comprehensive income include foreign currency translation adjustments and the change in net unrealized gains or losses on AFS marketable securities, and are as follows:

(in 000s)
	Foreign Currency Translation Adjustments			Unrealized Gain (Loss) on AFS Securities			Total
Balances as of May 1, 2014	$	3,334		$	1,843		$	5,177
Other comprehensive income (loss) before reclassifications:
Gross gains (losses) arising during the year	(3,355		)	7,483			4,128
Income taxes	—			2,713			2,713
	(3,355		)	4,770			1,415
Amounts reclassified to net income:
Gross amount reclassified	—			(24		)	(24		)
Income taxes	—			(9		)	(9		)
	—			(15		)	(15		)
Net other comprehensive income (loss)	(3,355		)	4,755			1,400
Balances as of October 31, 2014	$	(21	)	$	6,598		$	6,577
Balances as of May 1, 2013	$	6,809		$	3,741		$	10,550
Other comprehensive income (loss) before reclassifications:
Gross losses arising during the year	(2,510		)	(10,914		)	(13,424		)
Income taxes	—			(4,337		)	(4,337		)
Net other comprehensive loss	(2,510		)	(6,577		)	(9,087		)
Balances as of October 31, 2013	$	4,299		$	(2,836	)	$	1,463

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Mortgage Loans Held For Investment And Related Assets (Schedule Of Credit Quality Indicators) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	$ 258,728	$ 277,423	$ 306,103
Occupancy Status, Owner Occupied
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	181,836
Occupancy Status, Non-Owner Occupied
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	76,892
Documentation Level, Full Documentation
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	127,131
Documentation Level, Limited Documentation
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	16,790
Documentation Level, Stated Income
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	95,379
Documentation Level, No Documentation
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	19,428
Internal Risk Rating, High
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	41,758
Internal Risk Rating, Medium
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	107,075
Internal Risk Rating, Low
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	109,895
Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	148,833
Purchased From SCC | Occupancy Status, Owner Occupied
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	109,069
Purchased From SCC | Occupancy Status, Non-Owner Occupied
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	39,764
Purchased From SCC | Documentation Level, Full Documentation
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	49,157
Purchased From SCC | Documentation Level, Limited Documentation
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	4,676
Purchased From SCC | Documentation Level, Stated Income
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	83,074
Purchased From SCC | Documentation Level, No Documentation
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	11,926
Purchased From SCC | Internal Risk Rating, High
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	41,758
Purchased From SCC | Internal Risk Rating, Medium
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	107,075
Purchased From SCC | Internal Risk Rating, Low
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio
All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	109,895
All Other | Occupancy Status, Owner Occupied
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	72,767
All Other | Occupancy Status, Non-Owner Occupied
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	37,128
All Other | Documentation Level, Full Documentation
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	77,974
All Other | Documentation Level, Limited Documentation
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	12,114
All Other | Documentation Level, Stated Income
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	12,305
All Other | Documentation Level, No Documentation
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	7,502
All Other | Internal Risk Rating, High
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio
All Other | Internal Risk Rating, Medium
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio
All Other | Internal Risk Rating, Low
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	$ 109,895

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Receivables (Schedule Of Loans Receivable) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	$ 159,451	$ 244,196	$ 184,670
Accounts Receivable, Gross, Noncurrent	101,805	111,795	201,689
Emerald Advance lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	20,073
Short-term		20,577	21,692
Accounts Receivable, Gross, Noncurrent	2,778	3,862	6,161
Financing Receivable, Gross	22,851
Loans to franchisees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	62,568
Short-term		63,716	70,390
Accounts Receivable, Gross, Noncurrent	84,462	90,747	108,874
Receivables for tax preparation and related fees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	1,955
Short-term		48,812	2,036
Accounts Receivable, Gross, Noncurrent	$ 0	$ 0	$ 0

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Condensed Consolidating Financial Statements (Income Statement) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Condensed Financial Statements, Captions [Line Items]
Total revenues	$ 134,628	$ 134,340	$ 268,214	$ 261,535
Cost of revenues	221,697	207,063	419,423	403,313
Selling, general and administrative	97,379	94,092	194,579	190,789
Total operating expenses	319,076	301,155	614,002	594,102
Other income (expense), net (1)	(2,282)	1,254	(2,963)	(3,685)
Interest Expense, Debt	13,843	13,801	27,638	27,604
Loss from continuing operations before income tax benefit	(200,573)	(179,362)	(376,389)	(363,856)
Income tax benefit	(87,346)	(76,347)	(154,311)	(147,571)
Net loss from continuing operations	(113,227)	(103,015)	(222,078)	(216,285)
Net loss from discontinued operations	1,229	(1,928)	(6,152)	(3,845)
NET LOSS	(111,998)	(104,943)	(228,230)	(220,130)
Other comprehensive loss	1,094	1,720	1,400	(9,087)
Comprehensive loss	(110,904)	(103,223)	(226,830)	(229,217)
Block Financial Issuer [Member]
Condensed Financial Statements, Captions [Line Items]
Total revenues	20,891	21,170	44,751	48,385
Cost of revenues	10,851	13,240	22,658	38,906
Selling, general and administrative	5,854	1,369	9,197	15,407
Total operating expenses	16,705	14,609	31,855	54,313
Other income (expense), net (1)	2,232	1,662	1,396	1,706
Interest Expense, Debt	13,742	13,692	27,436	27,385
Loss from continuing operations before income tax benefit	(7,324)	(5,469)	(13,144)	(31,607)
Income tax benefit	(7,020)	(2,203)	(9,663)	(11,601)
Net loss from continuing operations	(304)	(3,266)	(3,481)	(20,006)
Net loss from discontinued operations	(1,634)	(1,553)	(8,843)	(2,716)
NET LOSS	(1,938)	(4,819)	(12,324)	(22,722)
Other comprehensive loss	4,382	1,108	4,261	(6,616)
Comprehensive loss	2,444	(3,711)	(8,063)	(29,338)
Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Total revenues	113,747	113,204	223,556	213,340
Cost of revenues	210,854	193,857	396,853	364,597
Selling, general and administrative	91,527	92,723	185,387	175,382
Total operating expenses	302,381	286,580	582,240	539,979
Other income (expense), net (1)	(18,005)	(408)	(19,076)	(5,391)
Interest Expense, Debt	101	109	202	219
Loss from continuing operations before income tax benefit	(206,740)	(173,893)	(377,962)	(332,249)
Income tax benefit	(77,671)	(74,144)	(139,232)	(135,970)
Net loss from continuing operations	(129,069)	(99,749)	(238,730)	(196,279)
Net loss from discontinued operations	2,863	(375)	2,691	(1,129)
NET LOSS	(126,206)	(100,124)	(236,039)	(197,408)
Other comprehensive loss	1,094	612	1,400	(2,471)
Comprehensive loss	(125,112)	(99,512)	(234,639)	(199,879)
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Total revenues
Cost of revenues
Selling, general and administrative
Total operating expenses
Other income (expense), net (1)	(114,653)	(104,943)	(233,646)	(220,130)
Interest Expense, Debt	0	0	0	0
Loss from continuing operations before income tax benefit	(114,653)	(104,943)	(233,646)	(220,130)
Income tax benefit	(2,655)		(5,416)
Net loss from continuing operations	(111,998)	(104,943)	(228,230)	(220,130)
Net loss from discontinued operations	0		0
NET LOSS	(111,998)	(104,943)	(228,230)	(220,130)
Other comprehensive loss	1,094	1,720	1,400	(9,087)
Comprehensive loss	(110,904)	(103,223)	(226,830)	(229,217)
Intersegment Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
Total revenues	(10)	(34)	(93)	(190)
Cost of revenues	(8)	(34)	(88)	(190)
Selling, general and administrative	(2)		(5)
Total operating expenses	(10)	(34)	(93)	(190)
Other income (expense), net (1)	128,144	104,943	248,363	220,130
Interest Expense, Debt	0	0	0	0
Loss from continuing operations before income tax benefit	128,144	104,943	248,363	220,130
Income tax benefit
Net loss from continuing operations	128,144	104,943	248,363	220,130
Net loss from discontinued operations
NET LOSS	128,144	104,943	248,363	220,130
Other comprehensive loss	(5,476)	(1,720)	(5,661)	9,087
Comprehensive loss	$ 122,668	$ 103,223	$ 242,702	$ 229,217

XML

Condensed Consolidating Financial Statements (Tables)

6 Months Ended

Oct. 31, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule of Condensed Consolidating Statement of Cash Flows [Text Block]

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Six months ended October 31, 2014	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by (used in) operating activities:	$	—		$	55,612		$	(683,189	)	$	—		$	(627,577	)
Cash flows from investing:
Purchases of AFS securities	—			—			(100		)	—			(100		)
Maturities of and payments received on AFS securities	—			49,013			—			—			49,013
Principal payments on mortgage loans held for investment, net	—			13,451			—			—			13,451
Capital expenditures	—			(119		)	(70,808		)	—			(70,927		)
Payments made for business acquisitions, net of cash acquired	—			—			(94,230		)	—			(94,230		)
Loans made to franchisees	—			(18,180		)	(71		)	—			(18,251		)
Repayments from franchisees	—			29,404			233			—			29,637
Intercompany payments/investments in subsidiaries	—			400,000			(109,031		)	(290,969		)	—
Other, net	—			4,372			6,313			—			10,685
Net cash provided by (used in) investing activities	—			477,941			(267,694		)	(290,969		)	(80,722		)
Cash flows from financing:
Repayments of long-term debt	—			(400,000		)	—			—			(400,000		)
Customer banking deposits, net	—			(317,095		)	—			826			(316,269		)
Dividends paid	(109,871		)	—			—			—			(109,871		)
Proceeds from exercise of stock options	14,477			—			—			—			14,477
Intercompany borrowings (repayments)	105,641			3,390			(400,000		)	290,969			—
Other, net	(10,247		)	—			(23,392		)	—			(33,639		)
Net cash used in financing activities	—			(713,705		)	(423,392		)	291,795			(845,302		)
Effects of exchange rates on cash	—			—			(4,216		)	—			(4,216		)
Net decrease in cash and cash equivalents	—			(180,152		)	(1,378,491		)	826			(1,557,817		)
Cash and cash equivalents at beginning of the period	—			612,376			1,574,031			(1,100		)	2,185,307
Cash and cash equivalents at end of the period	$	—		$	432,224		$	195,540		$	(274	)	$	627,490

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Six months ended October 31, 2013	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by (used in) operating activities:	$	799		$	46,969		$	(540,141	)	$	—		$	(492,373	)
Cash flows from investing:
Purchases of AFS securities	—			(45,158		)	—			—			(45,158		)
Maturities of and payments received on AFS securities	—			55,615			—			—			55,615
Principal payments on mortgage loans held for investment, net	—			24,340			—			—			24,340
Capital expenditures	—			(57		)	(86,869		)	—			(86,926		)
Payments made for business acquisitions, net of cash acquired	—			—			(20,927		)	—			(20,927		)
Loans made to franchisees	—			(22,114		)	—			—			(22,114		)
Repayments from franchisees	—			15,883			—			—			15,883
Intercompany payments/investments in subsidiaries (1)	—			23,036			(89,318		)	66,282			—
Other, net	—			11,368			3,887			—			15,255
Net cash provided by (used in) investing activities	—			62,913			(193,227		)	66,282			(64,032		)
Cash flows from financing:
Customer banking deposits, net	—			(278,077		)	—			2,277			(275,800		)
Dividends paid	(109,324		)	—			—			—			(109,324		)
Proceeds from exercise of stock options	24,536			—			—			—			24,536
Intercompany borrowings (repayments) (1)	89,318			—			(23,036		)	(66,282		)	—
Other, net	(5,329		)	—			(26,619		)	—			(31,948		)
Net cash used in financing activities	(799		)	(278,077		)	(49,655		)	(64,005		)	(392,536		)
Effects of exchange rates on cash	—			—			(7,871		)	—			(7,871		)
Net decrease in cash and cash equivalents	—			(168,195		)	(790,894		)	2,277			(956,812		)
Cash and cash equivalents at beginning of the period	—			558,110			1,192,197			(2,723		)	1,747,584
Cash and cash equivalents at end of the period	$	—		$	389,915		$	401,303		$	(446	)	$	790,772

Schedule Of Condensed Consolidating Statement Of Operations [Table Text Block]

Six months ended October 31, 2014	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	44,751		$	223,556		$	(93	)	$	268,214
Cost of revenues	—			22,658			396,853			(88		)	419,423
Selling, general and administrative	—			9,197			185,387			(5		)	194,579
Total operating expenses	—			31,855			582,240			(93		)	614,002
Other income (expense), net	(233,646		)	1,396			(19,076		)	248,363			(2,963		)
Interest expense on borrowings	—			27,436			202			—			27,638
Loss from continuing operations before tax benefit	(233,646		)	(13,144		)	(377,962		)	248,363			(376,389		)
Income tax benefit	(5,416		)	(9,663		)	(139,232		)	—			(154,311		)
Net loss from continuing operations	(228,230		)	(3,481		)	(238,730		)	248,363			(222,078		)
Net income (loss) from discontinued operations	—			(8,843		)	2,691			—			(6,152		)
Net loss	(228,230		)	(12,324		)	(236,039		)	248,363			(228,230		)
Other comprehensive income	1,400			4,261			1,400			(5,661		)	1,400
Comprehensive loss	$	(226,830	)	$	(8,063	)	$	(234,639	)	$	242,702		$	(226,830	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS													(in 000s)
Six months ended October 31, 2013	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	48,385		$	213,340		$	(190	)	$	261,535
Cost of revenues	—			38,906			364,597			(190		)	403,313
Selling, general and administrative	—			15,407			175,382			—			190,789
Total operating expenses	—			54,313			539,979			(190		)	594,102
Other income (expense), net (1)	(220,130		)	1,706			(5,391		)	220,130			(3,685		)
Interest expense on borrowings (1)	—			27,385			219			—			27,604
Loss from continuing operations before tax benefit	(220,130		)	(31,607		)	(332,249		)	220,130			(363,856		)
Income tax benefit (1)	—			(11,601		)	(135,970		)	—			(147,571		)
Net loss from continuing operations	(220,130		)	(20,006		)	(196,279		)	220,130			(216,285		)
Net loss from discontinued operations (1)	—			(2,716		)	(1,129		)	—			(3,845		)
Net loss	(220,130		)	(22,722		)	(197,408		)	220,130			(220,130		)
Other comprehensive loss	(9,087		)	(6,616		)	(2,471		)	9,087			(9,087		)
Comprehensive loss	$	(229,217	)	$	(29,338	)	$	(199,879	)	$	229,217		$	(229,217	)

⁽¹⁾  Amounts have been restated, including the presentation of interest expense on borrowings, and equity in earnings of subsidiaries net of income taxes and discontinued operations.

Schedule Of Condensed Consolidating Balance Sheet [Table Text Block]

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of October 31, 2013	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	389,915	$	401,303	$	(446	)	$	790,772
Cash & cash equivalents - restricted	—		6,795		40,726		—			47,521
Receivables, net	—		99,867		31,834		—			131,701
Prepaid expenses and other current assets	—		14,543		217,662		(6,545		)	225,660
Total current assets	—		511,120		691,525		(6,991		)	1,195,654
Mortgage loans held for investment, net	—		295,907		—		—			295,907
Investments in AFS securities	—		460,935		4,409		—			465,344
Property and equipment, net	—		145		311,012		—			311,157
Intangible assets, net	—		—		296,213		—			296,213
Goodwill	—		—		442,812		—			442,812
Investments in subsidiaries (1)	3,114,988		—		26,962		(3,141,950		)	—
Amounts due from affiliates	—		397,526		2,167,944		(2,565,470		)	—
Other assets	8,512		140,811		118,103		—			267,426
Total assets	$	3,123,500	$	1,806,444	$	4,058,980	$	(5,714,411	)	$	3,274,513
Customer banking deposits	$	—	$	655,575	$	—	$	(446	)	$	655,129
Accounts payable, accrued expenses and other current liabilities	581		183,342		243,071		—			426,994
Accrued salaries, wages and payroll taxes	—		1,881		39,703		—			41,584
Accrued income taxes	—		29,020		—		(6,545		)	22,475
Current portion of long-term debt	—		399,765		738		—			400,503
Total current liabilities	581		1,269,583		283,512		(6,991		)	1,546,685
Long-term debt	—		497,471		8,607		—			506,078
Other noncurrent liabilities	—		12,428		254,347		—			266,775
Amounts due to affiliates	2,167,944		—		397,526		(2,565,470		)	—
Total liabilities	2,168,525		1,779,482		943,992		(2,572,461		)	2,319,538
Stockholders' equity (1)	954,975		26,962		3,114,988		(3,141,950		)	954,975
Total liabilities and stockholders' equity	$	3,123,500	$	1,806,444	$	4,058,980	$	(5,714,411	)	$	3,274,513

Note: Amounts have been restated to include the presentation of a classified balance sheet.

⁽¹⁾  Amounts have been restated, including the presentation of the investment of Other Subsidiaries in Block Financial.

