[X] | ||
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the fiscal year ended: April 30, |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the transition period fromto |
MISSOURI | 44-0607856 | |
(State or other jurisdiction of | (I.R.S. Employer Identification Number) | |
incorporation or organization) |
Title of | Name of | |
Common Stock, without par value | New York Stock Exchange | |
Pacific Exchange |
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April 30, | 2005 | 2004 | 2003 | |||||||||||
U.S. OFFICES ... | ||||||||||||||
Company-owned offices | 5,811 | 5,172 | 4,688 | |||||||||||
Company-owned shared locations (1) | 1,296 | 996 | 607 | |||||||||||
Total company-owned offices | 7,107 | 6,168 | 5,295 | |||||||||||
Franchise offices | 3,528 | 3,418 | 3,967 | |||||||||||
Franchise shared locations (1) | 526 | 323 | 95 | |||||||||||
Total franchise offices | 4,054 | 3,741 | 4,062 | |||||||||||
11,161 | 9,909 | 9,357 | ||||||||||||
INTERNATIONAL OFFICES ... | ||||||||||||||
Canada | 912 | 891 | 910 | |||||||||||
Australia | 378 | 378 | 362 | |||||||||||
Other | 10 | 7 | 6 | |||||||||||
1,300 | 1,276 | 1,278 | ||||||||||||
April 30, | 2006 | 2005 | 2004 | |||||||||
U.S. OFFICES— | ||||||||||||
Company-owned offices | 6,387 | 5,811 | 5,172 | |||||||||
Company-owned shared locations(1) | 1,473 | 1,296 | 996 | |||||||||
Total company-owned offices | 7,860 | 7,107 | 6,168 | |||||||||
Franchise offices | 3,703 | 3,528 | 3,418 | |||||||||
Franchise shared locations(1) | 602 | 526 | 323 | |||||||||
Total franchise offices | 4,305 | 4,054 | 3,741 | |||||||||
12,165 | 11,161 | 9,909 | ||||||||||
INTERNATIONAL OFFICES— | ||||||||||||
Canada | 1,011 | 912 | 891 | |||||||||
Australia | 362 | 378 | 378 | |||||||||
Other | 10 | 10 | 7 | |||||||||
1,383 | 1,300 | 1,276 | ||||||||||
(1) | Shared locations include offices located within Wal-Mart, Sears or other third-party businesses. |
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United States and Canada | January – April | |||||
Australia | July – October | |||||
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• | ||
Option One’s wholesale origination channel works with independent brokers throughout the U.S. to fund non-prime mortgage loans through a national branch network. Wholesale originations represent the majority of Option One’s total loan production. | ||
• | HRBMC originates residential mortgage loans directly to retail | |
• | Option One’s national accounts channel forms partnerships with financial institutions, including national and regional banks, to allow them to offer non-prime loans. | |
• | Option One’s bulk acquisitions channel specializes in the purchase of performing non-prime mortgage loan pools. |
(in 000s) | ||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | |||||||||||
Wholesale | $ | 21,841,783 | $ | 16,828,138 | $ | 11,434,138 | ||||||||
Retail | 4,023,914 | 3,105,021 | 2,918,378 | |||||||||||
National accounts | 3,974,224 | 2,642,944 | 1,814,092 | |||||||||||
Bulk acquisitions | 1,161,803 | 679,910 | 411,013 | |||||||||||
$ | 31,001,724 | $ | 23,256,013 | $ | 16,577,621 | |||||||||
(dollars in 000s) | |||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | ||||||||||||
Loan type: | |||||||||||||||
2-year ARM | 61.6% | 63.4% | 70.3% | ||||||||||||
3-year ARM | 4.0% | 5.2% | 5.1% | ||||||||||||
Fixed 1st | 17.7% | 28.7% | 23.9% | ||||||||||||
Fixed 2nd | 3.8% | 1.6% | 0.7% | ||||||||||||
Interest only 1st | 12.6% | 0.7% | – % | ||||||||||||
Other | 0.3% | 0.4% | – % | ||||||||||||
Loan purpose: | |||||||||||||||
Cash-out refinance | 63.5% | 67.1% | 64.9% | ||||||||||||
Purchase | 30.8% | 26.0% | 26.9% | ||||||||||||
Rate or term refinance | 5.7% | 6.9% | 8.2% | ||||||||||||
Loan characteristics: | |||||||||||||||
Average loan size | $ | 160 | $ | 151 | $ | 144 | |||||||||
Weighted-average loan-to-value | 78.9% | 78.1% | 78.7% | ||||||||||||
Weighted-average FICO score | 614 | 608 | 604 | ||||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Loan type: | ||||||||||||
2-year ARM | 43.9% | 61.6 | % | 63.4 | % | |||||||
3-year ARM | 1.9% | 4.0 | % | 5.2 | % | |||||||
Fixed 1st | 12.7% | 17.7 | % | 28.7 | % | |||||||
Fixed 2nd | 4.9% | 3.8 | % | 1.6 | % | |||||||
Interest only 1st | 21.1% | 12.6 | % | 0.7 | % | |||||||
40-Year | 13.4% | 0.0 | % | 0.0 | % | |||||||
Other | 2.2% | 0.3 | % | 0.4 | % | |||||||
Percentage of fixed-rate mortgages | 20.0% | 22.1 | % | 30.4 | % | |||||||
Percentage of adjustable-rate mortgages | 80.0% | 77.9 | % | 69.6 | % | |||||||
Percentage of first mortgage loans owner-occupied | 91.7% | 92.6 | % | 92.9 | % | |||||||
Loan purpose: | ||||||||||||
Cash-out refinance | 60.2% | 63.5 | % | 67.1 | % | |||||||
Purchase | 35.0% | 30.8 | % | 26.0 | % | |||||||
Rate or term refinance | 4.8% | 5.7 | % | 6.9 | % | |||||||
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(dollars in 000s) | ||||||||||||||
Type of Servicing | Principal Balance | MSR Balance | Rate Earned | |||||||||||
Originated | $ | 47,376,295 | $ | 166,614 | 0.41% | |||||||||
Sub-servicing | 20,450,482 | – | 0.22% | |||||||||||
Purchased | 167,687 | – | 0.51% | |||||||||||
Total | $ | 67,994,464 | $ | 166,614 | 0.36% | |||||||||
(dollars in 000s) | ||||||||||||
Type of Servicing | Principal Balance | MSR Balance | Rate Earned | |||||||||
Originated | $ | 62,813,849 | $ | 272,472 | 0. 38 | % | ||||||
Sub-servicing | 10,471,509 | - | 0. 18 | % | ||||||||
Purchased | 96,719 | - | 0. 50 | % | ||||||||
Total | $ | 73,382,077 | $ | 272,472 | 0. 38 | % | ||||||
2005 | 2004 | |||||||||||||||||
Percent of | Number of | Percent of | Number of | |||||||||||||||
State | Volume | Branches | Volume | Branches | ||||||||||||||
California | 21.8% | 8 | 18.8% | 5 | ||||||||||||||
New York | 11.5% | 2 | 14.4% | 2 | ||||||||||||||
Massachusetts | 8.4% | 2 | 10.2% | 1 | ||||||||||||||
Florida | 7.2% | 4 | 6.4% | 4 | ||||||||||||||
New Jersey | 5.3% | 3 | 5.1% | 3 | ||||||||||||||
Other | 45.8% | 23 | 45.1% | 25 | ||||||||||||||
2006 | 2005 | |||||||||||||||
Percent of | Number of | Percent of | Number of | |||||||||||||
State | Volume | Branches | Volume | Branches | ||||||||||||
California | 24.5 | % | 6 | 21.8 | % | 8 | ||||||||||
Florida | 10.7 | % | 3 | 7.2 | % | 4 | ||||||||||
New York | 9.1 | % | 2 | 11.5 | % | 2 | ||||||||||
Massachusetts | 6.7 | % | 2 | 8.4 | % | 2 | ||||||||||
New Jersey | 5.1 | % | 1 | 5.3 | % | 3 | ||||||||||
Other | 43.9 | % | 20 | 45.8 | % | 23 | ||||||||||
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The federal Truth-in-Lending Act, as amended, and Regulation Z promulgated thereunder; | ||
• | The Equal Credit Opportunity Act, as amended, and Regulation B promulgated thereunder; | |
• | The Fair Credit Reporting Act, as amended; | |
• | The Fair Debt Collection Practices Act; | |
• | The federal Real Estate Settlement Procedures Act, as amended, and Regulation X promulgated thereunder; | |
• | The Home Ownership Equity Protection Act | |
• | The Soldiers’ and Sailors’ Civil Relief Act of 1940, as amended; | |
• | The Home Mortgage Disclosure Act | |
• | The federal Fair Housing Act; | |
• | The Telephone Consumer Protection Act; | |
• | The Gramm-Leach-Bliley Act and regulations adopted thereunder; | |
• | The Fair and Accurate Credit Transactions Act; | |
• | Regulation AB; and | |
• | Certain other laws and regulations. |
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RSM McGladrey Retirement Resources administers retirement plans, helps clients design the best plan for their needs, and provides retirement plan investment advice, year-end compliance, tax reporting and consulting. | |||
RSM EquiCo, Inc. is an investment banking firm specializing in business valuations, acquisitions and divestitures for private middle-market businesses. | |||
RSM McGladrey Employer Services, Inc. | |||
RSM McGladrey Financial Process Outsourcing, Inc. is a provider of accounting, reporting, payroll and bill paying services to distributors/franchisors and their population of retailers/franchisees. | |||
PDI Global, Inc. provides marketing, communications and visibility programs, tax and financial planning guides, and marketing and management consulting services to accountants, consultants, lawyers, banks, insurers, and other financial service providers. |
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(in 000s) | |||||||||||
Revenue | Total Production | ||||||||||
Per Advisor | Revenues | ||||||||||
Fiscal year 2005 ... | |||||||||||
Pre-2003 class | $ | 230 | $ | 121,342 | |||||||
2003 recruits | 114 | 16,416 | |||||||||
2004 recruits | 98 | 19,941 | |||||||||
2005 recruits | 65 | 8,203 | |||||||||
Fiscal year 2004 ... | |||||||||||
Pre-2003 class | $ | 216 | $ | 135,128 | |||||||
2003 recruits | 84 | 17,717 | |||||||||
2004 recruits | 61 | 7,664 | |||||||||
Revenue | Total Production | |||||||
Per Advisor | Revenues | |||||||
FISCAL YEAR 2006— | ||||||||
Pre-2004 class | $ | 250 | $ | 137,212 | ||||
2004 recruits | 157 | 19,579 | ||||||
2005 recruits | 109 | 19,942 | ||||||
2006 recruits | 111 | 13,741 | ||||||
FISCAL YEAR 2005— | ||||||||
Pre-2003 class | $ | 230 | $ | 121,342 | ||||
2003 recruits | 114 | 16,416 | ||||||
2004 recruits | 98 | 19,941 | ||||||
2005 recruits | 65 | 8,203 | ||||||
FISCAL YEAR 2004— | ||||||||
Pre-2003 class | $ | 216 | $ | 135,128 | ||||
2003 recruits | 84 | 17,717 | ||||||
2004 recruits | 61 | 7,664 | ||||||
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17 2005. We intend to continue defending the case vigorously, but there are no assurances as to its outcome.
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ITEM 5. | MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
(shares in 000s) | ||||||||||||||||||
Total Number of | Maximum Number | |||||||||||||||||
Total | Average | Shares Purchased as | of Shares that May Be | |||||||||||||||
Number of Shares | Price Paid | Part of Publicly Announced | Purchased Under the | |||||||||||||||
Purchased(2) | per Share | Plans or Programs(1) | Plans or Programs(1) | |||||||||||||||
February 1 – February 28 | 1 | $ | 50.82 | – | 15,104 | |||||||||||||
March 1 – March 31 | 2 | $ | 51.87 | – | 15,104 | |||||||||||||
April 1 – April 30 | 1 | $ | 50.70 | – | 15,104 | |||||||||||||
Average | Total Number of Shares | Maximum Number of | ||||||||||||||
Total Number of | Price Paid | Purchased as Part of Publicly | Shares that May Be Purchased | |||||||||||||
Shares Purchased (2) | per Share | Announced Plans or Programs(1) | Under the Plans or Programs(1) | |||||||||||||
February 1 – February 28 | 6 | $ | 24.09 | - | 10,494 | |||||||||||
March 1 – March 31 | 1 | $ | 25.17 | - | 10,494 | |||||||||||
April 1 – April 30 | 3 | $ | 22.05 | - | 10,494 | |||||||||||
(1) | On June 9, 2004, our Board of Directors approved the | |
(2) | All shares |
(in 000s, except per share amounts) | |||||||||||||||||||||||
Restated | Restated | Restated | Restated | ||||||||||||||||||||
April 30, | 2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||
Revenues | $ | 4,420,019 | $ | 4,247,880 | $ | 3,731,126 | $ | 3,311,943 | $ | 2,982,157 | |||||||||||||
Net income before change in accounting principle | 635,857 | 715,608 | 477,615 | 441,287 | 278,211 | ||||||||||||||||||
Net income | 635,857 | 709,249 | 477,615 | 441,287 | 282,625 | ||||||||||||||||||
Basic earnings per share: | |||||||||||||||||||||||
Net income before change in accounting principle | $ | 3.83 | $ | 4.04 | $ | 2.66 | $ | 2.41 | $ | 1.51 | |||||||||||||
Net income | 3.83 | 4.01 | 2.66 | 2.41 | 1.54 | ||||||||||||||||||
Diluted earnings per share: | |||||||||||||||||||||||
Net income before change in accounting principle | $ | 3.77 | $ | 3.96 | $ | 2.59 | $ | 2.34 | $ | 1.50 | |||||||||||||
Net income | 3.77 | 3.92 | 2.59 | 2.34 | 1.53 | ||||||||||||||||||
Total assets | $ | 5,539,283 | $ | 5,232,732 | $ | 4,666,502 | $ | 4,396,731 | $ | 4,170,980 | |||||||||||||
Long-term debt | 923,073 | 545,811 | 822,302 | 868,387 | 870,974 | ||||||||||||||||||
Dividends per share | $ | .86 | $ | .78 | $ | .70 | $ | .63 | $ | .59 |
April 30, | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||
Revenues | $ | 4,872,801 | $ | 4,420,019 | $ | 4,247,880 | $ | 3,731,126 | $ | 3,311,943 | ||||||||||
Net income before change in accounting principle | 490,408 | 623,910 | 700,452 | 477,615 | 441,287 | |||||||||||||||
Net income | 490,408 | 623,910 | 694,093 | 477,615 | 441,287 | |||||||||||||||
Basic earnings per share: | ||||||||||||||||||||
Net income before change in accounting principle | $ | 1.49 | $ | 1.88 | $ | 1.98 | $ | 1.33 | $ | 1.21 | ||||||||||
Net income | 1.49 | 1.88 | 1.96 | 1.33 | 1.21 | |||||||||||||||
Diluted earnings per share: | ||||||||||||||||||||
Net income before change in accounting principle | $ | 1.47 | $ | 1.85 | $ | 1.94 | $ | 1.30 | $ | 1.17 | ||||||||||
Net income | 1.47 | 1.85 | 1.92 | 1.30 | 1.17 | |||||||||||||||
Total assets | $ | 5,989,135 | $ | 5,538,056 | $ | 5,233,827 | $ | 4,666,502 | $ | 4,396,731 | ||||||||||
Long-term debt | 417,539 | 923,073 | 545,811 | 822,302 | 868,387 | |||||||||||||||
Dividends per share | $ | 0.49 | $ | 0.43 | $ | 0.39 | $ | 0.35 | $ | 0.32 | ||||||||||
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Business Services | ||
Investment Services |
Consolidated Results of Operations | (in 000s, except per share amounts) | |||||||||||||
Restated | Restated | |||||||||||||
Year ended April 30, | 2005 | 2004 | 2003 | |||||||||||
REVENUES ... | ||||||||||||||
Tax Services | $ | 2,358,293 | $ | 2,191,177 | $ | 1,946,763 | ||||||||
Mortgage Services | 1,246,018 | 1,323,709 | 1,150,080 | |||||||||||
Business Services | 573,316 | 499,210 | 434,140 | |||||||||||
Investment Services | 239,244 | 229,470 | 200,794 | |||||||||||
Corporate | 3,148 | 4,314 | (651 | ) | ||||||||||
$ | 4,420,019 | $ | 4,247,880 | $ | 3,731,126 | |||||||||
PRETAX INCOME (LOSS) ... | ||||||||||||||
Tax Services | $ | 663,518 | $ | 638,493 | $ | 556,703 | ||||||||
Mortgage Services | 496,093 | 688,523 | 656,324 | |||||||||||
Business Services | 29,871 | 19,312 | (16,033 | ) | ||||||||||
Investment Services | (75,370 | ) | (75,614 | ) | (219,421 | ) | ||||||||
Corporate | (96,397 | ) | (107,739 | ) | (122,009 | ) | ||||||||
1,017,715 | 1,162,975 | 855,564 | ||||||||||||
Income taxes | 381,858 | 447,367 | 377,949 | |||||||||||
Net income before change in accounting principle | 635,857 | 715,608 | 477,615 | |||||||||||
Cumulative effect of change in accounting principle | – | (6,359 | ) | – | ||||||||||
Net income | $ | 635,857 | $ | 709,249 | $ | 477,615 | ||||||||
Basic earnings per share | $ | 3.83 | $ | 4.01 | $ | 2.66 | ||||||||
Diluted earnings per share | 3.77 | 3.92 | 2.59 | |||||||||||
Year ended April 30, | 2006 | 2005 | 2004 | |||||||||
REVENUES – | ||||||||||||
Tax Services | $ | 2,451,806 | $ | 2,358,293 | $ | 2,191,177 | ||||||
Mortgage Services | 1,247,138 | 1,246,018 | 1,323,709 | |||||||||
Business Services | 877,259 | 573,316 | 499,210 | |||||||||
Investment Services | 287,955 | 239,244 | 229,470 | |||||||||
Corporate | 8,643 | 3,148 | 4,314 | |||||||||
$ | 4,872,801 | $ | 4,420,019 | $ | 4,247,880 | |||||||
PRETAX INCOME (LOSS) – | ||||||||||||
Tax Services | $ | 589,766 | $ | 663,518 | $ | 638,493 | ||||||
Mortgage Services | 321,616 | 496,093 | 688,523 | |||||||||
Business Services | 53,378 | 29,871 | 19,312 | |||||||||
Investment Services | (32,835 | ) | (75,370 | ) | (75,614 | ) | ||||||
Corporate | (104,532 | ) | (96,397 | ) | (107,739 | ) | ||||||
827,393 | 1,017,715 | 1,162,975 | ||||||||||
Income taxes | 336,985 | 393,805 | 462,523 | |||||||||
Net income before change in accounting principle | 490,408 | 623,910 | 700,452 | |||||||||
Cumulative effect of change in accounting principle | - | - | (6,359 | ) | ||||||||
Net income | $ | 490,408 | $ | 623,910 | $ | 694,093 | ||||||
Basic earnings per share | $ | 1.49 | $ | 1.88 | $ | 1.96 | ||||||
Diluted earnings per share | 1.47 | 1.85 | 1.92 |
(in 000s) | ||||||||
Acquisition cost of underlying mortgage loans | $ | 1,000,000 | ||||||
Fair values: | ||||||||
Net proceeds | $ | 990,000 | ||||||
Beneficial interest in Trusts | 20,000 | |||||||
MSRs | 9,000 | |||||||
$ | 1,019,000 | |||||||
Computation of gain on sale: | ||||||||
Net proceeds | $ | 990,000 | ||||||
Less allocated cost ($990,000/$1,019,000 × $1,000,000) | 971,541 | |||||||
Recorded gain on sale | $ | 18,459 | ||||||
Recorded beneficial interest in Trusts ($20,000/$1,019,000 × $1,000,000) | $ | 19,627 | ||||||
Recorded value of MSRs ($9,000/$1,019,000 × $1,000,000) | $ | 8,832 | ||||||
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(in 000s) | ||||
Acquisition cost of underlying mortgage loans | $ | 1,000,000 | ||
Fair values: | ||||
Net proceeds | $ | 995,000 | ||
Beneficial interest in Trusts | 20,000 | |||
MSRs | 7,000 | |||
$ | 1,022,000 | |||
Computation of gain on sale: | ||||
Net proceeds | $ | 995,000 | ||
Less allocated cost ($995,000 / $1,022,000 x $1,000,000) | 973,581 | |||
Recorded gain on sale | $ | 21,419 | ||
Recorded beneficial interest in Trusts ($20,000 / $1,022,000 x $1,000,000) | $ | 19,570 | ||
Recorded value of MSRs ($7,000 / $1,022,000 x $1,000,000) | $ | 6,849 | ||
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Tax Services – Operating Statistics | (in 000s, except average fee) | |||||||||||||||
Year ended April 30, | 2005 | 2004(1) | ||||||||||||||
2003(1) | ||||||||||||||||
Clients served ... | ||||||||||||||||
United States: | ||||||||||||||||
Company-owned offices | 10,608 | 10,627 | 10,105 | |||||||||||||
Franchise offices | 5,428 | 5,460 | 6,488 | |||||||||||||
16,036 | 16,087 | 16,593 | ||||||||||||||
Digital tax solutions: | ||||||||||||||||
Software(2) | 1,804 | 2,027 | 1,963 | |||||||||||||
Online(3) | 1,213 | 1,207 | 920 | |||||||||||||
19,053 | 19,321 | 19,476 | ||||||||||||||
International(4) | 2,333 | 2,253 | 2,227 | |||||||||||||
21,386 | 21,574 | 21,703 | ||||||||||||||
Average fee per client served (5) ... | ||||||||||||||||
Company-owned offices | $ | 158.19 | $ | 146.34 | $ | 137.16 | ||||||||||
Franchise offices | 135.98 | 127.91 | 118.05 | |||||||||||||
$ | 150.67 | $ | 140.09 | $ | 129.69 | |||||||||||
RALs (6) ... | ||||||||||||||||
Company-owned offices | 2,667 | 2,713 | 2,768 | |||||||||||||
Franchise offices | 1,499 | 1,508 | 1,790 | |||||||||||||
Digital tax solutions: | ||||||||||||||||
Software | 2 | 5 | – | |||||||||||||
Online | 32 | 57 | 75 | |||||||||||||
4,200 | 4,283 | 4,633 | ||||||||||||||
Tax Services – Operating Statistics | (in 000s, except average fee) | |||||||||||
Year Ended April 30, | 2006 | 2005(1) | 2004(1) | |||||||||
CLIENTS SERVED – | ||||||||||||
United States: | ||||||||||||
Company-owned operations | 10,359 | 10,608 | 10,627 | |||||||||
Franchise operations | 5,373 | 5,428 | 5,460 | |||||||||
15,732 | 16,036 | 16,087 | ||||||||||
Digital tax solutions(2) | 3,721 | 3,017 | 3,234 | |||||||||
19,453 | 19,053 | 19,321 | ||||||||||
International(3) | 2,459 | 2,333 | 2,253 | |||||||||
21,912 | 21,386 | 21,574 | ||||||||||
GROSS AVERAGE FEE PER CLIENT SERVED(4) – | ||||||||||||
Company-owned operations | $ | 169.58 | $ | 158.19 | $ | 146.34 | ||||||
Franchise operations | 143.52 | 135.98 | 127.91 | |||||||||
$ | 160.68 | $ | 150.67 | $ | 140.09 | |||||||
NET AVERAGE FEE PER CLIENT SERVED(5) – | ||||||||||||
Company-owned operations | $ | 162.91 | $ | 153.53 | $ | 142.51 | ||||||
RALs(6) – | ||||||||||||
Company-owned operations | 2,542 | 2,667 | 2,713 | |||||||||
Franchise operations | 1,487 | 1,499 | 1,508 | |||||||||
4,029 | 4,166 | 4,221 | ||||||||||
(1) | Company-owned and franchise data for fiscal years | |
(2) | Includes TaxCut federal units | |
In the current year, the end of the Canadian tax season was extended from April 30 to May 1, 2006. Clients served in our international operations in fiscal year 2006 includes approximately 41,400 returns in both company-owned and franchise offices which were accepted by the client on May 1, 2006. The revenues related to these returns will be recognized in fiscal year 2007. In the prior year, the end of the Canadian tax season was extended to May 2, 2005. Clients served in our international operations in fiscal year 2005 includes approximately 47,500 returns | ||
Calculated as gross tax preparation and related fees divided by clients served (U.S. only). | ||
(5) | Calculated as gross tax preparation and related fees, less discounts and coupons, divided by clients served (U.S. only). | |
(6) | Data is for tax season (January 1 – April 30) only. |
Tax Services – Financial Results | (in 000s) | |||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Service revenues: | ||||||||||||
Tax preparation and related fees | $ | 1,793,325 | $ | 1,718,867 | $ | 1,589,439 | ||||||
Other services | 204,968 | 193,163 | 172,517 | |||||||||
1,998,293 | 1,912,030 | 1,761,956 | ||||||||||
Royalties | 207,728 | 197,551 | 184,882 | |||||||||
RAL participation fees | 177,852 | 182,784 | 168,375 | |||||||||
Other | 67,933 | 65,928 | 75,964 | |||||||||
Total revenues | 2,451,806 | 2,358,293 | 2,191,177 | |||||||||
Cost of services: | ||||||||||||
Compensation and benefits | 765,868 | 726,654 | 672,066 | |||||||||
Occupancy | 317,030 | 281,772 | 255,516 | |||||||||
Supplies | 52,894 | 47,703 | 40,792 | |||||||||
Depreciation and amortization | 44,846 | 54,579 | 48,808 | |||||||||
Bad debt | 31,927 | 33,046 | 27,328 | |||||||||
Allocated shared services and other | 102,711 | 103,560 | 92,137 | |||||||||
1,315,276 | 1,247,314 | 1,136,647 | ||||||||||
Provision for RAL litigation | 70,200 | - | - | |||||||||
Other, selling, general and administrative | 476,564 | 447,461 | 416,037 | |||||||||
Total expenses | 1,862,040 | 1,694,775 | 1,552,684 | |||||||||
Pretax income | $ | 589,766 | $ | 663,518 | $ | 638,493 | ||||||
Tax Services – Financial Results | (in 000s) | |||||||||||||||
Restated | Restated | |||||||||||||||
Year ended April 30, | 2005 | 2004 | 2003 | |||||||||||||
Service revenues: | ||||||||||||||||
Tax preparation and related fees | $ | 1,718,867 | $ | 1,589,439 | $ | 1,437,835 | ||||||||||
Online tax services | 49,515 | 44,915 | 25,892 | |||||||||||||
Other service revenues | 143,648 | 127,602 | 97,794 | |||||||||||||
1,912,030 | 1,761,956 | 1,561,521 | ||||||||||||||
Royalties | 197,551 | 184,882 | 174,659 | |||||||||||||
RAL participation fees | 182,784 | 168,375 | 896 | |||||||||||||
RAL waiver fees | – | 6,548 | 138,242 | |||||||||||||
Software sales | 44,419 | 43,823 | 39,314 | |||||||||||||
Other | 21,509 | 25,593 | 32,131 | |||||||||||||
Total revenues | 2,358,293 | 2,191,177 | 1,946,763 | |||||||||||||
Cost of services: | ||||||||||||||||
Compensation and benefits | 726,654 | 672,066 | 591,556 | |||||||||||||
Occupancy | 281,772 | 255,516 | 225,045 | |||||||||||||
Depreciation and amortization | 54,579 | 48,808 | 42,505 | |||||||||||||
Supplies | 47,703 | 40,792 | 40,992 | |||||||||||||
Bad debt | 33,046 | 27,328 | 32,653 | |||||||||||||
Other | 103,560 | 92,137 | 125,653 | |||||||||||||
1,247,314 | 1,136,647 | 1,058,404 | ||||||||||||||
Cost of software sales | 37,819 | 41,895 | 34,842 | |||||||||||||
Selling, general and administrative | 409,642 | 374,142 | 296,814 | |||||||||||||
Total expenses | 1,694,775 | 1,552,684 | 1,390,060 | |||||||||||||
Pretax income | $ | 663,518 | $ | 638,493 | $ | 556,703 | ||||||||||
25
26
27
Mortgage Services – Operating Statistics | (dollars in 000s) | |||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | |||||||||||||
Volume of loans originated ... | ||||||||||||||||
Wholesale (non-prime) | $ | 26,977,810 | $ | 20,150,992 | $ | 13,659,243 | ||||||||||
Retail: Non-prime | 3,005,168 | 1,846,674 | 1,220,563 | |||||||||||||
Prime | 1,018,746 | 1,258,347 | 1,697,815 | |||||||||||||
$ | 31,001,724 | $ | 23,256,013 | $ | 16,577,621 | |||||||||||
Loan Characteristics ... | ||||||||||||||||
Weighted average FICO score (1) | 614 | 608 | 604 | |||||||||||||
Weighted average interest rate for borrowers (“WAC”) (1) | 7.36% | 7.39% | 8.15% | |||||||||||||