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of April 30, 2014	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	612,376	$	1,574,031	$	(1,100	)	$	2,185,307
Cash & cash equivalents - restricted	—		67,463		47,856		—			115,319
Receivables, net	—		89,975		101,643		—			191,618
Prepaid expenses and other current assets	—		10,202		188,065		—			198,267
Investments in AFS securities	—		423,495		—		—			423,495
Total current assets	—		1,203,511		1,911,595		(1,100		)	3,114,006
Mortgage loans held for investment, net	—		268,428		—		—			268,428
Investments in AFS securities	—		—		4,329		—			4,329
Property and equipment, net	—		121		304,790		—			304,911
Intangible assets, net	—		—		355,622		—			355,622
Goodwill	—		—		436,117		—			436,117
Investments in subsidiaries	904,331		—		60,902		(965,233		)	—
Amounts due from affiliates	642,101		386,818		397		(1,029,316		)	—
Other assets	11,271		173,168		25,677		—			210,116
Total assets	$	1,557,703	$	2,032,046	$	3,099,429	$	(1,995,649	)	$	4,693,529
Customer banking deposits	$	—	$	770,885	$	—	$	(1,100	)	$	769,785
Accounts payable, accrued expenses and other current liabilities	757		223,677		344,573		—			569,007
Accrued salaries, wages and payroll taxes	—		2,190		164,842		—			167,032
Accrued income taxes	—		71,132		335,523		—			406,655
Current portion of long-term debt	—		399,882		755		—			400,637
Total current liabilities	757		1,467,766		845,693		(1,100		)	2,313,116
Long-term debt	—		497,612		8,225		—			505,837
Other noncurrent liabilities	—		5,766		312,261		—			318,027
Amounts due to affiliates	397		—		1,028,919		(1,029,316		)	—
Total liabilities	1,154		1,971,144		2,195,098		(1,030,416		)	3,136,980
Stockholders' equity	1,556,549		60,902		904,331		(965,233		)	1,556,549
Total liabilities and stockholders' equity	$	1,557,703	$	2,032,046	$	3,099,429	$	(1,995,649	)	$	4,693,529

XML

Mortgage Loans Held For Investment And Related Assets (Schedule Of Non-Accrual Loans) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Mortgage Loans Held For Investment And Related Assets [Line Items]
Loans receivable recorded investment non-accrual status	$ 71,693	$ 74,295	$ 80,364
Financing receivable modifications to recorded investments	5,999	5,599	4,713
Total non-accrual loans	77,692	79,894	85,077
Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Loans receivable recorded investment non-accrual status	60,254	61,767	67,641
Financing receivable modifications to recorded investments	5,059	4,648	3,832
All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Loans receivable recorded investment non-accrual status	11,439	12,528	12,723
Financing receivable modifications to recorded investments	$ 940	$ 951	$ 881

XML

Commitments And Contingencies (Narrative) (Details) (USD $)	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Commitments And Contingencies [Line Items]
Standard guarantee accrual amount	$ 10,700,000	$ 11,400,000	$ 16,700,000
Contingent business acquisition obligations	10,555,000	9,206,000
Lines of credit, total obligation	81,000,000
Remaining franchise equity lines of credit-undrawn commitment	34,500,000
Maximum funding by facility	1,500,000,000
Financing Receivables, Line of Credit Facility, Compensating Balances	0
Level 3
Commitments And Contingencies [Line Items]
Contingent business acquisition obligations			$ 12,454,000

XML

Long-Term Debt Long-Term Debt (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Debt Instrument [Line Items]
Long-term Debt	$ 506,360	$ 906,474
Capital Lease Obligations	8,607	8,980	9,345
Long-term debt	506,360	906,474	906,581
Long-term Debt, Current Maturities	(772)	(400,637)	(400,503)
Long-term Debt, Excluding Current Maturities	505,588	505,837	506,078
5.5% Senior Notes [Member]
Debt Instrument [Line Items]
Long-term Debt	497,753	497,612	497,471
5.125% Senior Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Effective Percentage	5.125%
Long-term Debt	$ 0	$ 399,882	$ 399,765

XML

Mortgage Loans Held For Investment And Related Assets (Schedule Of Allowance For Loan Losses) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Loans and Leases Rollforward [Roll Forward]
Balance at beginning of the period	$ 11,272	$ 14,314
Provision	735	7,224
Recoveries	911	2,409
Charge-offs	(3,157)	(11,243)
Balance at end of the period	$ 9,761	$ 12,704

XML

Loss Per Share and Stockholders' Equity

6 Months Ended

Oct. 31, 2014

Earnings Per Share [Abstract]

Loss Per Share and Stockholders' Equity

NOTE 3: LOSS PER SHARE AND STOCKHOLDERS' EQUITY

LOSS PER SHARE – Basic and diluted loss per share is computed using the two-class method. The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income from continuing operations attributable to common shareholders by the weighted average shares outstanding during each period. The dilutive effect of potential common shares is included in diluted earnings per share except in those periods with a loss from continuing operations. Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain restrictions or the exercise of options to purchase 5.4 million shares for the three and six months ended October 31, 2014, and 6.0 million shares for the three and six months ended October 31, 2013, 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 October 31,						Six months ended October 31,
	2014			2013			2014			2013
Net loss from continuing operations attributable to shareholders	$	(113,227	)	$	(103,015	)	$	(222,078	)	$	(216,285	)
Amounts allocated to participating securities	(97		)	(92		)	(186		)	(154		)
Net loss from continuing operations attributable to common shareholders	$	(113,324	)	$	(103,107	)	$	(222,264	)	$	(216,439	)
Basic weighted average common shares	275,106			273,907			274,841			273,494
Potential dilutive shares	—			—			—			—
Dilutive weighted average common shares	275,106			273,907			274,841			273,494
Loss per share from continuing operations attributable to common shareholders:
Basic	$	(0.41	)	$	(0.38	)	$	(0.81	)	$	(0.79	)
Diluted	(0.41		)	(0.38		)	(0.81		)	(0.79		)

STOCK-BASED COMPENSATION – During the six months ended October 31, 2014, we acquired 0.3 million shares of our common stock at an aggregate cost of $10.2 million. These shares represent shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards. During the six months ended October 31, 2013, we acquired 0.2 million shares at an aggregate cost of $5.3 million for similar purposes.

During the six months ended October 31, 2014 and 2013, we issued 1.2 million and 1.6 million shares of common stock, respectively, due to the vesting or exercise of stock-based awards.

During the six months ended October 31, 2014, we granted equity awards equivalent to 1.0 million shares under our stock-based compensation plans, consisting primarily of nonvested units. Nonvested units generally either vest over a three-year period with one-third vesting each year or cliff vest at the end of a three-year period. Stock-based compensation expense of our continuing operations totaled $7.1 million and $14.6 million for the three and six months ended October 31, 2014, respectively, and $6.2 million and $10.8 million for the three and six months ended October 31, 2013, respectively. As of October 31, 2014, unrecognized compensation cost for stock options totaled $0.4 million, and for nonvested shares and units totaled $43.2 million.

OTHER COMPREHENSIVE INCOME –Components of other comprehensive income include foreign currency translation adjustments and the change in net unrealized gains or losses on AFS marketable securities, and are as follows:

(in 000s)
	Foreign Currency Translation Adjustments			Unrealized Gain (Loss) on AFS Securities			Total
Balances as of May 1, 2014	$	3,334		$	1,843		$	5,177
Other comprehensive income (loss) before reclassifications:
Gross gains (losses) arising during the year	(3,355		)	7,483			4,128
Income taxes	—			2,713			2,713
	(3,355		)	4,770			1,415
Amounts reclassified to net income:
Gross amount reclassified	—			(24		)	(24		)
Income taxes	—			(9		)	(9		)
	—			(15		)	(15		)
Net other comprehensive income (loss)	(3,355		)	4,755			1,400
Balances as of October 31, 2014	$	(21	)	$	6,598		$	6,577
Balances as of May 1, 2013	$	6,809		$	3,741		$	10,550
Other comprehensive income (loss) before reclassifications:
Gross losses arising during the year	(2,510		)	(10,914		)	(13,424		)
Income taxes	—			(4,337		)	(4,337		)
Net other comprehensive loss	(2,510		)	(6,577		)	(9,087		)
Balances as of October 31, 2013	$	4,299		$	(2,836	)	$	1,463

Gross amounts reclassified out of accumulated other comprehensive income are included in other income (expense), net in the consolidated statements of operations.

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Fair Value (Assets Remeasured At Fair Value On Non-Recurring Basis) (Details) (Non-Recurring, USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loss, Impaired mortgage loans held for investment	$ (1,440)	$ (2,353)
Total
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired mortgage loans held for investment	62,300	76,148
As a percentage of total assets	2.00%	2.30%
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired mortgage loans held for investment	0	0
As a percentage of total assets	0.00%	0.00%
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired mortgage loans held for investment	0	0
As a percentage of total assets	0.00%	0.00%
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired mortgage loans held for investment	$ 62,300	$ 76,148
As a percentage of total assets	2.00%	2.30%

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Receivables (Schedule Of Receivables Based On Year Of Origination) (Details) (Emerald Advance lines of credit, USD $) In Thousands, unless otherwise specified	Oct. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Gross	$ 22,851
Year Of Origination2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Gross	3,802
Year Of Origination2013 [Member] [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Gross	1,553
Year Of Origination 2012 and prior
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Gross	4,412
Revolving Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Gross	$ 13,084

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Goodwill And Intangible Assets (Tables)

6 Months Ended

Oct. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule Of Goodwill

Changes in the carrying amount of goodwill of our Tax Services segment for the six months ended October 31, 2014 and 2013 are as follows:

(in 000s)
	Goodwill			Accumulated Impairment Losses			Net
Balances as of April 30, 2014	$	468,414		$	(32,297	)	$	436,117
Acquisitions	28,378			—			28,378
Disposals and foreign currency changes, net	(313		)	—			(313		)
Impairments	—			—			—
Balances as of October 31, 2014	$	496,479		$	(32,297	)	$	464,182
Balances as of April 30, 2013	$	467,079		$	(32,297	)	$	434,782
Acquisitions	9,207			—			9,207
Disposals and foreign currency changes, net	(1,177		)	—			(1,177		)
Impairments	—			—			—
Balances as of October 31, 2013	$	475,109		$	(32,297	)	$	442,812

Schedule Of Intangible Assets

Components of the intangible assets of our Tax Services segment are as follows:

(in 000s)
	Gross Carrying Amount		Accumulated Amortization			Net
As of October 31, 2014:
Reacquired franchise rights	$	278,159	$	(33,721	)	$	244,438
Customer relationships	148,407		(66,714		)	81,693
Internally-developed software	110,140		(77,925		)	32,215
Noncompete agreements	28,960		(22,774		)	6,186
Franchise agreements	19,201		(7,574		)	11,627
Purchased technology	54,700		(16,814		)	37,886
	$	639,567	$	(225,522	)	$	414,045
As of October 31, 2013:
Reacquired franchise rights	$	222,371	$	(20,414	)	$	201,957
Customer relationships	109,237		(53,501		)	55,736
Internally-developed software	98,738		(76,517		)	22,221
Noncompete agreements	23,659		(21,898		)	1,761
Franchise agreements	19,201		(6,294		)	12,907
Purchased technology	14,800		(13,169		)	1,631
	$	488,006	$	(191,793	)	$	296,213
As of April 30, 2014:
Reacquired franchise rights	$	233,749	$	(26,136	)	$	207,613
Customer relationships	123,110		(59,521		)	63,589
Internally-developed software	101,162		(72,598		)	28,564
Noncompete agreements	24,694		(22,223		)	2,471
Franchise agreements	19,201		(6,934		)	12,267
Purchased technology	54,900		(13,782		)	41,118
	$	556,816	$	(201,194	)	$	355,622

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Investments (Tables)

6 Months Ended

Oct. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Amortized Cost And Fair Value Of Securities Available-For-Sale

The amortized cost and fair value of securities classified as AFS are summarized below:

(in 000s)
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
As of October 31, 2014:
Mortgage-backed securities	$	371,297	$	9,783	$	—		$	381,080
Municipal bonds	4,091		151		—			4,242
Common stock	5,000		532		—			5,532
U.S. treasury bills	100		—		—			100
	$	380,488	$	10,466	$	—		$	390,954
As of October 31, 2013:
Mortgage-backed securities	465,861		4,422		(9,348		)	460,935
Municipal bonds	4,149		260		—			4,409
	$	470,010	$	4,682	$	(9,348	)	$	465,344
As of April 30, 2014:
Mortgage-backed securities	$	420,697	$	2,798	$	—		$	423,495
Municipal bonds	4,120		209		—			4,329
	$	424,817	$	3,007	$	—		$	427,824

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Investments (Amortized Cost And Fair Value Of Securities Available-For-Sale) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Investments in available-for-sale securities, Amortized Cost	$ 380,488	$ 424,817	$ 470,010
Gross Unrealized Gains	10,466	3,007	4,682
Available For Sale Securities, Gross Unrealized Loss, Accumulated In Investments	0	0	(9,348)
Investments in available-for-sale securities, Fair Value	390,954	427,824	465,344
Long-Term | Mortgage-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Investments in available-for-sale securities, Amortized Cost	371,297	420,697	465,861
Gross Unrealized Gains	9,783	2,798	4,422
Available For Sale Securities, Gross Unrealized Loss, Accumulated In Investments	0	0	(9,348)
Investments in available-for-sale securities, Fair Value	381,080	423,495	460,935
Long-Term | Municipal Bonds
Schedule of Available-for-sale Securities [Line Items]
Investments in available-for-sale securities, Amortized Cost	4,091	4,120	4,149
Gross Unrealized Gains	151	209	260
Available For Sale Securities, Gross Unrealized Loss, Accumulated In Investments	0	0	0
Investments in available-for-sale securities, Fair Value	4,242	4,329	4,409
Long-Term | Common Stock [Member]
Schedule of Available-for-sale Securities [Line Items]
Investments in available-for-sale securities, Amortized Cost	5,000
Gross Unrealized Gains	532
Available For Sale Securities, Gross Unrealized Loss, Accumulated In Investments	0
Investments in available-for-sale securities, Fair Value	5,532
Long-Term | US Treasury Bill Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Investments in available-for-sale securities, Amortized Cost	100
Gross Unrealized Gains	0
Available For Sale Securities, Gross Unrealized Loss, Accumulated In Investments	0
Investments in available-for-sale securities, Fair Value	$ 100

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Receivables (Schedule Of Activity In The Allowance For Doubtful Accounts) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts	$ 51,746	$ 52,969	$ 52,578
Allowance for Doubtful Accounts [Roll Forward]
Beginning balance		57,703
Provision	2,724	6,111
Charge-offs	(3,556)	(7,753)
Ending balance		56,061
Emerald Advance lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts	7,910		7,530
Allowance for Doubtful Accounts [Roll Forward]
Beginning balance		7,390
Provision	380	0
Charge-offs	0	0
Ending balance		7,390
Loans to franchisees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts	0		0
Allowance for Doubtful Accounts [Roll Forward]
Beginning balance		0
Provision	0	0
Charge-offs	0	0
Ending balance		0
Receivables for tax preparation and related fees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts	2,077		3,002
Allowance for Doubtful Accounts [Roll Forward]
Beginning balance		2,769
Provision	149	188
Charge-offs	(1,074)	(479)
Ending balance		2,478
All Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts	41,759		42,046
Allowance for Doubtful Accounts [Roll Forward]
Beginning balance		47,544
Provision	2,195	5,923
Charge-offs	(2,482)	(7,274)
Ending balance		$ 46,193

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Long-Term Debt Long-Term Debt (Tables)

6 Months Ended

Oct. 31, 2014

Long-term Debt, Unclassified [Abstract]

Components of Long-term Debt

The components of long-term debt are as follows:

(in 000s)
As of	October 31, 2014			October 31, 2013			April 30, 2014
Senior Notes, 5.500%, due November 2022	$	497,753		$	497,471		$	497,612
Senior Notes, 5.125%, due October 2014	—			399,765			399,882
Capital lease obligation	8,607			9,345			8,980
	506,360			906,581			906,474
Less: Current portion	(772		)	(400,503		)	(400,637		)
	$	505,588		$	506,078		$	505,837

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Fair Value (Tables)

6 Months Ended

Oct. 31, 2014

Fair Value Disclosures [Abstract]

Assets Remeasured At Fair Value On Non-Recurring Basis

the six months ended October 31, 2014 and 2013 and the losses on those remeasurements:

(dollars in 000s)
	Total			Level 1			Level 2			Level 3			Losses
As of October 31, 2014:
Impaired mortgage loans held for investment	$	62,300		$	—		$	—		$	62,300		$	(1,440	)
As a percentage of total assets	2.0		%	—		%	—		%	2.0		%
As of October 31, 2013:
Impaired mortgage loans held for investment	$	76,148		$	—		$	—		$	76,148		$	(2,353	)
As a percentage of total assets	2.3		%	—		%	—		%	2.3		%

Quantitative Information About Level 3 Fair Value Measurements

(in 000s)
	Fair Value as of October 31, 2014		Valuation Technique	Unobservable Input	Range (Weighted Average)
Impaired mortgage loans held for investment – non TDRs	$	69,157	Collateral- based	Cost to list/sell Time to sell (months) Collateral depreciation Loss severity	0% – 190%(9%) 24 (24) (166%) – 100%(39%) 0% – 100%(61%)
Impaired mortgage loans held for investment – TDRs	$	35,964	Discounted cash flow	Aged default performance Loss severity	24% – 38%(31%) 0% – 22%(7%)

Fair Value Measurements, Recurring and Nonrecurring

The carrying amounts and estimated fair values of our financial instruments are as follows:

(in 000s)
As of	October 31, 2014				October 31, 2013				April 30, 2014
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Cash and cash equivalents	$	627,490	$	627,490	$	790,772	$	790,772	$	2,185,307	$	2,185,307
Cash and cash equivalents - restricted	55,543		55,543		47,521		47,521		115,319		115,319
Receivables, net - short-term	107,705		107,705		131,701		133,884		191,618		191,618
Mortgage loans held for investment, net	251,092		192,411		295,907		211,690		268,428		192,281
Investments in AFS securities	390,954		390,954		465,344		465,344		427,824		427,824
Receivables, net - long-term	101,805		101,805		198,597		206,481		111,795		111,795
Liabilities:
Customer banking deposits	455,308		452,351		656,305		656,300		770,288		765,376
Long-term debt	506,360		550,332		906,581		947,350		906,474		955,050
Contingent consideration payments	10,555		10,555		12,454		12,454		9,206		9,206

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H&R Block Bank H&R Block Bank

6 Months Ended

Oct. 31, 2014

H&R Block Bank [Abstract]

H&R Block Bank

NOTE 2: H&R BLOCK BANK

In April 2014, our subsidiaries, H&R Block Bank (HRB Bank) and Block Financial LLC, the sole shareholder of HRB Bank (Block Financial), entered into a definitive Purchase and Assumption Agreement (P&A Agreement) with BofI Federal Bank, a federal savings bank (BofI). The P&A Agreement is subject to various closing conditions, including the receipt of certain required approvals, entry into certain additional agreements, and the fulfillment of various other customary conditions. If the closing conditions (including regulatory approvals) are satisfied, we will complete a transaction in which we will sell assets and assign certain liabilities, including all of HRB Bank's deposit liabilities, to BofI (P&A Transaction). The parties to the P&A Agreement entered into a Letter Agreement, effective October 23, 2014 (Letter Agreement), which, among other things, extended the date after which any party is permitted to terminate the P&A Agreement from October 31, 2014 to May 31, 2015. The Letter Agreement was filed as an exhibit to our current report on Form 8-K on October 23, 2014.

Due to the lack of regulatory approval, we do not expect to consummate the P&A Transaction this calendar year. Therefore, we will continue offering financial services products to our clients through HRB Bank for the upcoming tax season.

If a closing had occurred as of October 31, 2014, we would have made a cash payment to BofI for the difference in the carrying value of assets sold and the carrying value of liabilities (including deposit liabilities) transferred of approximately $437 million. The amount of the cash payment made at closing will primarily be equal to the carrying value of the liabilities to be transferred since the carrying value of the assets to be transferred is immaterial. Due to the seasonality of our business, the timing of any closing of the P&A Transaction will impact the amount of deposit liabilities transferred. In connection with the closing we intend to liquidate the available-for-sale (AFS) securities held by HRB Bank, which totaled $381 million at October 31, 2014.

In connection with the additional agreements expected to be entered into upon the closing of the P&A Transaction, BofI would offer H&R Block-branded financial products distributed by the Company to the Company's clients. An operating subsidiary of the Company would provide certain marketing, servicing and operational support to BofI with respect to such financial products.