Weighted average loan-to-value (1) | 78.9% | 78.1% | 78.7% | |||||||||||||
Percentage of first mortgage loans owner-occupied | 92.6% | 92.9% | 93.0% | |||||||||||||
Percentage with prepayment penalty | 70.8% | 73.7% | 79.9% | |||||||||||||
Percentage of fixed-rate mortgages | 22.1% | 30.4% | 24.4% | |||||||||||||
Percentage of adjustable-rate mortgages | 77.9% | 69.6% | 75.6% | |||||||||||||
Origination margin (% of origination volume) (2) ... | ||||||||||||||||
Loan sale premium | 2.77% | 4.21% | 4.87% | |||||||||||||
Accretion on beneficial interest in Trusts | 0.63% | 0.72% | 0.65% | |||||||||||||
Gain (loss) on derivatives | 0.15% | (0.05% | ) | (0.02% | ) | |||||||||||
Loan sale repurchase reserves | (0.13% | ) | (0.20% | ) | (0.13% | ) | ||||||||||
MSR gain on sale | 0.44% | 0.36% | 0.36% | |||||||||||||
3.86% | 5.04% | 5.73% | ||||||||||||||
Cost of acquisition | (0.54% | ) | (0.50% | ) | (0.36% | ) | ||||||||||
Direct origination expenses | (0.68% | ) | (0.65% | ) | (0.62% | ) | ||||||||||
Net gain on sale – gross margin (3) ... | 2.64% | 3.89% | 4.75% | |||||||||||||
Other revenues | 0.03% | 0.01% | (0.01% | ) | ||||||||||||
Other cost of origination | (1.55% | ) | (1.68% | ) | (1.91% | ) | ||||||||||
Net margin | 1.12% | 2.22% | 2.83% | |||||||||||||
Total cost of origination | 2.23% | 2.33% | 2.53% | |||||||||||||
Total cost of origination and acquisition | 2.77% | 2.83% | 2.89% | |||||||||||||
Loan delivery ... | ||||||||||||||||
Loan sales | $ | 30,975,523 | $ | 23,234,935 | $ | 17,225,774 | ||||||||||
Execution price: (4) ... | ||||||||||||||||
Loans originated and sold | 3.01% | 4.09% | 4.63% | |||||||||||||
Loans acquired and sold | – | – | .18% | |||||||||||||
3.01% | 4.09% | 4.46% | ||||||||||||||
Mortgage Services – Operating Statistics | (dollars in 000s) | |||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
VOLUME OF LOANS ORIGINATED – | ||||||||||||
Wholesale (non-prime) | $ | 36,028,794 | $ | 26,977,810 | $ | 20,150,992 | ||||||
Retail:Non-prime | 3,260,071 | 3,005,168 | 1,846,674 | |||||||||
Prime | 1,490,898 | 1,018,746 | 1,258,347 | |||||||||
$ | 40,779,763 | $ | 31,001,724 | $ | 23,256,013 | |||||||
NON-PRIME LOAN CHARACTERISTICS – | ||||||||||||
Weighted average FICO score | 622 | 614 | 608 | |||||||||
Weighted average interest rate for borrowers (WAC) | 7.87 | % | 7.36 | % | 7.39 | % | ||||||
Weighted average loan-to-value | 80.6 | % | 78.9 | % | 78.7 | % | ||||||
Percentage with prepayment penalty | 72.4 | % | 70.8 | % | 73.7 | % | ||||||
ORIGINATION MARGIN (% OF ORIGINATION VOLUME) (1) – | ||||||||||||
Loan sale premium | 1.42 | % | 2.77 | % | 4.21 | % | ||||||
Residual cash flows from beneficial interest in Trusts | 0.51 | % | 0.63 | % | 0.72 | % | ||||||
Gain (loss) on derivatives | 0.35 | % | 0.15 | % | (0.05 | %) | ||||||
Loan sale repurchase reserves | (0.18 | %) | (0.13 | %) | (0.20 | %) | ||||||
Retained MSRs | 0.61 | % | 0.44 | % | 0.36 | % | ||||||
2.71 | % | 3.86 | % | 5.04 | % | |||||||
Cost of acquisition | (0.37 | %) | (0.54 | %) | (0.50 | %) | ||||||
Direct origination expenses | (0.58 | %) | (0.68 | %) | (0.65 | %) | ||||||
Net gain on sale – gross margin(2) | 1.76 | % | 2.64 | % | 3.89 | % | ||||||
Other revenues | (0.02 | %) | 0.03 | % | 0.01 | % | ||||||
Other cost of origination | (1.33 | %) | (1.55 | %) | (1.68 | %) | ||||||
Net margin | 0.41 | % | 1.12 | % | 2.22 | % | ||||||
Total cost of origination | 1.91 | % | 2.23 | % | 2.33 | % | ||||||
Total cost of origination and acquisition | 2.28 | % | 2.77 | % | 2.83 | % | ||||||
LOAN DELIVERY – | ||||||||||||
Loan sales | $ | 40,272,225 | $ | 30,975,523 | $ | 23,234,935 | ||||||
Execution price(3) | 1.58 | % | 3.01 | % | 4.09 | % |
Mortgage Services – Financial Results | (in 000s) | |||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Components of gains on sales: | ||||||||||||
Gain on mortgage loans | $ | 575,402 | $ | 772,061 | $ | 915,628 | ||||||
Gain (loss) on derivatives | 141,223 | 46,853 | (11,957 | ) | ||||||||
Gain on sales of AFS residual interests | 31,463 | 15,396 | 40,689 | |||||||||
Impairment of AFS residual interests | (34,107 | ) | (12,235 | ) | (26,063 | ) | ||||||
713,981 | 822,075 | 918,297 | ||||||||||
Interest income: | ||||||||||||
Accretion-residual interests | 114,346 | 137,610 | 186,466 | |||||||||
Other | 18,722 | 11,850 | 5,064 | |||||||||
133,068 | 149,460 | 191,530 | ||||||||||
Loan-servicing revenue | 398,992 | 273,056 | 211,710 | |||||||||
Other | 1,097 | 1,427 | 2,172 | |||||||||
Total revenues | 1,247,138 | 1,246,018 | 1,323,709 | |||||||||
Cost of services | 296,710 | 221,148 | 193,383 | |||||||||
Cost of other revenues: | ||||||||||||
Compensation and benefits | 293,781 | 239,997 | 206,238 | |||||||||
Occupancy | 45,116 | 37,336 | 28,418 | |||||||||
Other | 105,494 | 78,769 | 55,265 | |||||||||
444,391 | 356,102 | 289,921 | ||||||||||
Selling, general and administrative | 184,421 | 172,675 | 151,882 | |||||||||
Total expenses | 925,522 | 749,925 | 635,186 | |||||||||
Pretax income | $ | 321,616 | $ | 496,093 | $ | 688,523 | ||||||
(1) | ||
Defined as gain on sale of mortgage loans (including gain or loss on derivatives, mortgage servicing rights and net of direct origination and acquisition expenses) divided by origination volume. | ||
Defined as total premium received divided by total balance of loans delivered to third-party investors or securitization vehicles (excluding mortgage servicing rights and the effect of loan origination expenses). |
28
Year Ended April 30, | 2006 | 2005 | ||||||
Application process: | ||||||||
Total number of applications | 369,210 | 335,203 | ||||||
Number of sales associates(1) | 2,814 | 3,526 | ||||||
Closing ratio(2) | 60.3 | % | 58.3 | % | ||||
Originations: | ||||||||
Total number of originations | 222,749 | 195,392 | ||||||
WAC | 7.87 | % | 7.36 | % | ||||
Average loan size (all loans) | $ | 183 | $ | 159 | ||||
Total originations | $ | 40,779,763 | $ | 31,001,724 | ||||
Direct origination and acquisition expenses, net | $ | 387,911 | $ | 378,674 | ||||
Revenue (loan value): | ||||||||
Net gain on sale – gross margin(3) | 1.76 | % | 2.64 | % |
(1) | Includes all direct sales and back office sales support associates. | |
(2) | Percentage of loans funded divided by total applications in the period. | |
(3) | Defined as gain on sale of mortgage loans (including gain or loss on derivatives, mortgage servicing rights and net of direct origination and acquisition expenses) divided by origination volume. |
29
Mortgage Services – Financial Results | (in 000s) | |||||||||||||||
Restated | Restated | |||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | |||||||||||||
Components of gains on sales: | ||||||||||||||||
Gain on mortgage loans | $ | 772,061 | $ | 915,628 | $ | 792,072 | ||||||||||
Gain (loss) on derivatives | 46,853 | (11,957 | ) | (4,141 | ) | |||||||||||
Gain on sales of residual interests | 15,396 | 40,689 | 93,307 | |||||||||||||
Impairment of residual interests | (12,235 | ) | (26,063 | ) | (54,111 | ) | ||||||||||
822,075 | 918,297 | 827,127 | ||||||||||||||
Interest income: | ||||||||||||||||
Accretion-residual interests | 137,610 | 186,466 | 146,343 | |||||||||||||
Other | 11,850 | 5,064 | 5,421 | |||||||||||||
149,460 | 191,530 | 151,764 | ||||||||||||||
Loan-servicing revenue | 273,056 | 211,710 | 168,351 | |||||||||||||
Other | 1,427 | 2,172 | 2,838 | |||||||||||||
Total revenues | 1,246,018 | 1,323,709 | 1,150,080 | |||||||||||||
Cost of services | 221,300 | 193,018 | 141,419 | |||||||||||||
Cost of non-service revenues: | ||||||||||||||||
Compensation and benefits | 218,544 | 190,499 | 146,907 | |||||||||||||
Occupancy | 33,155 | 25,635 | 22,701 | |||||||||||||
Other | 72,803 | 71,634 | 74,332 | |||||||||||||
324,502 | 287,768 | 243,940 | ||||||||||||||
Selling, general and administrative | 204,123 | 154,400 | 108,397 | |||||||||||||
Total expenses | 749,925 | 635,186 | 493,756 | |||||||||||||
Pretax income | $ | 496,093 | $ | 688,523 | $ | 656,324 | ||||||||||
Year Ended April 30, | 2006 | 2005 | ||||||
Average servicing portfolio: | ||||||||
With related MSRs | $ | 56,521,595 | $ | 41,021,448 | ||||
Without related MSRs | 19,106,863 | 13,838,769 | ||||||
$ | 75,628,458 | $ | 54,860,217 | |||||
Ending servicing portfolio: | ||||||||
With related MSRs | $ | 62,910,568 | $ | 47,543,982 | ||||
Without related MSRs | 10,471,509 | 20,450,482 | ||||||
$ | 73,382,077 | $ | 67,994,464 | |||||
Number of loans serviced | 441,981 | 435,290 | ||||||
Average delinquency rate | 5.16 | % | 4.85 | % | ||||
Weighted average FICO score | 621 | 618 | ||||||
Weighted average interest rate (WAC) of portfolio | 7.58 | % | 7.46 | % | ||||
Weighted average rate earned | 0.38 | % | 0.36 | % | ||||
Carrying value of MSRs | $ | 272,472 | $ | 166,614 |
(dollars in 000s) | |||||||||||
Year Ended April 30, | 2005 | 2004 | |||||||||
Application process: | |||||||||||
Total number of applications | 335,203 | 269,267 | |||||||||
Number of sales associates(1) | 3,526 | 2,812 | |||||||||
Closing ratio(2) | 58.3% | 57.7% | |||||||||
Originations: | |||||||||||
Total number of originations | 195,392 | 155,339 | |||||||||
WAC | 7.36% | 7.39% | |||||||||
Average loan size (all loans) | $ | 159 | $ | 150 | |||||||
Total originations | $ | 31,001,724 | $ | 23,256,013 | |||||||
Non-prime origination ratio | 96.7% | 94.6% | |||||||||
Direct origination and acquisition expenses, net | $ | 378,674 | $ | 278,785 | |||||||
Revenue (loan value): | |||||||||||
Net gain on sale – gross margin | 2.64% | 3.89% |
30
(dollars in 000s) | |||||||||||
Year Ended April 30, | 2005 | 2004 | |||||||||
Average servicing portfolio: | |||||||||||
With related MSRs | $ | 41,021,448 | $ | 32,039,811 | |||||||
Without related MSRs | 13,838,769 | 6,481,069 | |||||||||
$ | 54,860,217 | $ | 38,520,880 | ||||||||
Number of loans serviced | 435,290 | 324,364 | |||||||||
Average delinquency rate | 4.85% | 6.04% | |||||||||
Weighted average FICO score | 610 | 596 | |||||||||
Value of MSRs | $ | 166,614 | $ | 113,821 | |||||||
Business Services – Operating Statistics | |||||||||||||||
Year ended April 30, | 2005 | 2004 | 2003 | ||||||||||||
Accounting, tax and consulting ... | |||||||||||||||
Chargeable hours (000s) | 2,898 | 2,598 | 2,584 | ||||||||||||
Chargeable hours per person | 1,430 | 1,414 | 1,388 | ||||||||||||
Net collected rate per hour | $ | 133 | $ | 124 | $ | 120 | |||||||||
Average margin per person | $ | 112,573 | $ | 102,496 | $ | 97,117 | |||||||||
Business Services – Financial Results | (in 000s) | ||||||||||||||
Restated | Restated | ||||||||||||||
Year ended April 30, | 2005 | 2004 | 2003 | ||||||||||||
Service revenues: | |||||||||||||||
Accounting, tax and consulting | $ | 412,473 | $ | 353,750 | $ | 337,903 | |||||||||
Capital markets | 67,922 | 73,860 | 35,629 | ||||||||||||
Payroll, benefits and retirement services | 27,331 | 21,172 | 20,745 | ||||||||||||
Other services | 31,170 | 19,390 | 7,912 | ||||||||||||
538,896 | 468,172 | 402,189 | |||||||||||||
Other | 34,420 | 31,038 | 31,951 | ||||||||||||
Total revenues | 573,316 | 499,210 | 434,140 | ||||||||||||
Cost of services: | |||||||||||||||
Compensation and benefits | 310,950 | 256,640 | 233,303 | ||||||||||||
Occupancy | 24,699 | 20,498 | 20,873 | ||||||||||||
Other | 36,672 | 33,080 | 32,562 | ||||||||||||
372,321 | 310,218 | 286,738 | |||||||||||||
Impairment of goodwill | – | – | 13,459 | ||||||||||||
Selling, general and administrative | 171,124 | 169,680 | 149,976 | ||||||||||||
Total expenses | 543,445 | 479,898 | 450,173 | ||||||||||||
Pretax income (loss) | $ | 29,871 | $ | 19,312 | $ | (16,033 | ) | ||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
ACCOUNTING, TAX AND BUSINESS CONSULTING - | ||||||||||||
Chargeable hours (000s) | 4,357 | 2,898 | 2,598 | |||||||||
Chargeable hours per person | 1,385 | 1,430 | 1,414 | |||||||||
Net billed rate per hour | $ | 141 | $ | 133 | $ | 124 | ||||||
Average margin per person | $ | 114,755 | $ | 112,573 | $ | 102,496 | ||||||
Business Services — Financial Results | (in 000s) | |||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Service revenues: | ||||||||||||
Accounting, tax and consulting | $ | 690,817 | $ | 412,473 | $ | 353,750 | ||||||
Capital markets | 59,553 | 67,922 | 73,860 | |||||||||
Payroll, benefits and retirement services | 36,605 | 27,331 | 21,172 | |||||||||
Other services | 52,501 | 31,170 | 19,390 | |||||||||
839,476 | 538,896 | 468,172 | ||||||||||
Other | 37,783 | 34,420 | 31,038 | |||||||||
Total revenues | 877,259 | 573,316 | 499,210 | |||||||||
Cost of services: | ||||||||||||
Compensation and benefits | 471,619 | 310,950 | 256,640 | |||||||||
Occupancy | 56,870 | 24,699 | 20,498 | |||||||||
Other | 65,386 | 36,672 | 33,080 | |||||||||
593,875 | 372,321 | 310,218 | ||||||||||
Selling, general and administrative | 230,006 | 171,124 | 169,680 | |||||||||
Total expenses | 823,881 | 543,445 | 479,898 | |||||||||
Pretax income | $ | 53,378 | $ | 29,871 | $ | 19,312 |
31
Investment Services – Operating Statistics | ||||||||||||||||
Year ended April 30, | 2005 | 2004 | 2003 | |||||||||||||
Customer trades (1) | 885,796 | 1,004,235 | 860,784 | |||||||||||||
Customer daily average trades | 3,529 | 3,923 | 3,429 | |||||||||||||
Average revenue per trade (2) | $ | 123.33 | $ | 119.36 | $ | 120.15 | ||||||||||
Customer accounts: (3) | ||||||||||||||||
Traditional brokerage | 431,749 | 463,736 | 501,001 | |||||||||||||
Express IRAs | 380,539 | 366,040 | 216,351 | |||||||||||||
812,288 | 829,776 | 717,352 | ||||||||||||||
Ending balance of assets under administration (billions) | $ | 27.8 | $ | 26.7 | $ | 22.3 | ||||||||||
Average assets per traditional brokerage account | $ | 63,755 | $ | 57,204 | $ | 43,991 | ||||||||||
Average margin balances (millions) | $ | 597 | $ | 545 | $ | 577 | ||||||||||
Average customer payables balances (millions) | $ | 975 | $ | 984 | $ | 819 | ||||||||||
Number of advisors | 1,010 | 1,009 | 984 | |||||||||||||
Included in the numbers above are the following relating to fee-based accounts: | ||||||||||||||||
Customer accounts | 7,668 | 6,964 | 4,680 | |||||||||||||
Average revenue per account | $ | 2,301 | $ | 1,572 | $ | 1,442 | ||||||||||
Assets under administration (millions) | $ | 1,975 | $ | 1,494 | $ | 789 | ||||||||||
Average assets per active account | $ | 260,238 | $ | 214,537 | $ | 168,522 | ||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Customer trades(1) | 974,625 | 885,796 | 1,004,235 | |||||||||
Customer daily average trades | 3,883 | 3,529 | 3,923 | |||||||||
Average revenue per trade(2) | $ | 119.11 | $ | 123.33 | $ | 119.36 | ||||||
Customer accounts:(3) | ||||||||||||
Traditional brokerage | 418,162 | 431,749 | 463,736 | |||||||||
Express IRAs | 442,157 | 380,539 | 366,040 | |||||||||
860,319 | 812,288 | 829,776 | ||||||||||
Ending balance of assets under administration (billions) | $ | 31.8 | $ | 27.8 | $ | 26.7 | ||||||
Average assets per traditional brokerage account | $ | 75,222 | $ | 63,755 | $ | 57,204 | ||||||
Average margin balances (millions) | $ | 539 | $ | 597 | $ | 545 | ||||||
Average customer payables balances (millions) | $ | 782 | $ | 975 | $ | 984 | ||||||
Number of advisors | 958 | 1,010 | 1,009 | |||||||||
Included in the numbers above are the following relating to fee-based accounts: | ||||||||||||
Customer household accounts | 9,224 | 7,668 | 6,964 | |||||||||
Average revenue per account | $ | 2,535 | $ | 2,301 | $ | 1,572 | ||||||
Ending balance of assets under administration (millions) | $ | 2,526 | $ | 1,975 | $ | 1,494 | ||||||
Average assets per active account | $ | 274,981 | $ | 260,238 | $ | 214,537 | ||||||
(1) | Includes only trades on which revenues are earned (“revenue trades”). Revenues are earned on both transactional and annuitized trades. | ||
(2) | Calculated as total trade revenues divided by revenue trades. | ||
(3) | Includes only accounts with a positive balance. |
Investment Services – Financial Results | (in 000s) | |||||||||||||||
Restated | Restated | |||||||||||||||
Year ended April 30, | 2005 | 2004 | 2003 | |||||||||||||
Service revenues: | ||||||||||||||||
Transactional revenue | $ | 88,516 | $ | 99,559 | $ | 91,587 | ||||||||||
Annuitized revenue | 77,386 | 60,950 | 38,507 | |||||||||||||
Production revenue | 165,902 | 160,509 | 130,094 | |||||||||||||
Other service revenue | 29,206 | 35,619 | 34,311 | |||||||||||||
195,108 | 196,128 | 164,405 | ||||||||||||||
Margin interest revenue | 43,698 | 33,408 | 37,300 | |||||||||||||
Less: interest expense | (3,114 | ) | (1,358 | ) | (4,830 | ) | ||||||||||
Net interest revenue | 40,584 | 32,050 | 32,470 | |||||||||||||
Other | 438 | (66 | ) | (911 | ) | |||||||||||
Total revenues (1) | 236,130 | 228,112 | 195,964 | |||||||||||||
Cost of services: | ||||||||||||||||
Compensation and benefits | 116,552 | 108,956 | 89,473 | |||||||||||||
Occupancy | 22,178 | 21,571 | 24,299 | |||||||||||||
Other | 19,555 | 24,091 | 25,604 | |||||||||||||
158,285 | 154,618 | 139,376 | ||||||||||||||
Impairment of goodwill | – | – | 108,792 | |||||||||||||
Selling, general and administrative | 153,215 | 149,108 | 167,217 | |||||||||||||
Total expenses | 311,500 | 303,726 | 415,385 | |||||||||||||
Pretax loss | $ | (75,370 | ) | $ | (75,614 | ) | $ | (219,421 | ) | |||||||
Investment Services – Financial Results | (in 000s) |
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Service revenues: | ||||||||||||
Transactional revenue | $ | 91,143 | $ | 88,516 | $ | 99,559 | ||||||
Annuitized revenue | 99,331 | 77,386 | 60,950 | |||||||||
Production revenue | 190,474 | 165,902 | 160,509 | |||||||||
Other services | 32,256 | 29,206 | 35,619 | |||||||||
222,730 | 195,108 | 196,128 | ||||||||||
Margin interest revenue | 60,795 | 43,698 | 33,408 | |||||||||
Less: interest expense | (6,643 | ) | (3,114 | ) | (1,358 | ) | ||||||
Net interest revenue | 54,152 | 40,584 | 32,050 | |||||||||
Other | 4,430 | 438 | (66 | ) | ||||||||
Total revenues(1) | 281,312 | 236,130 | 228,112 | |||||||||
Cost of services: | ||||||||||||
Compensation and benefits | 135,256 | 116,552 | 108,956 | |||||||||
Occupancy | 21,050 | 22,178 | 21,571 | |||||||||
Other | 21,132 | 19,555 | 24,091 | |||||||||
177,438 | 158,285 | 154,618 | ||||||||||
Selling, general and administrative | 136,709 | 153,215 | 149,108 | |||||||||
Total expenses | 314,147 | 311,500 | 303,726 | |||||||||
Pretax loss | $ | (32,835 | ) | $ | (75,370 | ) | $ | (75,614 | ) |
(1) | Total revenues, less interest |
32
33
Corporate – Financial Results | (in 000s) |
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Operating revenues | $ | 22,279 | $ | 13,592 | $ | 12,532 | ||||||
Eliminations | (13,636 | ) | (10,444 | ) | (8,218 | ) | ||||||
Total revenues | 8,643 | 3,148 | 4,314 | |||||||||
Corporate expenses: | ||||||||||||
Interest expense | 67,630 | 72,701 | 69,300 | |||||||||
Other | 65,484 | 51,262 | 50,476 | |||||||||
133,114 | 123,963 | 119,776 | ||||||||||
Support departments: | ||||||||||||
Marketing | 137,065 | 117,303 | 110,507 | |||||||||
Information technology | 116,990 | 107,306 | 110,569 | |||||||||
Finance | 49,719 | 34,498 | 33,829 | |||||||||
Other | 122,232 | 107,562 | 78,593 | |||||||||
426,006 | 366,669 | 333,498 | ||||||||||
Allocation of shared services | (425,589 | ) | (366,742 | ) | (336,639 | ) | ||||||
Other income, net | 20,356 | 24,345 | 4,582 | |||||||||
Pretax loss | $ | (104,532 | ) | $ | (96,397 | ) | $ | (107,739 | ) |
Corporate – Financial Results | (in 000s) | ||||||||||||||
Restated | Restated | ||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | ||||||||||||
Operating revenues | $ | 13,592 | $ | 12,532 | $ | 6,448 | |||||||||
Eliminations | (10,444 | ) | (8,218 | ) | (7,099 | ) | |||||||||
Total revenues | 3,148 | 4,314 | (651 | ) | |||||||||||
Corporate expenses: | |||||||||||||||
Interest expense | 72,701 | 69,300 | 74,482 | ||||||||||||
Other | 51,262 | 50,476 | 56,008 | ||||||||||||
123,963 | 119,776 | 130,490 | |||||||||||||
Support departments: | |||||||||||||||
Marketing | 117,303 | 110,507 | 88,819 | ||||||||||||
Information technology | 107,306 | 110,569 | 92,899 | ||||||||||||
Finance | 34,498 | 33,829 | 30,232 | ||||||||||||
Other | 107,562 | 78,593 | 65,734 | ||||||||||||
366,669 | 333,498 | 277,684 | |||||||||||||
Allocation of support departments | (366,742 | ) | (336,639 | ) | (280,677 | ) | |||||||||
Other income, net | 24,345 | 4,582 | 6,139 | ||||||||||||
Pretax loss | $ | (96,397 | ) | $ | (107,739 | ) | $ | (122,009 | ) | ||||||
34
35
(in 000s) | |||||||||||||||||||||||||||
Tax | Mortgage | Business | Investment | Consolidated | |||||||||||||||||||||||
Fiscal Year 2005 | Services | Services | Services | Services | Corporate | H&R Block | |||||||||||||||||||||
Cash provided by (used in): | |||||||||||||||||||||||||||
Operations | $ | 528,990 | $ | 98,303 | $ | 44,657 | $ | (32,408 | ) | $ | (125,749 | ) | $ | (513,793 | ) | ||||||||||||
Investing | (83,534 | ) | 99,906 | (37,816 | ) | 7,618 | (44,584 | ) | (58,410 | ) | |||||||||||||||||
Financing | 3,482 | (15,126 | ) | (23,223 | ) | (1,686 | ) | (391,362 | ) | (427,915 | ) | ||||||||||||||||
Net intercompany | (448,912 | ) | (184,156 | ) | 13,725 | 19,965 | 599,378 | – | |||||||||||||||||||
(in 000s) | ||||||||||||||||||||||||
Mortgage | Business | Investment | Consolidated | |||||||||||||||||||||
Tax Services | Services | Services | Services | Corporate | H&R Block | |||||||||||||||||||
FISCAL YEAR 2006 – | ||||||||||||||||||||||||
Cash provided by (used in): | ||||||||||||||||||||||||
Operations | $ | 596,025 | $ | (123,903 | ) | $ | 31,258 | $ | 24,894 | $ | 57,412 | $ | 585,686 | |||||||||||
Investing | (62,797 | ) | (309,302 | ) | (221,122 | ) | 12,615 | (107,899 | ) | (688,505 | ) | |||||||||||||
Financing | 14,173 | - | (23,611 | ) | 14,538 | (308,136 | ) | (303,036 | ) | |||||||||||||||
Net intercompany | (527,564 | ) | 422,418 | 233,744 | (13,470 | ) | (115,128 | ) | - |
(in 000s) | |||||||||||||||
Restated | Restated | ||||||||||||||
Year ended April 30, | 2005 | 2004 | 2003 | ||||||||||||
Cash proceeds: | |||||||||||||||
Whole loans sold by the Trusts | $ | 737,417 | $ | 741,233 | $ | 368,305 | |||||||||
Residual cash flows from Beneficial interest in Trusts | 193,639 | 167,705 | 103,294 | ||||||||||||
Loans securitized | 69,665 | 198,226 | 389,449 | ||||||||||||
Sale of previously securitized residuals | 15,396 | 40,689 | 93,307 | ||||||||||||
Gain (loss) on derivative instruments | 45,298 | (2,578 | ) | (2,056 | ) | ||||||||||
1,061,415 | 1,145,275 | 952,299 | |||||||||||||
Non-cash: | |||||||||||||||
Retained mortgage servicing rights | 137,510 | 84,274 | 60,078 | ||||||||||||
Additions (reductions) to balance sheet (1) | 15,885 | 11,490 | (10,829 | ) | |||||||||||
153,395 | 95,764 | 49,249 | |||||||||||||
Portion of gain on sale from capital market transactions | $ | 1,214,810 | $ | 1,241,039 | $ | 1,001,548 | |||||||||
Other items included in gain on sale: | |||||||||||||||
Changes in beneficial interest in Trusts | 36,281 | 37,918 | 74,987 | ||||||||||||
Impairments to fair value of residual interests | (12,235 | ) | (26,063 | ) | (54,111 | ) | |||||||||
Net change in fair value of derivative instruments | 1,555 | (9,379 | ) | (2,085 | ) | ||||||||||
Direct origination and acquisition expenses, net | (378,674 | ) | (278,785 | ) | (182,216 | ) | |||||||||
Loan sale repurchase reserves | (39,662 | ) | (46,820 | ) | (21,295 | ) | |||||||||
Other | – | 387 | 10,299 | ||||||||||||
(392,735 | ) | (322,742 | ) | (174,421 | ) | ||||||||||
Reported gains on sales of mortgage assets | $ | 822,075 | $ | 918,297 | $ | 827,127 | |||||||||
% of gain on sale from capital market transactions received as cash (2) | 87% | 92% | 95% | ||||||||||||
36
37
38
Short-term | Long-term | Outlook | |||||||||||||||||
A | Negative | ||||||||||||||||||
Moody’s | P2 | ||||||||||||||||||
S&P | A2 | BBB+ | Stable | ||||||||||||||||
DBRS | R-1 (low) | A | Stable |
Short-term | Long-term | Outlook | ||||||||||
DBRS | R-1 (low) | A | Stable |
39