The P&A Transaction is part of a three-step transaction pursuant to which the Company plans to divest HRB Bank (Divestiture Transaction), including: (1) the conversion of HRB Bank from a federal savings bank to a national bank; (2) the sale of certain HRB Bank assets to and assignment of certain liabilities (including all deposit liabilities) to BofI in the P&A Transaction; and (3) the merger of HRB Bank with and into Block Financial.

H&R Block, Inc., H&R Block Group, Inc. and Block Financial (our Holding Companies) are savings and loan holding companies (SLHCs) because they control HRB Bank. By consummating the Divestiture Transaction, our Holding Companies would cease to be SLHCs and would no longer be subject to regulation by the Board of Governors of the Federal Reserve System (Federal Reserve) as SLHCs or to the regulatory capital requirements applicable to SLHCs.

The obligations of the parties to complete the P&A Transaction are subject to the fulfillment of numerous conditions, including regulatory approval. We cannot be certain when or if the conditions to the P&A Transaction will be satisfied, or whether the P&A Transaction will be completed. In addition, there may be changes to the terms and conditions of the P&A Agreement and other contemplated agreements as part of the regulatory approval process.

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Interest Income And Interest Expense (Tables)

6 Months Ended

Oct. 31, 2014

Interest Income And Interest Expense [Abstract]

Schedule Of Interest Income And Expense Of Continuing Operations

The following table shows the components of interest income and expense:

(in 000s)
	Three months ended October 31,				Six months ended October 31,
	2014		2013		2014		2013
Interest income:
Mortgage loans, net	2,989		3,631		$	5,967	$	7,173
Loans to franchisees	1,890		2,384		3,961		4,673
AFS securities	2,133		2,513		4,403		4,854
Other	2,418		2,098		4,398		5,123
	$	9,430	$	10,626	$	18,729	$	21,823
Interest expense:
Borrowings	$	13,843	$	13,801	$	27,638	$	27,604
Deposits	140		513		285		1,156
	$	13,983	$	14,314	$	27,923	$	28,760

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Receivables (Narrative) (Details) (USD $)	6 Months Ended
	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Document Fiscal Year Focus	2015
Impaired non-accrual status term, days	60 days
Total Portfolio	$ 258,728,000	$ 277,423,000	$ 306,103,000
Loans to franchisees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Recorded Investment, Past Due	2,400,000	100,000	0
Emerald Advance lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-accrual status loans	20,000,000	20,700,000	26,200,000
Term Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables, net	100,600,000	109,100,000	126,300,000
Revolving Lines Of Credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables, net	46,400,000	45,400,000	53,000,000
Receivables for tax preparation and related fees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Short-term	$ 0	$ 1,900,000	$ 100,000

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Mortgage Loans Held For Investment And Related Assets (Information Related To Impaired Loans) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Mortgage Loans Held For Investment And Related Assets [Line Items]
Impaired Loans Balance	$ 111,114	$ 118,927	$ 127,606
Related Allowance	5,993	6,764	7,181
Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Impaired Loans Balance	93,632	98,999	107,152
Related Allowance	4,984	3,239	5,762
All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Impaired Loans Balance	17,482	19,928	20,454
Related Allowance	1,009	3,525	1,419
Balance With Allowance
Mortgage Loans Held For Investment And Related Assets [Line Items]
Impaired Loans Balance	29,226	33,100	35,296
Balance With Allowance | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Impaired Loans Balance	25,494	27,924	30,100
Balance With Allowance | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Impaired Loans Balance	3,732	5,176	5,196
Balance With No Allowance
Mortgage Loans Held For Investment And Related Assets [Line Items]
Impaired Loans Balance	81,888	85,827	92,310
Balance With No Allowance | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Impaired Loans Balance	68,138	71,075	77,052
Balance With No Allowance | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Impaired Loans Balance	$ 13,750	$ 14,752	$ 15,258

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Regulatory Capital Requirements (Narrative) (Details)	Sep. 30, 2014		Mar. 31, 2014		Sep. 30, 2013		Oct. 31, 2014 HRB Bank [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Tier 1 capital ratio (leverage)	54.30%	[1]	32.10%	[1]	40.40%	[1]	53.80%

[1] Tier 1 (core) capital divided by adjusted total assets.

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Consolidated Statements Of Operations And Comprehensive Income (Loss) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
REVENUES:
Service revenues	$ 115,442	$ 112,432	$ 230,915	$ 220,232
Royalty, product and other revenues	9,756	11,282	18,570	19,480
Interest income	9,430	10,626	18,729	21,823
Total revenues	134,628	134,340	268,214	261,535
Cost of revenues:
Compensation and benefits	69,381	60,526	121,236	106,838
Occupancy and equipment	87,626	82,358	170,932	161,094
Provision for bad debt and loan losses	385	2,849	4,749	14,340
Interest	13,983	14,314	27,923	28,760
Depreciation and amortization	28,429	22,095	53,514	40,715
Other	35,876	39,235	68,992	80,326
Cost of revenues	221,697	207,063	419,423	403,313
Selling, general and administrative:
Marketing and advertising	12,513	13,601	20,658	20,724
Compensation and benefits	54,353	54,818	115,317	107,865
Depreciation and amortization	10,500	4,573	19,101	8,827
Other selling, general and administrative	20,013	21,100	39,503	53,373
Selling, general and administrative	97,379	94,092	194,579	190,789
Total operating expenses	319,076	301,155	614,002	594,102
Other income (expense), net	(2,282)	1,254	(2,963)	(3,685)
Interest Expense, Debt	13,843	13,801	27,638	27,604
Loss from continuing operations before income tax benefit	(200,573)	(179,362)	(376,389)	(363,856)
Income tax benefit	(87,346)	(76,347)	(154,311)	(147,571)
Net loss from continuing operations	(113,227)	(103,015)	(222,078)	(216,285)
Net income (loss) from discontinued operations, net of tax (benefits) of $766 and ($1,218), ($3,798) and $(2,427)	1,229	(1,928)	(6,152)	(3,845)
NET LOSS	(111,998)	(104,943)	(228,230)	(220,130)
BASIC AND DILUTED LOSS PER SHARE:
Continuing operations (in usd per share)	$ (0.41)	$ (0.38)	$ (0.81)	$ (0.79)
Discontinued operations (in usd per share)	$ 0.00	$ (0.01)	$ (0.02)	$ (0.01)
Consolidated (in usd per share)	$ (0.41)	$ (0.39)	$ (0.83)	$ (0.80)
DIVIDENDS PAID PER SHARE (in usd per share)	$ 0.2000	$ 0.2000	$ 0.4	$ 0.4
COMPREHENSIVE INCOME (LOSS):
NET LOSS	(111,998)	(104,943)	(228,230)	(220,130)
Unrealized gains (losses) on securities, net of taxes:
Unrealized holding gains (losses) arising during the period	5,493	1,138	4,770	(6,577)
Reclassification adjustment for gains included in income	(589)	0	(15)	0
Change in foreign currency translation adjustments	(3,810)	582	(3,355)	(2,510)
Other comprehensive income (loss)	1,094	1,720	1,400	(9,087)
Comprehensive loss	$ (110,904)	$ (103,223)	$ (226,830)	$ (229,217)

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Mortgage Loans Held For Investment And Related Assets (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014
Mortgage Loans Held For Investment And Related Assets [Line Items]
Transfer of mortgage loans held for investment to held for sale	$ 0	$ 7,608
Allowance as Percent of Principal	3.80%	4.20%	4.10%
Percentage of mortgage loan portfolio consisting of borrowers from Florida, California, New York, and Wisconsin	52.00%
Minimum Credit Score
Mortgage Loans Held For Investment And Related Assets [Line Items]
Loan-to-value at origination in order to have internal risk rating of medium	80.00%
Minimum credit score to be given internal risk rating of low	700
Maximum Credit Score
Mortgage Loans Held For Investment And Related Assets [Line Items]
Loan-to-value at origination in order to have internal risk rating of medium	80.00%
Maximum credit score to be given internal risk rating of medium	700
Maximum [Member]
Mortgage Loans Held For Investment And Related Assets [Line Items]
Allowance for Credit Losses, Period at Which Collectively Evaluated for Impairment	60 days
Minimum [Member]
Mortgage Loans Held For Investment And Related Assets [Line Items]
Allowance for Credit Losses, Period at Which Indivudally Evaluated for Impairment	60 days

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Statement of Cash Flows [Abstract]
Repayments of Long-term Debt	$ 400,000	$ 0
NET CASH USED IN OPERATING ACTIVITIES	(627,577)	(492,373)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale securities	(100)	(45,158)
Maturities of and payments received on available-for-sale securities	49,013	55,615
Principal payments on mortgage loans held for investment, net	13,451	24,340
Purchases of property and equipment	(70,927)	(86,926)
Payments made for business acquisitions, net of cash acquired	94,230	20,927
Franchise loans:
Loans funded	(18,251)	(22,114)
Payments received	29,637	15,883
Other, net	10,685	15,255
Net cash provided by (used in) investing activities	(80,722)	(64,032)
CASH FLOWS FROM FINANCING ACTIVITIES:
Customer banking deposits, net	(316,269)	(275,800)
Dividends paid	(109,871)	(109,324)
Proceeds from exercise of stock options	14,477	24,536
Other, net	(33,639)	(31,948)
Net cash used in financing activities	(845,302)	(392,536)
Effects of exchange rates on cash	(4,216)	(7,871)
Net decrease in cash and cash equivalents	(1,557,817)	(956,812)
Cash and cash equivalents at beginning of the period	2,185,307	1,747,584
Cash and cash equivalents at end of the period	627,490	790,772
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net of refunds received	157,680	116,099
Interest paid on borrowings	27,379	27,804
Interest paid on deposits	341	1,180
Transfers of foreclosed loans to other assets	3,155	3,889
Accrued additions to property and equipment	3,243	6,729
Transfer of mortgage loans held for investment to held for sale	0	7,608
Conversion of investment security	$ 5,000	$ 0

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Goodwill And Intangible Assets (Schedule Of Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	$ 639,567	$ 556,816	$ 488,006
Accumulated Amortization	(225,522)	(201,194)	(191,793)
Net	414,045	355,622	296,213
Tax Services [Member] | Reacquired Franchise Rights [Member]
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	278,159	233,749	222,371
Accumulated Amortization	(33,721)	(26,136)	(20,414)
Net	244,438	207,613	201,957
Tax Services [Member] | Customer Relationships [Member]
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	148,407	123,110	109,237
Accumulated Amortization	(66,714)	(59,521)	(53,501)
Net	81,693	63,589	55,736
Tax Services [Member] | Software and Software Development Costs [Member]
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	110,140	101,162	98,738
Accumulated Amortization	(77,925)	(72,598)	(76,517)
Net	32,215	28,564	22,221
Tax Services [Member] | Noncompete Agreements [Member]
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	28,960	24,694	23,659
Accumulated Amortization	(22,774)	(22,223)	(21,898)
Net	6,186	2,471	1,761
Tax Services [Member] | Franchise Agreements
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	19,201	19,201	19,201
Accumulated Amortization	(7,574)	(6,934)	(6,294)
Net	11,627	12,267	12,907
Tax Services [Member] | Purchased Technology
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	54,700	54,900	14,800
Accumulated Amortization	(16,814)	(13,782)	(13,169)
Net	$ 37,886	$ 41,118	$ 1,631

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Regulatory Capital Requirements (Tables)

6 Months Ended

Oct. 31, 2014

Banking and Thrift [Abstract]

HRB Bank's Regulatory Capital Requirements

The following table sets forth HRB Bank's regulatory capital requirements calculated in its Call Report, as filed with the Federal Financial Institutions Examination Council (FFIEC):

(dollars in 000s)
	Actual				Minimum Capital Requirement					Minimum to be Well Capitalized
	Amount		Ratio		Amount		Ratio			Amount		Ratio
As of September 30, 2014:
Total risk-based capital ratio (1)	$	595,148	199.4	%	$	23,877	8.0	%		$	29,846	10.0	%
Tier 1 risk-based capital ratio (2)	591,293		198.1	%	N/A		N/A			17,908		6.0	%
Tier 1 capital ratio (leverage) (3)	591,293		54.3	%	130,689		12.0	%	(5)	54,454		5.0	%
Tangible equity ratio (4)	591,293		54.3	%	16,336		1.5	%		N/A		N/A
As of September 30, 2013:
Total risk-based capital ratio (1)	$	506,449	140.0	%	$	28,950	8.0	%		$	36,188	10.0	%
Tier 1 risk-based capital ratio (2)	501,720		138.6	%	N/A		N/A			21,713		6.0	%
Tier 1 capital ratio (leverage) (3)	501,720		40.4	%	148,869		12.0	%	(5)	62,029		5.0	%
Tangible equity ratio (4)	501,720		40.4	%	18,609		1.5	%		N/A		N/A
As of March 31, 2014:
Total risk-based capital ratio (1)	$	563,899	168.5	%	$	26,771	8.0	%		$	33,464	10.0	%
Tier 1 risk-based capital ratio (2)	559,572		167.2	%	N/A		N/A			20,079		6.0	%
Tier 1 capital ratio (leverage) (3)	559,572		32.1	%	209,041		12.0	%	(5)	87,101		5.0	%
Tangible equity ratio (4)	559,572		32.1	%	26,130		1.5	%		N/A		N/A

⁽¹⁾  Total risk-based capital divided by risk-weighted assets.

⁽²⁾  Tier 1 (core) capital less deduction for low-level recourse and residual interest divided by risk-weighted assets.

⁽³⁾  Tier 1 (core) capital divided by adjusted total assets.

⁽⁴⁾  Tangible capital divided by tangible assets.

⁽⁵⁾  Effective April 5, 2012, the minimum capital requirement was changed to 4% by the OCC, although HRB Bank plans to maintain a minimum of 12.0% leverage capital at the end of each calendar quarter.

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Income Taxes (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014
Income Tax Disclosure [Abstract]
Unrecognized Tax Benefits	$ 112.9	$ 129.8	$ 111.5
Significant (Increase) Decrease in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Upper Bound	18
Unrecognized Tax Benefits, Period Increase (Decrease)	1.4	16.6
Effect of anticipated settlements of audit issues and expiring statutes of limitations	11.6
Effective tax rate, excluding discrete tax items	37.80%	38.70%
Effective Income Tax Rate Reconciliation, Percent	41.00%	40.60%
Net Discreet Tax Expense (Benefit)	$ (12.1)	$ (6.9)

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Segment Information

6 Months Ended

Oct. 31, 2014

Segment Reporting [Abstract]

Segment Information

NOTE 16: SEGMENT INFORMATION

Results of our continuing operations by reportable segment are as follows:

(in 000s)
	Three months ended October 31,						Six months ended October 31,
	2014			2013			2014			2013
REVENUES :
Tax Services	$	128,683		$	128,040		$	257,763		$	249,731
Corporate and eliminations	5,945			6,300			10,451			11,804
	$	134,628		$	134,340		$	268,214		$	261,535
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES :
Tax Services	$	(176,642	)	$	(159,314	)	$	(327,202	)	$	(303,708	)
Corporate and eliminations	(23,931		)	(20,048		)	(49,187		)	(60,148		)
	$	(200,573	)	$	(179,362	)	$	(376,389	)	$	(363,856	)

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Segment Information (Tables)

6 Months Ended

Oct. 31, 2014

Segment Reporting [Abstract]

Operations By Reportable Operating Segment

Results of our continuing operations by reportable segment are as follows:

(in 000s)
	Three months ended October 31,						Six months ended October 31,
	2014			2013			2014			2013
REVENUES :
Tax Services	$	128,683		$	128,040		$	257,763		$	249,731
Corporate and eliminations	5,945			6,300			10,451			11,804
	$	134,628		$	134,340		$	268,214		$	261,535
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES :
Tax Services	$	(176,642	)	$	(159,314	)	$	(327,202	)	$	(303,708	)
Corporate and eliminations	(23,931		)	(20,048		)	(49,187		)	(60,148		)
	$	(200,573	)	$	(179,362	)	$	(376,389	)	$	(363,856	)

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Summary Of Significant Accounting Policies (Policy)

6 Months Ended

Oct. 31, 2014

Summary Of Significant Accounting Policies [Abstract]

Basis of Presentation

–The consolidated balance sheets as of October 31, 2014 and 2013, the consolidated statements of operations and comprehensive income (loss) for the three and six months ended October 31, 2014 and 2013, and the condensed consolidated statements of cash flows for the six months ended October 31, 2014 and 2013 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, 2014 and 2013 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, 2014 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2014 or for the year then ended are derived from our April 30, 2014 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.

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Commitments And Contingencies (Schedule Of Deferred Revenue Related To The Peace Of Mind Program) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Movement in Deferred Revenue [Roll Forward]
Balance, beginning of the period	$ 145,237	$ 146,286
Amounts deferred for new guarantees issued	2,104	1,840
Revenue recognized on previous deferrals	(40,816)	(46,977)
Balance, end of the period	$ 106,525	$ 101,149

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Summary Of Significant Accounting Policies

6 Months Ended

Oct. 31, 2014

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 October 31, 2014 and 2013, the consolidated statements of operations and comprehensive income (loss) for the three and six months ended October 31, 2014 and 2013, and the condensed consolidated statements of cash flows for the six months ended October 31, 2014 and 2013 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, 2014 and 2013 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, 2014 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2014 or for the year then ended are derived from our April 30, 2014 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 February 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 13 and 14 for additional information on litigation, claims and other loss contingencies related to our discontinued operations.

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Consolidated Statements Of Operations And Comprehensive Income (Loss) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Income Statement [Abstract]
Tax benefit on discontinued operations	$ 766	$ (1,218)	$ (3,798)	$ (2,427)

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Interest Income And Interest Expense

6 Months Ended

Oct. 31, 2014

Interest Income And Interest Expense [Abstract]

Interest Income And Interest Expense

NOTE 11: INTEREST INCOME AND INTEREST EXPENSE

The following table shows the components of interest income and expense:

(in 000s)
	Three months ended October 31,				Six months ended October 31,
	2014		2013		2014		2013
Interest income:
Mortgage loans, net	2,989		3,631		$	5,967	$	7,173
Loans to franchisees	1,890		2,384		3,961		4,673
AFS securities	2,133		2,513		4,403		4,854
Other	2,418		2,098		4,398		5,123
	$	9,430	$	10,626	$	18,729	$	21,823
Interest expense:
Borrowings	$	13,843	$	13,801	$	27,638	$	27,604
Deposits	140		513		285		1,156
	$	13,983	$	14,314	$	27,923	$	28,760

The presentation of interest expense from borrowings in the amount of $13.8 million and $27.6 million for the three and six months ended October 31, 2013, respectively, has been restated to correct errors in presentation. We reclassified such interest expense from cost of revenues to a separate caption.