(in 000s) | ||||||||||||||||||||||
Less Than | After | |||||||||||||||||||||
Total | 1 Year | 1 – 3 Years | 4 – 5 Years | 5 Years | ||||||||||||||||||
Debt | $ | 897,046 | $ | 45 | $ | 498,916 | $ | 91 | $ | 397,994 | ||||||||||||
Long-term obligation to government | 213,360 | 106,680 | 106,680 | – | – | |||||||||||||||||
Acquisition payments | 38,022 | 25,159 | 12,863 | – | – | |||||||||||||||||
Pension obligation assumed | 15,929 | 2,625 | 4,545 | 3,698 | 5,061 | |||||||||||||||||
Capital lease obligation | 13,550 | 341 | 730 | 997 | 11,482 | |||||||||||||||||
Operating leases | 708,611 | 229,768 | 313,264 | 124,945 | 40,634 | |||||||||||||||||
Total contractual cash obligations | $ | 1,886,518 | $ | 364,618 | $ | 936,998 | $ | 129,731 | $ | 455,171 | ||||||||||||
(in 000s) | ||||||||||||||||||||
Total | Less Than 1 Year | 1 - 3 Years | 4 - 5 Years | After 5 Years | ||||||||||||||||
Debt | $ | 897,426 | $ | 499,425 | $ | - | $ | - | $ | 398,001 | ||||||||||
Long-term obligation to government | 183,937 | 107,849 | 74,692 | 1,396 | - | |||||||||||||||
Retirement obligation assumed | 14,264 | 2,426 | 4,176 | 3,196 | 4,466 | |||||||||||||||
Acquisition payments | 13,895 | 7,210 | 6,458 | 91 | 136 | |||||||||||||||
Capital lease obligation | 13,209 | 357 | 860 | 1,043 | 10,949 | |||||||||||||||
Operating leases | 856,816 | 269,890 | 371,984 | 157,123 | 57,819 | |||||||||||||||
Total contractual cash obligations | $ | 1,979,547 | $ | 887,157 | $ | 458,170 | $ | 162,849 | $ | 471,371 | ||||||||||
(in 000s) | ||||||||||||||||||||||
Less Than | After | |||||||||||||||||||||
Total | 1 Year | 1 - 3 Years | 4 - 5 Years | 5 Years | ||||||||||||||||||
Commitments to fund mortgage loans | $ | 3,931,926 | $ | 3,931,926 | $ | – | $ | – | $ | – | ||||||||||||
Commitments to sell mortgage loans | 8,707,000 | 8,707,000 | – | – | – | |||||||||||||||||
Pledged securities | 44,609 | 44,609 | – | – | – | |||||||||||||||||
Commitment to fund M&P | 75,000 | 75,000 | – | – | – | |||||||||||||||||
Franchise Equity Lines of Credit | 68,949 | 20,122 | 20,476 | 28,351 | – | |||||||||||||||||
Mortgage loan repurchase obligations | 41,233 | 41,233 | – | – | – | |||||||||||||||||
Construction of new building | 143,116 | 103,505 | 39,611 | – | – | |||||||||||||||||
Other commercial commitments | 8,219 | 5,221 | 2,500 | 458 | 40 | |||||||||||||||||
Total commercial commitments | $ | 13,020,052 | $ | 12,928,616 | $ | 62,587 | $ | 28,809 | $ | 40 | ||||||||||||
(in 000s) | ||||||||||||||||||||
Total | Less Than 1 Year | 1 - 3 Years | 4 - 5 Years | After 5 Years | ||||||||||||||||
Commitments to fund mortgage loans | $ | 4,032,045 | $ | 4,032,045 | $ | - | $ | - | $ | - | ||||||||||
Commitments to sell mortgage loans | 3,052,688 | 3,052,688 | - | - | - | |||||||||||||||
Franchise Equity Lines of Credit | 75,909 | 18,860 | 29,958 | 27,091 | - | |||||||||||||||
Commitment to fund M&P | 75,000 | 75,000 | - | - | - | |||||||||||||||
Construction of new building | 63,887 | 63,887 | - | - | - | |||||||||||||||
Pledged securities | 53,026 | 53,026 | - | - | - | |||||||||||||||
Other commercial commitments | 31,282 | 8,209 | 19,888 | 3,185 | - | |||||||||||||||
Total commercial commitments | $ | 7,383,837 | $ | 7,303,715 | $ | 49,846 | $ | 30,276 | $ | - | ||||||||||
40
Origination Margin | (in 000s) | ||||||||||||||
Restated | Restated | ||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | ||||||||||||
Total expenses | $ | 749,925 | $ | 635,186 | $ | 493,756 | |||||||||
Add: Expenses netted against gain on sale revenues | 378,304 | 267,780 | 162,332 | ||||||||||||
Less: | |||||||||||||||
Cost of services | 221,300 | 193,018 | 141,419 | ||||||||||||
Cost of acquisition | 169,621 | 114,707 | 59,637 | ||||||||||||
Allocated support departments | 24,161 | 21,124 | 7,630 | ||||||||||||
Other | 20,323 | 31,378 | 28,238 | ||||||||||||
$ | 692,824 | $ | 542,739 | $ | 419,164 | ||||||||||
Divided by origination volume | $ | 31,001,724 | $ | 23,256,013 | $ | 16,577,621 | |||||||||
Total cost of origination | 2.23% | 2.33% | 2.53% | ||||||||||||
Origination Margin | (dollars in 000s) | |||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Total Mortgage Services expenses | $ | 925,522 | $ | 749,925 | $ | 635,186 | ||||||
Add: Expenses netted against gain on sale revenues | 387,911 | 378,304 | 267,780 | |||||||||
Less: | ||||||||||||
Cost of services | 296,710 | 221,148 | 193,383 | |||||||||
Cost of acquisition | 150,981 | 169,621 | 114,707 | |||||||||
Allocated support departments | 26,176 | 24,161 | 21,124 | |||||||||
Other | 62,500 | 20,323 | 31,378 | |||||||||
Total cost of origination | $ | 777,066 | $ | 692,976 | $ | 542,374 | ||||||
Divided by origination volume | $ | 40,779,763 | $ | 31,001,724 | $ | 23,256,013 | ||||||
Cost of origination margin | 1.91 | % | 2.23 | % | 2.33 | % |
41
42
43
(in 000s) | ||||||||||||||||||||||||||||||||||
Basis Point Change | ||||||||||||||||||||||||||||||||||
Fair Value at | ||||||||||||||||||||||||||||||||||
April 30, 2005 | - 200 | - 100 | - 50 | + 50 | + 100 | + 200 | + 300 | |||||||||||||||||||||||||||
Residual interests in securitizations – available-for-sale | $ | 205,936 | $ | 84,845 | $ | 30,417 | $ | 13,637 | $ | (13,520 | ) | $ | (28,174 | ) | $ | (51,466 | ) | $ | (75,296 | ) | ||||||||||||||
Interest rate caps | 12,458 | – | 205 | 4,580 | 20,746 | 29,262 | 46,751 | 64,195 | ||||||||||||||||||||||||||
Investments at captive insurance subsidiary | 9,968 | 1,079 | 522 | 256 | (248 | ) | (487 | ) | (942 | ) | (1,368 | ) | ||||||||||||||||||||||
Fixed income – trading (net) | 6,252 | 1,958 | 893 | 426 | (390 | ) | (749 | ) | (1,383 | ) | (1,921 | ) | ||||||||||||||||||||||
Interest rate swaps | (1,325 | ) | (84,723 | ) | (43,024 | ) | (19,524 | ) | 19,524 | 43,024 | 84,723 | 123,771 | ||||||||||||||||||||||
Basis Point Change | ||||||||||||||||||||||||||||||||||
Fair Value at | ||||||||||||||||||||||||||||||||||
April 30, 2004 | - 50 | + 50 | + 100 | + 200 | + 300 | |||||||||||||||||||||||||||||
Residual interests in securitizations – available-for-sale | $ | 210,973 | $ | 45,449 | $ | (18,563 | ) | $ | (32,709 | ) | $ | (46,527 | ) | $ | (48,090 | ) | ||||||||||||||||||
Investments at captive insurance subsidiary | 44,667 | 1,079 | (1,069 | ) | (1,591 | ) | (3,146 | ) | (4,667 | ) | ||||||||||||||||||||||||
Fixed income – trading (net) | 13,639 | 677 | (637 | ) | (1,228 | ) | (2,271 | ) | (3,164 | ) | ||||||||||||||||||||||||
(in 000s) | ||||||||||||||||||||||||||||||||||||
Carrying Value at | Basis Point Change | |||||||||||||||||||||||||||||||||||
April 30, 2006 | -300 | -200 | -100 | -50 | +50 | +100 | +200 | +300 | ||||||||||||||||||||||||||||
Mortgage loans held for investment | $ | 407,538 | $ | 16,285 | $ | 10,885 | $ | 5,485 | $ | 2,785 | $ | (2,672 | ) | $ | (5,301 | ) | $ | (9,592 | ) | $ | (15,020 | ) | ||||||||||||||
Mortgage loans held for sale | 236,399 | 9,253 | 6,113 | 3,057 | 1,528 | (1,549 | ) | (3,146 | ) | (6,356 | ) | (8,866 | ) | |||||||||||||||||||||||
Beneficial interest in Trusts – trading | 188,014 | 298,013 | 199,029 | 100,039 | 50,542 | (51,789 | ) | (103,365 | ) | (189,389 | ) | (270,970 | ) | |||||||||||||||||||||||
Residual interests in securitizations – available-for-sale | 159,058 | 32,692 | 13,543 | 4,795 | 2,503 | (4,181 | ) | (8,798 | ) | (17,931 | ) | (21,232 | ) | |||||||||||||||||||||||
Fixed income – trading (net) | 15,609 | 4,323 | 2,617 | 1,174 | 509 | (751 | ) | (1,359 | ) | (2,368 | ) | (3,274 | ) | |||||||||||||||||||||||
Interest rate swaps | 8,831 | (523,639 | ) | (344,606 | ) | (170,090 | ) | (84,500 | ) | 83,466 | 165,791 | 327,397 | 484,929 | |||||||||||||||||||||||
Investments at captive insurance subsidiary | 8,508 | 1,260 | 814 | 395 | 195 | (189 | ) | (372 | ) | (723 | ) | (1,054 | ) | |||||||||||||||||||||||
Put options on Eurodollar futures | 3,282 | - | 10 | 347 | 1,183 | 8,549 | 15,671 | 31,539 | 47,955 | |||||||||||||||||||||||||||
Forward loan sale commitments | 1,961 | (158,345 | ) | (105,563 | ) | (52,782 | ) | (26,391 | ) | 26,391 | 52,782 | 105,563 | 158,345 | |||||||||||||||||||||||
Carrying Value at | Basis Point Change | |||||||||||||||||||||||||||||||||||
April 30, 2005 | -200 | -100 | -50 | +50 | +100 | +200 | +300 | |||||||||||||||||||||||||||||
Residual interests in securitizations – available-for-sale | $ | 205,936 | $ | 84,845 | $ | 30,417 | $ | 13,637 | $ | (13,520 | ) | $ | (28,174 | ) | $ | (51,466 | ) | $ | (75,296 | ) | ||||||||||||||||
Interest rate caps | 12,458 | - | 205 | 4,580 | 20,746 | 29,262 | 46,751 | 64,195 | ||||||||||||||||||||||||||||
Investments at captive insurance subsidiary | 9,968 | 1,079 | 522 | 256 | (248 | ) | (487 | ) | (942 | ) | (1,368 | ) | ||||||||||||||||||||||||
Fixed income – trading (net) | 6,252 | 1,958 | 893 | 426 | (390 | ) | (749 | ) | (1,383 | ) | (1,921 | ) | ||||||||||||||||||||||||
Interest rate swaps | (1,325 | ) | (84,723 | ) | (43,024 | ) | (19,524 | ) | 19,524 | 43,024 | 84,723 | 123,771 | ||||||||||||||||||||||||
44
45
46
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
AND COMPREHENSIVE INCOME | (Amounts in 000s, except per share amounts) | |||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
REVENUES– | ||||||||||||
Service revenues | $ | 3,463,111 | $ | 2,920,586 | $ | 2,639,367 | ||||||
Other revenues: | ||||||||||||
Gains on sales of mortgage assets, net | 713,981 | 822,075 | 918,297 | |||||||||
Product and other revenues | 492,502 | 478,443 | 460,421 | |||||||||
Interest income | 203,207 | 198,915 | 229,795 | |||||||||
4,872,801 | 4,420,019 | 4,247,880 | ||||||||||
OPERATING EXPENSES– | ||||||||||||
Cost of services | 2,383,299 | 1,999,068 | 1,794,866 | |||||||||
Cost of other revenues | 522,992 | 448,021 | 382,518 | |||||||||
Selling, general and administrative | 1,112,585 | 920,677 | 846,157 | |||||||||
4,018,876 | 3,367,766 | 3,023,541 | ||||||||||
Operating income | 853,925 | 1,052,253 | 1,224,339 | |||||||||
Interest expense | 49,059 | 62,367 | 71,218 | |||||||||
Other income, net | 22,527 | 27,829 | 9,854 | |||||||||
Income before taxes | 827,393 | 1,017,715 | 1,162,975 | |||||||||
Income taxes | 336,985 | 393,805 | 462,523 | |||||||||
Net income before change in accounting principle | 490,408 | 623,910 | 700,452 | |||||||||
Cumulative effect of change in accounting principle for multiple deliverable revenue arrangements, less tax benefit of $4,031 | - | - | (6,359 | ) | ||||||||
NET INCOME | $ | 490,408 | $ | 623,910 | $ | 694,093 | ||||||
BASIC EARNINGS PER SHARE– | ||||||||||||
Before change in accounting principle | $ | 1.49 | $ | 1.88 | $ | 1.98 | ||||||
Cumulative effect of change in accounting principle | - | - | (0.02 | ) | ||||||||
Net income | $ | 1.49 | $ | 1.88 | $ | 1.96 | ||||||
DILUTED EARNINGS PER SHARE– | ||||||||||||
Before change in accounting principle | $ | 1.47 | $ | 1.85 | $ | 1.94 | ||||||
Cumulative effect of change in accounting principle | - | - | (0.02 | ) | ||||||||
Net income | $ | 1.47 | $ | 1.85 | $ | 1.92 | ||||||
COMPREHENSIVE INCOME– | ||||||||||||
Net income | $ | 490,408 | $ | 623,910 | $ | 694,093 | ||||||
Unrealized gains on securities, net of taxes: | ||||||||||||
Unrealized holding gains arising during the period, less taxes of $13,585, $36,670, and $64,174 | 22,059 | 59,409 | 103,886 | |||||||||
Reclassification adjustment for gains included in income, less taxes of $40,846, $40,661 and $67,561 | (66,188 | ) | (65,848 | ) | (109,385 | ) | ||||||
Change in foreign currency translation adjustments | (2,641 | ) | 8,946 | 12,355 | ||||||||
$ | 443,638 | $ | 626,417 | $ | 700,949 | |||||||
(Amounts in 000s, except per share amounts) | ||||||||||||||||
Restated(1) | Restated(1) | |||||||||||||||
Year ended April 30, | 2005 | 2004 | 2003 | |||||||||||||
REVENUES ... | ||||||||||||||||
Service revenues | $ | 2,920,586 | $ | 2,639,367 | $ | 2,295,936 | ||||||||||
Other revenues: | ||||||||||||||||
Gains on sales of mortgage assets, net | 822,075 | 918,297 | 827,127 | |||||||||||||
Product and other revenues | 478,443 | 460,421 | 412,995 | |||||||||||||
Interest income | 198,915 | 229,795 | 195,068 | |||||||||||||
4,420,019 | 4,247,880 | 3,731,126 | ||||||||||||||
OPERATING EXPENSES ... | ||||||||||||||||
Cost of service revenues | 1,999,220 | 1,794,501 | 1,625,937 | |||||||||||||
Cost of other revenues | 416,421 | 380,365 | 300,749 | |||||||||||||
Impairment of goodwill | – | – | 122,251 | |||||||||||||
Selling, general and administrative | 952,125 | 848,675 | 760,864 | |||||||||||||
3,367,766 | 3,023,541 | 2,809,801 | ||||||||||||||
Operating income | 1,052,253 | 1,224,339 | 921,325 | |||||||||||||
Interest expense | 62,367 | 71,218 | 76,723 | |||||||||||||
Other income, net | 27,829 | 9,854 | 10,962 | |||||||||||||
Income before taxes | 1,017,715 | 1,162,975 | 855,564 | |||||||||||||
Income taxes | 381,858 | 447,367 | 377,949 | |||||||||||||
Net income before change in accounting principle | 635,857 | 715,608 | 477,615 | |||||||||||||
Cumulative effect of change in accounting principle for multiple deliverable revenue arrangements, less tax benefit of $4,031 | – | (6,359 | ) | – | ||||||||||||
NET INCOME | $ | 635,857 | $ | 709,249 | $ | 477,615 | ||||||||||
BASIC EARNINGS PER SHARE ... | ||||||||||||||||
Before change in accounting principle | $ | 3.83 | $ | 4.04 | $ | 2.66 | ||||||||||
Cumulative effect of change in accounting principle | – | (.03 | ) | – | ||||||||||||
Net income | $ | 3.83 | $ | 4.01 | $ | 2.66 | ||||||||||
DILUTED EARNINGS PER SHARE ... | ||||||||||||||||
Before change in accounting principle | $ | 3.77 | $ | 3.96 | $ | 2.59 | ||||||||||
Cumulative effect of change in accounting principle | – | (.04 | ) | – | ||||||||||||
Net income | $ | 3.77 | $ | 3.92 | $ | 2.59 | ||||||||||
COMPREHENSIVE INCOME ... | ||||||||||||||||
Net income | $ | 635,857 | $ | 709,249 | $ | 477,615 | ||||||||||
Unrealized gains on securities, net of taxes: | ||||||||||||||||
Unrealized holding gains arising during the period, less taxes of $36,670, $64,174, and $70,983 | 59,409 | 103,886 | 114,885 | |||||||||||||
Reclassification adjustment for gains included in income, less taxes of $40,661, $67,561 and $72,370 | (65,848 | ) | (109,385 | ) | (117,073 | ) | ||||||||||
Change in foreign currency translation adjustments | 8,946 | 12,355 | 17,415 | |||||||||||||
$ | 638,364 | $ | 716,105 | $ | 492,842 | |||||||||||
47
CONSOLIDATED BALANCE SHEETS – | (Amounts in 000s, except share and per share amounts) | |||||||||||
April 30, | 2006 | 2005 | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS – | ||||||||||||
Cash and cash equivalents | $ | 694,358 | $ | 1,100,213 | ||||||||
Cash and cash equivalents – restricted | 394,069 | 516,909 | ||||||||||
Receivables from customers, brokers, dealers and clearing organizations, less allowance for doubtful accounts of $1,783 and $1,151 | 496,577 | 590,226 | ||||||||||
Receivables, less allowance for doubtful accounts of $64,480 and $34,201 | 503,188 | 341,706 | ||||||||||
Mortgage loans held for sale | 236,399 | 77,082 | ||||||||||
Prepaid expenses and other current assets | 499,356 | 444,498 | ||||||||||
Total current assets | 2,823,947 | 3,070,634 | ||||||||||
Residual interests in securitizations – available-for-sale | 159,058 | 205,936 | ||||||||||
Beneficial interest in Trusts – trading | 188,014 | 215,367 | ||||||||||
Mortgage servicing rights | 272,472 | 166,614 | ||||||||||
Mortgage loans held for investment, net | 407,538 | - | ||||||||||
Property and equipment, net | 443,785 | 330,150 | ||||||||||
Intangible assets, net | 219,494 | 247,092 | ||||||||||
Goodwill, net | 1,100,452 | 1,015,947 | ||||||||||
Other assets | 374,375 | 286,316 | ||||||||||
Total assets | $ | 5,989,135 | $ | 5,538,056 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
LIABILITIES– | ||||||||||||
Current portion of long-term debt | $ | 506,992 | $ | 25,545 | ||||||||
Accounts payable to customers, brokers and dealers | 781,303 | 950,684 | ||||||||||
Accounts payable, accrued expenses and other current liabilities | 768,505 | 564,749 | ||||||||||
Accrued salaries, wages and payroll taxes | 330,946 | 318,644 | ||||||||||
Accrued income taxes | 505,690 | 375,174 | ||||||||||
Total current liabilities | 2,893,436 | 2,234,796 | ||||||||||
Long-term debt | 417,539 | 923,073 | ||||||||||
Other noncurrent liabilities | 530,361 | 430,919 | ||||||||||
Total liabilities | 3,841,336 | 3,588,788 | ||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||
STOCKHOLDERS’ EQUITY– | ||||||||||||
Common stock, no par, stated value $0.01 per share, 800,000,000 shares authorized, 435,890,796 shares issued at April 30, 2006 and 2005 | 4,359 | 4,359 | ||||||||||
Convertible preferred stock, no par, stated value $0.01 per share, 500,000 shares authorized | - | - | ||||||||||
Additional paid-in capital | 653,053 | 598,388 | ||||||||||
Accumulated other comprehensive income | 21,948 | 68,718 | ||||||||||
Retained earnings | 3,492,059 | 3,161,682 | ||||||||||
Less treasury shares, at cost | (2,023,620 | ) | (1,883,879 | ) | ||||||||
Total stockholders’ equity | 2,147,799 | 1,949,268 | ||||||||||
Total liabilities and stockholders’ equity | $ | 5,989,135 | $ | 5,538,056 | ||||||||
(Amounts in 000s, except share and per share amounts) | ||||||||||||
Restated(1) | ||||||||||||
April 30, | 2005 | 2004 | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS ... | ||||||||||||
Cash and cash equivalents | $ | 1,100,213 | $ | 1,072,745 | ||||||||
Cash and cash equivalents – restricted | 516,909 | 545,428 | ||||||||||
Receivables from customers, brokers, dealers and clearing organizations, less allowance for doubtful accounts of $1,151 and $1,103 | 590,226 | 625,076 | ||||||||||
Receivables, less allowance for doubtful accounts of $38,879 and $53,418 | 418,788 | 329,219 | ||||||||||
Prepaid expenses and other current assets | 444,498 | 381,024 | ||||||||||
Total current assets | 3,070,634 | 2,953,492 | ||||||||||
Residual interests in securitizations – available-for-sale | 205,936 | 210,973 | ||||||||||
Beneficial interest in Trusts – trading | 215,367 | 153,818 | ||||||||||
Mortgage servicing rights | 166,614 | 113,821 | ||||||||||
Property and equipment, net | 330,150 | 273,303 | ||||||||||
Intangible assets, net | 247,092 | 293,477 | ||||||||||
Goodwill, net | 1,015,947 | 993,467 | ||||||||||
Other assets | 287,543 | 240,381 | ||||||||||
Total assets | $ | 5,539,283 | $ | 5,232,732 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
LIABILITIES ... | ||||||||||||
Current portion of long-term debt | $ | 25,545 | $ | 275,669 | ||||||||
Accounts payable to customers, brokers and dealers | 950,684 | 1,065,793 | ||||||||||
Accounts payable, accrued expenses and other | 564,749 | 461,640 | ||||||||||
Accrued salaries, wages and payroll taxes | 318,644 | 280,367 | ||||||||||
Accrued income taxes | 349,298 | 413,868 | ||||||||||
Total current liabilities | 2,208,920 | 2,497,337 | ||||||||||
Long-term debt | 923,073 | 545,811 | ||||||||||
Other noncurrent liabilities | 430,919 | 369,769 | ||||||||||
Total liabilities | 3,562,912 | 3,412,917 | ||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||
STOCKHOLDERS’ EQUITY ... | ||||||||||||
Common stock, no par, stated value $.01 per share, 800,000,000 shares authorized, 217,945,398 shares issued at April 30, 2005 and 2004 | 2,179 | 2,179 | ||||||||||
Convertible preferred stock, no par, stated value $.01 per share, 500,000 shares authorized | – | – | ||||||||||
Additional paid-in capital | 600,568 | 545,065 | ||||||||||
Accumulated other comprehensive income | 68,718 | 66,211 | ||||||||||
Retained earnings | 3,188,785 | 2,695,916 | ||||||||||
Less treasury shares, at cost | (1,883,879 | ) | (1,489,556 | ) | ||||||||
Total stockholders’ equity | 1,976,371 | 1,819,815 | ||||||||||
Total liabilities and stockholders’ equity | $ | 5,539,283 | $ | 5,232,732 | ||||||||
48
CONSOLIDATED STATEMENTS OF CASH FLOWS – | (Amounts in 000s) | |||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES– | ||||||||||||
Net income | $ | 490,408 | $ | 623,910 | $ | 694,093 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 191,703 | 183,867 | 179,131 | |||||||||
Provision for bad debt | 39,746 | 52,221 | 53,663 | |||||||||
Provision for deferred taxes on income | (43,409 | ) | (40,023 | ) | (2,081 | ) | ||||||
Accretion of residual interests in securitizations | (114,346 | ) | (137,610 | ) | (186,466 | ) | ||||||
Impairment of available-for-sale residual interests in securitizations | 34,107 | 12,235 | 26,063 | |||||||||
Realized gain on sale of previously securitized residual interests | (31,463 | ) | (15,396 | ) | (40,689 | ) | ||||||
Additions to trading residual interests in securitizations, net | (350,861 | ) | (115,657 | ) | (327,996 | ) | ||||||
Proceeds from net interest margin transactions | 295,159 | 98,743 | 310,358 | |||||||||
Additions to mortgage servicing rights | (250,537 | ) | (137,510 | ) | (84,274 | ) | ||||||
Amortization and impairment of mortgage servicing rights | 144,679 | 84,717 | 69,718 | |||||||||
Stock-based compensation | 57,020 | 44,139 | 25,718 | |||||||||
Cumulative effect of change in accounting principle | - | - | 6,359 | |||||||||
Changes in assets and liabilities, net of acquisitions: | ||||||||||||
Cash and cash equivalents – restricted | 122,840 | 28,519 | (107,186 | ) | ||||||||
Receivables from customers, brokers, dealers and clearing organizations | 88,954 | 33,892 | (108,846 | ) | ||||||||
Receivables | (136,121 | ) | (121,177 | ) | 26,294 | |||||||
Mortgage loans held for sale: | ||||||||||||
Originations and purchases | (40,358,579 | ) | (31,003,456 | ) | (23,255,483 | ) | ||||||
Sales and principal repayments | 40,256,802 | 30,990,566 | 23,246,815 | |||||||||
Prepaid expenses and other current assets | (61,948 | ) | (53,858 | ) | 26,978 | |||||||
Beneficial interest in Trusts | 47,015 | (61,549 | ) | (17,222 | ) | |||||||
Accounts payable to customers, brokers and dealers | (169,381 | ) | (115,109 | ) | 203,099 | |||||||
Accounts payable, accrued expenses and other current liabilities | 130,274 | 113,419 | (104,563 | ) | ||||||||
Accrued salaries, wages and payroll taxes | (5,643 | ) | 38,277 | 70,521 | ||||||||
Accrued income taxes | 101,093 | (20,281 | ) | 110,021 | ||||||||
Other non-current liabilities | 125,482 | 26,527 | 35,965 | |||||||||
Other, net | (17,308 | ) | 4,387 | 2,473 | ||||||||
Net cash provided by operating activities | 585,686 | 513,793 | 852,463 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES– | ||||||||||||
Available-for-sale securities: | ||||||||||||
Purchases of available-for-sale securities | (9,216 | ) | (10,175 | ) | (11,434 | ) | ||||||
Cash received from residual interests in securitizations | 80,539 | 136,045 | 193,606 | |||||||||
Cash proceeds from sale of previously securitized residuals | 62,396 | 16,485 | 53,391 | |||||||||
Sales of other available-for-sale securities | 11,218 | 9,752 | 15,410 | |||||||||
Mortgage loans originated and held for investment, net | (407,538 | ) | - | - | ||||||||
Purchases of property and equipment, net | (250,510 | ) | (209,458 | ) | (123,826 | ) | ||||||
Payments made for business acquisitions, net of cash acquired | (212,543 | ) | (37,621 | ) | (280,865 | ) | ||||||
Other, net | 37,149 | 36,562 | 26,332 | |||||||||
Net cash used in investing activities | (688,505 | ) | (58,410 | ) | (127,386 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES– | ||||||||||||
Repayments of commercial paper and other short-term borrowings | (7,048,881 | ) | (5,941,623 | ) | (4,618,853 | ) | ||||||
Proceeds from issuance of commercial paper and other short-term borrowings | 7,048,881 | 5,941,623 | 4,618,853 | |||||||||
Repayments of Senior Notes | - | (250,000 | ) | - | ||||||||
Proceeds from issuance of Senior Notes | - | 395,221 | - | |||||||||
Payments on acquisition debt | (26,819 | ) | (25,664 | ) | (59,003 | ) | ||||||
Dividends paid | (160,031 | ) | (142,988 | ) | (138,397 | ) | ||||||
Acquisition of treasury shares | (260,312 | ) | (530,022 | ) | (519,862 | ) | ||||||