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Document And Entity Information	6 Months Ended
	Oct. 31, 2014	Nov. 30, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Oct. 31, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Entity Registrant Name	H&R BLOCK INC
Entity Central Index Key	0000012659
Current Fiscal Year End Date	--04-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		275,168,156

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Commitments And Contingencies

6 Months Ended

Oct. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

NOTE 12: COMMITMENTS AND CONTINGENCIES

Changes in deferred revenue balances related to our Peace of Mind® (POM) program, the current portion of which is included in accounts payable, accrued expenses and other current liabilities and the long-term portion of which is included in other noncurrent liabilities in the consolidated balance sheets, are as follows:

(in 000s)
Six months ended October 31,	2014			2013
Balance, beginning of the period	$	145,237		$	146,286
Amounts deferred for new guarantees issued	2,104			1,840
Revenue recognized on previous deferrals	(40,816		)	(46,977		)
Balance, end of the period	$	106,525		$	101,149

We accrued $10.7 million, $16.7 million and $11.4 million as of October 31, 2014 and 2013 and April 30, 2014, respectively, related to estimated losses under our standard guarantee, which is included with our standard in-office tax preparation services. The current portion of this liability is included in accounts payable, accrued expenses and other current liabilities and the long-term portion is included in other noncurrent liabilities in the consolidated balance sheets.

We have accrued estimated contingent consideration payments totaling $10.6 million, $12.5 million and $9.2 million as of October 31, 2014 and 2013 and April 30, 2014, respectively, related to acquisitions, with the short-term amount recorded in accounts payable, accrued expenses and other current liabilities and the long-term portion included in other noncurrent 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 $81.0 million at October 31, 2014, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $34.5 million.

We maintain compensating balances with certain financial institutions that are creditors in our $1.5 billion unsecured committed line of credit governed by a Credit and Guarantee Agreement (2012 CLOC), which are not legally restricted as to withdrawal. We had no material compensating balances as of October 31, 2014. These balances may fluctuate significantly over the course of any fiscal year.

NOTE 14: LOSS CONTINGENCIES ARISING FROM REPRESENTATIONS AND WARRANTIES OF OUR DISCONTINUED MORTGAGE OPERATIONS

SCC ceased originating mortgage loans in December 2007 and, in April 2008, sold its servicing assets and discontinued its remaining operations.

Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers, who generally securitized such loans, or in the form of RMBSs. In connection with the sale of loans and/or RMBSs, SCC made certain representations and warranties. 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, represented approximately 68% of the disposal of loans originated in calendar years 2005, 2006 and 2007, included a "knowledge qualifier" limiting SCC's liability to those instances where SCC had knowledge of the fraud at the time the loans were sold. Representations and warranties made in other sale transactions effectively did not include a knowledge qualifier as to borrower fraud. SCC believes it would have an obligation to repurchase a loan only if it breached a representation and warranty and such breach materially and adversely affects the value of the mortgage loan or certificate holder's interest in the mortgage loan. SCC also would assert that it has no liability for the failure to repurchase any mortgage loan that has been liquidated prior to a repurchase demand, although there is conflicting case law on the liquidated loan defense issue. These decisions are from lower courts, are inconsistent in their analysis and receptivity to this defense, and are subject to appeal. Such claims together with any settlement arrangements related to these losses are collectively referred to as "representation and warranty claims."

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 $2.1 billion since May 1, 2008, of which $1.8 billion were received prior to fiscal year 2013.

SETTLEMENT ACTIONS –SCC has entered into tolling agreements with the counterparties that have made and are expected to assert a significant majority of previously denied and possible future representation and warranty claims. These tolling agreements toll the running of any applicable statute of limitations related to potential lawsuits regarding representation and warranty claims and other claims against SCC.

Beginning in the fourth quarter of fiscal year 2013 and continuing through the second quarter of fiscal year 2015, SCC has been engaged in discussions with these counterparties regarding the bulk settlement of previously denied and potential future claims. Based on settlement discussions with these counterparties, SCC believes a bulk settlement approach, rather than the loan-by-loan resolution process, will be needed to resolve all of the representation and warranty and other claims that are the subject of these discussions. On December 5, 2014, SCC entered into a settlement agreement to resolve certain of these claims. The amount to be paid under the settlement agreement is 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 October 31, 2014 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 accounts payable, accrued expenses 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)
Six months ended October 31,	2014		2013
Balance, beginning of the period	$	183,765	$	158,765
Provisions	10,000		—
Payments	—		—
Balance, end of the period	$	193,765	$	158,765

In December 2013, a decision by the New York intermediate appellate court, ACE Securities Corp. v. DB Structured Products, Inc., held that, under New York law, which governs many RMBS transactions into which SCC entered, the six-year statute of limitations starts to run at the time the representations and warranties are made, not the date when the repurchase demand was denied. That decision has been applied by the state and federal courts in several RMBS lawsuits not involving SCC, resulting in the dismissal of claims involving representations and warranties made more than six years prior to the initiation of the lawsuit. Unless overturned by New York's highest appellate court, which has taken the case for review, this decision would apply to claims and lawsuits brought against SCC where New York law governs. 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. In addition, if the ACE decision is overturned, it could result in representation and warranty claims being asserted that were previously thought to be time-barred. It is also possible that in response to the statute of limitations rulings, parties seeking to pursue representation and warranty claims or lawsuits with respect to trusts where the statute of limitations for representation and warranty claims against the originator has run, may pursue alternate legal theories of recovery or assert claims against other contractual parties. SCC has not accrued liabilities for claims not subject to a tolling arrangement or not asserted prior to the expiration of the applicable statute of limitations. The impact on SCC, if any, of the ACE decision being overturned or from alternative legal theories or assertions is unclear.

SCC is taking the legal position, where appropriate, for both contractual representation and warranty claims and similar claims in litigation, that a valid representation and warranty claim cannot be made with respect to a mortgage loan that has been liquidated. There is conflicting case law on this issue. These decisions are from lower courts, are inconsistent in their analysis and receptivity to this defense, and are subject to appeal. It is anticipated that the liquidated mortgage loan defense will be the subject of future judicial decisions. In the event the liquidated loan defense is further clarified by the courts or other developments occur, the liquidated loan defense may be a factor in SCC's estimated accrual for representation and warranty claims where such defense may be applicable.

SCC believes it is reasonably possible that future representation and warranty losses may vary from amounts accrued for these exposures. SCC currently believes the aggregate range of reasonably possible losses in excess of amounts accrued is not material. This estimated range is based on the best information currently available, significant management judgment and a number of factors that are subject to change, including developments in case law and the factors mentioned above. The actual loss that may be incurred could differ materially from our accrual or the estimate of reasonably possible losses.

As described more fully in note 13, losses may also be incurred with respect to various indemnification claims by underwriters and depositors in securitization transactions in which SCC participated. Losses from these indemnification claims are frequently not subject to a stated term or limit. We have not concluded that a loss related to any of these indemnification claims is probable, have not accrued a liability for these claims and are not able to estimate a reasonably possible loss or range of loss for these claims. Accordingly, neither the accrued liability described above totaling $193.8 million, nor the estimated range of reasonably possible losses in excess of the amount accrued described above, includes any possible losses which may arise from these indemnification claims. There can be no assurances as to the outcome or impact of these indemnification claims. In the event of unfavorable outcomes on these claims, 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. SCC's principal assets, as of October 31, 2014, total approximately $520 million and consist primarily of an intercompany note receivable and a deferred tax asset. We believe our legal position is strong on any potential corporate veil-piercing arguments; however, if this position is challenged and not upheld, it could have a material adverse effect on our business and our consolidated financial position, results of operations and cash flows.

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
ASSETS
Cash and cash equivalents	$ 627,490	$ 2,185,307	$ 790,772
Cash and cash equivalents - restricted	55,543	115,319	47,521
Receivables, less allowance for doubtful accounts of $51,746, $52,969 and $52,578	107,705	191,618	131,701
Prepaid expenses and other current assets	285,463	198,267	225,660
Investments in available-for-sale securities	381,180	423,495
Total current assets	1,457,381	3,114,006	1,195,654
Mortgage loans held for investment, less allowance for loan losses of $9,761, $12,704 and $11,272	251,092	268,428	295,907
Investments in available-for-sale securities	9,774	4,329	465,344
Property and equipment, at cost less accumulated depreciation and amortization of $491,153, $449,738 and $446,049	318,225	304,911	311,157
Intangible assets, net	414,045	355,622	296,213
Goodwill	464,182	436,117	442,812
Other assets	176,591	210,116	267,426
Total assets	3,091,290	4,693,529	3,274,513
LIABILITIES:
Customer banking deposits	454,860	769,785	655,129
Accounts payable, accrued expenses and other current liabilities	436,830	569,007	426,994
Accrued salaries, wages and payroll taxes	36,215	167,032	41,584
Accrued income taxes	147,000	406,655	22,475
Current portion of long-term debt	772	400,637	400,503
Total current liabilities	1,075,677	2,313,116	1,546,685
Long-term debt	505,588	505,837	506,078
Other noncurrent liabilities	271,349	318,027	266,775
Total liabilities	1,852,614	3,136,980	2,319,538
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, stated value $.01 per share, 800,000,000 shares authorized, shares issued of 316,628,110	3,166	3,166	3,166
Convertible preferred stock, no par, stated value $0.01 per share, 500,000 shares authorized
Additional paid-in capital	772,662	766,654	757,828
Accumulated other comprehensive income	6,577	5,177	1,463
Retained earnings	1,250,465	1,589,297	1,003,842
Less treasury shares, at cost	(794,194)	(807,745)	(811,324)
Total stockholders' equity	1,238,676	1,556,549	954,975
Total liabilities and stockholders' equity	$ 3,091,290	$ 4,693,529	$ 3,274,513

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Investments

6 Months Ended

Oct. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Investments

NOTE 6: INVESTMENTS

The amortized cost and fair value of securities classified as AFS are summarized below:

(in 000s)
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
As of October 31, 2014:
Mortgage-backed securities	$	371,297	$	9,783	$	—		$	381,080
Municipal bonds	4,091		151		—			4,242
Common stock	5,000		532		—			5,532
U.S. treasury bills	100		—		—			100
	$	380,488	$	10,466	$	—		$	390,954
As of October 31, 2013:
Mortgage-backed securities	465,861		4,422		(9,348		)	460,935
Municipal bonds	4,149		260		—			4,409
	$	470,010	$	4,682	$	(9,348	)	$	465,344
As of April 30, 2014:
Mortgage-backed securities	$	420,697	$	2,798	$	—		$	423,495
Municipal bonds	4,120		209		—			4,329
	$	424,817	$	3,007	$	—		$	427,824

Substantially all AFS debt securities held as of October 31, 2014 mature after five years.

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Mortgage Loans Held For Investment And Related Assets

6 Months Ended

Oct. 31, 2014

Mortgage Loans Held For Investment And Related Assets [Abstract]

Mortgage Loans Held For Investment And Related Assets

NOTE 5: MORTGAGE LOANS HELD FOR INVESTMENT

The composition of our mortgage loan portfolio is as follows:

(dollars in 000s)
As of	October 31, 2014					October 31, 2013					April 30, 2014
	Amount			% of Total		Amount			% of Total		Amount			% of Total
Adjustable-rate loans	$	138,808		54	%	$	165,289		54	%	$	149,480		54	%
Fixed-rate loans	119,920			46	%	140,814			46	%	127,943			46	%
	258,728			100	%	306,103			100	%	277,423			100	%
Unamortized deferred fees and costs	2,125					2,508					2,277
Less: Allowance for loan losses	(9,761		)			(12,704		)			(11,272		)
	$	251,092				$	295,907				$	268,428

Our loan loss allowance as a percent of mortgage loans was 3.8% as of October 31, 2014, compared to 4.2% as of October 31, 2013 and 4.1% as of April 30, 2014.

Activity in the allowance for loan losses for the six months ended October 31, 2014 and 2013 is as follows:

(in 000s)
Six months ended October 31,	2014			2013
Balance at beginning of the period	$	11,272		$	14,314
Provision	735			7,224
Recoveries	911			2,409
Charge-offs	(3,157		)	(11,243		)
Balance at end of the period	$	9,761		$	12,704

When determining our allowance for loan losses, we evaluate loans less than 60 days past due on a pooled basis, while loans we consider impaired, including those loans more than 60 days past due or modified as a troubled debt restructuring (TDR), are evaluated individually. The balance of these loans and the related allowance is as follows:

(in 000s)
As of	October 31, 2014				October 31, 2013				April 30, 2014
	Portfolio  Balance		Related  Allowance		Portfolio  Balance		Related  Allowance		Portfolio  Balance		Related  Allowance
Pooled (less than 60 days past due)	$	147,614	$	3,768	$	178,497	$	5,523	$	158,496	$	4,508
Impaired:
Individually (TDRs)	40,201		4,237		47,011		4,598		43,865		4,346
Individually (60 days or more past due)	70,913		1,756		80,595		2,583		75,062		2,418
	$	258,728	$	9,761	$	306,103	$	12,704	$	277,423	$	11,272

Detail of our mortgage loans held for investment and the related allowance as of October 31, 2014 is as follows:

(dollars in 000s)
	Outstanding Principal Balance		Loan Loss Allowance				% 30+ Days Past Due
			Amount		% of Principal
Purchased from SCC	$	148,833	$	7,847	5.3	%	27.9	%
All other	109,895		1,914		1.7	%	6.9	%
	$	258,728	$	9,761	3.8	%	19.0	%

Credit quality indicators as of October 31, 2014 include the following:

(in 000s)
Credit Quality Indicators	Purchased from SCC		All Other		Total Portfolio
Occupancy status:
Owner occupied	$	109,069	$	72,767	$	181,836
Non-owner occupied	39,764		37,128		76,892
	$	148,833	$	109,895	$	258,728
Documentation level:
Full documentation	$	49,157	$	77,974	$	127,131
Limited documentation	4,676		12,114		16,790
Stated income	83,074		12,305		95,379
No documentation	11,926		7,502		19,428
	$	148,833	$	109,895	$	258,728
Internal risk rating:
High	$	41,758	$	—	$	41,758
Medium	107,075		—		107,075
Low	—		109,895		109,895
	$	148,833	$	109,895	$	258,728

Loans given our internal risk rating of "high" generally had no documentation or were based on stated income. Loans given our internal risk rating of "medium" generally had full documentation or were based on stated income, with loan-to-value ratios at origination of more than 80%, and were made to borrowers with credit scores below 700 at origination. Loans given our internal risk rating of "low" generally had loan-to-value ratios at origination of less than 80% and were made to borrowers with credit scores greater than 700 at origination.

Our mortgage loans held for investment include concentrations of loans to borrowers in certain states, which may result in increased exposure to loss as a result of changes in real estate values and underlying economic or market conditions related to a particular geographical location. Approximately 52% of our mortgage loan portfolio consists of loans to borrowers located in the states of Florida, California and New York.

Detail of the aging of the mortgage loans in our portfolio as of October 31, 2014 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	$	11,199	$	324	$	47,514	$	59,037	$	89,796	$	148,833
All other	4,613		78		7,530		12,221		97,674		109,895
	$	15,812	$	402	$	55,044	$	71,258	$	187,470	$	258,728

⁽¹⁾  We do not accrue interest on loans past due 90 days or more.

Information related to our non-accrual loans is as follows:

(in 000s)
As of	October 31, 2014		October 31, 2013		April 30, 2014
Loans:
Purchased from SCC	$	60,254	$	67,641	$	61,767
Other	11,439		12,723		12,528
	71,693		80,364		74,295
TDRs:
Purchased from SCC	5,059		3,832		4,648
Other	940		881		951
	5,999		4,713		5,599
Total non-accrual loans	$	77,692	$	85,077	$	79,894

Information related to impaired loans is as follows:

(in 000s)
	Balance With Allowance		Balance With No Allowance		Total Impaired Loans		Related Allowance
As of October 31, 2014:
Purchased from SCC	$	25,494	$	68,138	$	93,632	$	4,984
Other	3,732		13,750		17,482		1,009
	$	29,226	$	81,888	$	111,114	$	5,993
As of October 31, 2013:
Purchased from SCC	$	30,100	$	77,052	$	107,152	$	5,762
Other	5,196		15,258		20,454		1,419
	$	35,296	$	92,310	$	127,606	$	7,181
As of April 30, 2014:
Purchased from SCC	$	27,924	$	71,075	$	98,999	$	3,239
Other	5,176		14,752		19,928		3,525
	$	33,100	$	85,827	$	118,927	$	6,764

Information related to the allowance for impaired loans is as follows:

(in 000s)
As of	October 31, 2014		October 31, 2013		April 30, 2014
Portion of total allowance for loan losses allocated to impaired loans and TDR loans:
Based on collateral value method	$	1,756	$	2,583	$	2,418
Based on discounted cash flow method	4,237		4,598		4,346
	$	5,993	$	7,181	$	6,764

Information related to activities of our non-performing assets is as follows:

(in 000s)
Six months ended October 31,	2014		2013
Average impaired loans:
Purchased from SCC	$	99,706	$	121,532
All other	19,404		23,646
	$	119,110	$	145,178

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Condensed Consolidating Financial Statements

6 Months Ended

Oct. 31, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

NOTE 17: CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Block Financial is a 100% owned subsidiary of the Company. Block Financial is the Issuer and the Company is the full and unconditional Guarantor of the Senior Notes issued on October 25, 2012, our 2012 CLOC, and other indebtedness issued from time to time. These condensed consolidating financial statements have been prepared using the equity method of accounting. Earnings of subsidiaries are, therefore, reflected in the Company's investment in subsidiaries account. The elimination entries eliminate investments in subsidiaries, related stockholders' equity and other intercompany balances and transactions.

Certain amounts included in the following statements of operations for the three and six months ended October 31, 2013, the statements of cash flows for the six months ended October 31, 2013, and the balance sheet as of October 31, 2013 have been restated to correct errors in presentation. The statements of operations have been corrected to properly reflect equity earnings in subsidiaries of H&R Block, Inc. (Guarantor) in "Other income (expense), net" to include income taxes and discontinued operations which were previously shown on separate lines. The balance sheet has been corrected to properly reflect a classified balance sheet and to show the investment in Block Financial by Other Subsidiaries. The statements of cash flows have been corrected to properly reflect intercompany borrowings and payments as either investing or financing activities, as appropriate. These restatements impacted disclosures required by this note, but had no impact on the consolidated financial statements as of and for the three and six months ended October 31, 2013.

Additionally, as discussed in note 11, the presentation of interest expense on borrowings for the three and six months ended October 31, 2013 has been restated to correct errors in presentation. We reclassified such interest expense from cost of revenues to a separate caption.

Six months ended October 31, 2014	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	44,751		$	223,556		$	(93	)	$	268,214
Cost of revenues	—			22,658			396,853			(88		)	419,423
Selling, general and administrative	—			9,197			185,387			(5		)	194,579
Total operating expenses	—			31,855			582,240			(93		)	614,002
Other income (expense), net	(233,646		)	1,396			(19,076		)	248,363			(2,963		)
Interest expense on borrowings	—			27,436			202			—			27,638
Loss from continuing operations before tax benefit	(233,646		)	(13,144		)	(377,962		)	248,363			(376,389		)
Income tax benefit	(5,416		)	(9,663		)	(139,232		)	—			(154,311		)
Net loss from continuing operations	(228,230		)	(3,481		)	(238,730		)	248,363			(222,078		)
Net income (loss) from discontinued operations	—			(8,843		)	2,691			—			(6,152		)
Net loss	(228,230		)	(12,324		)	(236,039		)	248,363			(228,230		)
Other comprehensive income	1,400			4,261			1,400			(5,661		)	1,400
Comprehensive loss	$	(226,830	)	$	(8,063	)	$	(234,639	)	$	242,702		$	(226,830	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS													(in 000s)
Six months ended October 31, 2013	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	48,385		$	213,340		$	(190	)	$	261,535
Cost of revenues	—			38,906			364,597			(190		)	403,313
Selling, general and administrative	—			15,407			175,382			—			190,789
Total operating expenses	—			54,313			539,979			(190		)	594,102
Other income (expense), net (1)	(220,130		)	1,706			(5,391		)	220,130			(3,685		)
Interest expense on borrowings (1)	—			27,385			219			—			27,604
Loss from continuing operations before tax benefit	(220,130		)	(31,607		)	(332,249		)	220,130			(363,856		)
Income tax benefit (1)	—			(11,601		)	(135,970		)	—			(147,571		)
Net loss from continuing operations	(220,130		)	(20,006		)	(196,279		)	220,130			(216,285		)
Net loss from discontinued operations (1)	—			(2,716		)	(1,129		)	—			(3,845		)
Net loss	(220,130		)	(22,722		)	(197,408		)	220,130			(220,130		)
Other comprehensive loss	(9,087		)	(6,616		)	(2,471		)	9,087			(9,087		)
Comprehensive loss	$	(229,217	)	$	(29,338	)	$	(199,879	)	$	229,217		$	(229,217	)

⁽¹⁾  Amounts have been restated, including the presentation of interest expense on borrowings, and equity in earnings of subsidiaries net of income taxes and discontinued operations.

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of October 31, 2013	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	389,915	$	401,303	$	(446	)	$	790,772
Cash & cash equivalents - restricted	—		6,795		40,726		—			47,521
Receivables, net	—		99,867		31,834		—			131,701
Prepaid expenses and other current assets	—		14,543		217,662		(6,545		)	225,660
Total current assets	—		511,120		691,525		(6,991		)	1,195,654
Mortgage loans held for investment, net	—		295,907		—		—			295,907
Investments in AFS securities	—		460,935		4,409		—			465,344
Property and equipment, net	—		145		311,012		—			311,157
Intangible assets, net	—		—		296,213		—			296,213
Goodwill	—		—		442,812		—			442,812
Investments in subsidiaries (1)	3,114,988		—		26,962		(3,141,950		)	—
Amounts due from affiliates	—		397,526		2,167,944		(2,565,470		)	—
Other assets	8,512		140,811		118,103		—			267,426
Total assets	$	3,123,500	$	1,806,444	$	4,058,980	$	(5,714,411	)	$	3,274,513
Customer banking deposits	$	—	$	655,575	$	—	$	(446	)	$	655,129
Accounts payable, accrued expenses and other current liabilities	581		183,342		243,071		—			426,994
Accrued salaries, wages and payroll taxes	—		1,881		39,703		—			41,584
Accrued income taxes	—		29,020		—		(6,545		)	22,475
Current portion of long-term debt	—		399,765		738		—			400,503
Total current liabilities	581		1,269,583		283,512		(6,991		)	1,546,685
Long-term debt	—		497,471		8,607		—			506,078
Other noncurrent liabilities	—		12,428		254,347		—			266,775
Amounts due to affiliates	2,167,944		—		397,526		(2,565,470		)	—
Total liabilities	2,168,525		1,779,482		943,992		(2,572,461		)	2,319,538
Stockholders' equity (1)	954,975		26,962		3,114,988		(3,141,950		)	954,975
Total liabilities and stockholders' equity	$	3,123,500	$	1,806,444	$	4,058,980	$	(5,714,411	)	$	3,274,513

Note: Amounts have been restated to include the presentation of a classified balance sheet.

⁽¹⁾  Amounts have been restated, including the presentation of the investment of Other Subsidiaries in Block Financial.

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of April 30, 2014	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	612,376	$	1,574,031	$	(1,100	)	$	2,185,307
Cash & cash equivalents - restricted	—		67,463		47,856		—			115,319
Receivables, net	—		89,975		101,643		—			191,618
Prepaid expenses and other current assets	—		10,202		188,065		—			198,267
Investments in AFS securities	—		423,495		—		—			423,495
Total current assets	—		1,203,511		1,911,595		(1,100		)	3,114,006
Mortgage loans held for investment, net	—		268,428		—		—			268,428
Investments in AFS securities	—		—		4,329		—			4,329
Property and equipment, net	—		121		304,790		—			304,911
Intangible assets, net	—		—		355,622		—			355,622
Goodwill	—		—		436,117		—			436,117
Investments in subsidiaries	904,331		—		60,902		(965,233		)	—
Amounts due from affiliates	642,101		386,818		397		(1,029,316		)	—
Other assets	11,271		173,168		25,677		—			210,116
Total assets	$	1,557,703	$	2,032,046	$	3,099,429	$	(1,995,649	)	$	4,693,529
Customer banking deposits	$	—	$	770,885	$	—	$	(1,100	)	$	769,785
Accounts payable, accrued expenses and other current liabilities	757		223,677		344,573		—			569,007
Accrued salaries, wages and payroll taxes	—		2,190		164,842		—			167,032
Accrued income taxes	—		71,132		335,523		—			406,655
Current portion of long-term debt	—		399,882		755		—			400,637
Total current liabilities	757		1,467,766		845,693		(1,100		)	2,313,116
Long-term debt	—		497,612		8,225		—			505,837
Other noncurrent liabilities	—		5,766		312,261		—			318,027
Amounts due to affiliates	397		—		1,028,919		(1,029,316		)	—
Total liabilities	1,154		1,971,144		2,195,098		(1,030,416		)	3,136,980
Stockholders' equity	1,556,549		60,902		904,331		(965,233		)	1,556,549
Total liabilities and stockholders' equity	$	1,557,703	$	2,032,046	$	3,099,429	$	(1,995,649	)	$	4,693,529

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Six months ended October 31, 2014	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by (used in) operating activities:	$	—		$	55,612		$	(683,189	)	$	—		$	(627,577	)
Cash flows from investing:
Purchases of AFS securities	—			—			(100		)	—			(100		)
Maturities of and payments received on AFS securities	—			49,013			—			—			49,013
Principal payments on mortgage loans held for investment, net	—			13,451			—			—			13,451
Capital expenditures	—			(119		)	(70,808		)	—			(70,927		)
Payments made for business acquisitions, net of cash acquired	—			—			(94,230		)	—			(94,230		)
Loans made to franchisees	—			(18,180		)	(71		)	—			(18,251		)
Repayments from franchisees	—			29,404			233			—			29,637
Intercompany payments/investments in subsidiaries	—			400,000			(109,031		)	(290,969		)	—
Other, net	—			4,372			6,313			—			10,685
Net cash provided by (used in) investing activities	—			477,941			(267,694		)	(290,969		)	(80,722		)
Cash flows from financing:
Repayments of long-term debt	—			(400,000		)	—			—			(400,000		)
Customer banking deposits, net	—			(317,095		)	—			826			(316,269		)
Dividends paid	(109,871		)	—			—			—			(109,871		)
Proceeds from exercise of stock options	14,477			—			—			—			14,477
Intercompany borrowings (repayments)	105,641			3,390			(400,000		)	290,969			—
Other, net	(10,247		)	—			(23,392		)	—			(33,639		)
Net cash used in financing activities	—			(713,705		)	(423,392		)	291,795			(845,302		)
Effects of exchange rates on cash	—			—			(4,216		)	—			(4,216		)
Net decrease in cash and cash equivalents	—			(180,152		)	(1,378,491		)	826			(1,557,817		)
Cash and cash equivalents at beginning of the period	—			612,376			1,574,031			(1,100		)	2,185,307
Cash and cash equivalents at end of the period	$	—		$	432,224		$	195,540		$	(274	)	$	627,490

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Six months ended October 31, 2013	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by (used in) operating activities:	$	799		$	46,969		$	(540,141	)	$	—		$	(492,373	)
Cash flows from investing:
Purchases of AFS securities	—			(45,158		)	—			—			(45,158		)
Maturities of and payments received on AFS securities	—			55,615			—			—			55,615
Principal payments on mortgage loans held for investment, net	—			24,340			—			—			24,340
Capital expenditures	—			(57		)	(86,869		)	—			(86,926		)
Payments made for business acquisitions, net of cash acquired	—			—			(20,927		)	—			(20,927		)
Loans made to franchisees	—			(22,114		)	—			—			(22,114		)
Repayments from franchisees	—			15,883			—			—			15,883
Intercompany payments/investments in subsidiaries (1)	—			23,036			(89,318		)	66,282			—
Other, net	—			11,368			3,887			—			15,255
Net cash provided by (used in) investing activities	—			62,913			(193,227		)	66,282			(64,032		)
Cash flows from financing:
Customer banking deposits, net	—			(278,077		)	—			2,277			(275,800		)
Dividends paid	(109,324		)	—			—			—			(109,324		)
Proceeds from exercise of stock options	24,536			—			—			—			24,536
Intercompany borrowings (repayments) (1)	89,318			—			(23,036		)	(66,282		)	—
Other, net	(5,329		)	—			(26,619		)	—			(31,948		)
Net cash used in financing activities	(799		)	(278,077		)	(49,655		)	(64,005		)	(392,536		)
Effects of exchange rates on cash	—			—			(7,871		)	—			(7,871		)
Net decrease in cash and cash equivalents	—			(168,195		)	(790,894		)	2,277			(956,812		)
Cash and cash equivalents at beginning of the period	—			558,110			1,192,197			(2,723		)	1,747,584
Cash and cash equivalents at end of the period	$	—		$	389,915		$	401,303		$	(446	)	$	790,772

⁽¹⁾ Amounts have been restated, including the presentation of intercompany borrowings (payments) as either investing or financing activities.

XML

Litigation And Related Contingencies

6 Months Ended

Oct. 31, 2014

Litigation And Related Contingencies [Abstract]

Litigation And Related Contingencies

NOTE 13: 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 October 31, 2014. 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 October 31, 2014 and 2013 and April 30, 2014, we accrued liabilities of $10.3 million, $20.6 million and $23.7 million, respectively, for matters other than those described in note 14.

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 October 31, 2014, we believe the aggregate range of reasonably possible losses in excess of amounts accrued is not material.

For other matters, we are not currently able to estimate the reasonably possible loss or range of loss. We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the reasonably possible loss or range of loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts, or the status of any settlement negotiations.

On a quarterly and annual basis, we review relevant information with respect to litigation and other loss contingencies and update our accruals, disclosures and estimates of reasonably possible loss or range of loss based on such reviews. Costs incurred with defending matters are expensed as incurred. Any receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously, but there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our business and consolidated financial position, results of operations and cash flows.

LITIGATION, CLAIMS, INCLUDING INDEMNIFICATION CLAIMS, OR OTHER LOSS CONTINGENCIES PERTAINING TO DISCONTINUED MORTGAGE OPERATIONS – Although SCC ceased its mortgage loan origination activities in December 2007 and sold its loan servicing business in April 2008, SCC or the Company have been, remain, or may in the future be subject to litigation, claims, including indemnification claims, and other loss contingencies pertaining to SCC's mortgage business activities that occurred prior to such termination and sale. These contingencies, claims and lawsuits include actions by regulators, third parties seeking indemnification, including depositors and underwriters, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others alleged to be similarly situated. Among other things, these contingencies, claims and lawsuits allege or may allege discriminatory or unfair and deceptive loan origination and servicing (including debt collection, foreclosure and eviction) practices, other common law torts, rights to indemnification and contribution, breach of contract, violations of securities laws and a variety of federal statutes, including the Truth in Lending Act (TILA), Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement Procedures Act (RESPA), Home Ownership & Equity Protection Act (HOEPA), as well as similar state statutes. Given the impact of the financial crisis on the non-prime mortgage environment, the aggregate volume of these matters is substantial although it is difficult to predict either the likelihood of new matters being initiated or the outcome of existing matters. In many of these matters, including certain of the lawsuits and claims described below, it is not possible to estimate a reasonably possible loss or range of loss due to, among other things, the inherent uncertainties involved in these matters, some of which are beyond the Company's control, and the indeterminate damages sought in some of these matters.

On October 15, 2010, the Federal Home Loan Bank of Chicago (FHLB-Chicago) filed a lawsuit in the Circuit Court of Cook County, Illinois (Case No. 10CH45033) styled Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al. against multiple defendants, including various SCC-related entities, H&R Block, Inc. and other entities, arising out of FHLB-Chicago's purchase of residential mortgage-backed securities (RMBSs). The plaintiff seeks rescission and damages under state securities law and for common law negligent misrepresentation in connection with its purchase of two securities collateralized by loans originated and securitized by SCC. These two securities had a total initial principal amount of approximately $50 million, of which approximately $34 million remains outstanding. The plaintiff agreed to voluntarily dismiss H&R Block, Inc. from the suit. The remaining defendants, including SCC, filed motions to dismiss, which the court denied. The defendants moved for leave to appeal and the circuit court denied the motion. A portion of our loss contingency accrual is related to this matter for the amount of loss that we consider probable and reasonably estimable.

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 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 and repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter.

On April 5, 2013, a third lawsuit was filed by Homeward in the 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 and repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter.

Underwriters and depositors are, or have been, involved in multiple lawsuits related to securitization transactions in which SCC participated. These lawsuits allege or alleged a variety of claims, including violations of federal and state securities laws and common law fraud, based on alleged materially inaccurate or misleading disclosures. Based on information currently available to SCC, it believes that the 19 lawsuits in which SCC received notice of a claim for indemnification of losses and expenses, involved 38 securitization transactions with original investments of approximately $14 billion (of which the outstanding principal amount is approximately $4 billion). Because SCC has not been a party to these lawsuits (with the exception of the Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation case discussed above) 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 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 is probable, nor have we accrued a liability related to any of these claims.

LITIGATION, CLAIMS OR OTHER LOSS CONTINGENCIES PERTAINING TO CONTINUING OPERATIONS –

RAL and RAC Litigation. A series of putative class action lawsuits were filed against us in various federal courts beginning on November 17, 2011 concerning the refund anticipation loan (RAL) and refund anticipation check (RAC) products. The plaintiffs generally allege we engaged in unfair, deceptive or fraudulent acts in violation of various state consumer protection laws by facilitating RALs that were accompanied by allegedly inaccurate TILA disclosures, and by offering RACs without any TILA disclosures. Certain plaintiffs also allege violation of disclosure requirements of various state statutes expressly governing RALs and provisions of those statutes prohibiting tax preparers from charging or retaining certain fees. Collectively, the plaintiffs seek to represent clients who purchased RAL or RAC products in up to forty-two states and the District of Columbia during timeframes ranging from 2007 to the present. The plaintiffs seek equitable relief, disgorgement of profits, compensatory and statutory damages, restitution, civil penalties, attorneys' fees and costs. These cases were consolidated by the Judicial Panel on Multidistrict Litigation into a single proceeding in the United States District Court for the Northern District of Illinois for coordinated pretrial proceedings, styled IN RE: H&R Block Refund Anticipation Loan Litigation (MDL No. 2373/No: 1:12-CV-02973-JBG ). On July 23, 2014, the MDL court granted our motion to compel arbitration of the claims of the named plaintiffs and stayed the cases pending arbitration. The MDL court subsequently certified its July 23 order for interlocutory appeal. On October 16, 2014, Plaintiffs filed a petition for permission to appeal with the Seventh 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.

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. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

On April 19, 2012, a putative class action lawsuit was filed against us in the United States District Court for the Western District of Missouri styled Ronald Perras v. H&R Block, Inc., et al. (Case No. 4:12-cv-00450-DGK)concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff seeks to represent all persons nationwide (excluding citizens of Missouri) who were charged the compliance fee, and asserts claims of violation of various state consumer laws, money had and received, and unjust enrichment. In November 2013, the court compelled arbitration of the 2011 claims and stayed all proceedings with respect to those claims. On June 20, 2014, the court denied class certification of the remaining 2012 claims. Plaintiff filed an appeal of the denial of class certification to 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.

Form 8863 Litigation. A series of putative class action lawsuits were filed against us in various federal courts and one state court beginning on March 13, 2013. Taken together, the plaintiffs in these lawsuits purport to represent certain clients nationwide who filed Form 8863 during tax season 2013 through an H&R Block office or using H&R Block At Home® online tax services or tax preparation software, and allege breach of contract, negligence and violation of state consumer laws in connection with transmission of the form. The plaintiffs seek damages, pre-judgment interest, attorneys' fees and costs. In August 2013, the plaintiff in the state court action voluntarily dismissed her case without prejudice. On October 10, 2013, the Judicial Panel on Multidistrict Litigation granted our petition to consolidate the remaining federal lawsuits for coordinated pretrial proceedings in the United States District Court for the Western District of Missouri in a proceeding styled IN RE: H&R BLOCK IRS FORM 8863 LITIGATION (MDL No. 2474/Case No. 4:13-MD-02474-FJG). On July 11, 2014, the MDL court granted our motion to compel arbitration for those named plaintiffs who agreed to arbitrate their claims. Plaintiffs filed a consolidated class action complaint in October 2014. We filed a motion to strike class allegations in the consolidated complaint relating to clients who agreed to arbitration, which remains pending. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability 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.

Although we sold H&R Block Financial Advisors, Inc. (HRBFA) effective November 1, 2008, we remain responsible for any liabilities relating to the Express IRA litigation, among other things, through an indemnification agreement. A portion of our accrual is related to these indemnity obligations.

RSM McGladrey and Related Businesses. On April 17, 2009, a shareholder derivative complaint was filed by Brian Menezes, derivatively and on behalf of nominal defendant International Textile Group, Inc. against McGladrey Capital Markets LLC (MCM) and others in the Court of Common Pleas, Greenville County, South Carolina (C.A. No. 2009-CP-23-3346) styled Brian P. Menezes, Derivatively on Behalf of Nominal Defendant, International Textile Group, Inc. (f/k/a Safety Components International, Inc.) v.McGladrey Capital Markets, LLC (f/k/a RSM EquiCo Capital Markets, LLC), et al. The plaintiffs filed an amended complaint in October 2011 styled In re International Textile Group Merger Litigation, adding a putative class action claim. The plaintiffs allege claims of aiding and abetting, civil conspiracy, gross negligence and breach of fiduciary duty against MCM in connection with a fairness opinion MCM provided to the Special Committee of Safety Components International, Inc. (SCI) in 2006 regarding the merger between International Textile Group, Inc. and SCI. The plaintiffs seek actual and punitive damages, pre-judgment interest, attorneys' fees and costs. On February 8, 2012, the court dismissed the plaintiffs' civil conspiracy claim against all defendants. A class was certified on the remaining claims on November 20, 2012. The court granted summary judgment in favor of MCM on June 3, 2013 on the breach of fiduciary duty claim. To avoid the cost and inherent risk associated with litigation, the parties signed a memorandum of understanding to resolve the case, which was subject to approval by the court. The court granted preliminary approval of the settlement on February 19, 2014 and final approval on September 2, 2014. We previously recorded a liability for our estimate of the expected loss. The amount we paid under the settlement did not exceed the amount we previously accrued.