Proceeds from issuance of common stock | 108,507 | 136,102 | 119,956 | |||||||||
Other, net | 35,619 | (10,564 | ) | 31,681 | ||||||||
Net cash used in financing activities | (303,036 | ) | (427,915 | ) | (565,625 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | (405,855 | ) | 27,468 | 159,452 | ||||||||
Cash and cash equivalents at beginning of the year | 1,100,213 | 1,072,745 | 913,293 | |||||||||
Cash and cash equivalents at end of the year | $ | 694,358 | $ | 1,100,213 | $ | 1,072,745 | ||||||
(Amounts in 000s) | ||||||||||||||||||
Restated(1) | Restated(1) | |||||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES ... | ||||||||||||||||||
Net income | $ | 635,857 | $ | 709,249 | $ | 477,615 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||
Depreciation and amortization | 183,867 | 179,131 | 169,092 | |||||||||||||||
Provision for bad debt | 52,221 | 53,663 | 49,748 | |||||||||||||||
Provision for deferred taxes on income | (42,345 | ) | (986 | ) | (29,944 | ) | ||||||||||||
Accretion of residual interests in securitizations | (137,610 | ) | (186,466 | ) | (146,343 | ) | ||||||||||||
Impairment of residual interests in securitizations | 12,235 | 26,063 | 54,111 | |||||||||||||||
Realized gain on sale of previously securitized residual interests | (15,396 | ) | (40,689 | ) | (93,307 | ) | ||||||||||||
Additions to trading securities – residual interests in securitizations | (115,657 | ) | (327,996 | ) | (542,544 | ) | ||||||||||||
Proceeds from net interest margin transactions | 98,743 | 310,358 | 541,791 | |||||||||||||||
Additions to mortgage servicing rights | (137,510 | ) | (84,274 | ) | (65,345 | ) | ||||||||||||
Amortization of mortgage servicing rights | 84,191 | 69,718 | 47,107 | |||||||||||||||
Net change in beneficial interest in Trusts | (61,549 | ) | (17,222 | ) | (84,655 | ) | ||||||||||||
Impairment of goodwill | – | – | 122,251 | |||||||||||||||
Tax benefit from stock option exercises | 10,961 | 23,957 | 37,304 | |||||||||||||||
Stock-based compensation | 44,139 | 25,718 | 2,079 | |||||||||||||||
Cumulative effect of change in accounting principle | – | 6,359 | – | |||||||||||||||
Changes in assets and liabilities, net of acquisitions: | ||||||||||||||||||
Cash and cash equivalents – restricted | 28,519 | (107,186 | ) | (286,069 | ) | |||||||||||||
Receivables for customers, brokers dealers and clearing organizations | 33,892 | (108,846 | ) | 326,824 | ||||||||||||||
Receivables | (121,177 | ) | 26,294 | (72,423 | ) | |||||||||||||
Mortgage loans held for sale: | ||||||||||||||||||
Originations and purchases | (31,003,456 | ) | (23,255,483 | ) | (17,827,828 | ) | ||||||||||||
Sales and principal repayments | 30,990,566 | 23,246,815 | 17,837,323 | |||||||||||||||
Prepaid expenses and other current assets | (53,858 | ) | 26,978 | 43,818 | ||||||||||||||
Accounts payable to customers, brokers and dealers | (115,109 | ) | 203,099 | (40,507 | ) | |||||||||||||
Accounts payable, accrued expenses and other | 113,419 | (104,563 | ) | 60,454 | ||||||||||||||
Accrued salaries, wages and payroll taxes | 38,277 | 70,521 | (42,911 | ) | ||||||||||||||
Accrued income taxes | (29,906 | ) | 93,770 | 111,822 | ||||||||||||||
Other, net | 20,479 | 14,481 | 40,272 | |||||||||||||||
Net cash provided by operating activities | 513,793 | 852,463 | 689,735 | |||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES ... | ||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||
Purchases of available-for-sale securities | (10,175 | ) | (11,434 | ) | (14,614 | ) | ||||||||||||
Cash received from residual interests in securitizations | 136,045 | 193,606 | 140,795 | |||||||||||||||
Cash proceeds from sale of previously securitized residuals | 16,485 | 53,391 | 142,486 | |||||||||||||||
Sales of other available-for-sale securities | 9,752 | 15,410 | 14,081 | |||||||||||||||
Purchases of property and equipment, net | (209,458 | ) | (123,826 | ) | (148,706 | ) | ||||||||||||
Payments made for business acquisitions, net of cash acquired | (37,621 | ) | (280,865 | ) | (26,408 | ) | ||||||||||||
Other, net | 36,562 | 26,332 | 19,895 | |||||||||||||||
Net cash provided by (used in) investing activities | (58,410 | ) | (127,386 | ) | 127,529 | |||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES ... | ||||||||||||||||||
Repayments of commercial paper | (5,191,623 | ) | (4,618,853 | ) | (9,925,516 | ) | ||||||||||||
Proceeds from issuance of commercial paper | 5,191,623 | 4,618,853 | 9,925,516 | |||||||||||||||
Repayments of Senior Notes | (250,000 | ) | – | – | ||||||||||||||
Proceeds from issuance of Senior Notes | 395,221 | – | – | |||||||||||||||
Payments on acquisition debt | (25,664 | ) | (59,003 | ) | (57,469 | ) | ||||||||||||
Dividends paid | (142,988 | ) | (138,397 | ) | (125,898 | ) | ||||||||||||
Acquisition of treasury shares | (530,022 | ) | (519,862 | ) | (317,570 | ) | ||||||||||||
Proceeds from issuance of common stock | 136,102 | 119,956 | 126,325 | |||||||||||||||
Other, net | (10,564 | ) | 31,681 | (2,572 | ) | |||||||||||||
Net cash used in financing activities | (427,915 | ) | (565,625 | ) | (377,184 | ) | ||||||||||||
Net increase in cash and cash equivalents | 27,468 | 159,452 | 440,080 | |||||||||||||||
Cash and cash equivalents at beginning of the year | 1,072,745 | 913,293 | 473,213 | |||||||||||||||
Cash and cash equivalents at end of the year | $ | 1,100,213 | $ | 1,072,745 | $ | 913,293 | ||||||||||||
49
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY– | (Amounts in 000s, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||
Convertible | Accumulated | |||||||||||||||||||||||||||||||||||||||||
Preferred | Additional | Other | ||||||||||||||||||||||||||||||||||||||||
Common Stock | Stock | Paid-in | Comprehensive | Retained | Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Income (Loss) | Earnings | Shares | Amount | Equity | |||||||||||||||||||||||||||||||||
Balances at April 30, 2003 | 435,891 | $ | 4,359 | - | $ | - | $ | 494,213 | $ | 59,355 | $ | 2,125,064 | (76,688 | ) | $ | (1,093,593 | ) | $ | 1,589,398 | |||||||||||||||||||||||
Net income | - | - | - | - | - | - | 694,093 | - | - | 694,093 | ||||||||||||||||||||||||||||||||
Unrealized translation gain | - | - | - | - | - | 12,355 | - | - | - | 12,355 | ||||||||||||||||||||||||||||||||
Change in net unrealized gain on marketable securities | - | - | - | - | - | (5,499 | ) | - | - | - | (5,499 | ) | ||||||||||||||||||||||||||||||
Stock-based compensation expense | - | - | - | - | 25,718 | - | - | - | - | 25,718 | ||||||||||||||||||||||||||||||||
Shares issued for: | ||||||||||||||||||||||||||||||||||||||||||
Stock options | - | - | - | - | 21,585 | - | - | 7,856 | 117,975 | 139,560 | ||||||||||||||||||||||||||||||||
Restricted shares | - | - | - | - | 385 | - | - | 145 | 2,103 | 2,488 | ||||||||||||||||||||||||||||||||
ESPP | - | - | - | - | 984 | - | - | 255 | 3,821 | 4,805 | ||||||||||||||||||||||||||||||||
Acquisition of treasury shares | - | - | - | - | - | - | - | (21,266 | ) | (519,862 | ) | (519,862 | ) | |||||||||||||||||||||||||||||
Cash dividends paid – $0.39 per share | - | - | - | - | - | - | (138,397 | ) | - | - | (138,397 | ) | ||||||||||||||||||||||||||||||
Balances at April 30, 2004 | 435,891 | 4,359 | - | - | 542,885 | 66,211 | 2,680,760 | (89,698 | ) | (1,489,556 | ) | 1,804,659 | ||||||||||||||||||||||||||||||
Net income | - | - | - | - | - | - | 623,910 | - | - | 623,910 | ||||||||||||||||||||||||||||||||
Unrealized translation gain | - | - | - | - | - | 8,946 | - | - | - | 8,946 | ||||||||||||||||||||||||||||||||
Change in net unrealized gain on marketable securities | - | - | - | - | - | (6,439 | ) | - | - | - | (6,439 | ) | ||||||||||||||||||||||||||||||
Stock-based compensation expense | - | - | - | - | 44,139 | - | - | - | - | 44,139 | ||||||||||||||||||||||||||||||||
Shares issued for: | ||||||||||||||||||||||||||||||||||||||||||
Stock options | - | - | - | - | 15,892 | - | - | 6,959 | 124,263 | 140,155 | ||||||||||||||||||||||||||||||||
Restricted shares | - | - | - | - | (5,718 | ) | - | - | 352 | 6,098 | 380 | |||||||||||||||||||||||||||||||
ESPP | - | - | - | - | 1,190 | - | - | 301 | 5,338 | 6,528 | ||||||||||||||||||||||||||||||||
Acquisition of treasury shares | - | - | - | - | - | - | - | (22,564 | ) | (530,022 | ) | (530,022 | ) | |||||||||||||||||||||||||||||
Cash dividends paid – $0.43 per share | - | - | - | - | - | - | (142,988 | ) | - | - | (142,988 | ) | ||||||||||||||||||||||||||||||
Balances at April 30, 2005 | 435,891 | 4,359 | - | - | 598,388 | 68,718 | 3,161,682 | (104,650 | ) | (1,883,879 | ) | 1,949,268 | ||||||||||||||||||||||||||||||
Net income | - | - | - | - | - | - | 490,408 | - | - | 490,408 | ||||||||||||||||||||||||||||||||
Unrealized translation loss | - | - | - | - | - | (2,641 | ) | - | - | - | (2,641 | ) | ||||||||||||||||||||||||||||||
Change in net unrealized gain on marketable securities | - | - | - | - | - | (44,129 | ) | - | - | - | (44,129 | ) | ||||||||||||||||||||||||||||||
Stock-based compensation expense | - | - | - | - | 57,020 | - | - | - | - | 57,020 | ||||||||||||||||||||||||||||||||
Shares issued for: | ||||||||||||||||||||||||||||||||||||||||||
Stock options | - | - | - | - | 5,831 | - | - | 5,492 | 102,068 | 107,899 | ||||||||||||||||||||||||||||||||
Restricted shares | - | - | - | - | (9,649 | ) | - | - | 616 | 11,160 | 1,511 | |||||||||||||||||||||||||||||||
ESPP | - | - | - | - | 1,463 | - | - | 398 | 7,343 | 8,806 | ||||||||||||||||||||||||||||||||
Acquisition of treasury shares | - | - | - | - | - | - | - | (9,234 | ) | (260,312 | ) | (260,312 | ) | |||||||||||||||||||||||||||||
Cash dividends paid – $0.49 per share | - | - | - | - | - | - | (160,031 | ) | - | - | (160,031 | ) | ||||||||||||||||||||||||||||||
Balances at April 30, 2006 | 435,891 | $ | 4,359 | - | $ | - | $ | 653,053 | $ | 21,948 | $ | 3,492,059 | (107,378 | ) | $ | (2,023,620 | ) | $ | 2,147,799 | |||||||||||||||||||||||
(Amounts in 000s, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||
Convertible | Accumulated | ||||||||||||||||||||||||||||||||||||||||||
Common Stock | Preferred Stock | Additional | Other | Treasury Stock | |||||||||||||||||||||||||||||||||||||||
Paid-In | Comprehensive | Retained | Total | ||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Income (Loss) | Earnings | Shares | Amount | Equity | ||||||||||||||||||||||||||||||||||
Balances at April 30, 2002 (1) | 217,945 | $ | 2,179 | – | $ | – | $ | 468,052 | $ | 44,128 | $ | 1,767,702 | (36,820 | ) | $ | (912,641 | ) | $ | 1,369,420 | ||||||||||||||||||||||||
Prior year adjustment (2) | – | – | – | – | – | – | 5,645 | – | – | 5,645 | |||||||||||||||||||||||||||||||||
Balances at April 30, 2002 (2) | 217,945 | 2,179 | – | – | 468,052 | 44,128 | 1,773,347 | (36,820 | ) | (912,641 | ) | 1,375,065 | |||||||||||||||||||||||||||||||
Net income (2) | – | – | – | – | – | – | 477,615 | – | – | 477,615 | |||||||||||||||||||||||||||||||||
Unrealized translation gain | – | – | – | – | – | 17,415 | – | – | – | 17,415 | |||||||||||||||||||||||||||||||||
Change in net unrealized gain on marketable securities (2) | – | – | – | – | – | (2,188 | ) | – | – | – | (2,188 | ) | |||||||||||||||||||||||||||||||
Shares issued for: | |||||||||||||||||||||||||||||||||||||||||||
Stock options | – | – | – | – | 27,241 | – | – | 5,070 | 135,409 | 162,650 | |||||||||||||||||||||||||||||||||
Restricted shares | – | – | – | – | 5 | – | – | (64 | ) | (1,306 | ) | (1,301 | ) | ||||||||||||||||||||||||||||||
ESPP | – | – | – | – | 1,095 | – | – | 94 | 2,515 | 3,610 | |||||||||||||||||||||||||||||||||
Acquisition of treasury shares | – | – | – | – | – | – | – | (6,624 | ) | (317,570 | ) | (317,570 | ) | ||||||||||||||||||||||||||||||
Cash dividends paid – $.70 per share | – | – | – | – | – | – | (125,898 | ) | – | – | (125,898 | ) | |||||||||||||||||||||||||||||||
Balances at April 30, 2003 (2) | 217,945 | 2,179 | – | – | 496,393 | 59,355 | 2,125,064 | (38,344 | ) | (1,093,593 | ) | 1,589,398 | |||||||||||||||||||||||||||||||
Net income (2) | – | – | – | – | – | – | 709,249 | – | – | 709,249 | |||||||||||||||||||||||||||||||||
Unrealized translation gain | – | – | – | – | – | 12,355 | – | – | – | 12,355 | |||||||||||||||||||||||||||||||||
Change in net unrealized gain on marketable securities (2) | – | – | – | – | – | (5,499 | ) | – | – | – | (5,499 | ) | |||||||||||||||||||||||||||||||
Stock-based compensation expense | – | – | – | – | 25,718 | – | – | – | – | 25,718 | |||||||||||||||||||||||||||||||||
Shares issued for: | |||||||||||||||||||||||||||||||||||||||||||
Stock options | – | – | – | – | 21,585 | – | – | 3,928 | 117,975 | 139,560 | |||||||||||||||||||||||||||||||||
Restricted shares | – | – | – | – | 385 | – | – | 72 | 2,103 | 2,488 | |||||||||||||||||||||||||||||||||
ESPP | – | – | – | – | 984 | – | – | 127 | 3,821 | 4,805 | |||||||||||||||||||||||||||||||||
Acquisition of treasury shares | – | – | – | – | – | – | – | (10,633 | ) | (519,862 | ) | (519,862 | ) | ||||||||||||||||||||||||||||||
Cash dividends paid – $.78 per share | – | – | – | – | – | – | (138,397 | ) | – | – | (138,397 | ) | |||||||||||||||||||||||||||||||
Balances at April 30, 2004 (2) | 217,945 | 2,179 | – | – | 545,065 | 66,211 | 2,695,916 | (44,850 | ) | (1,489,556 | ) | 1,819,815 | |||||||||||||||||||||||||||||||
Net income | – | – | – | – | – | – | 635,857 | – | – | 635,857 | |||||||||||||||||||||||||||||||||
Unrealized translation gain | – | – | – | – | – | 8,946 | – | – | – | 8,946 | |||||||||||||||||||||||||||||||||
Change in net unrealized gain on marketable securities | – | – | – | – | – | (6,439 | ) | – | – | – | (6,439 | ) | |||||||||||||||||||||||||||||||
Stock-based compensation expense | – | – | – | – | 44,139 | – | – | – | – | 44,139 | |||||||||||||||||||||||||||||||||
Shares issued for: | |||||||||||||||||||||||||||||||||||||||||||
Stock options | – | – | – | – | 15,892 | – | – | 3,479 | 124,263 | 140,155 | |||||||||||||||||||||||||||||||||
Restricted shares | – | – | – | – | (5,718 | ) | – | – | 176 | 6,098 | 380 | ||||||||||||||||||||||||||||||||
ESPP | – | – | – | – | 1,190 | – | – | 151 | 5,338 | 6,528 | |||||||||||||||||||||||||||||||||
Acquisition of treasury shares | – | – | – | – | – | – | – | (11,281 | ) | (530,022 | ) | (530,022 | ) | ||||||||||||||||||||||||||||||
Cash dividends paid – $.86 per share | – | – | – | – | – | – | (142,988 | ) | – | – | (142,988 | ) | |||||||||||||||||||||||||||||||
Balances at April 30, 2005 | 217,945 | $ | 2,179 | – | $ | – | $ | 600,568 | $ | 68,718 | $ | 3,188,785 | (52,325 | ) | $ | (1,883,879 | ) | $ | 1,976,371 | ||||||||||||||||||||||||
50
51
52
53
(in 000s, except per share amounts) | |||||||||||||||
Restated | Restated | ||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | ||||||||||||
Net income | $ | 635,857 | $ | 709,249 | $ | 477,615 | |||||||||
Add: Stock-based compensation expense included in reported net income, net of taxes | 28,819 | 18,029 | 1,223 | ||||||||||||
Deduct: Total stock-based compensation expense determined under fair value method for all awards, net of taxes | (39,544 | ) | (30,662 | ) | (21,025 | ) | |||||||||
Pro forma net income | $ | 625,132 | $ | 696,616 | $ | 457,813 | |||||||||
Basic earnings per share: | |||||||||||||||
As presented | $ | 3.83 | $ | 4.01 | $ | 2.66 | |||||||||
Pro forma | 3.77 | 3.93 | 2.55 | ||||||||||||
Diluted earnings per share: | |||||||||||||||
As presented | $ | 3.77 | $ | 3.92 | $ | 2.59 | |||||||||
Pro forma | 3.71 | 3.86 | 2.50 | ||||||||||||
(in 000s, except per share amounts) | ||||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Net income | $ | 490,408 | $ | 623,910 | $ | 694,093 | ||||||
Add: Stock-based compensation expense included in reported net income, net of taxes | 37,254 | 28,819 | 18,029 | |||||||||
Deduct: Total stock-based compensation expense determined under fair value method for all awards, net of taxes | (47,428 | ) | (39,544 | ) | (30,662 | ) | ||||||
Pro forma net income | $ | 480,234 | $ | 613,185 | $ | 681,460 | ||||||
Basic earnings per share: | ||||||||||||
As presented | $ | 1.49 | $ | 1.88 | $ | 1.96 | ||||||
Pro forma | 1.46 | 1.85 | 1.92 | |||||||||
Diluted earnings per share: | ||||||||||||
As presented | $ | 1.47 | $ | 1.85 | $ | 1.92 | ||||||
Pro forma | 1.44 | 1.82 | 1.89 | |||||||||
54
(in 000s, except per share amounts) | |||||||||||
Net income | $ | 477,615 | $ | 475,969 | |||||||
Earnings per share: | |||||||||||
Basic | $ | 2.66 | $ | 2.65 | |||||||
Diluted | 2.59 | 2.59 | |||||||||
55
56
(in 000s, except per share amounts) | ||||||||||||||||||||||||||
Year Ended April 30, | 2004 | 2003 | ||||||||||||||||||||||||
As Previously | As Previously | |||||||||||||||||||||||||
Reported(1) | Adjustments | Restated | Reported(1) | Adjustments | Restated | |||||||||||||||||||||
Gains on sales of mortgage assets, net | $ | 913,699 | $ | 4,598 | $ | 918,297 | $ | 864,701 | $ | (37,574 | ) | $ | 827,127 | |||||||||||||
Interest income | 211,359 | 18,436 | 229,795 | 193,889 | 1,179 | 195,068 | ||||||||||||||||||||
Total revenues | 4,224,846 | 23,034 | 4,247,880 | 3,767,521 | (36,395 | ) | 3,731,126 | |||||||||||||||||||
Cost of service revenues | 1,787,089 | 7,412 | 1,794,501 | 1,623,601 | 2,336 | 1,625,937 | ||||||||||||||||||||
Cost of other revenues | 375,713 | 4,652 | 380,365 | 295,975 | 4,774 | 300,749 | ||||||||||||||||||||
Impairment of goodwill | – | – | – | 35,777 | 86,474 | 122,251 | ||||||||||||||||||||
Selling, general and administrative | 836,523 | 12,152 | 848,675 | 755,203 | 5,661 | 760,864 | ||||||||||||||||||||
Total operating expenses | 2,999,325 | 24,216 | 3,023,541 | 2,710,556 | 99,245 | 2,809,801 | ||||||||||||||||||||
Operating income | 1,225,521 | (1,182 | ) | 1,224,339 | 1,056,965 | (135,640 | ) | 921,325 | ||||||||||||||||||
Income before taxes | 1,164,157 | (1,182 | ) | 1,162,975 | 987,077 | (131,513 | ) | 855,564 | ||||||||||||||||||
Income taxes | 459,901 | (12,534 | ) | 447,367 | 407,013 | (29,064 | ) | 377,949 | ||||||||||||||||||
Net income | 697,897 | 11,352 | 709,249 | 580,064 | (102,449 | ) | 477,615 | |||||||||||||||||||
Basic earnings per share | $ | 3.94 | $ | 0.07 | $ | 4.01 | $ | 3.23 | $ | (0.57 | ) | $ | 2.66 | |||||||||||||
Diluted earnings per share | 3.86 | 0.06 | 3.92 | 3.15 | (0.56 | ) | 2.59 | |||||||||||||||||||
Reclassification adjustment for gains included in income | $ | (95,150 | ) | $ | (14,235 | ) | $ | (109,385 | ) | $ | (139,566 | ) | $ | 22,493 | $ | (117,073 | ) | |||||||||
Comprehensive income | 718,988 | (2,883 | ) | 716,105 | 572,798 | (79,956 | ) | 492,842 | ||||||||||||||||||
(in 000s) | ||||||||||||||
April 30, | 2004 | |||||||||||||
As Previously | ||||||||||||||
Reported(1) | Adjustments | Restated | ||||||||||||
Intangible assets, net | $ | 325,829 | $ | (32,352 | ) | $ | 293,477 | |||||||
Goodwill, net | 959,418 | 34,049 | 993,467 | |||||||||||
Property and equipment, net | 279,220 | (5,917 | ) | 273,303 | ||||||||||
Other assets | 308,714 | (68,333 | ) | 240,381 | ||||||||||
Total assets | 5,295,468 | (62,736 | ) | 5,232,732 | ||||||||||
Accrued salaries, wages and payroll taxes | 268,747 | 11,620 | 280,367 | |||||||||||
Accrued income taxes | 405,668 | 8,200 | 413,868 | |||||||||||
Other noncurrent liabilities | 382,168 | (12,399 | ) | 369,769 | ||||||||||
Total liabilities | 3,398,459 | 14,458 | 3,412,917 | |||||||||||
Accumulated other comprehensive income | 57,953 | 8,258 | 66,211 | |||||||||||
Retained earnings | 2,781,368 | (85,452 | ) | 2,695,916 | ||||||||||
Total stockholders’ equity | 1,897,009 | (77,194 | ) | 1,819,815 | ||||||||||
Total liabilities and stockholders’ equity | 5,295,468 | (62,736 | ) | 5,232,732 | ||||||||||
(in 000s) | ||||||||||||||||||||||||||
Year Ended April 30, | 2004 | 2003 | ||||||||||||||||||||||||
As Previously | As Previously | |||||||||||||||||||||||||
Reported(1) | Adjustments | Restated | Reported(1) | Adjustments | Restated | |||||||||||||||||||||
Net income | $ | 697,897 | $ | 11,352 | $ | 709,249 | $ | 580,064 | $ | (102,449 | ) | $ | 477,615 | |||||||||||||
Depreciation and amortization | 172,038 | 7,093 | 179,131 | 161,821 | 7,271 | 169,092 | ||||||||||||||||||||
Provision for deferred taxes on income | 11,459 | (12,445 | ) | (986 | ) | 10,574 | (40,518 | ) | (29,944 | ) | ||||||||||||||||
Accretion of residual interests in securitizations | (168,029 | ) | (18,436 | ) | (186,465 | ) | (145,165 | ) | (1,178 | ) | (146,343 | ) | ||||||||||||||
Impairment of residual interests in securitizations | 30,661 | (4,598 | ) | 26,063 | 54,111 | – | 54,111 | |||||||||||||||||||
Realized gain on sale of previously securitized residual interests | (40,689 | ) | – | (40,689 | ) | (130,881 | ) | 37,574 | (93,307 | ) | ||||||||||||||||
Impairment of goodwill | – | – | – | 35,777 | 86,474 | 122,251 | ||||||||||||||||||||
Accounts payable, accrued expenses and deposits | (105,737 | ) | 1,174 | (104,563 | ) | 57,658 | 2,796 | 60,454 | ||||||||||||||||||
Accrued salaries, wages and payroll taxes | 58,468 | 12,053 | 70,521 | (42,772 | ) | (139 | ) | (42,911 | ) | |||||||||||||||||
Accrued income taxes | 93,710 | 60 | 93,770 | 99,715 | 12,107 | 111,822 | ||||||||||||||||||||
Net cash provided by operating activities | 856,210 | (3,747 | ) | 852,463 | 691,926 | (2,191 | ) | 689,735 | ||||||||||||||||||
Purchases of property and equipment, net | (127,573 | ) | 3,747 | (123,826 | ) | (150,897 | ) | 2,191 | (148,706 | ) | ||||||||||||||||
Net cash provided by (used in) investing activities | (131,133 | ) | 3,747 | (127,386 | ) | 125,338 | 2,191 | 127,529 | ||||||||||||||||||
(in 000s) | |||||||||||||||
Business | Asset Acquired | Estimated Life | Asset Value at Acquisition | ||||||||||||
Fiscal year 2005 ... | |||||||||||||||
Non-accounting firm Business Services acquisitions | Property and equipment | $ | 2,497 | ||||||||||||
Goodwill | 9,666 | ||||||||||||||
Customer relationships | 10 years | 7,730 | |||||||||||||
Noncompete agreements | 15 years | 100 | |||||||||||||
Weighted average life | 10 years | $ | 19,993 | ||||||||||||
Fiscal year 2004 ... | |||||||||||||||
Former major franchise territories | Property and equipment | $ | 2,697 | ||||||||||||
Goodwill | 205,313 | ||||||||||||||
Customer relationships | 10 years | 18,167 | |||||||||||||
Noncompete agreements | 3 years | 17,069 | |||||||||||||
Weighted average life | 7 years | $ | 243,246 | ||||||||||||
Accounting firms | Goodwill | $ | 3,923 | ||||||||||||
Customer relationships | 10 years | 1,794 | |||||||||||||
Noncompete agreements | 15 years | 747 | |||||||||||||
Weighted average life | 11 years | $ | 6,464 | ||||||||||||
Fiscal year 2003 ... | |||||||||||||||
Accounting firms | Goodwill | $ | 2,404 | ||||||||||||
Customer relationships | 10 years | 2,242 | |||||||||||||
Noncompete agreements | 15 years | 728 | |||||||||||||
Weighted average life | 11 years | $ | 5,374 | ||||||||||||
(in 000s) | ||||||||||||
Asset Acquired | Weighted Average Life | Asset Value at Acquisition | ||||||||||
FISCAL YEAR 2006– | ||||||||||||
American Express Tax and Business Services, Inc. | Property and equipment | $ | 17,759 | |||||||||
Goodwill | 72,123 | |||||||||||
Customer relationships | 11 years | 18,800 | ||||||||||
Noncompete agreements | 6 years | 3,900 | ||||||||||
Trade name | 2 years | 2,600 | ||||||||||
Other assets | 128,998 | |||||||||||
Liabilities | (53,442 | ) | ||||||||||
Weighted average life | 9 years | $ | 190,738 | |||||||||
Other | Goodwill | $ | 13,616 | |||||||||
Customer relationships | 9 years | 8,397 | ||||||||||
Noncompete agreements | 9 years | 2,024 | ||||||||||
Other assets (liabilities) | (4,353 | ) | ||||||||||
Weighted average life | 9 years | $ | 19,684 | |||||||||
FISCAL YEAR 2005– | ||||||||||||
Non-accounting firm Business Services acquisitions | Property and equipment | $ | 2,497 | |||||||||
Goodwill | 9,666 | |||||||||||
Customer relationships | 10 years | 7,730 | ||||||||||
Noncompete agreements | 15 years | 100 | ||||||||||
Weighted average life | 10 years | $ | 19,993 | |||||||||
FISCAL YEAR 2004– | ||||||||||||
Former major franchise territories | Property and equipment | $ | 2,697 | |||||||||
Goodwill | 205,313 | |||||||||||
Customer relationships | 10 years | 18,167 | ||||||||||
Noncompete agreements | 3 years | 17,069 | ||||||||||
Weighted average life | 7 years | $ | 243,246 | |||||||||
Accounting firms | Goodwill | $ | 3,923 | |||||||||
Customer relationships | 10 years | 1,794 | ||||||||||
Noncompete agreements | 15 years | 747 | ||||||||||
Weighted average life | 11 years | $ | 6,464 | |||||||||
• | Determination of the post-closing adjustment and final purchase price; | |
• | Determination of final liabilities relating to planned exit activities; and | |
• | Determination of the tax basis of acquired assets and liabilities, and deferred tax balances of the acquired business. |
57
(in 000s, except per share amounts) | |||||||||||||||
Restated | Restated | ||||||||||||||
Year ended April 30, | 2005 | 2004 | 2003 | ||||||||||||
Net income before change in accounting | $ | 635,857 | $ | 715,608 | $ | 477,615 | |||||||||
Basic weighted average common shares | 165,806 | 177,076 | 179,638 | ||||||||||||
Dilutive potential shares from stock options and restricted stock | 3,006 | 3,725 | 4,439 | ||||||||||||
Convertible preferred stock | 1 | 1 | 1 | ||||||||||||
Dilutive weighted average common shares | 168,813 | 180,802 | 184,078 | ||||||||||||
Earnings per share: | |||||||||||||||
Basic | $ | 3.83 | $ | 4.04 | $ | 2.66 | |||||||||
Diluted | 3.77 | 3.96 | 2.59 | ||||||||||||
(in 000s, except per share amounts) | ||||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Net income before change in accounting principle | $ | 490,408 | $ | 623,910 | $ | 700,452 | ||||||
Basic weighted average common shares | 328,118 | 331,612 | 354,152 | |||||||||
Dilutive potential shares from stock options and restricted stock | 5,067 | 6,011 | 7,449 | |||||||||
Convertible preferred stock | 2 | 2 | 2 | |||||||||
Dilutive weighted average common shares | 333,187 | 337,625 | 361,603 | |||||||||
Earnings per share: | ||||||||||||
Basic | $ | 1.49 | $ | 1.88 | $ | 1.98 | ||||||
Diluted | 1.47 | 1.85 | 1.94 |
(in 000s) | ||||||||||||||||||||||||||||||||||
2005 | 2004 (Restated) | |||||||||||||||||||||||||||||||||
Gross | Gross | Gross | Gross | |||||||||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Market | Amortized | Unrealized | Unrealized | Market | |||||||||||||||||||||||||||
Cost | Gains | Losses(1) | Value | Cost | Gains | Losses(1) | Value | |||||||||||||||||||||||||||
Municipal bonds | $ | 9,797 | $ | 172 | $ | (1 | ) | $ | 9,968 | $ | 8,846 | $ | 27 | $ | (78 | ) | $ | 8,795 | ||||||||||||||||
Common stock | 4,250 | 308 | (129 | ) | 4,429 | 4,661 | 450 | (82 | ) | 5,029 | ||||||||||||||||||||||||
Residual interests | 90,525 | 115,411 | – | 205,936 | 85,100 | 125,873 | – | 210,973 | ||||||||||||||||||||||||||
$ | 104,572 | $ | 115,891 | $ | (130 | ) | $ | 220,333 | $ | 98,607 | $ | 126,350 | $ | (160 | ) | $ | 224,797 | |||||||||||||||||
(in 000s) | ||||||||||||||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||||||||||||||
Gross | Gross | Gross | Gross | |||||||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Market | Amortized | Unrealized | Unrealized | Market | |||||||||||||||||||||||||
Cost | Gains | Losses(1) | Value | Cost | Gains | Losses(1) | Value | |||||||||||||||||||||||||
Municipal bonds | $ | 8,556 | $ | 5 | $ | (53 | ) | $ | 8,508 | $ | 9,797 | $ | 172 | $ | (1 | ) | $ | 9,968 | ||||||||||||||
Common stock | 3,998 | 382 | (100 | ) | 4,280 | 4,250 | 308 | (129 | ) | 4,429 | ||||||||||||||||||||||
Residual interests | 114,922 | 44,136 | - | 159,058 | 90,525 | 115,411 | - | 205,936 | ||||||||||||||||||||||||
$ | 127,476 | $ | 44,523 | $ | (153 | ) | $ | 171,846 | $ | 104,572 | $ | 115,891 | $ | (130 | ) | $ | 220,333 | |||||||||||||||
58
(in 000s) | ||||||||
April 30, | 2006 | 2005 | ||||||
Balance, beginning of year | $ | - | $ | - | ||||
Additions (resulting from securitization of mortgage loans) | 353,882 | 110,305 | ||||||
Cash received | (12,858 | ) | - | |||||
Accretion | 5,950 | - | ||||||
Change of fair value | 9,837 | 5,352 | ||||||
Residuals securitized in NIM transactions | (356,811 | ) | (115,657 | ) | ||||
Balance, end of year | $ | - | $ | - | ||||
59
(in 000s) | ||||||||
April 30, | 2006 | 2005 | ||||||
Balance, beginning of year | $ | 205,936 | $ | 210,973 | ||||
Additions (resulting from NIM transactions) | 61,651 | 16,914 | ||||||
Cash received | (80,539 | ) | (136,045 | ) | ||||
Cash proceeds from sales and securitizations of residual interests | (62,396 | ) | (16,485 | ) | ||||
Accretion | 108,396 | 137,610 | ||||||
Impairments of fair value | (34,107 | ) | (12,235 | ) | ||||
Other | (1,583 | ) | - | |||||
Change in unrealized holding gains arising during the period | (38,300 | ) | 5,204 | |||||
Balance, end of year | $ | 159,058 | $ | 205,936 | ||||
(in 000s) | ||||||||||
Restated | ||||||||||
April 30, | 2005 | 2004 | ||||||||
Balance, beginning of year | $ | 210,973 | $ | 264,337 | ||||||
Additions (resulting from NIM transactions) | 16,914 | 9,007 | ||||||||
Cash received | (136,045 | ) | (193,606 | ) | ||||||
Cash received on sales of residual interests | (16,485 | ) | (53,391 | ) | ||||||
Accretion | 137,610 | 184,253 | ||||||||
Impairments of fair value | (12,235 | ) | (26,063 | ) | ||||||
Other | – | (6,203 | ) | |||||||
Change in unrealized holding gains arising during the period | 5,204 | 32,639 | ||||||||
Balance, end of year | $ | 205,936 | $ | 210,973 | ||||||
(in 000s) | ||||||||||
April 30, | 2005 | 2004 | ||||||||
Balance, beginning of year | $ | 113,821 | $ | 99,265 | ||||||
Additions | 137,510 | 84,274 | ||||||||
Amortization | (84,191 | ) | (69,718 | ) | ||||||
Impairments of fair value | (526 | ) | – | |||||||
Balance, end of year | $ | 166,614 | $ | 113,821 | ||||||
(in 000s) | ||||||||
April 30, | 2006 | 2005 | ||||||
Balance, beginning of year | $ | 166,614 | $ | 113,821 | ||||
Additions | 250,537 | 137,510 | ||||||
Amortization | (144,359 | ) | (84,191 | ) | ||||
Impairments of fair value | (320 | ) | (526 | ) | ||||
Balance, end of year | $ | 272,472 | $ | 166,614 | ||||
60
2005 | 2004 | 2003 | ||||||||||||
Estimated credit losses | 2.72% | 3.63% | 3.60% | |||||||||||
Discount rate | 25.00% | 16.25% | 13.03% | |||||||||||
Variable returns to third-party beneficial interest holders | LIBOR forward curve at valuation date | |||||||||||||
2006 | 2005 | 2004 | ||||||||||
Estimated credit losses | 2.55% | 2.72% | 3.63% | |||||||||
Discount rate | 25.00% | 25.00% | 16.25% | |||||||||
Variable returns to third-party beneficial interest holders | LIBOR forward curve at closing date |
April 30, | 2005 | 2004 | ||||||||
Estimated credit losses – residual interests | 3.03% | 4.16% | ||||||||
Discount rate – residual interests | 21.01% | 19.09% | ||||||||
Discount rate – MSRs | 12.80% | 12.80% | ||||||||
Variable returns to third-party beneficial interest holders | LIBOR forward curve at valuation date | |||||||||
April 30, | 2006 | 2005 | ||||||||||
Estimated credit losses – residual interests | 3.07% | 3.03% | ||||||||||
Discount rate – residual interests | 21.98% | 21.01% | ||||||||||
Discount rate – MSRs | 18.00% | 12.80% | ||||||||||
Variable returns to third-party beneficial interest holders | LIBOR forward curve at valuation date |
Months Outstanding Without | |||||||||||||||
Prepayment Penalty | |||||||||||||||
Prior to | |||||||||||||||
Penalty | |||||||||||||||
Expiration | Zero – 3 | Remaining Life | |||||||||||||
Adjustable rate mortgage loans: | |||||||||||||||
With prepayment penalties | 30% | 70% | 44% | ||||||||||||
Without prepayment penalties | 36% | 53% | 40% | ||||||||||||
Fixed rate mortgage loans: | |||||||||||||||
With prepayment penalties | 29% | 46% | 42% | ||||||||||||
Prior to | Months Outstanding Without | |||||||||||
Penalty | Prepayment Penalty | |||||||||||
Expiration | Zero - 3 | Remaining Life | ||||||||||
Adjustable rate mortgage loans: | ||||||||||||
With prepayment penalties | 31% | 72% | 39% | |||||||||
Without prepayment penalties | 35% | 52% | 35% | |||||||||
Fixed rate mortgage loans: | ||||||||||||
With prepayment penalties | 30% | 48% | 38% |
Mortgage Loans Securitized in | |||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | Prior | |||||||||||||||||||
As of: | |||||||||||||||||||||||
April 30, 2005 | 2.83% | 2.30% | 2.08% | 2.53% | 4.52% | ||||||||||||||||||
April 30, 2004 | – | 3.92% | 4.35% | 3.58% | 4.46% | ||||||||||||||||||
Mortgage Loans Securitized in | ||||||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | Prior | |||||||||||||||||||
As of: | ||||||||||||||||||||||||
April 30, 2006 | 3.05% | 2.48% | 2.18% | 2.13% | 2.69% | 4.75% | ||||||||||||||||||
April 30, 2005 | - | 2.83% | 2.30% | 2.08% | 2.53% | 4.52% | ||||||||||||||||||
April 30, 2004 | - | - | 3.92% | 4.35% | 3.58% | 4.46% |
(in 000s) | ||||||||||||
Residential Mortgage Loans | ||||||||||||
Available-for-sale | Beneficial interest | |||||||||||
Residuals | in Trusts | MSRs | ||||||||||
Carrying amount/fair value of residuals | $ | 159,058 | $ | 188,014 | $ | 272,472 | ||||||
Weighted average life (in years) | 1.9 | 1.9 | 1.3 | |||||||||
$ impact on fair value: | ||||||||||||
Prepayments (including defaults): | ||||||||||||
Adverse 10% | $ | 4,330 | $ | (11,656 | ) | $ | (39,163 | ) | ||||
Adverse 20% | 13,924 | (17,892 | ) | (65,779 | ) | |||||||
Credit losses: | ||||||||||||
Adverse 10% | $ | (46,560 | ) | $ | (6,399 | ) | Not applicable | |||||
Adverse 20% | (75,445 | ) | (12,796 | ) | Not applicable | |||||||
Discount rate: | ||||||||||||
Adverse 10% | $ | (5,657 | ) | $ | (5,972 | ) | $ | (4,368 | ) | |||
Adverse 20% | (10,948 | ) | (11,687 | ) | (8,607 | ) | ||||||
Variable interest rates: | ||||||||||||
Adverse 10% | $ | (4,143 | ) | $ | (53,757 | ) | Not applicable | |||||
Adverse 20% | (8,590 | ) | (107,183 | ) | Not applicable |
(in 000s) | ||||||||||||||||
Residential Mortgage Loans | ||||||||||||||||
NIM | Beneficial interest | |||||||||||||||
Residuals | in Trusts | MSRs | ||||||||||||||
Carrying amount/fair value of residuals | $ | 205,936 | $ | 215,367 | $ | 166,614 | ||||||||||
Weighted average life (in years) | 1.3 | 2.3 | 1.2 | |||||||||||||
$ impact on fair value: | ||||||||||||||||
Prepayments (including defaults): | ||||||||||||||||
Adverse 10% | $ | (2,458 | ) | $ | (12,950 | ) | $ | (23,801 | ) | |||||||
Adverse 20% | 8,293 | (20,572 | ) | (40,525 | ) | |||||||||||
Credit losses: | ||||||||||||||||
Adverse 10% | $ | (32,731 | ) | $ | (6,962 | ) | Not applicable | |||||||||
Adverse 20% | (64,368 | ) | (13,917 | ) | Not applicable | |||||||||||
Discount rate: | ||||||||||||||||
Adverse 10% | $ | (5,158 | ) | $ | (5,492 | ) | $ | (2,175 | ) | |||||||
Adverse 20% | (10,023 | ) | (10,730 | ) | (4,301 | ) | ||||||||||
Variable interest rates: | ||||||||||||||||
Adverse 10% | $ | (9,991 | ) | $ | (36,552 | ) | Not applicable | |||||||||
Adverse 20% | (20,700 | ) | (73,646 | ) | Not applicable | |||||||||||
61
(in 000s) | ||||||||||||||||||||||||||
Total Principal | Principal Amount of Loans | Net Credit Losses | ||||||||||||||||||||||||
Amount of Loans Outstanding | 60 Days or More Past Due | (net of recoveries) | ||||||||||||||||||||||||
April 30, | April 30, | Year Ended April 30, | ||||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||||||||
Residual mortgage loans | $ | 10,300,805 | $ | 15,732,953 | $ | 1,128,376 | $ | 1,286,069 | $ | 132,015 | $ | 159,253 | �� | |||||||||||||
Warehouse | 6,742,387 | 3,244,141 | – | – | – | – | ||||||||||||||||||||
Total loans | $ | 17,043,192 | $ | 18,977,094 | $ | 1,128,376 | $ | 1,286,069 | $ | 132,015 | $ | 159,253 | ||||||||||||||
(in 000s) | ||||||||||||||||||||||||
Total Principal | Principal Amount of Loans | Credit Losses | ||||||||||||||||||||||
Amount of Loans Outstanding | 60 Days or More Past Due | (net of recoveries) | ||||||||||||||||||||||
April 30, | April 30, | Year Ended April 30, | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
Securitized mortgage loans | $ | 10,046,032 | $ | 10,300,805 | $ | 1,012,414 | $ | 1,128,376 | $ | 115,976 | $ | 132,015 | ||||||||||||
Mortgage loans in warehouse Trusts | 7,845,834 | 6,742,387 | - | - | - | - | ||||||||||||||||||
Total loans | $ | 17,891,866 | $ | 17,043,192 | $ | 1,012,414 | $ | 1,128,376 | $ | 115,976 | $ | 132,015 | ||||||||||||
(in 000s) | ||||||||||||||||||
Restated | ||||||||||||||||||
2004 | Additions | Other | 2005 | |||||||||||||||
Tax Services | $ | 350,044 | $ | 10,175 | $ | 562 | $ | 360,781 | ||||||||||
Mortgage Services | 152,467 | – | – | 152,467 | ||||||||||||||
Business Services | 317,002 | 11,513 | 230 | 328,745 | ||||||||||||||
Investment Services | 173,954 | – | – | 173,954 | ||||||||||||||
$ | 993,467 | $ | 21,688 | $ | 792 | $ | 1,015,947 | |||||||||||
(in 000s) | ||||||||||||||||
2005 | Additions | Other | 2006 | |||||||||||||
Tax Services | $ | 360,781 | $ | 15,338 | $ | 396 | $ | 376,515 | ||||||||
Mortgage Services | 152,467 | - | - | 152,467 | ||||||||||||
Business Services | 328,745 | 70,401 | (1,630 | ) | 397,516 | |||||||||||
Investment Services | 173,954 | - | - | 173,954 | ||||||||||||
$ | 1,015,947 | $ | 85,739 | $ | (1,234 | ) | $ | 1,100,452 | ||||||||
(in 000s) | ||||||||||||||||||||||||
April 30, | 2006 | 2005 | ||||||||||||||||||||||
Gross | Gross | |||||||||||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | |||||||||||||||||||||
Amount | Amortization | Net | Amount | Amortization | Net | |||||||||||||||||||
Tax Services: | ||||||||||||||||||||||||
Customer relationships | $ | 27,257 | $ | (10,842 | ) | $ | 16,415 | $ | 23,717 | $ | (7,207 | ) | $ | 16,510 | ||||||||||
Noncompete agreements | 18,879 | (17,686 | ) | 1,193 | 17,677 | (11,608 | ) | 6,069 | ||||||||||||||||
Business Services: | ||||||||||||||||||||||||
Customer relationships | 153,844 | (81,178 | ) | 72,666 | 130,585 | (68,433 | ) | 62,152 | ||||||||||||||||
Noncompete agreements | 32,534 | (14,300 | ) | 18,234 | 27,796 | (11,274 | ) | 16,522 | ||||||||||||||||
Trade name - amortizing | 4,050 | (1,823 | ) | 2,227 | 1,450 | (995 | ) | 455 | ||||||||||||||||
Trade name - non-amortizing | 55,637 | (4,868 | ) | 50,769 | 55,637 | (4,868 | ) | 50,769 | ||||||||||||||||
Investment Services: | ||||||||||||||||||||||||
Customer relationships | 293,000 | (235,010 | ) | 57,990 | 293,000 | (198,385 | ) | 94,615 | ||||||||||||||||
$ | 585,201 | $ | (365,707 | ) | $ | 219,494 | $ | 549,862 | $ | (302,770 | ) | $ | 247,092 | |||||||||||
-----------------------------------------------------------------------------------------------------------------------(in-000s) | |||||||||||||||||||||||||||
April 30, | 2005 | 2004 (Restated) | |||||||||||||||||||||||||
Gross | Gross | ||||||||||||||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | ||||||||||||||||||||||||
Amount | Amortization | Net | Amount | Amortization | Net | ||||||||||||||||||||||
Tax Services: | |||||||||||||||||||||||||||
Customer relationships | $ | 23,717 | $ | (7,207 | ) | $ | 16,510 | $ | 19,011 | $ | (3,377 | ) | $ | 15,634 | |||||||||||||
Noncompete agreements | 17,677 | (11,608 | ) | 6,069 | 17,364 | (5,724 | ) | 11,640 | |||||||||||||||||||
Business Services: | |||||||||||||||||||||||||||
Customer relationships | 130,585 | (68,433 | ) | 62,152 | 121,229 | (56,313 | ) | 64,916 | |||||||||||||||||||
Noncompete agreements | 27,796 | (11,274 | ) | 16,522 | 27,424 | (8,670 | ) | 18,754 | |||||||||||||||||||
Trade name – amortizing | 1,450 | (995 | ) | 455 | 1,450 | (926 | ) | 524 | |||||||||||||||||||
Trade name – non-amortizing | 55,637 | (4,868 | ) | 50,769 | 55,637 | (4,868 | ) | 50,769 | |||||||||||||||||||
Investment Services: | |||||||||||||||||||||||||||
Customer relationships | 293,000 | (198,385 | ) | 94,615 | 293,000 | (161,760 | ) | 131,240 | |||||||||||||||||||
$ | 549,862 | $ | (302,770 | ) | $ | 247,092 | $ | 535,115 | $ | (241,638 | ) | $ | 293,477 | ||||||||||||||
62
(in 000s) | ||||||||||
Restated | ||||||||||
April 30, | 2005 | 2004 | ||||||||
Land | $ | 23,716 | $ | 29,925 | ||||||
Buildings | 67,031 | 71,923 | ||||||||
Computers and other equipment | 568,986 | 498,373 | ||||||||
Capitalized software | 153,794 | 137,784 | ||||||||
Leasehold improvements | 175,048 | 114,537 | ||||||||
988,575 | 852,542 | |||||||||
Less: Accumulated depreciation and amortization | 658,425 | 579,239 | ||||||||
$ | 330,150 | $ | 273,303 | |||||||
(in 000s) | ||||||||
April 30, | 2006 | 2005 | ||||||
Land | $ | 17,152 | $ | 23,716 | ||||
Buildings | 50,232 | 67,031 | ||||||
Computers and other equipment | 592,610 | 568,986 | ||||||
Capitalized software | 180,591 | 153,794 | ||||||
Leasehold improvements | 189,283 | 175,048 | ||||||
Construction in process | 118,709 | - | ||||||
1,148,577 | 988,575 | |||||||
Less: Accumulated depreciation and amortization | 704,792 | 658,425 | ||||||
$ | 443,785 | $ | 330,150 | |||||
(in 000s) | ||||||||||||||||||||
Asset (Liability) | Gain (Loss) in the | |||||||||||||||||||
Balance at April 30, | Year Ended April 30, | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2004 | ||||||||||||||||
Interest rate swaps | $ | 8,831 | $ | (1,325 | ) | $ | 137,192 | $ | 47,192 | $ | (2,703 | ) | ||||||||
Put options on Eurodollar futures | 3,282 | - | 1,071 | - | - | |||||||||||||||
Forward loans sale commitments | 1,961 | - | 1,961 | - | - | |||||||||||||||
Interest rate caps | - | 12,458 | 802 | (106 | ) | - | ||||||||||||||
Rate-lock equivalents | (317 | ) | 801 | (1,118 | ) | 2,187 | (13,917 | ) | ||||||||||||
Prime short sales | 777 | (805 | ) | 1,315 | (2,420 | ) | 4,663 | |||||||||||||
$ | 14,534 | $ | 11,129 | $ | 141,223 | $ | 46,853 | $ | (11,957 | ) | ||||||||||
(in 000s) | ||||||||||||||||||||||
Asset (Liability) | Gain (Loss) in the | |||||||||||||||||||||
Balance at April 30, | Year Ended April 30, | |||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2003 | ||||||||||||||||||
Interest rate swaps | $ | (1,325 | ) | $ | – | $ | 47,192 | $ | (2,703 | ) | $ | (5,194 | ) | |||||||||
Interest rate caps | 12,458 | – | (106 | ) | – | – | ||||||||||||||||
Rate-lock equivalents | 801 | (1,386 | ) | 2,187 | (13,917 | ) | 6,158 | |||||||||||||||
Prime short sales | (805 | ) | 2,080 | (2,420 | ) | 4,663 | (5,105 | ) | ||||||||||||||
$ | 11,129 | $ | 694 | $ | 46,853 | $ | (11,957 | ) | $ | (4,141 | ) | |||||||||||
63
(in 000s) | ||||||||||
April 30, | 2005 | 2004 | ||||||||
Senior Notes, 81/2%, due April 2007 | $ | 498,825 | $ | 498,225 | ||||||
Senior Notes, 5.125%, due October 2014 | 397,766 | – | ||||||||
Business Services acquisition obligations, due from May 2005 to January 2008 | 38,022 | 60,768 | ||||||||
Capital lease obligations | 13,550 | 12,512 | ||||||||
Other obligations | 455 | – | ||||||||
Senior Notes, 63/4%, due November 2004 | – | 249,975 | ||||||||
948,618 | 821,480 | |||||||||
Less: Current portion | 25,545 | �� | 275,669 | |||||||
$ | 923,073 | $ | 545,811 | |||||||
(in 000s) | ||||||||
April 30, | 2006 | 2005 | ||||||
| | | ||||||||
Senior Notes, 81/2%, due April 2007 | $ | 499,425 | $ | 498,825 | ||||
Senior Notes, 5.125%, due October 2014 | 398,001 | 397,766 | ||||||
Business Services acquisition obligations, due from May 2006 to January 2008 | 13,439 | 38,022 | ||||||
Capital lease obligations | 13,209 | 13,550 | ||||||
Other obligations | 457 | 455 | ||||||
924,531 | 948,618 | |||||||
Less: Current portion | 506,992 | 25,545 | ||||||
$ | 417,539 | $ | 923,073 | |||||
64
65
(shares in 000s) | ||||||||||||||||||||||||||
2005 | 2004 | 2003 | ||||||||||||||||||||||||
Weighted- | Weighted- | Weighted- | ||||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||||
Shares | Exercise Price | Shares | Exercise Price | Shares | Exercise Price | |||||||||||||||||||||
Options outstanding, beginning of year | 14,482 | $ | 35.86 | 15,772 | $ | 32.14 | 15,910 | $ | 26.33 | |||||||||||||||||
Options granted | 3,802 | 47.73 | 3,744 | 44.05 | 5,364 | 44.32 | ||||||||||||||||||||
Options exercised | (3,479 | ) | 37.24 | (3,927 | ) | 29.11 | (5,098 | ) | 24.65 | |||||||||||||||||
Options expired/cancelled | (1,253 | ) | 44.42 | (1,107 | ) | 34.51 | (404 | ) | 34.53 | |||||||||||||||||
Options outstanding, end of year | 13,552 | 38.04 | 14,482 | 35.86 | 15,772 | 32.14 | ||||||||||||||||||||
Shares exercisable, end of year | 6,634 | 31.78 | 6,668 | 30.78 | 6,836 | 25.21 | ||||||||||||||||||||
Restricted shares granted | 490 | 47.78 | 514 | 43.93 | 45 | 44.64 | ||||||||||||||||||||
Restricted shares vested | 175 | 43.31 | 72 | 23.79 | 63 | 21.02 | ||||||||||||||||||||
Restricted shares outstanding, end of year | 777 | 46.40 | 510 | 43.92 | 100 | 29.15 | ||||||||||||||||||||
Shares reserved for future option or restricted stock grants, end of year | 9,889 | 9,880 | 14,563 | |||||||||||||||||||||||
(shares in 000s) | ||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||
Weighted-Average | Weighted-Average | Weighted-Average | ||||||||||||||||||||||
Shares | Exercise Price | Shares | Exercise Price | Shares | Exercise Price | |||||||||||||||||||
Options outstanding, beginning of year | 27,103 | $ | 19.02 | 28,964 | $ | 17.93 | 31,544 | $ | 16.07 | |||||||||||||||
Options granted | 6,918 | 29.11 | 7,604 | 23.86 | 7,488 | 22.03 | ||||||||||||||||||
Options exercised | (5,479 | ) | 18.17 | (6,959 | ) | 18.62 | (7,854 | ) | 14.56 | |||||||||||||||
Options expired/cancelled | (2,494 | ) | 24.04 | (2,506 | ) | 22.21 | (2,214 | ) | 17.26 | |||||||||||||||
Options outstanding, end of year | 26,048 | 21.40 | 27,103 | 19.02 | 28,964 | 17.93 | ||||||||||||||||||
Shares exercisable, end of year | 14,693 | 18.51 | 13,268 | 15.89 | 13,336 | 15.39 | ||||||||||||||||||
Restricted shares granted | 1,745 | 26.69 | 980 | 23.89 | 1,028 | 21.97 | ||||||||||||||||||
Restricted shares vested | 616 | 22.96 | 352 | 21.66 | 144 | 11.90 | ||||||||||||||||||
Restricted shares outstanding, end of year | 2,455 | 25.54 | 1,554 | 23.20 | 1,020 | 21.96 | ||||||||||||||||||
Shares reserved for future option or restricted stock grants, end of year | 27,356 | 9,889 | 9,880 |
(shares in 000s) | ||||||||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||||||
Number | Weighted-Average | Weighted- | Number | Weighted- | ||||||||||||||||||
Outstanding | Remaining | Average | Exercisable | Average | ||||||||||||||||||
at April 30 | Contractual Life | Exercise Price | at April 30 | Exercise Price | ||||||||||||||||||
$ 16.13 – 21.91 | 1,740 | 4 years | $ | 18.15 | 1,713 | $ | 18.16 | |||||||||||||||
$ 22.13 – 27.81 | 1,231 | 4 years | 25.98 | 1,228 | 25.97 | |||||||||||||||||
$ 32.10 – 39.96 | 2,925 | 7 years | 33.34 | 1,503 | 33.46 | |||||||||||||||||
$ 40.00 – 46.26 | 3,983 | 8 years | 44.45 | 2,081 | 44.03 | |||||||||||||||||
$ 47.00 – 58.95 | 3,673 | 9 years | 48.30 | 109 | 54.07 | |||||||||||||||||
13,552 | 6,634 | |||||||||||||||||||||
(shares in 000s) | ||||||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||||
Number | Weighted-Average | Weighted- | Number | Weighted- | ||||||||||||||||
Outstanding | Remaining | Average | Exercisable | Average | ||||||||||||||||
at April 30 | Contractual Life | Exercise Price | at April 30 | Exercise Price | ||||||||||||||||
$8.06 – 10.95 | 2,575 | 3 years | $ | 9.11 | 2,575 | $ | 9.11 | |||||||||||||
$11.06 – 13.91 | 1,764 | 3 years | 13.13 | 1,764 | 13.13 | |||||||||||||||
$16.05 – 19.98 | 4,900 | 6 years | 16.69 | 2,728 | 16.74 | |||||||||||||||
$20.00 – 24.95 | 10,330 | 7 years | 23.25 | 7,279 | 23.30 | |||||||||||||||
$25.25 – 29.48 | 6,479 | 9 years | 29.14 | 347 | 28.96 | |||||||||||||||
26,048 | 14,693 | |||||||||||||||||||
Year ended April 30, | 2005 | 2004 | 2003 | ||||||||||||
Stock option grants – management: | |||||||||||||||
Risk-free interest rate | 3.86% | 2.64% | 3.82% | ||||||||||||
Expected life | 5 years | 5 years | 5 years | ||||||||||||
Expected volatility | 32.07% | 31.13% | 29.30% | ||||||||||||
Dividend yield | 1.84% | 1.63% | 1.59% | ||||||||||||
Weighted average fair value | $ | 11.73 | $ | 10.01 | $ | 10.24 | |||||||||
Stock option grants – seasonal: | |||||||||||||||