In connection with the sale of RSM McGladrey, Inc. (RSM) and MCM, we indemnified the buyers against certain litigation matters. The indemnities are not subject to a stated term or limit. A portion of our accrual is related to these indemnity obligations.

OTHER – We are from time to time a party to litigation, claims and other loss contingencies not discussed herein arising out of our business operations. These matters may include actions by state attorneys general, other state regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others similarly situated.

While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on our business or our consolidated financial position, results of operations and cash flows.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our consolidated financial position, results of operations and cash flows.

(in 000s)
Six months ended October 31,	2014		2013
Balance, beginning of the period	$	183,765	$	158,765
Provisions	10,000		—
Payments	—		—
Balance, end of the period	$	193,765	$	158,765

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Fair Value

6 Months Ended

Oct. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value

NOTE 9: FAIR VALUE

FAIR VALUE MEASUREMENT

Assets measured on a recurring basis are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Our investments in AFS securities are carried at fair value on a recurring basis with gains and losses reported as a component of other comprehensive income, except for losses assessed to be other than temporary. Our AFS securities include certain agency and agency-sponsored mortgage-backed securities and municipal bonds. Quoted market prices are not available for these securities, as they are not actively traded and have fewer observable transactions. As a result, we use third-party pricing services to determine fair value and classify the securities as Level 2. The third-party pricing services' models are based on market data and utilize available trade, bid and other market information for similar securities. There were no transfers of AFS securities between hierarchy levels during the six months ended October 31, 2014 and 2013. See note 6 for details of our AFS securities that were remeasured at fair value on a recurring basis during the six months ended October 31, 2014 and 2013 and the unrealized gains or losses on those remeasurements.

The following table presents the assets that were remeasured at fair value on a non-recurring basis during the six months ended October 31, 2014 and 2013 and the losses on those remeasurements:

(dollars in 000s)
	Total			Level 1			Level 2			Level 3			Losses
As of October 31, 2014:
Impaired mortgage loans held for investment	$	62,300		$	—		$	—		$	62,300		$	(1,440	)
As a percentage of total assets	2.0		%	—		%	—		%	2.0		%
As of October 31, 2013:
Impaired mortgage loans held for investment	$	76,148		$	—		$	—		$	76,148		$	(2,353	)
As a percentage of total assets	2.3		%	—		%	—		%	2.3		%

The fair value of impaired mortgage loans held for investment is generally based on the net present value of discounted cash flows for TDR loans or the appraised value of the underlying collateral for all other loans. Impaired and TDR loans are required to be remeasured at least annually, based on HRB Bank's loan policy. These loans are classified as Level 3.

We have established various controls and procedures to ensure that the unobservable inputs used in the fair value measurement of these instruments are appropriate. Appraisals are obtained from certified appraisers and reviewed internally by HRB Bank's asset management group. The inputs and assumptions used in our discounted cash flow model for TDRs are reviewed and approved by HRB Bank management each time the balances are remeasured. Significant changes in fair value from the previous measurement are presented to HRB Bank management for approval. There were no changes to the unobservable inputs used in determining the fair values of our Level 3 financial assets.

The following table presents the quantitative information about our Level 3 fair value measurements, which utilize significant unobservable internally-developed inputs:

(in 000s)
	Fair Value as of October 31, 2014		Valuation Technique	Unobservable Input	Range (Weighted Average)
Impaired mortgage loans held for investment – non TDRs	$	69,157	Collateral- based	Cost to list/sell Time to sell (months) Collateral depreciation Loss severity	0% – 190%(9%) 24 (24) (166%) – 100%(39%) 0% – 100%(61%)
Impaired mortgage loans held for investment – TDRs	$	35,964	Discounted cash flow	Aged default performance Loss severity	24% – 38%(31%) 0% – 22%(7%)

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of our financial instruments are as follows:

(in 000s)
As of	October 31, 2014				October 31, 2013				April 30, 2014
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Cash and cash equivalents	$	627,490	$	627,490	$	790,772	$	790,772	$	2,185,307	$	2,185,307
Cash and cash equivalents - restricted	55,543		55,543		47,521		47,521		115,319		115,319
Receivables, net - short-term	107,705		107,705		131,701		133,884		191,618		191,618
Mortgage loans held for investment, net	251,092		192,411		295,907		211,690		268,428		192,281
Investments in AFS securities	390,954		390,954		465,344		465,344		427,824		427,824
Receivables, net - long-term	101,805		101,805		198,597		206,481		111,795		111,795
Liabilities:
Customer banking deposits	455,308		452,351		656,305		656,300		770,288		765,376
Long-term debt	506,360		550,332		906,581		947,350		906,474		955,050
Contingent consideration payments	10,555		10,555		12,454		12,454		9,206		9,206

Fair value estimates, methods and assumptions are set forth below. The fair value was not estimated for assets and liabilities that are not considered financial instruments.

▪ Cash and cash equivalents, including restricted - Fair value approximates the carrying amount (Level 1).

▪ Receivables, net - short-term - For short-term balances the carrying values reported in the balance sheet approximate fair market value due to the relative short-term nature of the respective instruments (Level 1).

▪ Mortgage loans held for investment, net - The fair value of mortgage loans held for investment is determined using market pricing sources based on projected future cash flows of each individual asset, and loan characteristics including channel and performance characteristics (Level 3).

▪ Investments in AFS securities - For mortgage-backed securities, we use a third-party pricing service to determine fair value. The service's pricing model is based on market data and utilizes available trade, bid and other market information for similar securities (Level 2). The fair value of our investment in common stock is determined based on quoted market prices (Level 1).

▪ Receivables, net - long-term - The carrying values for the long-term portion of loans to franchisees approximate fair market value due to variable interest rates, low historical delinquency rates and franchise territories serving as collateral (Level 1). Long-term EA receivables are carried at net realizable value which approximates fair value (Level 3). Net realizable value is determined based on historical collection rates.

▪ Customer banking deposits - The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, checking, money market and savings accounts, is equal to the amount payable on demand (Level 1). The fair value of IRAs and other time deposits is estimated by discounting the future cash flows using the rates currently offered by HRB Bank for products with similar remaining maturities (Level 3).

▪ Long-term debt - The fair value of our Senior Notes is based on quotes from multiple banks (Level 2).

▪ Contingent consideration payments - Fair value approximates the carrying amount (Level 3).

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Goodwill And Intangible Assets Schedule of Acquired Intangible Assets and Useful Lives (Details)	6 Months Ended
	Oct. 31, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	6 years
Reacquired Franchise Rights [Member] | Tax Services [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	6 years
Customer Relationships [Member] | Tax Services [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years
Software and Software Development Costs [Member] | Tax Services [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years
Noncompete Agreements [Member] | Tax Services [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years

XML

Goodwill And Intangible Assets

6 Months Ended

Oct. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Intangible Assets

NOTE 7: GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill of our Tax Services segment for the six months ended October 31, 2014 and 2013 are as follows:

(in 000s)
	Goodwill			Accumulated Impairment Losses			Net
Balances as of April 30, 2014	$	468,414		$	(32,297	)	$	436,117
Acquisitions	28,378			—			28,378
Disposals and foreign currency changes, net	(313		)	—			(313		)
Impairments	—			—			—
Balances as of October 31, 2014	$	496,479		$	(32,297	)	$	464,182
Balances as of April 30, 2013	$	467,079		$	(32,297	)	$	434,782
Acquisitions	9,207			—			9,207
Disposals and foreign currency changes, net	(1,177		)	—			(1,177		)
Impairments	—			—			—
Balances as of October 31, 2013	$	475,109		$	(32,297	)	$	442,812

The increase in goodwill resulted from acquired franchisee and competitor businesses during the period.

We test goodwill for impairment annually or more frequently if events occur or circumstances change which would, more likely than not, reduce the fair value of a reporting unit below its carrying value.

Components of the intangible assets of our Tax Services segment are as follows:

(in 000s)
	Gross Carrying Amount		Accumulated Amortization			Net
As of October 31, 2014:
Reacquired franchise rights	$	278,159	$	(33,721	)	$	244,438
Customer relationships	148,407		(66,714		)	81,693
Internally-developed software	110,140		(77,925		)	32,215
Noncompete agreements	28,960		(22,774		)	6,186
Franchise agreements	19,201		(7,574		)	11,627
Purchased technology	54,700		(16,814		)	37,886
	$	639,567	$	(225,522	)	$	414,045
As of October 31, 2013:
Reacquired franchise rights	$	222,371	$	(20,414	)	$	201,957
Customer relationships	109,237		(53,501		)	55,736
Internally-developed software	98,738		(76,517		)	22,221
Noncompete agreements	23,659		(21,898		)	1,761
Franchise agreements	19,201		(6,294		)	12,907
Purchased technology	14,800		(13,169		)	1,631
	$	488,006	$	(191,793	)	$	296,213
As of April 30, 2014:
Reacquired franchise rights	$	233,749	$	(26,136	)	$	207,613
Customer relationships	123,110		(59,521		)	63,589
Internally-developed software	101,162		(72,598		)	28,564
Noncompete agreements	24,694		(22,223		)	2,471
Franchise agreements	19,201		(6,934		)	12,267
Purchased technology	54,900		(13,782		)	41,118
	$	556,816	$	(201,194	)	$	355,622

Amortization of intangible assets for the three and six months ended October 31, 2014 was $13.2 million and $24.5 million, respectively. Amortization of intangible assets for the three and six months ended October 31, 2013 was $6.5 million and $12.6 million, respectively. Estimated amortization of intangible assets for fiscal years 2015, 2016, 2017, 2018 and 2019 is $52.0 million, $48.1 million, $40.6 million, $35.8 million and $31.5 million, respectively.

The increase in intangible assets resulted primarily from acquired franchisee and competitor businesses during the period. The weighted-average life of the acquired assets is as follows:

Assets acquired	Weighted-Average Life (in years)
Reacquired franchise rights	6
Customer relationships	5
Internally-developed software	5
Noncompete agreements	5
Total	6

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Long-Term Debt Long-Term Debt

6 Months Ended

Oct. 31, 2014

Long-term Debt, Unclassified [Abstract]

Long-term Debt

NOTE 8: LONG-TERM DEBT

The components of long-term debt are as follows:

(in 000s)
As of	October 31, 2014			October 31, 2013			April 30, 2014
Senior Notes, 5.500%, due November 2022	$	497,753		$	497,471		$	497,612
Senior Notes, 5.125%, due October 2014	—			399,765			399,882
Capital lease obligation	8,607			9,345			8,980
	506,360			906,581			906,474
Less: Current portion	(772		)	(400,503		)	(400,637		)
	$	505,588		$	506,078		$	505,837

Our 5.125% Senior Notes with a principal balance of $400 million matured in October 2014 and, utilizing available cash on hand, we repaid them according to their terms.

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Income Taxes

6 Months Ended

Oct. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 10: 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's U.S. federal consolidated tax returns for 2011 and 2012 are currently under examination.

We had gross unrecognized tax benefits of $112.9 million, $129.8 million and $111.5 million as of October 31, 2014 and 2013 and April 30, 2014, respectively. The gross unrecognized tax benefits increased $1.4 million and decreased $16.6 million during the six months ended October 31, 2014 and 2013, respectively. The increase in unrecognized tax benefits during the six months ending October 31, 2014 is related to various current year federal and state tax positions offset by benefits from tax positions expiring due to statutes of limitations. We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease by approximately $18 million within the next twelve months. The anticipated decrease is due to the expiration of statutes of limitations and anticipated settlements of federal and state audit issues. The portion of unrecognized benefits expected to be cash settled within the next twelve months amounts to $11.6 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 six months ended October 31, 2014 is expected to be offset by income in the fourth quarter due to the established pattern of seasonality in our primary business operations. As such, management has determined that it is more-likely-than-not that realization of tax benefits recorded in our financial statements will occur in 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.

Excluding discrete items, management's estimate of the annualized effective tax rate for the six months ended October 31, 2014 and 2013 was 37.8% and 38.7%, respectively. Our effective tax rate for continuing operations, including the effects of discrete income tax items was 41.0% and 40.6% for the six months ended October 31, 2014 and 2013, 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. During the six months ended October 31, 2014, a net discrete tax benefit of $12.1 million was recorded compared to a net discrete tax benefit of $6.9 million in the same period of the prior year. Virtually all of the $12.1 million current year discrete tax benefit was recorded in the second quarter. This benefit was due largely to tax reserves released resulting from tax positions expiring due to statutes of limitations. Due to the seasonal nature of our business, the effective tax rate through our second quarter may not be indicative of the rate for our full fiscal year.

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Fair Value Fair Value (Summary Of Carrying Amounts And Estimated Fair Values Of Company's Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013	Apr. 30, 2013
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash & cash equivalents	$ 627,490	$ 2,185,307	$ 790,772	$ 1,747,584
Cash and cash equivalents, Estimated Fair Value	627,490	2,185,307
Cash and cash equivalents - restricted, Carrying Amount	55,543	115,319	47,521
Cash and cash equivalents - restricted, Estimated Fair Value	55,543	115,319
Receivables, net - short-term, Carrying Amount	107,705	191,618	131,701
Receivables, net - short-term, Estimated Fair Value	107,705	191,618
Mortgage loans held for investment, less allowance for loan losses of $9,761, $12,704 and $11,272	251,092	268,428	295,907
Loans Receivable, Fair Value Disclosure	192,411	192,281
Investments in available-for-sale securities, Carrying Amount	9,774	4,329	465,344
Investments in available-for-sale securities, Estimated Fair Value	390,954	427,824	465,344
Accounts Receivable, Net, Noncurrent	101,805	111,795	198,597
Receivables, net - long-term, Estimated Fair Value	101,805	111,795
Total Portfolio	258,728	277,423	306,103
Deposits, Carrying Amount	437,000
Deposits, Estimated Fair Value	452,351	765,376
Long-term Debt	506,360	906,474
Long-term borrowings, Estimated Fair Value	550,332	955,050
Cusiness Combination, Contingent Consideration, at Fair Value	10,555	9,206
Business Combination, Contingent Consideration, Liability	10,555	9,206
Level 1
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash and cash equivalents, Estimated Fair Value			790,772
Cash and cash equivalents - restricted, Estimated Fair Value			47,521
Receivables, net - short-term, Estimated Fair Value			133,884
Level 3
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Loans Receivable, Fair Value Disclosure			211,690
Long-term Debt			906,581
Long-term borrowings, Estimated Fair Value			947,350
Cusiness Combination, Contingent Consideration, at Fair Value			12,454
Business Combination, Contingent Consideration, Liability			12,454
Level 2
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments in available-for-sale securities, Estimated Fair Value			465,344
Level 1 And 3
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Receivables, net - long-term, Estimated Fair Value			206,481
Deposits, Carrying Amount			656,305
Deposits, Estimated Fair Value			656,300
HRB Bank [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Deposits, Carrying Amount	$ 455,308	$ 770,288

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Interest Income And Interest Expense (Schedule Of Interest Income And Expense Of Continuing Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Schedule Of Interest Income And Expense [Line Items]
Interest Expense, Debt	$ 13,843	$ 13,801	$ 27,638	$ 27,604
Interest Income	9,430	10,626	18,729	21,823
Interest expense	13,983	14,314	27,923	28,760
Mortgage Loans, Net
Schedule Of Interest Income And Expense [Line Items]
Interest Income	2,989	3,631	5,967	7,173
Loans to franchisees
Schedule Of Interest Income And Expense [Line Items]
Interest Income	1,890	2,384	3,961	4,673
AFS Securities
Schedule Of Interest Income And Expense [Line Items]
Interest Income	2,133	2,513	4,403	4,854
Other
Schedule Of Interest Income And Expense [Line Items]
Interest Income	2,418	2,098	4,398	5,123
Borrowings
Schedule Of Interest Income And Expense [Line Items]
Interest Expense, Debt	13,843	13,801	27,638	27,604
Deposits
Schedule Of Interest Income And Expense [Line Items]
Interest Expense, Deposits	$ 140	$ 513	$ 285	$ 1,156

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Fair Value (Quantitative Information About Level 3 Fair Value Measurements) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014
Third Party Pricing | Minimum | REO
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Cost to list/sell	5.00%
Loss severity	0.00%
Third Party Pricing | Maximum | REO
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Cost to list/sell	34.00%
Loss severity	100.00%
Third Party Pricing | Weighted Average | REO
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Cost to list/sell	5.00%
Loss severity	53.00%
Collateral-Based | Impaired Mortgage Loans Held For Investment - Non TDRs
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Time to sell (in months)	24 months
Collateral-Based | Impaired Mortgage Loans Held For Investment - TDRs
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	$ 35,964
Collateral-Based | Minimum | Impaired Mortgage Loans Held For Investment - Non TDRs
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Cost to list/sell	0.00%
Loss severity	0.00%
Collateral depreciation	(166.00%)
Collateral-Based | Maximum | Impaired Mortgage Loans Held For Investment - Non TDRs
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Cost to list/sell	1.90%
Loss severity	100.00%
Collateral depreciation	100.00%
Collateral-Based | Weighted Average | Impaired Mortgage Loans Held For Investment - Non TDRs
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Cost to list/sell	9.00%
Loss severity	61.00%
Time to sell (in months)	24 months
Collateral depreciation	39.00%
Discounted Cash Flow | Impaired Mortgage Loans Held For Investment - Non TDRs
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	$ 69,157
Discounted Cash Flow | Minimum | Impaired Mortgage Loans Held For Investment - TDRs
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Loss severity	0.00%
Aged default performance	24.00%
Discounted Cash Flow | Maximum | Impaired Mortgage Loans Held For Investment - TDRs
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Loss severity	22.00%
Aged default performance	38.00%
Discounted Cash Flow | Weighted Average | Impaired Mortgage Loans Held For Investment - TDRs
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Loss severity	7.00%
Aged default performance	31.00%

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Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations (Tables)

6 Months Ended

Oct. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Litigation And Related Contingencies

NOTE 13: 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 October 31, 2014. 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 October 31, 2014 and 2013 and April 30, 2014, we accrued liabilities of $10.3 million, $20.6 million and $23.7 million, respectively, for matters other than those described in note 14.

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 October 31, 2014, we believe the aggregate range of reasonably possible losses in excess of amounts accrued is not material.

For other matters, we are not currently able to estimate the reasonably possible loss or range of loss. We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the reasonably possible loss or range of loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts, or the status of any settlement negotiations.

On a quarterly and annual basis, we review relevant information with respect to litigation and other loss contingencies and update our accruals, disclosures and estimates of reasonably possible loss or range of loss based on such reviews. Costs incurred with defending matters are expensed as incurred. Any receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously, but there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our business and consolidated financial position, results of operations and cash flows.

LITIGATION, CLAIMS, INCLUDING INDEMNIFICATION CLAIMS, OR OTHER LOSS CONTINGENCIES PERTAINING TO DISCONTINUED MORTGAGE OPERATIONS – Although SCC ceased its mortgage loan origination activities in December 2007 and sold its loan servicing business in April 2008, SCC or the Company have been, remain, or may in the future be subject to litigation, claims, including indemnification claims, and other loss contingencies pertaining to SCC's mortgage business activities that occurred prior to such termination and sale. These contingencies, claims and lawsuits include actions by regulators, third parties seeking indemnification, including depositors and underwriters, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others alleged to be similarly situated. Among other things, these contingencies, claims and lawsuits allege or may allege discriminatory or unfair and deceptive loan origination and servicing (including debt collection, foreclosure and eviction) practices, other common law torts, rights to indemnification and contribution, breach of contract, violations of securities laws and a variety of federal statutes, including the Truth in Lending Act (TILA), Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement Procedures Act (RESPA), Home Ownership & Equity Protection Act (HOEPA), as well as similar state statutes. Given the impact of the financial crisis on the non-prime mortgage environment, the aggregate volume of these matters is substantial although it is difficult to predict either the likelihood of new matters being initiated or the outcome of existing matters. In many of these matters, including certain of the lawsuits and claims described below, it is not possible to estimate a reasonably possible loss or range of loss due to, among other things, the inherent uncertainties involved in these matters, some of which are beyond the Company's control, and the indeterminate damages sought in some of these matters.

On October 15, 2010, the Federal Home Loan Bank of Chicago (FHLB-Chicago) filed a lawsuit in the Circuit Court of Cook County, Illinois (Case No. 10CH45033) styled Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al. against multiple defendants, including various SCC-related entities, H&R Block, Inc. and other entities, arising out of FHLB-Chicago's purchase of residential mortgage-backed securities (RMBSs). The plaintiff seeks rescission and damages under state securities law and for common law negligent misrepresentation in connection with its purchase of two securities collateralized by loans originated and securitized by SCC. These two securities had a total initial principal amount of approximately $50 million, of which approximately $34 million remains outstanding. The plaintiff agreed to voluntarily dismiss H&R Block, Inc. from the suit. The remaining defendants, including SCC, filed motions to dismiss, which the court denied. The defendants moved for leave to appeal and the circuit court denied the motion. A portion of our loss contingency accrual is related to this matter for the amount of loss that we consider probable and reasonably estimable.

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 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 and repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter.

On April 5, 2013, a third lawsuit was filed by Homeward in the 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 and repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter.

Underwriters and depositors are, or have been, involved in multiple lawsuits related to securitization transactions in which SCC participated. These lawsuits allege or alleged a variety of claims, including violations of federal and state securities laws and common law fraud, based on alleged materially inaccurate or misleading disclosures. Based on information currently available to SCC, it believes that the 19 lawsuits in which SCC received notice of a claim for indemnification of losses and expenses, involved 38 securitization transactions with original investments of approximately $14 billion (of which the outstanding principal amount is approximately $4 billion). Because SCC has not been a party to these lawsuits (with the exception of the Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation case discussed above) 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 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 is probable, nor have we accrued a liability related to any of these claims.

LITIGATION, CLAIMS OR OTHER LOSS CONTINGENCIES PERTAINING TO CONTINUING OPERATIONS –

RAL and RAC Litigation. A series of putative class action lawsuits were filed against us in various federal courts beginning on November 17, 2011 concerning the refund anticipation loan (RAL) and refund anticipation check (RAC) products. The plaintiffs generally allege we engaged in unfair, deceptive or fraudulent acts in violation of various state consumer protection laws by facilitating RALs that were accompanied by allegedly inaccurate TILA disclosures, and by offering RACs without any TILA disclosures. Certain plaintiffs also allege violation of disclosure requirements of various state statutes expressly governing RALs and provisions of those statutes prohibiting tax preparers from charging or retaining certain fees. Collectively, the plaintiffs seek to represent clients who purchased RAL or RAC products in up to forty-two states and the District of Columbia during timeframes ranging from 2007 to the present. The plaintiffs seek equitable relief, disgorgement of profits, compensatory and statutory damages, restitution, civil penalties, attorneys' fees and costs. These cases were consolidated by the Judicial Panel on Multidistrict Litigation into a single proceeding in the United States District Court for the Northern District of Illinois for coordinated pretrial proceedings, styled IN RE: H&R Block Refund Anticipation Loan Litigation (MDL No. 2373/No: 1:12-CV-02973-JBG ). On July 23, 2014, the MDL court granted our motion to compel arbitration of the claims of the named plaintiffs and stayed the cases pending arbitration. The MDL court subsequently certified its July 23 order for interlocutory appeal. On October 16, 2014, Plaintiffs filed a petition for permission to appeal with the Seventh 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.

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. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

On April 19, 2012, a putative class action lawsuit was filed against us in the United States District Court for the Western District of Missouri styled Ronald Perras v. H&R Block, Inc., et al. (Case No. 4:12-cv-00450-DGK)concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff seeks to represent all persons nationwide (excluding citizens of Missouri) who were charged the compliance fee, and asserts claims of violation of various state consumer laws, money had and received, and unjust enrichment. In November 2013, the court compelled arbitration of the 2011 claims and stayed all proceedings with respect to those claims. On June 20, 2014, the court denied class certification of the remaining 2012 claims. Plaintiff filed an appeal of the denial of class certification to 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.

Form 8863 Litigation. A series of putative class action lawsuits were filed against us in various federal courts and one state court beginning on March 13, 2013. Taken together, the plaintiffs in these lawsuits purport to represent certain clients nationwide who filed Form 8863 during tax season 2013 through an H&R Block office or using H&R Block At Home® online tax services or tax preparation software, and allege breach of contract, negligence and violation of state consumer laws in connection with transmission of the form. The plaintiffs seek damages, pre-judgment interest, attorneys' fees and costs. In August 2013, the plaintiff in the state court action voluntarily dismissed her case without prejudice. On October 10, 2013, the Judicial Panel on Multidistrict Litigation granted our petition to consolidate the remaining federal lawsuits for coordinated pretrial proceedings in the United States District Court for the Western District of Missouri in a proceeding styled IN RE: H&R BLOCK IRS FORM 8863 LITIGATION (MDL No. 2474/Case No. 4:13-MD-02474-FJG). On July 11, 2014, the MDL court granted our motion to compel arbitration for those named plaintiffs who agreed to arbitrate their claims. Plaintiffs filed a consolidated class action complaint in October 2014. We filed a motion to strike class allegations in the consolidated complaint relating to clients who agreed to arbitration, which remains pending. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability 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.

Although we sold H&R Block Financial Advisors, Inc. (HRBFA) effective November 1, 2008, we remain responsible for any liabilities relating to the Express IRA litigation, among other things, through an indemnification agreement. A portion of our accrual is related to these indemnity obligations.

RSM McGladrey and Related Businesses. On April 17, 2009, a shareholder derivative complaint was filed by Brian Menezes, derivatively and on behalf of nominal defendant International Textile Group, Inc. against McGladrey Capital Markets LLC (MCM) and others in the Court of Common Pleas, Greenville County, South Carolina (C.A. No. 2009-CP-23-3346) styled Brian P. Menezes, Derivatively on Behalf of Nominal Defendant, International Textile Group, Inc. (f/k/a Safety Components International, Inc.) v.McGladrey Capital Markets, LLC (f/k/a RSM EquiCo Capital Markets, LLC), et al. The plaintiffs filed an amended complaint in October 2011 styled In re International Textile Group Merger Litigation, adding a putative class action claim. The plaintiffs allege claims of aiding and abetting, civil conspiracy, gross negligence and breach of fiduciary duty against MCM in connection with a fairness opinion MCM provided to the Special Committee of Safety Components International, Inc. (SCI) in 2006 regarding the merger between International Textile Group, Inc. and SCI. The plaintiffs seek actual and punitive damages, pre-judgment interest, attorneys' fees and costs. On February 8, 2012, the court dismissed the plaintiffs' civil conspiracy claim against all defendants. A class was certified on the remaining claims on November 20, 2012. The court granted summary judgment in favor of MCM on June 3, 2013 on the breach of fiduciary duty claim. To avoid the cost and inherent risk associated with litigation, the parties signed a memorandum of understanding to resolve the case, which was subject to approval by the court. The court granted preliminary approval of the settlement on February 19, 2014 and final approval on September 2, 2014. We previously recorded a liability for our estimate of the expected loss. The amount we paid under the settlement did not exceed the amount we previously accrued.

In connection with the sale of RSM McGladrey, Inc. (RSM) and MCM, we indemnified the buyers against certain litigation matters. The indemnities are not subject to a stated term or limit. A portion of our accrual is related to these indemnity obligations.

OTHER – We are from time to time a party to litigation, claims and other loss contingencies not discussed herein arising out of our business operations. These matters may include actions by state attorneys general, other state regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others similarly situated.

While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on our business or our consolidated financial position, results of operations and cash flows.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our consolidated financial position, results of operations and cash flows.

(in 000s)
Six months ended October 31,	2014		2013
Balance, beginning of the period	$	183,765	$	158,765
Provisions	10,000		—
Payments	—		—
Balance, end of the period	$	193,765	$	158,765

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Mortgage Loans Held For Investment And Related Assets (Schedule Of Past Due Mortgage Loans) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014		Apr. 30, 2014	Oct. 31, 2013
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	$ 258,728		$ 277,423	$ 306,103
Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	148,833
All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	109,895
Less than 60 Days Past Due
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	15,812
Less than 60 Days Past Due | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	11,199
Less than 60 Days Past Due | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	4,613
60 – 89 Days Past Due
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	402
60 – 89 Days Past Due | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	324
60 – 89 Days Past Due | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	78
90 Days Past Due
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	55,044	[1]
90 Days Past Due | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	47,514	[1]
90 Days Past Due | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	7,530	[1]
Total Past Due
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	71,258
Total Past Due | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	59,037
Total Past Due | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	12,221
Current
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	187,470
Current | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	89,796
Current | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	$ 97,674

[1] We do not accrue interest on loans past due 90 days or more.

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Regulatory Capital Requirements

6 Months Ended

Oct. 31, 2014

Banking and Thrift [Abstract]

Regulatory Capital Requirements

NOTE 15: REGULATORY CAPITAL REQUIREMENTS

The following table sets forth HRB Bank's regulatory capital requirements calculated in its Call Report, as filed with the Federal Financial Institutions Examination Council (FFIEC):

(dollars in 000s)
	Actual				Minimum Capital Requirement					Minimum to be Well Capitalized
	Amount		Ratio		Amount		Ratio			Amount		Ratio
As of September 30, 2014:
Total risk-based capital ratio (1)	$	595,148	199.4	%	$	23,877	8.0	%		$	29,846	10.0	%
Tier 1 risk-based capital ratio (2)	591,293		198.1	%	N/A		N/A			17,908		6.0	%
Tier 1 capital ratio (leverage) (3)	591,293		54.3	%	130,689		12.0	%	(5)	54,454		5.0	%
Tangible equity ratio (4)	591,293		54.3	%	16,336		1.5	%		N/A		N/A
As of September 30, 2013:
Total risk-based capital ratio (1)	$	506,449	140.0	%	$	28,950	8.0	%		$	36,188	10.0	%
Tier 1 risk-based capital ratio (2)	501,720		138.6	%	N/A		N/A			21,713		6.0	%
Tier 1 capital ratio (leverage) (3)	501,720		40.4	%	148,869		12.0	%	(5)	62,029		5.0	%
Tangible equity ratio (4)	501,720		40.4	%	18,609		1.5	%		N/A		N/A
As of March 31, 2014:
Total risk-based capital ratio (1)	$	563,899	168.5	%	$	26,771	8.0	%		$	33,464	10.0	%
Tier 1 risk-based capital ratio (2)	559,572		167.2	%	N/A		N/A			20,079		6.0	%
Tier 1 capital ratio (leverage) (3)	559,572		32.1	%	209,041		12.0	%	(5)	87,101		5.0	%
Tangible equity ratio (4)	559,572		32.1	%	26,130		1.5	%		N/A		N/A

⁽¹⁾  Total risk-based capital divided by risk-weighted assets.

⁽²⁾  Tier 1 (core) capital less deduction for low-level recourse and residual interest divided by risk-weighted assets.

⁽³⁾  Tier 1 (core) capital divided by adjusted total assets.

⁽⁴⁾  Tangible capital divided by tangible assets.

⁽⁵⁾  Effective April 5, 2012, the minimum capital requirement was changed to 4% by the OCC, although HRB Bank plans to maintain a minimum of 12.0% leverage capital at the end of each calendar quarter.

Quantitative measures established by regulation to ensure capital adequacy require HRB Bank to maintain minimum amounts and ratios of tangible equity, total risk-based capital and Tier 1 capital, as set forth in the table above. As of October 31, 2014, HRB Bank's leverage ratio was 53.8%.

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Receivables (Tables)

6 Months Ended

Oct. 31, 2014

Accounts, Notes, Loans and Financing Receivable, Unclassified [Abstract]

Schedule Of Short-Term Receivables

Receivables consist of the following:

(in 000s)
As of	October 31, 2014					October 31, 2013						April 30, 2014
	Short-term			Long-term		Short-term			Long-term			Short-term			Long-term
Loans to franchisees	$	62,568		$	84,462	$	70,390		$	108,874		$	63,716		$	90,747
Receivables for tax preparation and related fees	36,369			—		35,927			—			45,619			—
Cash Back® receivables	1,955			—		2,036			—			48,812			—
Emerald Advance lines of credit	20,073			2,778		21,692			6,161			20,577			3,862
Royalties from franchisees	10,060			—		10,732			—			9,978			—
Note receivable	—			—		—			62,786			—			—
Other	28,426			14,565		43,893			23,868			55,494			17,186
	159,451			101,805		184,670			201,689			244,196			111,795
Allowance for doubtful accounts	(51,746		)	—		(52,969		)	(3,092		)	(52,578		)	—
	$	107,705		$	101,805	$	131,701		$	198,597		$	191,618		$	111,795

Schedule Of Receivables Based On Year Of Origination

These amounts as of October 31, 2014, by year of origination, are as follows:

(in 000s)
Credit Quality Indicator – Year of origination:
2014	$	3,802
2013	1,553
2012 and prior	4,412
Revolving loans	13,084
	$	22,851

Schedule Of Activity In The Allowance For Doubtful Accounts

Activity in the allowance for doubtful accounts for our short-term and long-term receivables for the six months ended October 31, 2014 and 2013 is as follows:

(in 000s)
	EAs		Loans to  Franchisees		Cash Back ®			All Other			Total
Balances as of May 1, 2014	$	7,530	$	—	$	3,002		$	42,046		$	52,578
Provision	380		—		149			2,195			2,724
Charge-offs	—		—		(1,074		)	(2,482		)	(3,556		)
Balances as of October 31, 2014	$	7,910	$	—	$	2,077		$	41,759		$	51,746
Balances as of May 1, 2013	$	7,390	$	—	$	2,769		$	47,544		$	57,703
Provision	—		—		188			5,923			6,111
Charge-offs	—		—		(479		)	(7,274		)	(7,753		)
Balances as of October 31, 2013	$	7,390	$	—	$	2,478		$	46,193		$	56,061

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Mortgage Loans Held For Investment And Related Assets (Schedule Of Mortgage Loans Held For Investment And The Related Allowance) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Mortgage Loans Held For Investment And Related Assets [Line Items]
Outstanding Principal Balance	$ 258,728	$ 277,423	$ 306,103
Loan Loss Allowance, Amount	9,761	11,272	12,704
Loan Loss Allowance, % of Principal	3.80%	4.10%	4.20%
% 30 Days Past Due	19.00%
Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Outstanding Principal Balance	148,833
Loan Loss Allowance, Amount	7,847
Loan Loss Allowance, % of Principal	5.30%
% 30 Days Past Due	27.90%
All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Outstanding Principal Balance	109,895
Loan Loss Allowance, Amount	$ 1,914
Loan Loss Allowance, % of Principal	1.70%
% 30 Days Past Due	6.90%

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Receivables (Schedule Of Short-Term Receivables) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	$ 159,451	$ 244,196	$ 184,670
Accounts Receivable, Gross, Noncurrent	101,805	111,795	201,689
Allowance for doubtful accounts	(51,746)	(52,578)	(52,969)
Allowance for Doubtful Accounts Receivable, Noncurrent	0	0	(3,092)
Receivables, net	107,705	191,618	131,701
Accounts Receivable, Net, Noncurrent	101,805	111,795	198,597
Loans to franchisees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables, gross		63,716	70,390
Accounts Receivable, Gross, Current	62,568
Accounts Receivable, Gross, Noncurrent	84,462	90,747	108,874
Allowance for doubtful accounts	0	0
Cash Back® receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables, gross		45,619	35,927
Accounts Receivable, Gross, Current	36,369
Accounts Receivable, Gross, Noncurrent	0	0	0
Receivables for tax preparation and related fees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables, gross		48,812	2,036
Accounts Receivable, Gross, Current	1,955
Accounts Receivable, Gross, Noncurrent	0	0	0
Allowance for doubtful accounts	(2,077)	(3,002)
Emerald Advance lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables, gross		20,577	21,692
Accounts Receivable, Gross, Current	20,073
Accounts Receivable, Gross, Noncurrent	2,778	3,862	6,161
Allowance for doubtful accounts	(7,910)	(7,530)
Note receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables, gross		9,978	10,732
Accounts Receivable, Gross, Current	10,060
Accounts Receivable, Gross, Noncurrent	0	0
Royalties from franchisees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables, gross	0	0	0
Accounts Receivable, Gross, Noncurrent	0	0	62,786
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables, gross		55,494	43,893
Accounts Receivable, Gross, Current	28,426
Accounts Receivable, Gross, Noncurrent	$ 14,565	$ 17,186	$ 23,868

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 51,746	$ 52,578	$ 52,969
Allowance for loan losses	9,761	11,272	12,704
Accumulated depreciation and amortization	$ 491,153	$ 446,049	$ 449,738
Common stock, no par value	$ 0	$ 0	$ 0
Common stock, stated value per share	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	800,000,000	800,000,000	800,000,000
Common stock, shares issued	316,628,110	316,628,110	316,628,110
Convertible preferred stock, stated value per share	$ 0.01	$ 0.01	$ 0.01
Convertible preferred stock, shares authorized	500,000	500,000	500,000

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Receivables

6 Months Ended

Oct. 31, 2014

Accounts, Notes, Loans and Financing Receivable, Unclassified [Abstract]

Receivables

NOTE 4: RECEIVABLES

Receivables consist of the following:

(in 000s)
As of	October 31, 2014					October 31, 2013						April 30, 2014
	Short-term			Long-term		Short-term			Long-term			Short-term			Long-term
Loans to franchisees	$	62,568		$	84,462	$	70,390		$	108,874		$	63,716		$	90,747
Receivables for tax preparation and related fees	36,369			—		35,927			—			45,619			—
Cash Back® receivables	1,955			—		2,036			—			48,812			—
Emerald Advance lines of credit	20,073			2,778		21,692			6,161			20,577			3,862
Royalties from franchisees	10,060			—		10,732			—			9,978			—
Note receivable	—			—		—			62,786			—			—
Other	28,426			14,565		43,893			23,868			55,494			17,186
	159,451			101,805		184,670			201,689			244,196			111,795
Allowance for doubtful accounts	(51,746		)	—		(52,969		)	(3,092		)	(52,578		)	—
	$	107,705		$	101,805	$	131,701		$	198,597		$	191,618		$	111,795

Balances presented above as short-term are included in receivables, while the long-term portions are included in other assets in the consolidated balance sheets.