Risk-free interest rate | 2.60% | 1.21% | 2.82% | ||||||||||||
Expected life | 2 years | 2 years | 2 years | ||||||||||||
Expected volatility | 27.65% | 31.97% | 28.71% | ||||||||||||
Dividend yield | 1.85% | 1.66% | 1.39% | ||||||||||||
Weighted average fair value | $ | 6.58 | $ | 6.06 | $ | 5.91 | |||||||||
ESPP options: | |||||||||||||||
Risk-free interest rate | 2.17% | .97% | 1.45% | ||||||||||||
Expected life | 6 months | 6 months | 6 months | ||||||||||||
Expected volatility | 21.18% | 38.14% | 44.38% | ||||||||||||
Dividend yield | 1.82% | 1.55% | 1.60% | ||||||||||||
Weighted average fair value | $ | 7.67 | $ | 9.96 | $ | 9.02 | |||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Stock option grants - management: | ||||||||||||
Risk-free interest rate | 3.68 | % | 3.86 | % | 2.64 | % | ||||||
Expected life | 5 years | 5 years | 5 years | |||||||||
Expected volatility | 27.28 | % | 32.07 | % | 31.13 | % | ||||||
Dividend yield | 1.72 | % | 1.84 | % | 1.63 | % | ||||||
Weighted average fair value | $ | 6.23 | $ | 5.87 | $ | 5.01 | ||||||
Stock option grants - seasonal: | ||||||||||||
Risk-free interest rate | 3.61 | % | 2.60 | % | 1.21 | % | ||||||
Expected life | 2 years | 2 years | 2 years | |||||||||
Expected volatility | 23.28 | % | 27.65 | % | 31.97 | % | ||||||
Dividend yield | 1.71 | % | 1.85 | % | 1.66 | % | ||||||
Weighted average fair value | $ | 3.70 | $ | 3.29 | $ | 3.03 | ||||||
ESPP options: | ||||||||||||
Risk-free interest rate | 3.96 | % | 2.17 | % | 0.97 | % | ||||||
Expected life | 6 months | 6 months | 6 months | |||||||||
Expected volatility | 25.06 | % | 21.18 | % | 38.14 | % | ||||||
Dividend yield | 1.91 | % | 1.82 | % | 1.55 | % | ||||||
Weighted average fair value | $ | 4.55 | $ | 3.84 | $ | 4.98 |
66
67
(in 000s) | ||||||||||||||
Restated | Restated | |||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | |||||||||||
Domestic | $ | 1,013,844 | $ | 1,150,450 | $ | 844,565 | ||||||||
Foreign | 3,871 | 12,525 | 10,999 | |||||||||||
$ | 1,017,715 | $ | 1,162,975 | $ | 855,564 | |||||||||
(in 000s) | ||||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Domestic | $ | 808,992 | $ | 1,013,844 | $ | 1,150,450 | ||||||
Foreign | 18,401 | 3,871 | 12,525 | |||||||||
$ | 827,393 | $ | 1,017,715 | $ | 1,162,975 | |||||||
(in 000s) | |||||||||||||||
Restated | Restated | ||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | ||||||||||||
Current: | |||||||||||||||
Federal | $ | 384,735 | $ | 389,557 | $ | 361,676 | |||||||||
State | 37,192 | 54,169 | 40,964 | ||||||||||||
Foreign | 2,276 | 4,627 | 5,253 | ||||||||||||
424,203 | 448,353 | 407,893 | |||||||||||||
Deferred: | |||||||||||||||
Federal | (39,770 | ) | (895 | ) | (27,610 | ) | |||||||||
State | (1,666 | ) | (87 | ) | (1,646 | ) | |||||||||
Foreign | (909 | ) | (4 | ) | (688 | ) | |||||||||
(42,345 | ) | (986 | ) | (29,944 | ) | ||||||||||
Total provision for income taxes before change in accounting principle | 381,858 | 447,367 | 377,949 | ||||||||||||
Income tax on cumulative effect of change in accounting principle | – | (4,031 | ) | – | |||||||||||
Income tax included in comprehensive income | (3,991 | ) | (3,387 | ) | (1,387 | ) | |||||||||
Total income taxes | $ | 377,867 | $ | 439,949 | $ | 376,562 | |||||||||
(in 000s) | ||||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Current: | ||||||||||||
Federal | $ | 320,244 | $ | 379,907 | $ | 382,865 | ||||||
State | 53,783 | 53,452 | 77,112 | |||||||||
Foreign | 6,367 | 469 | 4,627 | |||||||||
380,394 | 433,828 | 464,604 | ||||||||||
Deferred: | ||||||||||||
Federal | (36,545 | ) | (37,681 | ) | (1,880 | ) | ||||||
State | (6,137 | ) | (1,433 | ) | (197 | ) | ||||||
Foreign | (727 | ) | (909 | ) | (4 | ) | ||||||
(43,409 | ) | (40,023 | ) | (2,081 | ) | |||||||
Total provision for income taxes before change in accounting principle | 336,985 | 393,805 | 462,523 | |||||||||
Income tax on cumulative effect of change in accounting principle | - | - | (4,031 | ) | ||||||||
Income tax included in comprehensive income | (27,261 | ) | (3,991 | ) | (3,387 | ) | ||||||
Income tax included in stockholders’ equity for compensation expense for tax purposes in excess of amounts recognized for financial reporting purposes | (9,529 | ) | (10,918 | ) | (24,730 | ) | ||||||
Total income taxes | $ | 300,195 | $ | 378,896 | $ | 430,375 | ||||||
(dollars in 000s) | |||||||||||||||
Restated | Restated | ||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | ||||||||||||
Statutory tax | $ | 356,200 | $ | 407,041 | $ | 299,447 | |||||||||
Increases in income taxes resulting from: | |||||||||||||||
State income taxes, net of Federal income tax benefit | 25,552 | 26,652 | 24,093 | ||||||||||||
Impairment of non-deductible goodwill | – | – | 42,788 | ||||||||||||
Other | 106 | 13,674 | 11,621 | ||||||||||||
Total income tax expense | $ | 381,858 | $ | 447,367 | $ | 377,949 | |||||||||
Effective tax rate | 37.5% | 38.5% | 44.2% | ||||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Statutory tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
Increases in income tax rate resulting from: | ||||||||||||
State income taxes, net of Federal income tax benefit | 3.7 | % | 3.7 | % | 3.6 | % | ||||||
Other | 2.0 | % | - | % | 1.2 | % | ||||||
Effective tax rate | 40.7 | % | 38.7 | % | 39.8 | % | ||||||
(in 000s) | ||||||||||||
Restated | ||||||||||||
April 30, | 2005 | 2004 | ||||||||||
Gross deferred tax assets: | ||||||||||||
Accrued expenses | $ | 53,006 | $ | 55,643 | ||||||||
Allowance for credit losses and related reserves | 35,116 | 23,099 | ||||||||||
Net operating losses | 3,524 | 270 | ||||||||||
Current | 91,646 | 79,012 | ||||||||||
Residual interest income | 131,580 | 114,743 | ||||||||||
Deferred and stock-based compensation | 61,111 | 34,724 | ||||||||||
Property and equipment | 31,379 | 6,107 | ||||||||||
Net operating losses | 20,018 | 23,661 | ||||||||||
Noncurrent | 244,088 | 179,235 | ||||||||||
335,734 | 258,247 | |||||||||||
Valuation allowance | (20,018 | ) | (23,661 | ) | ||||||||
315,716 | 234,586 | |||||||||||
Gross deferred tax liabilities: | ||||||||||||
Prepaid expenses and revenue deferred for tax | (13,454 | ) | (15,040 | ) | ||||||||
Current | (13,454 | ) | (15,040 | ) | ||||||||
Mortgage servicing rights | (61,190 | ) | (38,005 | ) | ||||||||
Intangible assets | (100,923 | ) | (87,728 | ) | ||||||||
Noncurrent | (162,113 | ) | (125,733 | ) | ||||||||
Net deferred tax assets | $ | 140,149 | $ | 93,813 | ||||||||
(in 000s) | ||||||||
April 30, | 2006 | 2005 | ||||||
Gross deferred tax assets: | ||||||||
Accrued expenses | $ | 63,058 | $ | 53,006 | ||||
Allowance for credit losses and related reserves | 46,192 | 35,116 | ||||||
Net operating losses | - | 3,524 | ||||||
Current | 109,250 | 91,646 | ||||||
Residual interest income | 146,348 | 129,323 | ||||||
Deferred and stock-based compensation | 91,030 | 61,111 | ||||||
Property and equipment | 43,513 | 33,767 | ||||||
Deferred revenue | 57,836 | - | ||||||
Net operating losses | 16,471 | 20,018 | ||||||
Other | 394 | - | ||||||
Noncurrent | 355,592 | 244,219 | ||||||
464,842 | 335,865 | |||||||
Valuation allowance | (25,816 | ) | (20,354 | ) | ||||
439,026 | 315,511 | |||||||
Gross deferred tax liabilities: | ||||||||
Prepaid expenses and revenue deferred for tax | (16,037 | ) | (13,454 | ) | ||||
Current | (16,037 | ) | (13,454 | ) | ||||
Mortgage servicing rights | (101,621 | ) | (61,190 | ) | ||||
Intangible assets | (87,992 | ) | (101,945 | ) | ||||
Noncurrent | (189,613 | ) | (163,135 | ) | ||||
Net deferred tax assets | $ | 233,376 | $ | 138,922 | ||||
68
(in 000s) | ||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | |||||||||||
Income taxes paid | $ | 437,427 | $ | 331,635 | $ | 247,057 | ||||||||
Interest paid | 82,535 | 84,551 | 84,094 | |||||||||||
(in 000s) | ||||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Income taxes paid | $ | 270,540 | $ | 437,427 | $ | 331,635 | ||||||
Interest paid (net of amounts capitalized) | 102,317 | 82,535 | 84,551 |
(in 000s) | ||||||||||||||
Restated | Restated | |||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | |||||||||||
Additions to residual interests | $ | 16,914 | $ | 9,007 | $ | 753 | ||||||||
Residual interest mark-to-market | 95,929 | 167,065 | 9,176 | |||||||||||
(in 000s) | ||||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
Additions to available-for-sale residual interests | $ | 61,651 | $ | 16,914 | $ | 9,007 | ||||||
Residual interest mark-to-market | 35,274 | 95,929 | 167,065 |
(in 000s) | ||||||||||
April 30, | 2005 | 2004 | ||||||||
Balance, beginning of year | $ | 123,048 | $ | 49,280 | ||||||
Amounts deferred for new guarantees issued | 77,756 | 81,803 | ||||||||
Revenue recognized on previous deferrals | (70,042 | ) | (69,522 | ) | ||||||
Adjustment resulting from change in accounting principle | – | 61,487 | ||||||||
Balance, end of year | $ | 130,762 | $ | 123,048 | ||||||
(in 000s) | ||||||||
April 30, | 2006 | 2005 | ||||||
Balance, beginning of year | $ | 130,762 | $ | 123,048 | ||||
Amounts deferred for new guarantees issued | 78,900 | 77,756 | ||||||
Revenue recognized on previous deferrals | (67,978 | ) | (70,042 | ) | ||||
Balance, end of year | $ | 141,684 | $ | 130,762 | ||||
69
70
(in 000s) | ||||
2007 | $ | 269,890 | ||
2008 | 210,596 | |||
2009 | 161,388 | |||
2010 | 105,163 | |||
2011 | 51,960 | |||
2012 and beyond | 57,819 | |||
$ | 856,816 | |||
(in 000s) | ||||||
2006 | $ | 229,768 | ||||
2007 | 186,111 | |||||
2008 | 127,153 | |||||
2009 | 81,608 | |||||
2010 | 43,337 | |||||
2011 and beyond | 40,634 | |||||
$ | 708,611 | |||||
(in 000s) | ||||||||||||
Charges | Cash | Accrual | ||||||||||
to Date | Payments | balance | ||||||||||
Employee severance costs | $ | 6,742 | $ | 5,005 | $ | 1,737 | ||||||
Contract termination costs | 5,882 | 61 | 5,821 | |||||||||
$ | 12,624 | $ | 5,066 | $ | 7,558 | |||||||
71
72
NOTE 19: |
73
74 |
(in 000s) | |||||||||||||||||||||||||||||||||
2004 | 2003 | ||||||||||||||||||||||||||||||||
Year Ended April 30, | 2005 | As Reported | Adjustments | Restated | As Reported | Adjustments | Restated | ||||||||||||||||||||||||||
REVENUES ... | |||||||||||||||||||||||||||||||||
Tax Services | $ | 2,358,293 | $ | 2,191,177 | $ | – | $ | 2,191,177 | $ | 1,946,763 | $ | – | $ | 1,946,763 | |||||||||||||||||||
Mortgage Services | 1,246,018 | 1,300,675 | 23,034 | 1,323,709 | 1,186,476 | (36,396 | ) | 1,150,080 | |||||||||||||||||||||||||
Business Services | 573,316 | 499,210 | – | 499,210 | 434,140 | – | 434,140 | ||||||||||||||||||||||||||
Investment Services | 239,244 | 229,470 | – | 229,470 | 200,794 | – | 200,794 | ||||||||||||||||||||||||||
Corporate | 3,148 | 4,314 | – | 4,314 | (651 | ) | – | (651 | ) | ||||||||||||||||||||||||
$ | 4,420,019 | $ | 4,205,570 | $ | 42,310 | $ | 4,247,880 | $ | 3,746,457 | $ | (15,331 | ) | $ | 3,731,126 | |||||||||||||||||||
INCOME (LOSS) BEFORE TAXES ... | |||||||||||||||||||||||||||||||||
Tax Services | $ | 663,518 | $ | 638,689 | $ | (196 | ) | $ | 638,493 | $ | 557,542 | $ | (839 | ) | $ | 556,703 | |||||||||||||||||
Mortgage Services | 496,093 | 678,261 | 10,262 | 688,523 | 693,950 | (37,626 | ) | 656,324 | |||||||||||||||||||||||||
Business Services | 29,871 | 19,321 | (9 | ) | 19,312 | (14,118 | ) | (1,915 | ) | (16,033 | ) | ||||||||||||||||||||||
Investment Services | (75,370 | ) | (64,446 | ) | (11,168 | ) | (75,614 | ) | (128,292 | ) | (91,129 | ) | (219,421 | ) | |||||||||||||||||||
Corporate | (96,397 | ) | (107,668 | ) | (71 | ) | (107,739 | ) | (122,005 | ) | (4 | ) | (122,009 | ) | |||||||||||||||||||
$ | 1,017,715 | $ | 1,164,157 | $ | (1,182 | ) | $ | 1,162,975 | $ | 987,077 | $ | (131,513 | ) | $ | 855,564 | ||||||||||||||||||
(in 000s) | ||||||||||||||||
Restated | Restated | |||||||||||||||
Year Ended April 30, | 2005 | 2004 | 2003 | |||||||||||||
DEPRECIATION AND AMORTIZATION ... | ||||||||||||||||
Tax Services | $ | 79,079 | $ | 76,279 | $ | 61,487 | ||||||||||
Mortgage Services | 31,043 | 24,428 | 21,703 | |||||||||||||
Business Services | 23,591 | 23,104 | 23,135 | |||||||||||||
Investment Services | 48,662 | 54,378 | 61,254 | |||||||||||||
Corporate | 1,492 | 942 | 1,513 | |||||||||||||
$ | 183,867 | $ | 179,131 | $ | 169,092 | |||||||||||
Goodwill impairments: | ||||||||||||||||
Business Services | – | – | 13,459 | |||||||||||||
Investment Services | – | – | 108,792 | |||||||||||||
– | – | 122,251 | ||||||||||||||
$ | 183,867 | $ | 179,131 | $ | 291,343 | |||||||||||
CAPITAL EXPENDITURES ... | ||||||||||||||||
Tax Services | $ | 74,297 | $ | 50,204 | $ | 65,469 | ||||||||||
Mortgage Services | 56,613 | 28,176 | 38,204 | |||||||||||||
Business Services | 22,582 | 18,003 | 15,248 | |||||||||||||
Investment Services | 9,503 | 10,531 | 13,371 | |||||||||||||
Corporate | 46,463 | 16,912 | 16,414 | |||||||||||||
$ | 209,458 | $ | 123,826 | $ | 148,706 | |||||||||||
IDENTIFIABLE ASSETS ... | ||||||||||||||||
Tax Services | $ | 716,981 | $ | 666,548 | $ | 354,617 | ||||||||||
Mortgage Services | 1,336,920 | 1,108,022 | 1,241,772 | |||||||||||||
Business Services | 701,763 | 637,542 | 677,334 | |||||||||||||
Investment Services | 1,481,127 | 1,624,383 | 1,423,716 | |||||||||||||
Corporate | 1,302,492 | 1,196,237 | 969,063 | |||||||||||||
$ | 5,539,283 | $ | 5,232,732 | $ | 4,666,502 | |||||||||||
(in 000s) | ||||||||||||
Year Ended April 30, | 2006 | 2005 | 2004 | |||||||||
REVENUES– | ||||||||||||
Tax Services | $ | 2,451,806 | $ | 2,358,293 | $ | 2,191,177 | ||||||
Mortgage Services | 1,247,138 | 1,246,018 | 1,323,709 | |||||||||
Business Services | 877,259 | 573,316 | 499,210 | |||||||||
Investment Services | 287,955 | 239,244 | 229,470 | |||||||||
Corporate | 8,643 | 3,148 | 4,314 | |||||||||
$ | 4,872,801 | $ | 4,420,019 | $ | 4,247,880 | |||||||
INCOME (LOSS) BEFORE TAXES– | ||||||||||||
Tax Services | $ | 589,766 | $ | 663,518 | $ | 638,493 | ||||||
Mortgage Services | 321,616 | 496,093 | 688,523 | |||||||||
Business Services | 53,378 | 29,871 | 19,312 | |||||||||
Investment Services | (32,835 | ) | (75,370 | ) | (75,614 | ) | ||||||
Corporate | (104,532 | ) | (96,397 | ) | (107,739 | ) | ||||||
$ | 827,393 | $ | 1,017,715 | $ | 1,162,975 | |||||||
DEPRECIATION AND AMORTIZATION– | ||||||||||||
Tax Services | $ | 69,095 | $ | 79,079 | $ | 76,279 | ||||||
Mortgage Services | 37,988 | 31,043 | 24,428 | |||||||||
Business Services | 38,037 | 23,591 | 23,104 | |||||||||
Investment Services | 46,081 | 48,662 | 54,378 | |||||||||
Corporate | 502 | 1,492 | 942 | |||||||||
$ | 191,703 | $ | 183,867 | $ | 179,131 | |||||||
CAPITAL EXPENDITURES– | ||||||||||||
Tax Services | $ | 43,607 | $ | 74,297 | $ | 50,204 | ||||||
Mortgage Services | 48,694 | 56,613 | 28,176 | |||||||||
Business Services | 32,270 | 22,582 | 18,003 | |||||||||
Investment Services | 11,088 | 9,503 | 10,531 | |||||||||
Corporate | 114,851 | 46,463 | 16,912 | |||||||||
$ | 250,510 | $ | 209,458 | $ | 123,826 | |||||||
IDENTIFIABLE ASSETS– | ||||||||||||
Tax Services | $ | 843,717 | $ | 716,981 | $ | 666,548 | ||||||
Mortgage Services | 1,903,729 | 1,336,920 | 1,108,022 | |||||||||
Business Services | 988,323 | 701,763 | 637,542 | |||||||||
Investment Services | 1,306,822 | 1,481,127 | 1,624,383 | |||||||||
Corporate | 946,544 | 1,301,265 | 1,197,332 | |||||||||
$ | 5,989,135 | $ | 5,538,056 | $ | 5,233,827 | |||||||
75
NOTE 20: |
(in 000s, except per share amounts) | ||||||||||||||||||||
Fiscal Year 2006 Quarter Ended | Fiscal Year 2006 | April 30, 2006 | January 31, 2006 | October 31, 2005 | July 31, 2005 | |||||||||||||||
Revenues | $ | 4,872,801 | $ | 2,496,018 | $ | 1,156,747 | $ | 605,043 | $ | 614,993 | ||||||||||
Income (loss) before taxes | 827,393 | 980,983 | 25,408 | (133,129 | ) | (45,869 | ) | |||||||||||||
Income tax (benefit) | 336,985 | 393,445 | 13,295 | (51,880 | ) | (17,875 | ) | |||||||||||||
Net income (loss) | $ | 490,408 | $ | 587,538 | $ | 12,113 | $ | (81,249 | ) | $ | (27,994 | ) | ||||||||
Basic earnings (loss) per share | $ | 1.49 | $ | 1.79 | $ | 0.04 | $ | (0.25 | ) | $ | (0.08 | ) | ||||||||
Diluted earnings (loss) per share | $ | 1.47 | $ | 1.77 | $ | 0.04 | $ | (0.25 | ) | $ | (0.08 | ) |
(in 000s, except per share amounts) | ||||||||||||||||||||||
As Reported | As Restated | |||||||||||||||||||||
Fiscal Year 2005 Quarter Ended | Fiscal Year 2005 | April 30, 2005 | January 31, 2005 | January 31, 2005 | ||||||||||||||||||
Revenues | $ | 4,420,019 | $ | 2,355,279 | $ | 1,032,007 | $ | 1,036,236 | ||||||||||||||
Income before taxes | 1,017,715 | 1,003,055 | 151,683 | 153,278 | ||||||||||||||||||
Income taxes | 381,858 | 376,349 | 59,991 | 57,513 | ||||||||||||||||||
Net income | $ | 635,857 | $ | 626,706 | $ | 91,692 | $ | 95,765 | ||||||||||||||
Basic earnings per share | $ | 3.83 | $ | 3.79 | $ | .56 | $ | .58 | ||||||||||||||
Diluted earnings per share | $ | 3.77 | $ | 3.72 | $ | .55 | $ | .57 |
As Reported | As Restated | As Reported | As Restated | |||||||||||||||||||
Fiscal Year 2005 Quarter Ended | October 31, 2004 | October 31, 2004 | July 31, 2004 | July 31, 2004 | ||||||||||||||||||
Revenues | $ | 539,255 | $ | 541,953 | $ | 482,711 | $ | 486,551 | ||||||||||||||
Income before taxes | (85,924 | ) | (79,818 | ) | (72,564 | ) | (58,800 | ) | ||||||||||||||
Income taxes | (33,725 | ) | (29,946 | ) | (28,481 | ) | (22,058 | ) | ||||||||||||||
Net income | $ | (52,199 | ) | $ | (49,872 | ) | $ | (44,083 | ) | $ | (36,742 | ) | ||||||||||
Basic earnings per share | $ | (.32 | ) | $ | (.30 | ) | $ | (.26 | ) | $ | (.22 | ) | ||||||||||
Diluted earnings per share | $ | (.32 | ) | $ | (.30 | ) | $ | (.26 | ) | $ | (.22 | ) | ||||||||||
As Reported | As Restated | As Reported | As Restated | As Reported | |||||||||||||||||||
Fiscal Year 2004 Quarter Ended | Fiscal Year 2004 | Fiscal Year 2004 | April 30, 2004 | April 30, 2004 | January 31, 2004 | ||||||||||||||||||
Revenues | $ | 4,224,846 | $ | 4,247,880 | $ | 2,197,760 | $ | 2,200,935 | $ | 962,830 | |||||||||||||
Income before taxes | 1,164,157 | 1,162,975 | 952,074 | 949,469 | 176,120 | ||||||||||||||||||
Income taxes | 459,901 | 447,367 | 376,439 | 365,237 | 69,394 | ||||||||||||||||||
Net income before change in accounting principle | 704,256 | 715,608 | 575,635 | 584,232 | 106,723 | ||||||||||||||||||
Cumulative effect of change in accounting principle | (6,359 | ) | (6,359 | ) | – | – | – | ||||||||||||||||
Net income | $ | 697,897 | $ | 709,249 | $ | 575,635 | $ | 584,232 | $ | 106,726 | |||||||||||||
Basic earnings per share: | |||||||||||||||||||||||
Before change in accounting principle | $ | 3.98 | $ | 4.04 | $ | 3.30 | $ | 3.35 | $ | .60 | |||||||||||||
Net income | 3.94 | 4.01 | 3.30 | 3.35 | .60 | ||||||||||||||||||
Diluted earnings per share: | |||||||||||||||||||||||
Before change in accounting principle | $ | 3.90 | $ | 3.96 | $ | 3.23 | $ | 3.28 | $ | .59 | |||||||||||||
Net income | 3.86 | 3.92 | 3.23 | 3.28 | .59 | ||||||||||||||||||
Fiscal Year 2005 Quarter Ended | Fiscal Year 2005 | April 30, 2005 | January 31, 2005 | October 31, 2004 | July 31, 2004 | |||||||||||||||
Revenues | $ | 4,420,019 | $ | 2,355,279 | $ | 1,036,236 | $ | 541,953 | $ | 486,551 | ||||||||||
Income (loss) before taxes | 1,017,715 | 1,003,055 | 153,278 | (79,818 | ) | (58,800 | ) | |||||||||||||
Income tax (benefit) | 393,805 | 388,125 | 59,542 | (31,016 | ) | (22,846 | ) | |||||||||||||
Net income (loss) | $ | 623,910 | $ | 614,930 | $ | 93,736 | $ | (48,802 | ) | $ | (35,954 | ) | ||||||||
Basic earnings (loss) per share | $ | 1.88 | $ | 1.86 | $ | 0.28 | $ | (0.15 | ) | $ | (0.11 | ) | ||||||||
Diluted earnings (loss) per share | $ | 1.85 | $ | 1.83 | $ | 0.28 | $ | (0.15 | ) | $ | (0.11 | ) |
Fiscal Year 2004 Quarter | As Restated | As Reported | As Restated | As Reported | As Restated | ||||||||||||||||||
Ended | January 31, 2004 | October 31, 2003 | October 31, 2003 | July 31, 2003 | July 31, 2003 | ||||||||||||||||||
Revenues | $ | 974,520 | $ | 568,872 | $ | 573,267 | $ | 495,384 | $ | 499,158 | |||||||||||||
Income before taxes | 181,406 | 17,134 | 15,390 | 18,829 | 16,710 | ||||||||||||||||||
Income taxes | 69,782 | 6,758 | 5,920 | 7,310 | 6,428 | ||||||||||||||||||
Net income before change in accounting principle | 111,624 | 10,376 | 9,470 | 11,519 | 10,282 | ||||||||||||||||||
Cumulative effect of change in accounting principle | – | – | – | (6,359 | ) | (6,359 | ) | ||||||||||||||||
Net income | $ | 111,624 | $ | 10,376 | $ | 9,470 | $ | 5,160 | $ | 3,923 | |||||||||||||
Basic earnings per share: | |||||||||||||||||||||||
Before change in accounting principle | $ | .63 | $ | .06 | $ | .05 | $ | .06 | $ | .06 | |||||||||||||
Net income | .63 | .06 | .05 | .03 | .02 | ||||||||||||||||||
Diluted earnings per share: | |||||||||||||||||||||||
Before change in accounting principle | $ | .62 | $ | .06 | $ | .05 | $ | .06 | $ | .06 | |||||||||||||
Net income | .62 | .06 | .05 | .03 | .02 | ||||||||||||||||||
(in 000s) | ||||||||||||||||||||||||||
Fiscal Year 2005 Quarter Ended | January 31, 2005 | October 31, 2004 | July 31, 2004 | |||||||||||||||||||||||
Impact on | Revenues | Pretax Income | Revenues | Pretax Income | Revenues | Pretax Income | ||||||||||||||||||||
Purchase accounting | $ | – | $ | (1,831 | ) | $ | – | $ | (1,831 | ) | $ | – | $ | (1,831 | ) | |||||||||||
Sales of previously securitized residual interests | 4,229 | 4,229 | 2,698 | 2,698 | 3,840 | 3,840 | ||||||||||||||||||||
Lease accounting | – | (1,207 | ) | – | (414 | ) | – | (175 | ) | |||||||||||||||||
Incentive compensation accrual | – | – | – | – | – | 12,070 | ||||||||||||||||||||
Improper capitalization | – | 404 | – | 5,653 | – | (140 | ) | |||||||||||||||||||
$ | 4,229 | $ | 1,595 | $ | 2,698 | $ | 6,106 | $ | 3,840 | $ | 13,764 | |||||||||||||||
Income tax (benefit) | (2,478 | ) | 3,779 | 6,423 | ||||||||||||||||||||||
Net income | $ | 4,073 | $ | 2,327 | $ | 7,341 | ||||||||||||||||||||
Fiscal Year 2004 Quarter Ended | April 30, 2004 | January 31, 2004 | ||||||||||||||||
Impact on | Revenues | Pretax Income | Revenues | Pretax Income | ||||||||||||||
Purchase accounting | $ | – | $ | (1,831 | ) | $ | – | $ | (1,831 | ) | ||||||||
Sales of previously securitized residual interests | 3,175 | 3,175 | 11,690 | 11,690 | ||||||||||||||
Lease accounting | – | (608 | ) | – | (510 | ) | ||||||||||||
Incentive compensation accrual | – | (3,018 | ) | – | (3,018 | ) | ||||||||||||
Improper capitalization | – | (323 | ) | – | (1,045 | ) | ||||||||||||
$ | 3,175 | $ | (2,605 | ) | $ | 11,690 | $ | 5,286 | ||||||||||
Income tax (benefit) | (11,202 | ) | 388 | |||||||||||||||
Net income | $ | 8,597 | $ | 4,898 | ||||||||||||||
Fiscal Year 2004 Quarter Ended | October 31, 2003 | July 31, 2003 | ||||||||||||||||
Impact on | Revenues | Pretax Income | Revenues | Pretax Income | ||||||||||||||
Purchase accounting | $ | – | $ | (1,831 | ) | $ | – | $ | (1,831 | ) | ||||||||
Sales of previously securitized residual interests | 4,395 | 4,395 | 3,774 | 3,775 | ||||||||||||||
Lease accounting | – | (216 | ) | – | 28 | |||||||||||||
Incentive compensation accrual | – | (3,018 | ) | – | (3,018 | ) | ||||||||||||
Improper capitalization | – | (1,074 | ) | – | (1,073 | ) | ||||||||||||
$ | 4,395 | $ | (1,744 | ) | $ | 3,774 | $ | (2,119 | ) | |||||||||
Income tax (benefit) | (838 | ) | (882 | ) | ||||||||||||||
Net income | $ | (906 | ) | $ | (1,237 | ) | ||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Fiscal Year | ||||||||||||||||||||
Fiscal year 2005 ... | ||||||||||||||||||||||||
Dividends per share | $ | .22 | $ | .22 | $ | .22 | $ | .20 | $ | .86 | ||||||||||||||
Stock price range: | ||||||||||||||||||||||||
High | $ | 55.86 | $ | 50.49 | $ | 51.50 | $ | 50.00 | $ | 55.86 | ||||||||||||||
Low | 46.85 | 45.98 | 45.13 | 44.16 | 44.16 | |||||||||||||||||||
Fiscal year 2004 ... | ||||||||||||||||||||||||
Dividends per share | $ | .20 | $ | .20 | $ | .20 | $ | .18 | $ | .78 | ||||||||||||||
Stock price range: | ||||||||||||||||||||||||