LOANS TO FRANCHISEES –Franchisee loan balances as of October 31, 2014 and 2013 and April 30, 2014, consisted of $100.6 million, $126.3 million and $109.1 million, respectively, in term loans made primarily to finance the purchase of franchises and $46.4 million, $53.0 million and $45.4 million, respectively, in revolving lines of credit primarily for the purpose of funding off-season working capital needs.

As of October 31, 2014 and 2013, loans with a principal balance of $2.4 million and $0.1 million, respectively, were more than 30 days past due, while we had no loans more than 30 days past due at April 30, 2014. 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 October 31, 2014 and 2013 and April 30, 2014, $27 thousand, $0.1 million and $1.9 million of Cash Back balances were more than 60 days old, respectively.

H&R BLOCK EMERALD ADVANCE® LINES OF CREDIT –We review the credit quality of our H&R Block Emerald Advance® lines of credit (EA) receivables based on pools, which are segregated by the year of origination, with older years being deemed more unlikely to be repaid. These amounts as of October 31, 2014, by year of origination, are as follows:

(in 000s)
Credit Quality Indicator – Year of origination:
2014	$	3,802
2013	1,553
2012 and prior	4,412
Revolving loans	13,084
	$	22,851

As of October 31, 2014 and 2013 and April 30, 2014, $20.0 million, $26.2 million and $20.7 million of EAs were on non-accrual status and classified as impaired, or more than 60 days past due, respectively.

ALLOWANCE FOR DOUBTFUL ACCOUNTS –Activity in the allowance for doubtful accounts for our short-term and long-term receivables for the six months ended October 31, 2014 and 2013 is as follows:

(in 000s)
	EAs		Loans to  Franchisees		Cash Back ®			All Other			Total
Balances as of May 1, 2014	$	7,530	$	—	$	3,002		$	42,046		$	52,578
Provision	380		—		149			2,195			2,724
Charge-offs	—		—		(1,074		)	(2,482		)	(3,556		)
Balances as of October 31, 2014	$	7,910	$	—	$	2,077		$	41,759		$	51,746
Balances as of May 1, 2013	$	7,390	$	—	$	2,769		$	47,544		$	57,703
Provision	—		—		188			5,923			6,111
Charge-offs	—		—		(479		)	(7,274		)	(7,753		)
Balances as of October 31, 2013	$	7,390	$	—	$	2,478		$	46,193		$	56,061

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Goodwill And Intangible Assets (Schedule Of Goodwill) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Goodwill [Roll Forward]
Goodwill before impairment losses, beginning balance	$ 468,414	$ 467,079
Accumulated impairment losses, beginning balance	(32,297)	(32,297)
Goodwill, beginning balance	436,117	434,782
Acquisitions	28,378	9,207
Disposals and foreign currency changes, net	(313)	(1,177)
Impairments	0	0
Goodwill before impairment losses, ending balance	496,479	475,109
Accumulated impairment losses, ending balance	(32,297)	(32,297)
Goodwill, ending balance	$ 464,182	$ 442,812

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Litigation And Related Contingencies (Details) (USD $)	35 Months Ended
	Nov. 30, 2007 transaction	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013	Apr. 05, 2013 loan	Oct. 31, 2014 ederal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al [Member] Pending Litigation [Member]	Oct. 15, 2010 ederal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al [Member] Pending Litigation [Member]	Apr. 30, 2014 MGRID LLC v. Merrill Lynch Mortgage Lending Inc [Member] lawsuit	Apr. 30, 2014 MGRID LLC v. Merrill Lynch Mortgage Lending Inc [Member] SCC [Member]	Apr. 30, 2014 MGRID LLC v. Merrill Lynch Mortgage Lending Inc [Member] SCC [Member] Claims with Knowledge of Outstanding Principal Amount [Member]
Loss Contingencies [Line Items]
Loss Contingency Accrual		$ 10,300,000	$ 23,700,000	$ 20,600,000
Initial principal on loans securitized							50,000,000
Principal outstanding on loans securitized						34,000,000
Loans Sold To Trust, With Claims of Breach of Contract and Indemnity					159
Number Of Lawsuits								19
Securitization Transactions	38
Estimated Litigation Liability									$ 14,000,000,000	$ 4,000,000,000

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Mortgage Loans Held For Investment And Related Assets (Tables)

6 Months Ended

Oct. 31, 2014

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	October 31, 2014					October 31, 2013					April 30, 2014
	Amount			% of Total		Amount			% of Total		Amount			% of Total
Adjustable-rate loans	$	138,808		54	%	$	165,289		54	%	$	149,480		54	%
Fixed-rate loans	119,920			46	%	140,814			46	%	127,943			46	%
	258,728			100	%	306,103			100	%	277,423			100	%
Unamortized deferred fees and costs	2,125					2,508					2,277
Less: Allowance for loan losses	(9,761		)			(12,704		)			(11,272		)
	$	251,092				$	295,907				$	268,428

Schedule Of Allowance For Loan Losses

Activity in the allowance for loan losses for the six months ended October 31, 2014 and 2013 is as follows:

(in 000s)
Six months ended October 31,	2014			2013
Balance at beginning of the period	$	11,272		$	14,314
Provision	735			7,224
Recoveries	911			2,409
Charge-offs	(3,157		)	(11,243		)
Balance at end of the period	$	9,761		$	12,704

Schedule Of Portfolio Balance And Related Allowance

The balance of these loans and the related allowance is as follows:

(in 000s)
As of	October 31, 2014				October 31, 2013				April 30, 2014
	Portfolio  Balance		Related  Allowance		Portfolio  Balance		Related  Allowance		Portfolio  Balance		Related  Allowance
Pooled (less than 60 days past due)	$	147,614	$	3,768	$	178,497	$	5,523	$	158,496	$	4,508
Impaired:
Individually (TDRs)	40,201		4,237		47,011		4,598		43,865		4,346
Individually (60 days or more past due)	70,913		1,756		80,595		2,583		75,062		2,418
	$	258,728	$	9,761	$	306,103	$	12,704	$	277,423	$	11,272

Schedule Of Mortgage Loans Held For Investment And The Related Allowance

Detail of our mortgage loans held for investment and the related allowance as of October 31, 2014 is as follows:

(dollars in 000s)
	Outstanding Principal Balance		Loan Loss Allowance				% 30+ Days Past Due
			Amount		% of Principal
Purchased from SCC	$	148,833	$	7,847	5.3	%	27.9	%
All other	109,895		1,914		1.7	%	6.9	%
	$	258,728	$	9,761	3.8	%	19.0	%

Schedule Of Credit Quality Indicators

Credit quality indicators as of October 31, 2014 include the following:

(in 000s)
Credit Quality Indicators	Purchased from SCC		All Other		Total Portfolio
Occupancy status:
Owner occupied	$	109,069	$	72,767	$	181,836
Non-owner occupied	39,764		37,128		76,892
	$	148,833	$	109,895	$	258,728
Documentation level:
Full documentation	$	49,157	$	77,974	$	127,131
Limited documentation	4,676		12,114		16,790
Stated income	83,074		12,305		95,379
No documentation	11,926		7,502		19,428
	$	148,833	$	109,895	$	258,728
Internal risk rating:
High	$	41,758	$	—	$	41,758
Medium	107,075		—		107,075
Low	—		109,895		109,895
	$	148,833	$	109,895	$	258,728

Schedule Of Past Due Mortgage Loans

Detail of the aging of the mortgage loans in our portfolio as of October 31, 2014 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	$	11,199	$	324	$	47,514	$	59,037	$	89,796	$	148,833
All other	4,613		78		7,530		12,221		97,674		109,895
	$	15,812	$	402	$	55,044	$	71,258	$	187,470	$	258,728

⁽¹⁾  We do not accrue interest on loans past due 90 days or more.

Schedule Of Non-Accrual Loans

Information related to our non-accrual loans is as follows:

(in 000s)
As of	October 31, 2014		October 31, 2013		April 30, 2014
Loans:
Purchased from SCC	$	60,254	$	67,641	$	61,767
Other	11,439		12,723		12,528
	71,693		80,364		74,295
TDRs:
Purchased from SCC	5,059		3,832		4,648
Other	940		881		951
	5,999		4,713		5,599
Total non-accrual loans	$	77,692	$	85,077	$	79,894

Information Related To Impaired Loans

Information related to impaired loans is as follows:

(in 000s)
	Balance With Allowance		Balance With No Allowance		Total Impaired Loans		Related Allowance
As of October 31, 2014:
Purchased from SCC	$	25,494	$	68,138	$	93,632	$	4,984
Other	3,732		13,750		17,482		1,009
	$	29,226	$	81,888	$	111,114	$	5,993
As of October 31, 2013:
Purchased from SCC	$	30,100	$	77,052	$	107,152	$	5,762
Other	5,196		15,258		20,454		1,419
	$	35,296	$	92,310	$	127,606	$	7,181
As of April 30, 2014:
Purchased from SCC	$	27,924	$	71,075	$	98,999	$	3,239
Other	5,176		14,752		19,928		3,525
	$	33,100	$	85,827	$	118,927	$	6,764

Schedule Of Allowance For Impaired Loans

Information related to the allowance for impaired loans is as follows:

(in 000s)
As of	October 31, 2014		October 31, 2013		April 30, 2014
Portion of total allowance for loan losses allocated to impaired loans and TDR loans:
Based on collateral value method	$	1,756	$	2,583	$	2,418
Based on discounted cash flow method	4,237		4,598		4,346
	$	5,993	$	7,181	$	6,764

Information Related To Activities Of Non-Performing Assets

Information related to activities of our non-performing assets is as follows:

(in 000s)
Six months ended October 31,	2014		2013
Average impaired loans:
Purchased from SCC	$	99,706	$	121,532
All other	19,404		23,646
	$	119,110	$	145,178

XML

Segment Information (Continuing Operations By Reportable Operating Segment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Segment Reporting Information [Line Items]
Total revenues	$ 134,628	$ 134,340	$ 268,214	$ 261,535
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES :	(200,573)	(179,362)	(376,389)	(363,856)
Tax Services [Member]
Segment Reporting Information [Line Items]
Total revenues	128,683	128,040	257,763	249,731
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES :	(176,642)	(159,314)	(327,202)	(303,708)
Corporate And Eliminations
Segment Reporting Information [Line Items]
Total revenues	5,945	6,300	10,451	11,804
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES :	$ (23,931)	$ (20,048)	$ (49,187)	$ (60,148)

XML

H&R Block Bank (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2013
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Customer Deposits	$ 437,000
Investments in available-for-sale securities	381,180	423,495
HRB Bank [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Customer Deposits	$ 455,308	$ 770,288

XML

Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations

6 Months Ended

Oct. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Loss Contingencies Arising From Representations and Warranties of Our Discontinued Mortgage Operations

NOTE 12: COMMITMENTS AND CONTINGENCIES

Changes in deferred revenue balances related to our Peace of Mind® (POM) program, the current portion of which is included in accounts payable, accrued expenses and other current liabilities and the long-term portion of which is included in other noncurrent liabilities in the consolidated balance sheets, are as follows:

(in 000s)
Six months ended October 31,	2014			2013
Balance, beginning of the period	$	145,237		$	146,286
Amounts deferred for new guarantees issued	2,104			1,840
Revenue recognized on previous deferrals	(40,816		)	(46,977		)
Balance, end of the period	$	106,525		$	101,149

We accrued $10.7 million, $16.7 million and $11.4 million as of October 31, 2014 and 2013 and April 30, 2014, respectively, related to estimated losses under our standard guarantee, which is included with our standard in-office tax preparation services. The current portion of this liability is included in accounts payable, accrued expenses and other current liabilities and the long-term portion is included in other noncurrent liabilities in the consolidated balance sheets.

We have accrued estimated contingent consideration payments totaling $10.6 million, $12.5 million and $9.2 million as of October 31, 2014 and 2013 and April 30, 2014, respectively, related to acquisitions, with the short-term amount recorded in accounts payable, accrued expenses and other current liabilities and the long-term portion included in other noncurrent 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 $81.0 million at October 31, 2014, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $34.5 million.

We maintain compensating balances with certain financial institutions that are creditors in our $1.5 billion unsecured committed line of credit governed by a Credit and Guarantee Agreement (2012 CLOC), which are not legally restricted as to withdrawal. We had no material compensating balances as of October 31, 2014. These balances may fluctuate significantly over the course of any fiscal year.

NOTE 14: LOSS CONTINGENCIES ARISING FROM REPRESENTATIONS AND WARRANTIES OF OUR DISCONTINUED MORTGAGE OPERATIONS

SCC ceased originating mortgage loans in December 2007 and, in April 2008, sold its servicing assets and discontinued its remaining operations.

Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers, who generally securitized such loans, or in the form of RMBSs. In connection with the sale of loans and/or RMBSs, SCC made certain representations and warranties. 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, represented approximately 68% of the disposal of loans originated in calendar years 2005, 2006 and 2007, included a "knowledge qualifier" limiting SCC's liability to those instances where SCC had knowledge of the fraud at the time the loans were sold. Representations and warranties made in other sale transactions effectively did not include a knowledge qualifier as to borrower fraud. SCC believes it would have an obligation to repurchase a loan only if it breached a representation and warranty and such breach materially and adversely affects the value of the mortgage loan or certificate holder's interest in the mortgage loan. SCC also would assert that it has no liability for the failure to repurchase any mortgage loan that has been liquidated prior to a repurchase demand, although there is conflicting case law on the liquidated loan defense issue. These decisions are from lower courts, are inconsistent in their analysis and receptivity to this defense, and are subject to appeal. Such claims together with any settlement arrangements related to these losses are collectively referred to as "representation and warranty claims."

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 $2.1 billion since May 1, 2008, of which $1.8 billion were received prior to fiscal year 2013.

SETTLEMENT ACTIONS –SCC has entered into tolling agreements with the counterparties that have made and are expected to assert a significant majority of previously denied and possible future representation and warranty claims. These tolling agreements toll the running of any applicable statute of limitations related to potential lawsuits regarding representation and warranty claims and other claims against SCC.

Beginning in the fourth quarter of fiscal year 2013 and continuing through the second quarter of fiscal year 2015, SCC has been engaged in discussions with these counterparties regarding the bulk settlement of previously denied and potential future claims. Based on settlement discussions with these counterparties, SCC believes a bulk settlement approach, rather than the loan-by-loan resolution process, will be needed to resolve all of the representation and warranty and other claims that are the subject of these discussions. On December 5, 2014, SCC entered into a settlement agreement to resolve certain of these claims. The amount to be paid under the settlement agreement is 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 October 31, 2014 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 accounts payable, accrued expenses 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)
Six months ended October 31,	2014		2013
Balance, beginning of the period	$	183,765	$	158,765
Provisions	10,000		—
Payments	—		—
Balance, end of the period	$	193,765	$	158,765

In December 2013, a decision by the New York intermediate appellate court, ACE Securities Corp. v. DB Structured Products, Inc., held that, under New York law, which governs many RMBS transactions into which SCC entered, the six-year statute of limitations starts to run at the time the representations and warranties are made, not the date when the repurchase demand was denied. That decision has been applied by the state and federal courts in several RMBS lawsuits not involving SCC, resulting in the dismissal of claims involving representations and warranties made more than six years prior to the initiation of the lawsuit. Unless overturned by New York's highest appellate court, which has taken the case for review, this decision would apply to claims and lawsuits brought against SCC where New York law governs. 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. In addition, if the ACE decision is overturned, it could result in representation and warranty claims being asserted that were previously thought to be time-barred. It is also possible that in response to the statute of limitations rulings, parties seeking to pursue representation and warranty claims or lawsuits with respect to trusts where the statute of limitations for representation and warranty claims against the originator has run, may pursue alternate legal theories of recovery or assert claims against other contractual parties. SCC has not accrued liabilities for claims not subject to a tolling arrangement or not asserted prior to the expiration of the applicable statute of limitations. The impact on SCC, if any, of the ACE decision being overturned or from alternative legal theories or assertions is unclear.

SCC is taking the legal position, where appropriate, for both contractual representation and warranty claims and similar claims in litigation, that a valid representation and warranty claim cannot be made with respect to a mortgage loan that has been liquidated. There is conflicting case law on this issue. These decisions are from lower courts, are inconsistent in their analysis and receptivity to this defense, and are subject to appeal. It is anticipated that the liquidated mortgage loan defense will be the subject of future judicial decisions. In the event the liquidated loan defense is further clarified by the courts or other developments occur, the liquidated loan defense may be a factor in SCC's estimated accrual for representation and warranty claims where such defense may be applicable.

SCC believes it is reasonably possible that future representation and warranty losses may vary from amounts accrued for these exposures. SCC currently believes the aggregate range of reasonably possible losses in excess of amounts accrued is not material. This estimated range is based on the best information currently available, significant management judgment and a number of factors that are subject to change, including developments in case law and the factors mentioned above. The actual loss that may be incurred could differ materially from our accrual or the estimate of reasonably possible losses.

As described more fully in note 13, losses may also be incurred with respect to various indemnification claims by underwriters and depositors in securitization transactions in which SCC participated. Losses from these indemnification claims are frequently not subject to a stated term or limit. We have not concluded that a loss related to any of these indemnification claims is probable, have not accrued a liability for these claims and are not able to estimate a reasonably possible loss or range of loss for these claims. Accordingly, neither the accrued liability described above totaling $193.8 million, nor the estimated range of reasonably possible losses in excess of the amount accrued described above, includes any possible losses which may arise from these indemnification claims. There can be no assurances as to the outcome or impact of these indemnification claims. In the event of unfavorable outcomes on these claims, 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. SCC's principal assets, as of October 31, 2014, total approximately $520 million and consist primarily of an intercompany note receivable and a deferred tax asset. We believe our legal position is strong on any potential corporate veil-piercing arguments; however, if this position is challenged and not upheld, it could have a material adverse effect on our business and our consolidated financial position, results of operations and cash flows.