High | $ | 61.00 | $ | 60.18 | $ | 48.36 | $ | 46.00 | $ | 61.00 | ||||||||||||||
Low | 44.50 | 47.14 | 40.55 | 36.30 | 36.30 | |||||||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fiscal Year | ||||||||||||||||
FISCAL YEAR 2006– | ||||||||||||||||||||
Dividends per share | $ | 0.13 | $ | 0.13 | $ | 0.13 | $ | 0.11 | $ | 0.49 | ||||||||||
Stock price range: | ||||||||||||||||||||
High | $ | 25.67 | $ | 26.96 | $ | 29.02 | $ | 30.00 | $ | 30.00 | ||||||||||
Low | 19.80 | 23.06 | 23.01 | 24.47 | 19.80 | |||||||||||||||
FISCAL YEAR 2005– | ||||||||||||||||||||
Dividends per share | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.10 | $ | 0.43 | ||||||||||
Stock price range: | ||||||||||||||||||||
High | $ | 27.93 | $ | 25.25 | $ | 25.75 | $ | 25.00 | $ | 27.93 | ||||||||||
Low | 23.43 | 22.99 | 22.57 | 22.08 | 22.08 |
NOTE 21: | CONDENSED CONSOLIDATING FINANCIAL STATEMENTS |
76
CONDENSED CONSOLIDATING INCOME STATEMENTS | (in 000s) | |||||||||||||||||||
H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||
Year Ended April 30, 2006 | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | |||||||||||||||
Revenues | $ | - | $ | 2,018,045 | $ | 2,871,364 | $ | (16,608 | ) | $ | 4,872,801 | |||||||||
Expenses: | ||||||||||||||||||||
Cost of service revenues | - | 500,545 | 1,883,374 | (620 | ) | 2,383,299 | ||||||||||||||
Cost of other revenues | - | 486,971 | 36,021 | - | 522,992 | |||||||||||||||
Selling, general and administrative | - | 481,544 | 646,535 | (15,494 | ) | 1,112,585 | ||||||||||||||
- | 1,469,060 | 2,565,930 | (16,114 | ) | 4,018,876 | |||||||||||||||
Operating income | - | 548,985 | 305,434 | (494 | ) | 853,925 | ||||||||||||||
Interest expense | - | 47,242 | 1,817 | - | 49,059 | |||||||||||||||
Other income, net | 827,393 | - | 22,527 | (827,393 | ) | 22,527 | ||||||||||||||
Income before taxes | 827,393 | 501,743 | 326,144 | (827,887 | ) | 827,393 | ||||||||||||||
Income taxes | 336,985 | 198,454 | 138,744 | (337,198 | ) | 336,985 | ||||||||||||||
Net income | $ | 490,408 | $ | 303,289 | $ | 187,400 | $ | (490,689 | ) | $ | 490,408 | |||||||||
H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||
Year Ended April 30, 2005 | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | |||||||||||||||
Revenues | $ | - | $ | 1,871,703 | $ | 2,565,496 | $ | (17,180 | ) | $ | 4,420,019 | |||||||||
Expenses: | ||||||||||||||||||||
Cost of service revenues | - | 404,053 | 1,595,199 | (184 | ) | 1,999,068 | ||||||||||||||
Cost of other revenues | - | 417,508 | 30,513 | - | 448,021 | |||||||||||||||
Selling, general and administrative | - | 447,688 | 487,419 | (14,430 | ) | 920,677 | ||||||||||||||
- | 1,269,249 | 2,113,131 | (14,614 | ) | 3,367,766 | |||||||||||||||
Operating income | - | 602,454 | 452,365 | (2,566 | ) | 1,052,253 | ||||||||||||||
Interest expense | - | 59,247 | 3,293 | (173 | ) | 62,367 | ||||||||||||||
Other income, net | 1,017,715 | 17,277 | 10,552 | (1,017,715 | ) | 27,829 | ||||||||||||||
Income before taxes | 1,017,715 | 560,484 | 459,624 | (1,020,108 | ) | 1,017,715 | ||||||||||||||
Income taxes | 393,805 | 218,869 | 175,862 | (394,731 | ) | 393,805 | ||||||||||||||
Net income | $ | 623,910 | $ | 341,615 | $ | 283,762 | $ | (625,377 | ) | $ | 623,910 | |||||||||
H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||
Year Ended April 30, 2004 | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | |||||||||||||||
Revenues | $ | - | $ | 1,844,772 | $ | 2,419,446 | $ | (16,338 | ) | $ | 4,247,880 | |||||||||
Expenses: | ||||||||||||||||||||
Cost of service revenues | - | 372,582 | 1,422,567 | (283 | ) | 1,794,866 | ||||||||||||||
Cost of other revenues | - | 357,350 | 25,168 | - | 382,518 | |||||||||||||||
Selling, general and administrative | - | 368,725 | 493,114 | (15,682 | ) | 846,157 | ||||||||||||||
- | 1,098,657 | 1,940,849 | (15,965 | ) | 3,023,541 | |||||||||||||||
Operating income | - | 746,115 | 478,597 | (373 | ) | 1,224,339 | ||||||||||||||
Interest expense | - | 66,931 | 4,287 | - | 71,218 | |||||||||||||||
Other income, net | 1,162,975 | - | 9,854 | (1,162,975 | ) | 9,854 | ||||||||||||||
Income before taxes | 1,162,975 | 679,184 | 484,164 | (1,163,348 | ) | 1,162,975 | ||||||||||||||
Income taxes | 462,523 | 263,456 | 199,216 | (462,672 | ) | 462,523 | ||||||||||||||
Income before change in accounting | 700,452 | 415,728 | 284,948 | (700,676 | ) | 700,452 | ||||||||||||||
Cumulative effect of change in accounting | (6,359 | ) | - | (6,359 | ) | 6,359 | (6,359 | ) | ||||||||||||
Net income | $ | 694,093 | $ | 415,728 | $ | 278,589 | $ | (694,317 | ) | $ | 694,093 | |||||||||
77
CONDENSED CONSOLIDATING BALANCE SHEETS | (in 000s) | |||||||||||||||||||
H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||
April 30, 2006 | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | |||||||||||||||
Cash & cash equivalents | $ | - | $ | 151,561 | $ | 542,797 | $ | - | $ | 694,358 | ||||||||||
Cash & cash equivalents - restricted | - | 377,445 | 16,624 | - | 394,069 | |||||||||||||||
Receivables from customers, brokers and dealers, net | - | 496,577 | - | - | 496,577 | |||||||||||||||
Receivables, net | 161 | 128,123 | 374,904 | - | 503,188 | |||||||||||||||
Intangible assets and goodwill, net | - | 387,194 | 932,752 | - | 1,319,946 | |||||||||||||||
Investments in subsidiaries | 5,237,611 | 215 | 456 | (5,237,611 | ) | 671 | ||||||||||||||
Other assets | - | 2,116,900 | 463,966 | (540 | ) | 2,580,326 | ||||||||||||||
Total assets | $ | 5,237,772 | $ | 3,658,015 | $ | 2,331,499 | $ | (5,238,151 | ) | $ | 5,989,135 | |||||||||
Accounts payable to customers, brokers and dealers | $ | - | $ | 781,303 | $ | - | $ | - | $ | 781,303 | ||||||||||
Long-term debt | - | 398,001 | 19,538 | - | 417,539 | |||||||||||||||
Other liabilities | 2 | 1,042,611 | 1,599,881 | - | 2,642,494 | |||||||||||||||
Net intercompany advances | 3,089,971 | (355,358 | ) | (2,734,567 | ) | (46 | ) | - | ||||||||||||
Stockholders’ equity | 2,147,799 | 1,791,458 | 3,446,647 | (5,238,105 | ) | 2,147,799 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 5,237,772 | $ | 3,658,015 | $ | 2,331,499 | $ | (5,238,151 | ) | $ | 5,989,135 | |||||||||
H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||
April 30, 2005 | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | |||||||||||||||
Cash & cash equivalents | $ | - | $ | 162,983 | $ | 937,230 | $ | - | $ | 1,100,213 | ||||||||||
Cash & cash equivalents - restricted | - | 488,761 | 28,148 | - | 516,909 | |||||||||||||||
Receivables from customers, brokers and dealers, net | - | 590,226 | - | - | 590,226 | |||||||||||||||
Receivables, net | 101 | 122,908 | 218,697 | - | 341,706 | |||||||||||||||
Intangible assets and goodwill, net | - | 421,036 | 842,003 | - | 1,263,039 | |||||||||||||||
Investments in subsidiaries | 4,851,680 | 210 | 449 | (4,851,680 | ) | 659 | ||||||||||||||
Other assets | - | 1,484,164 | 241,532 | (392 | ) | 1,725,304 | ||||||||||||||
Total assets | $ | 4,851,781 | $ | 3,270,288 | $ | 2,268,059 | $ | (4,852,072 | ) | $ | 5,538,056 | |||||||||
Accounts payable to customers, brokers and dealers | $ | - | $ | 950,684 | $ | - | $ | - | $ | 950,684 | ||||||||||
Long-term debt | - | 896,591 | 26,482 | - | 923,073 | |||||||||||||||
Other liabilities | 2 | 532,562 | 1,182,459 | 8 | 1,715,031 | |||||||||||||||
Net intercompany advances | 2,902,511 | (641,611 | ) | (2,262,818 | ) | 1,918 | - | |||||||||||||
Stockholders’ equity | 1,949,268 | 1,532,062 | 3,321,936 | (4,853,998 | ) | 1,949,268 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 4,851,781 | $ | 3,270,288 | $ | 2,268,059 | $ | (4,852,072 | ) | $ | 5,538,056 | |||||||||
78
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS | (in 000s) | |||||||||||||||||||
H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||
Year Ended April 30, 2006 | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | |||||||||||||||
Net cash provided by (used in) operating activities: | $ | 66,667 | $ | (2,937 | ) | $ | 521,956 | $ | - | $ | 585,686 | |||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Cash received on residual interests | - | 80,539 | - | - | 80,539 | |||||||||||||||
Mortgage loans originated and held for investment | - | (407,538 | ) | - | - | (407,538 | ) | |||||||||||||
Purchases of property & equipment | - | (59,824 | ) | (190,686 | ) | - | (250,510 | ) | ||||||||||||
Payments made for business acquisitions | - | (2,939 | ) | (209,604 | ) | - | (212,543 | ) | ||||||||||||
Net intercompany advances | 245,169 | - | - | (245,169 | ) | - | ||||||||||||||
Other, net | - | 80,486 | 21,061 | - | 101,547 | |||||||||||||||
Net cash provided by (used in) investing activities | 245,169 | (309,276 | ) | (379,229 | ) | (245,169 | ) | (688,505 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Repayments of short-term debt | - | (6,790,463 | ) | (258,418 | ) | - | (7,048,881 | ) | ||||||||||||
Proceeds from issuance of short-term debt | - | 6,790,463 | 258,418 | - | 7,048,881 | |||||||||||||||
Payments on acquisition debt | - | - | (26,819 | ) | - | (26,819 | ) | |||||||||||||
Dividends paid | (160,031 | ) | - | - | - | (160,031 | ) | |||||||||||||
Acquisition of treasury shares | (260,312 | ) | - | - | - | (260,312 | ) | |||||||||||||
Proceeds from issuance of common stock | 108,507 | - | - | - | 108,507 | |||||||||||||||
Net intercompany advances | - | 286,253 | (531,422 | ) | 245,169 | - | ||||||||||||||
Other, net | - | 14,538 | 21,081 | - | 35,619 | |||||||||||||||
Net cash provided by (used in) financing activities | (311,836 | ) | 300,791 | (537,160 | ) | 245,169 | (303,036 | ) | ||||||||||||
Net decrease in cash and cash equivalents | - | (11,422 | ) | (394,433 | ) | - | (405,855 | ) | ||||||||||||
Cash and cash equivalents at beginning of the year | - | 162,983 | 937,230 | - | 1,100,213 | |||||||||||||||
Cash and cash equivalents at end of the year | $ | - | $ | 151,561 | $ | 542,797 | $ | - | $ | 694,358 | ||||||||||
H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||
Year Ended April 30, 2005 | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | |||||||||||||||
Net cash provided by operating activities: | $ | 39,134 | $ | 122,311 | $ | 352,348 | $ | - | $ | 513,793 | ||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Cash received on residual interests | - | 136,045 | - | - | 136,045 | |||||||||||||||
Purchases of property & equipment | - | (66,255 | ) | (143,203 | ) | - | (209,458 | ) | ||||||||||||
Payments made for business acquisitions | - | - | (37,621 | ) | - | (37,621 | ) | |||||||||||||
Net intercompany advances | 497,774 | - | - | (497,774 | ) | - | ||||||||||||||
Other, net | - | 33,710 | 18,914 | - | 52,624 | |||||||||||||||
Net cash provided by (used in) investing activities | 497,774 | 103,500 | (161,910 | ) | (497,774 | ) | (58,410 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Repayments of short-term debt | - | (5,941,623 | ) | - | - | (5,941,623 | ) | |||||||||||||
Proceeds from issuance of short-term debt | - | 5,941,623 | - | - | 5,941,623 | |||||||||||||||
Repayments of long-term debt | - | (250,000 | ) | - | - | (250,000 | ) | |||||||||||||
Proceeds from issuance of long-term debt | - | 395,221 | - | - | 395,221 | |||||||||||||||
Payments on acquisition debt | - | - | (25,664 | ) | - | (25,664 | ) | |||||||||||||
Dividends paid | (142,988 | ) | - | - | - | (142,988 | ) | |||||||||||||
Acquisition of treasury shares | (530,022 | ) | - | - | - | (530,022 | ) | |||||||||||||
Proceeds from issuance of common stock | 136,102 | - | - | - | 136,102 | |||||||||||||||
Net intercompany advances | - | (324,424 | ) | (173,350 | ) | 497,774 | - | |||||||||||||
Other, net | - | (16,813 | ) | 6,249 | - | (10,564 | ) | |||||||||||||
Net cash provided by (used in) financing activities | (536,908 | ) | (196,016 | ) | (192,765 | ) | 497,774 | (427,915 | ) | |||||||||||
Net increase (decrease) in cash and cash equivalents | - | 29,795 | (2,327 | ) | - | 27,468 | ||||||||||||||
Cash and cash equivalents at beginning of the year | - | 133,188 | 939,557 | - | 1,072,745 | |||||||||||||||
Cash and cash equivalents at end of the year | $ | - | $ | 162,983 | $ | 937,230 | $ | - | $ | 1,100,213 | ||||||||||
79
H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||
Year Ended April 30, 2004 | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | |||||||||||||||
Net cash provided by operating activities: | $ | 64,782 | $ | 163,464 | $ | 624,217 | $ | - | $ | 852,463 | ||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Cash received on residual interests | - | 193,606 | - | - | 193,606 | |||||||||||||||
Purchases of property & equipment | - | (35,482 | ) | (88,344 | ) | - | (123,826 | ) | ||||||||||||
Payments made for business acquisitions | - | - | (280,865 | ) | - | (280,865 | ) | |||||||||||||
Net intercompany advances | 473,521 | - | - | (473,521 | ) | - | ||||||||||||||
Other, net | - | 66,046 | 17,653 | - | 83,699 | |||||||||||||||
Net cash provided by (used in) investing activities | 473,521 | 224,170 | (351,556 | ) | (473,521 | ) | (127,386 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Repayments of commercial paper | - | (4,618,853 | ) | - | - | (4,618,853 | ) | |||||||||||||
Proceeds from issuance of commercial paper | - | 4,618,853 | - | - | 4,618,853 | |||||||||||||||
Payments on acquisition debt | - | - | (59,003 | ) | - | (59,003 | ) | |||||||||||||
Dividends paid | (138,397 | ) | - | - | - | (138,397 | ) | |||||||||||||
Acquisition of treasury shares | (519,862 | ) | - | - | - | (519,862 | ) | |||||||||||||
Proceeds from issuance of common stock | 119,956 | - | - | - | 119,956 | |||||||||||||||
Net intercompany advances | - | (453,477 | ) | (20,044 | ) | 473,521 | - | |||||||||||||
Other, net | - | 18,850 | 12,831 | - | 31,681 | |||||||||||||||
Net cash provided by (used in) financing activities | (538,303 | ) | (434,627 | ) | (66,216 | ) | 473,521 | (565,625 | ) | |||||||||||
Net increase (decrease) in cash and cash equivalents | - | (46,993 | ) | 206,445 | - | 159,452 | ||||||||||||||
Cash and cash equivalents at beginning of the year | - | 180,181 | 733,112 | - | 913,293 | |||||||||||||||
Cash and cash equivalents at end of the year | $ | - | $ | 133,188 | $ | 939,557 | $ | - | $ | 1,072,745 | ||||||||||
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
(in 000s) | ||||||||||||||||||||||||
H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||||||
Year Ended April 30, 2005 | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | |||||||||||||||||||
Revenues | $ | – | $ | 1,871,703 | $ | 2,565,496 | $ | (17,180 | ) | $ | 4,420,019 | |||||||||||||
Expenses: | ||||||||||||||||||||||||
Cost of service revenues | – | 404,205 | 1,595,199 | (184 | ) | 1,999,220 | ||||||||||||||||||
Cost of other revenues | – | 385,908 | 30,513 | – | 416,421 | |||||||||||||||||||
Selling, general and administrative | – | 479,136 | 487,419 | (14,430 | ) | 952,125 | ||||||||||||||||||
– | 1,269,249 | 2,113,131 | (14,614 | ) | 3,367,766 | |||||||||||||||||||
Operating income | – | 602,454 | 452,365 | (2,566 | ) | 1,052,253 | ||||||||||||||||||
Interest expense | – | 59,247 | 3,293 | (173 | ) | 62,367 | ||||||||||||||||||
Other income, net | 1,017,715 | 17,277 | 10,552 | (1,017,715 | ) | 27,829 | ||||||||||||||||||
Income before taxes | 1,017,715 | 560,484 | 459,624 | (1,020,108 | ) | 1,017,715 | ||||||||||||||||||
Income taxes | 381,858 | 206,572 | 175,969 | (382,541 | ) | 381,858 | ||||||||||||||||||
Net income | $ | 635,857 | $ | 353,912 | $ | 283,655 | $ | (637,567 | ) | $ | 635,857 | |||||||||||||
Year Ended April 30, 2004 | H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||||
(as restated) | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | ||||||||||||||||||
Revenues | $ | – | $ | 1,844,772 | $ | 2,419,446 | $ | (16,338 | ) | $ | 4,247,880 | ||||||||||||
Expenses: | |||||||||||||||||||||||
Cost of service revenues | – | 372,217 | 1,422,567 | (283 | ) | 1,794,501 | |||||||||||||||||
Cost of other revenues | – | 355,197 | 25,168 | – | 380,365 | ||||||||||||||||||
Selling, general and administrative | – | 399,956 | 464,401 | (15,682 | ) | 848,675 | |||||||||||||||||
– | 1,127,370 | 1,912,136 | (15,965 | ) | 3,023,541 | ||||||||||||||||||
Operating income | – | 717,402 | 507,310 | (373 | ) | 1,224,339 | |||||||||||||||||
Interest expense | – | 38,218 | 33,000 | – | 71,218 | ||||||||||||||||||
Other income, net | 1,162,975 | – | 9,854 | (1,162,975 | ) | 9,854 | |||||||||||||||||
Income before taxes | 1,162,975 | 679,184 | 484,164 | (1,163,348 | ) | 1,162,975 | |||||||||||||||||
Income taxes | 447,367 | 263,456 | 184,055 | (447,511 | ) | 447,367 | |||||||||||||||||
Income before change in accounting | 715,608 | 415,728 | 300,109 | (715,837 | ) | 715,608 | |||||||||||||||||
Cumulative effect of change in accounting | (6,359 | ) | – | (6,359 | ) | 6,359 | (6,359 | ) | |||||||||||||||
Net income | $ | 709,249 | $ | 415,728 | $ | 293,750 | $ | (709,478 | ) | $ | 709,249 | ||||||||||||
(in 000s) | |||||||||||||||||||||||
Year Ended April 30, 2003 | H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||||
(as restated) | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | ||||||||||||||||||
Revenues | $ | – | $ | 1,551,572 | $ | 2,192,510 | $ | (12,956 | ) | $ | 3,731,126 | ||||||||||||
Expenses: | |||||||||||||||||||||||
Cost of service revenues | – | 304,947 | 1,320,729 | 261 | 1,625,937 | ||||||||||||||||||
Cost of other revenues | – | 285,228 | 15,521 | – | 300,749 | ||||||||||||||||||
Selling, general and administrative | – | 429,255 | 467,057 | (13,197 | ) | 883,115 | |||||||||||||||||
– | 1,019,430 | 1,803,307 | (12,936 | ) | 2,809,801 | ||||||||||||||||||
Operating income | – | 532,142 | 389,203 | (20 | ) | 921,325 | |||||||||||||||||
Interest expense | – | 50,276 | 26,447 | – | 76,723 | ||||||||||||||||||
Other income, net | 855,564 | 4,127 | 6,835 | (855,564 | ) | 10,962 | |||||||||||||||||
Income before taxes | 855,564 | 485,993 | 369,591 | (855,584 | ) | 855,564 | |||||||||||||||||
Income taxes | 377,949 | 232,577 | 145,381 | (377,958 | ) | 377,949 | |||||||||||||||||
Net income | $ | 477,615 | $ | 253,416 | $ | 224,210 | $ | (477,626 | ) | $ | 477,615 | ||||||||||||
(in 000s) | |||||||||||||||||||||||
H&R Block, Inc. | BFC | Other | Consolidated | ||||||||||||||||||||
April 30, 2005 | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | ||||||||||||||||||
Cash & cash equivalents | $ | – | $ | 162,983 | $ | 937,230 | $ | – | $ | 1,100,213 | |||||||||||||
Cash & cash equivalents — restricted | – | 488,761 | 28,148 | – | 516,909 | ||||||||||||||||||
Receivables from customers, brokers and dealers, net | – | 590,226 | – | – | 590,226 | ||||||||||||||||||
Receivables, net | 101 | 199,990 | 218,697 | – | 418,788 | ||||||||||||||||||
Intangible assets and goodwill, net | – | 421,036 | 842,003 | – | 1,263,039 | ||||||||||||||||||
Investments in subsidiaries | 4,878,783 | 210 | 449 | (4,878,783 | ) | 659 | |||||||||||||||||
Other assets | – | 1,407,082 | 243,007 | (640 | ) | 1,649,449 | |||||||||||||||||
Total assets | $ | 4,878,884 | $ | 3,270,288 | $ | 2,269,534 | $ | (4,879,423 | ) | $ | 5,539,283 | ||||||||||||
Accounts payable to customers, brokers and dealers | $ | – | $ | 950,684 | $ | – | $ | – | $ | 950,684 | |||||||||||||
Long-term debt | – | 896,591 | 26,482 | – | 923,073 | ||||||||||||||||||
Other liabilities | 2 | 532,562 | 1,156,583 | 8 | 1,689,155 | ||||||||||||||||||
Net intercompany advances | 2,902,511 | (653,908 | ) | (2,250,521 | ) | 1,918 | – | ||||||||||||||||
Stockholders’ equity | 1,976,371 | 1,544,359 | 3,336,990 | (4,881,349 | ) | 1,976,371 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | 4,878,884 | $ | 3,270,288 | $ | 2,269,534 | $ | (4,879,423 | ) | $ | 5,539,283 | ||||||||||||
April 30, 2004 (as | H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||||
restated) | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | ||||||||||||||||||
Cash & cash equivalents | $ | – | $ | 133,188 | $ | 939,557 | $ | – | $ | 1,072,745 | |||||||||||||
Cash & cash equivalents — restricted | – | 532,201 | 13,227 | – | 545,428 | ||||||||||||||||||
Receivables from customers, brokers and dealers, net | – | 625,076 | – | – | 625,076 | ||||||||||||||||||
Receivables, net | 180 | 150,188 | 178,851 | – | 329,219 | ||||||||||||||||||
Intangible assets and goodwill, net | – | 457,661 | 829,283 | – | 1,286,944 | ||||||||||||||||||
Investments in subsidiaries | 4,214,499 | 205 | 297 | (4,214,499 | ) | 502 | |||||||||||||||||
Other assets | (145 | ) | 1,125,578 | 247,758 | (373 | ) | 1,372,818 | ||||||||||||||||
Total assets | $ | 4,214,534 | $ | 3,024,097 | $ | 2,208,973 | $ | (4,214,872 | ) | $ | 5,232,732 | ||||||||||||
Accounts payable to customers, brokers and dealers | $ | – | $ | 1,065,793 | $ | – | $ | – | $ | 1,065,793 | |||||||||||||
Long-term debt | – | 498,225 | 47,586 | – | 545,811 | ||||||||||||||||||
Other liabilities | 15,879 | 580,331 | 1,204,542 | 561 | 1,801,313 | ||||||||||||||||||
Net intercompany advances | 2,378,840 | (317,187 | ) | (2,061,092 | ) | (561 | ) | – | |||||||||||||||
Stockholders’ equity | 1,819,815 | 1,196,935 | 3,017,937 | (4,214,872 | ) | 1,819,815 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | 4,214,534 | $ | 3,024,097 | $ | 2,208,973 | $ | (4,214,872 | ) | $ | 5,232,732 | ||||||||||||
(in 000s) | |||||||||||||||||||||||
Year Ended April 30, | H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||||
2005 | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | ||||||||||||||||||
Net cash provided by operating activities: | $ | 39,134 | $ | 91,081 | $ | 383,578 | $ | – | $ | 513,793 | |||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Cash received on residual interests | – | 136,045 | – | – | 136,045 | ||||||||||||||||||
Purchases of property & equipment, net | – | (66,255 | ) | (143,203 | ) | – | (209,458 | ) | |||||||||||||||
Payments made for business acquisitions | – | – | (37,621 | ) | – | (37,621 | ) | ||||||||||||||||
Net intercompany advances | 497,774 | – | – | (497,774 | ) | – | |||||||||||||||||
Other, net | – | 60,424 | (7,800 | ) | – | 52,624 | |||||||||||||||||
Net cash provided by (used in) investing activities | 497,774 | 130,214 | (188,624 | ) | (497,774 | ) | (58,410 | ) | |||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Repayments of commercial paper | – | (5,191,623 | ) | – | – | (5,191,623 | ) | ||||||||||||||||
Proceeds from issuance of commercial paper | – | 5,191,623 | – | – | 5,191,623 | ||||||||||||||||||
Repayments of long- term debt | – | (250,000 | ) | – | – | (250,000 | ) | ||||||||||||||||
Proceeds from issuance of long-term debt | – | 395,221 | – | – | 395,221 | ||||||||||||||||||
Payments on acquisition debt | – | – | (25,664 | ) | – | (25,664 | ) | ||||||||||||||||
Dividends paid | (142,988 | ) | – | – | – | (142,988 | ) | ||||||||||||||||
Acquisition of treasury shares | (530,022 | ) | – | – | – | (530,022 | ) | ||||||||||||||||
Proceeds from issuance of common stock | 136,102 | – | – | – | 136,102 | ||||||||||||||||||
Net intercompany advances | – | (336,721 | ) | (161,053 | ) | 497,774 | – | ||||||||||||||||
Other, net | – | – | (10,564 | ) | – | (10,564 | ) | ||||||||||||||||
Net cash provided by (used in) financing activities | (536,908 | ) | (191,500 | ) | (197,281 | ) | 497,774 | (427,915 | ) | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | – | 29,795 | (2,327 | ) | – | 27,468 | |||||||||||||||||
Cash and cash equivalents at beginning of the year | – | 133,188 | 939,557 | – | 1,072,745 | ||||||||||||||||||
Cash and cash equivalents at end of the year | $ | – | $ | 162,983 | $ | 937,230 | $ | – | $ | 1,100,213 | |||||||||||||
(in 000s) | |||||||||||||||||||||||
Year Ended April 30, | H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||||
2004 (as restated) | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | ||||||||||||||||||
Net cash provided by operating activities: | $ | 64,782 | $ | 184,949 | $ | 677,076 | $ | – | $ | 926,807 | |||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Cash received on residual interests | – | 193,606 | – | – | 193,606 | ||||||||||||||||||
Purchases of property & equipment, net | – | (39,229 | ) | (88,344 | ) | – | (127,573 | ) | |||||||||||||||
Payments made for business acquisitions | – | – | (280,865 | ) | – | (280,865 | ) | ||||||||||||||||
Net intercompany advances | 473,521 | – | – | (473,521 | ) | – | |||||||||||||||||
Other, net | – | 66,046 | 17,653 | – | 83,699 | ||||||||||||||||||
Net cash provided by (used in) investing activities | 473,521 | 220,423 | (351,556 | ) | (473,521 | ) | (131,133 | ) | |||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Repayments of commercial paper | – | (4,618,853 | ) | – | – | (4,618,853 | ) | ||||||||||||||||
Proceeds from issuance of commercial paper | – | 4,618,853 | – | – | 4,618,853 | ||||||||||||||||||
Payments on acquisition debt | – | – | (59,003 | ) | – | (59,003 | ) | ||||||||||||||||
Dividends paid | (138,397 | ) | – | – | – | (138,397 | ) | ||||||||||||||||
Acquisition of treasury shares | (519,862 | ) | – | – | – | (519,862 | ) | ||||||||||||||||
Proceeds from issuance of common stock | 119,956 | – | – | – | 119,956 | ||||||||||||||||||
Net intercompany advances | – | (453,477 | ) | (20,044 | ) | 473,521 | – | ||||||||||||||||
Other, net | – | – | (2,045 | ) | – | (2,045 | ) | ||||||||||||||||
Net cash provided by (used in) financing activities | (538,303 | ) | (453,477 | ) | (81,092 | ) | 473,521 | (599,351 | ) | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | – | (48,105 | ) | 244,428 | – | 196,323 | |||||||||||||||||
Cash and cash equivalents at beginning of the year | – | 180,181 | 695,172 | – | 875,353 | ||||||||||||||||||
Cash and cash equivalents at end of the year | $ | – | $ | 132,076 | $ | 939,600 | $ | – | $ | 1,071,676 | |||||||||||||
Year Ended April 30, | H&R Block, Inc. | BFC | Other | Consolidated | |||||||||||||||||||
2003 (as restated) | (Guarantor) | (Issuer) | Subsidiaries | Eliminations | H&R Block | ||||||||||||||||||
Net cash provided by operating activities | $ | 36,560 | $ | 140,617 | $ | 513,648 | $ | – | $ | 690,825 | |||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Cash received on residual interests | – | 140,795 | – | – | 140,795 | ||||||||||||||||||
Sales of residual interests in securitizations | – | 142,486 | – | – | 142,486 | ||||||||||||||||||
Purchases of property & equipment, net | – | (37,999 | ) | (112,898 | ) | – | (150,897 | ) | |||||||||||||||
Payments made for business acquisitions | – | – | (26,408 | ) | – | (26,408 | ) | ||||||||||||||||
Net intercompany advances | 280,583 | – | – | (280,583 | ) | – | |||||||||||||||||
Other, net | – | (1,480 | ) | 20,843 | – | 19,363 | |||||||||||||||||
Net cash provided by (used in) investing activities | 280,583 | 243,802 | (118,463 | ) | (280,583 | ) | 125,339 | ||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Repayments of commercial paper | – | (9,925,516 | ) | – | – | (9,925,516 | ) | ||||||||||||||||
Proceeds from issuance of commercial paper | – | 9,925,516 | – | – | 9,925,516 | ||||||||||||||||||
Payments on acquisition debt | – | – | (57,469 | ) | – | (57,469 | ) | ||||||||||||||||
Dividends paid | (125,898 | ) | – | – | – | (125,898 | ) | ||||||||||||||||
Acquisition of treasury shares | (317,570 | ) | – | – | – | (317,570 | ) | ||||||||||||||||
Proceeds from issuance of common stock | 126,325 | – | – | – | 126,325 | ||||||||||||||||||
Net intercompany advances | – | (402,197 | ) | 121,614 | 280,583 | – | |||||||||||||||||
Other, net | – | – | (2,344 | ) | – | (2,344 | ) | ||||||||||||||||
Net cash provided by (used in) financing activities | (317,143 | ) | (402,197 | ) | 61,801 | 280,583 | (376,956 | ) | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | – | (17,778 | ) | 456,986 | – | 439,208 | |||||||||||||||||
Cash and cash equivalents at beginning of the year | – | 197,959 | 238,186 | – | 436,145 | ||||||||||||||||||
Cash and cash equivalents at end of the year | $ | – | $ | 180,181 | $ | 695,172 | $ | – | $ | 875,353 | |||||||||||||
80
ITEM 9B. | OTHER INFORMATION |
ITEM 10. |
Information appearing under the heading “Election of Directors” | |||
Information appearing under the heading “Section 16(a) Beneficial Ownership Reporting Compliance” | |||
Information appearing under the heading “Board of Directors’ Meetings and Committees” regarding identification of the Audit Committee and Audit Committee financial experts. |
81
Name, age | Current position | Business experience since May 1, | 2001 | |||
Mark A. Ernst , age 47 | Chairman of the Board, President and Chief Executive Officer | Chairman of the Board of Directors since September 2002; Chief Executive Officer since January 2001; President of the Company since September | ||||
William L. Trubeck , age | Executive Vice President and Chief Financial Officer | Executive Vice President and Chief Financial Officer since October 2004; Executive Vice President | ||||
Jeffrey E. Nachbor, age | ||||||
Senior Vice President and Corporate Controller | Senior Vice President and Corporate Controller since October | April 2003. | ||||
Robert E. Dubrish , age | President and Chief Executive Officer, Option One Mortgage Corporation | President and Chief Executive Officer, Option One Mortgage Corporation, since March 1996. | ||||
Timothy C. Gokey , age | President, Retail Tax Services | President, Retail Tax Services since June 2004; McKinsey & Company from 1986 until June 2004. | ||||
Brad C. Iversen , age | Senior Vice President and Chief Marketing Officer | Senior Vice President and Chief Marketing Officer since September 2003; Founded Catamount Marketing in 2002; Executive Vice President and Director of Marketing at Bank One Corporation from 1997 to 2002. | ||||
Linda M. McDougall , age | Vice President, Communications | Vice President, Communications since July 1999. | ||||
Steve L. Nadon, age 49 | President, Consumer Financial Services Group | President, Consumer Financial Services Group since March 2006; Executive Vice President and Chief Operating Officer of Option One Mortgage Corporation from January 1998 to March 2006. | ||||
82
Name, age | May 1, 2001 | |||||
Tammy S. Serati , age | Senior Vice President, Human Resources | Senior Vice President, Human Resources since December 2002; Vice President, Human Resources Corporate Staffs, for Monsanto Agricultural Company, from May 2000 through November 2002. | ||||
Becky S. Shulman , age | Vice President and Treasurer | Vice President and Treasurer since September 2001; Chief Investment Officer of U.S. Central Credit Union, from September 1998 until August 2001. | ||||
Nicholas J. Spaeth , age | Senior Vice President and Chief Legal Officer | Senior Vice President and Chief Legal Officer since February 2004; Senior Vice President, General Counsel and Secretary of Intuit, Inc. from August 2003 to February 2004; Senior Vice President, General Counsel and Secretary, GE Employers Reinsurance Corporation from September 2000 until August | 2003. | |||
Steven Tait , age | President, RSM McGladrey Business Services, Inc. | President, RSM McGladrey Business Services, Inc. since April 2003; Executive Vice President, Sales & Client Operations, Gartner, Inc., from June 2001 through March 2003; Senior Vice President, Sales and Operations at Gartner, Inc. from July 2000 until May | ||||
2001. | ||||||
Robert A. Weinberger , age 61 | Vice President, Government Relations | Vice President, Government Relations, since March 1996. | ||||
Marc West , age | Senior Vice President and Chief Information Officer | Senior Vice President and Chief Information Officer since September 2004; Senior Vice President and Chief Information Officer of Electronic Arts Inc. from 2000 until September 2004. | ||||
Bret G. Wilson , age | Vice President and Secretary | Vice President and Secretary since October 2002; Vice President, Corporate Development and Risk Management from October 2000 until October | 2002. |
ITEM 11. |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. |
83
(a) | |
1. | The following financial statements appearing in Item 8: “Consolidated Statements of Income and Comprehensive Income;” “Consolidated Balance Sheets;” “Consolidated Statements of Cash Flows;” and “Consolidated Statements of Stockholders’ Equity.” | ||
2. | Financial Statement Schedule II | ||
3. | Exhibits: The list of exhibits in the Exhibit Index to this Report is incorporated herein by reference. The following exhibits are required to be filed as exhibits to this Form 10-K: |
10.6 | The H&R Block Executive Performance Plan. | ||
10.38 | Agreement of Settlement dated April 19, 2006 among HSBC Finance Corporation, HSBC Taxpayer Financial Services Inc., Beneficial Franchise Company, Inc., H&R Block, Inc., H&R Block Services, Inc., H&R Block Tax Services, Inc., Block Financial Corporation, HRB Royalty, Inc., H&R Block Eastern Enterprises, Inc., and Lynne A. Carnegie. | ||
10.70 | Amendment Number Seven, dated April 28, 2006, to Indenture between Option One Owner Trust 2001-1A and Wells Fargo Bank, N.A. | ||
10.77 | Amendment Number Eight, dated April 28, 2006, to Indenture between Option One Owner Trust 2001-1B and Wells Fargo Bank, N.A. | ||
12 | Computation of Ratio of Earnings to Fixed Charges for the five years ended April 30, 2006. | ||
21 | Subsidiaries of the Company. | ||
23.1 | Consent of KPMG LLP, Independent Registered Public Accounting Firm. | ||
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. |
84
85
3.1 | Restated Articles of Incorporation of H&R Block, Inc., as amended, filed as Exhibit 3.2 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, are incorporated herein by reference. | |
3.2 | Certificate of Amendment of Articles of Incorporation effective September 30, 2004, filed as Exhibit 3.1 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, is incorporated herein by reference. | |
3.3 | Amended and Restated Bylaws of H&R Block, Inc., as amended and restated as of June 9, 2004, filed as Exhibit 3.3 to the Company’s annual report on Form 10-K for the year ended April 30, 2004, file number 1-6089, is incorporated herein by reference. | |
4.1 | Indenture dated as of October 20, 1997, among H&R Block, Inc., Block Financial Corporation and Bankers Trust Company, as Trustee, filed as Exhibit 4(a) to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 1997, file number 1-6089, is incorporated herein by reference. | |
4.2 | First Supplemental Indenture, dated as of April 18, 2000, among H&R Block, Inc., Block Financial Corporation, Bankers Trust Company and the Bank of New York, filed as Exhibit 4(a) to the Company’s current report on Form 8-K dated April 13, 2000, file number 1-6089, is incorporated herein by reference. | |
4.3 | Officer’s Certificate, dated October 26, 2004, in respect of 5.125% Notes due 2014 of Block Financial Corporation, filed as Exhibit 4.1 to the Company’s current report on Form 8-K dated October 21, 2004, file number 1-6089, is incorporated herein by reference. | |
4.4 | Form of 81/2% Senior Note due 2007 of Block Financial Corporation, filed as Exhibit 4(b) to the Company’s current report on Form 8-K dated April 13, 2000, file number 1-6089, is incorporated herein by reference. | |
4.5 | Form of 5.125% Note due 2014 of Block Financial Corporation, filed as Exhibit 4.2 to the Company’s current report on Form 8-K dated October 21, 2004, file number 1-6089, is incorporated herein by reference. | |
4.6 | Copy of Rights Agreement dated March 25, 1998, between H&R Block, Inc. and ChaseMellon Shareholder Services, L.L.C., filed on July 22, 1998 as Exhibit 1 to the Company’s Registration Statement on Form 8-A, file number 1-6089, is incorporated herein by reference. | |
4.7 | Form of Certificate of Designation, Preferences and Rights of Participating Preferred Stock of H&R Block, Inc., filed as Exhibit 4(e) to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 1995, file number 1-6089, is incorporated by reference. | |
4.8 | Form of Certificate of Amendment of Certificate of Designation, Preferences and Rights of Participating Preferred Stock of H&R Block, Inc., filed as Exhibit 4(j) to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 1998, file number 1-6089, is incorporated by reference. | |
4.9 | Form of Certificate of Designation, Preferences and Rights of Delayed Convertible Preferred Stock of H&R Block, Inc., filed as Exhibit 4(f) to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 1995, file number 1-6089, is incorporated by reference. | |
10.1 | * | The Company’s 2003 Long-Term Executive Compensation Plan, as amended and restated as of September 10, 2003, filed as Exhibit 10.2 to the Company’s quarterly report on Form 10-Q for the quarter ended |
October 31, 2003, file number 1-6089, is incorporated by reference. | ||
10.2 | * | Form of 2003 Long-Term Executive Compensation Plan Award |
10.3 | * | The H&R Block Deferred Compensation Plan for Directors, as Amended and Restated effective July 1, 2002, filed as Exhibit 10.2 to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2002, file number 1-6089, is incorporated by reference. |
10.4 | * | The H&R Block Deferred Compensation Plan for Executives, as Amended and Restated July 1, 2002, filed as Exhibit 10.3 to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2002, file number 1-6089, is incorporated by reference. |
10.5 | * | Amendment No. 1 to the H&R Block Deferred Compensation Plan for Executives, as Amended and Restated, effective as of March 12, 2003, filed as Exhibit 10.5 to the company’s annual report on Form 10-K for the fiscal year ended April 30, 2003, file number 1-6089, is incorporated herein by reference. |
10.6 | * | The H&R Block Executive Performance Plan. |
10.7 | * | Summary of Non-Employee Director Compensation and Benefits, filed as Exhibit 10.1 to the Company’s current report on Form 8-K dated March 1, 2006, file number 1-6089, is incorporated herein by reference. |
10.8 | * | Description of Executive Officer Cash Compensation, filed as Exhibit 10.8 to the Company’s quarterly report on Form 10-Q for the quarter ended July 31, 2005, file number 1-6089, is incorporated herein by reference. |
10.9 | * | The Company’s 1989 Stock Option Plan for Outside Directors, as amended and restated as of September 8, 2004, filed as Exhibit 10.5 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, is incorporated herein by reference. |
10.10 | * | Form of 1989 Stock Option Plan for Outside Directors Stock Option |
10.11 | * | The H&R Block Stock Plan for Non-Employee Directors, as amended |
August 1, 2001, filed as Exhibit 10.3 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2001, file number 1-6089, is incorporated herein by reference. | ||
10.12 | * | The H&R Block, Inc. 2000 Employee Stock Purchase Plan, as amended August 1, 2001, filed as Exhibit 10.2 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2001, file number 1-6089, is incorporated herein by reference. |
10.13 | * | The H&R Block, Inc. Executive Survivor Plan (as Amended and Restated) filed as Exhibit 10.4 to the Company’s quarterly report on |
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Form 10-Q for the quarter ended October 31, 2000, file number 1-6089, is incorporated herein by reference. | ||
10.14 | * | First Amendment to the H&R Block, Inc. Executive Survivor Plan (as Amended and Restated), filed as Exhibit 10.9 to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2002, file number 1-6089, is incorporated by reference. |
10.15 | * | Second Amendment to the H&R Block, Inc. Executive Survivor Plan (as Amended and Restated), effective as of March 12, 2003, filed as Exhibit 10.12 to the company’s annual report on Form 10-K for the fiscal year ended April 30, 2003, file number 1-6089, is incorporated herein by reference. |
10.16 | * | Employment Agreement dated July 16, 1998, between the Company and Mark A. Ernst, filed as Exhibit 10(a) to the Company’s quarterly report on Form 10-Q for the quarter ended July 31, 1998, file number 1-6089, is incorporated herein by reference. |
10.17 | * | Amendment to Employment Agreement dated June 30, 2000, between HRB Management, Inc. and Mark A. Ernst, filed as Exhibit 10.1 to the Company’s quarterly report on Form 10-Q for the quarter ended July 31, 2000, file number 1-6089, is incorporated herein by reference. |
10.18 | * | Employment Agreement dated as of October 4, 2004 between HRB Management, Inc. and William L. Trubeck, filed as Exhibit 10.2 to the Company’s current report on Form 8-K/A Amendment No. 1 dated September 9, 2004, file number 1-6089, is incorporated herein by reference. |
10.19 | Employment Agreement dated as of February 2, 2004, between HRB Management, Inc. and Nicholas J. Spaeth, filed as Exhibit 10.16 to the company’s annual report on Form 10-K for the fiscal year ended April 30, 2004, file number 1-6089, is incorporated herein by reference. | |
10.20 | * | Employment Agreement dated September 2, 2003, between HRB Management, Inc. and Brad C. Iversen, filed as Exhibit 10.1 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2004, file number 1-6089, is incorporated herein by reference. |
10.21 | * | Employment Agreement between Option One Mortgage Corporation and Robert E. Dubrish, executed on February 9, 2002, filed as Exhibit 10.2 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2002, file number 1-6089, is incorporated herein by reference. |
10.22 | * | Employment Agreement dated December 2, 2002 between HRB Management, Inc. and Tammy S. Serati, filed as Exhibit 10.4 to the quarterly report on Form 10-Q for the quarter ended January 31, 2003, file number 1-6089, is incorporated herein by reference. |
10.23 | * | Employment Agreement dated as of April 1, 2003 between HRB Business Services, Inc. and Steven Tait, filed as Exhibit 10.23 to the annual report on Form 10-K for the fiscal year ended April 30, 2003, file number 1-6089, is incorporated herein by reference. |
10.24 | * | Employment Agreement dated as of September 15, 2004 between HRB Management, Inc. and Marc West, filed as Exhibit 10.1 to the quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, is incorporated herein by reference. |
10.25 | * | Employment Agreement dated as of June 28, 2004 between H&R Block Services, Inc. and Timothy C. Gokey, filed as Exhibit 10.4 to the quarterly report on Form 10-Q for the quarter ended July 31, 2004, file number 1-6089, is incorporated herein by reference. |
10.26 | * | Employment Agreement dated September 27, 2005 between HRB Management, Inc. and Jeff Nachbor, filed as Exhibit 10.10 to the quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated herein by reference. |
10.27 | * | Form of Indemnification Agreement for directors, filed as Exhibit 10.1 to the Company’s current report on Form 8-K dated December 14, 2005, file number 1-6089, is incorporated herein by reference. |
10.28 | Second Amended and Restated Refund Anticipation Loan Operations Agreement dated as of June 9, 2003, between H&R Block Services, Inc., Household Tax Masters, Inc. and Beneficial Franchise Company, filed as Exhibit 10.27 to the annual report on Form 10-K for the fiscal year ended April 30, 2003, file number 1-6089, is incorporated herein by reference. | |
10.29 | Fourth Amended and Restated Refund Anticipation Loan Participation Agreement dated as of December 31, 2004, between Block Financial Corporation, HSBC Taxpayer Financial Services, Inc. and Household Tax Masters Acquisition Corporation, filed as Exhibit 10.2 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.30 | 2004 Amendment to Second Amended and Restated Refund Anticipation Loan Operations Agreement dated as of August 20, 2004, by and among H&R Block Services, Inc., Household Tax Masters, Inc., and Beneficial Franchise Company, filed as Exhibit 10.3 to the quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, is incorporated herein by reference.** | |
10.31 | Second Amendment to Second Amended and Restated Refund Anticipation Loan Operations Agreement dated as of August 31, 2005 among H&R Block Services, Inc., H&R Block Tax Services, Inc. HRB Royalty, Inc. HSBC Taxpayer Financial Services, Inc., HSBC Bank USA, National Association and Beneficial Franchise Company filed as Exhibit 10.23 to the quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated herein by reference.** | |
10.32 | HSBC Retail Settlement Products Distribution Agreement dated as of September 23, 2005, among HSBC Bank USA, National Association, HSBC Taxpayer Financial Services Inc., Beneficial Franchise Company Inc., Household Tax Masters Acquisition Corporation, H&R Block Services, Inc., H&R Block Tax Services, Inc., H&R Block Enterprises, Inc., H&R Block Eastern Enterprises, Inc., H&R Block Digital Tax Solutions, LLC, H&R Block Associates, L.P., HRB Royalty, Inc., HSBC Finance Corporation and H&R Block, Inc., filed as Exhibit 10.14 to the quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated herein by reference. ** | |
10.33 | ||
10.34 | HSBC Refund Anticipation Participation Agreement dated as of September 23, 2005, among Household Tax Masters Acquisition |
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Corporation, Block Financial Corporation, HSBC Bank USA, National Association and HSBC Taxpayer Financial Services Inc., filed as Exhibit 10.16 to the quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated herein by reference. ** | ||
10.35 | HSBC Settlement Products Servicing Agreement dated as of September 23, 2005, among HSBC Bank USA, National Association, HSBC Taxpayer Financial Services Inc., Household Tax Masters Acquisition Corporation and Block Financial Corporation, filed as Exhibit 10.17 to the quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated herein by reference. ** | |
10.36 | HSBC Program Appendix of Defined Terms and Rules of Construction, filed as Exhibit 10.18 to the quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated herein by reference. ** | |
10.37 | Agreement of Settlement dated December 23, 2005 among H&R Block, Inc., H&R Block Services, Inc., H&R Block Tax Services, Inc., Block Financial Corporation, HRB Royalty, Inc., H&R Block Eastern Enterprises, Inc., Deadra D. Cummins, Ivan and La Donna Bell, Levon Mitchell, Geral Mitchell, Joyce Green, Lynn Becker, Justin Sevey, Maryanne Hoekman and Renea Griffith, filed as Exhibit 10.5 to the quarterly report on Form 10-Q for the quarter ended January 31, 2006, file number 1-6089, is incorporated herein by reference.* | |
10.38 | Agreement of Settlement dated April 19, 2006 among HSBC Finance Corporation, HSBC Taxpayer Financial Services Inc., Beneficial Franchise Company, Inc., H&R Block, Inc., H&R Block Services, Inc., H&R Block Tax Services, Inc., Block Financial Corporation, HRB Royalty, Inc., H&R Block Eastern Enterprises, Inc., and Lynne A. Carnegie. | |
10.39 | Amended and Restated Five-Year Credit and Guarantee Agreement dated as of August 10, 2005 among Block Financial Corporation, H&R Block, Inc.,. the lenders party thereto, Bank of America, N.A., HSBC Bank USA, National Association, Royal Bank of Scotland PLC, JPMorgan Chase Bank, N.A., and J.P Morgan Securities Inc., filed as Exhibit 10.3 to the quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.40 | Five-Year Credit and Guarantee Agreement dated as of August 10, 2005 among Block Financial Corporation, H&R Block, Inc., the lenders party thereto, Bank of America, N.A., HSBC Bank USA, National Association, The Royal Bank of Scotland PLC, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities, Inc., filed as Exhibit 10.4 to the quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.41 | License Agreement dated as of June 30, 2004 by and between Sears, Roebuck and Co. and H&R Block Services, Inc., filed as Exhibit 10.3 to the quarterly report on Form 10-Q for the quarter ended July 31, 2004, file number 1-6089, is incorporated herein by reference. | |
10.42 | Other Income License Agreement (Products and/or Services) dated September | |
Standard Form of Agreement Between Owner and Designer/Builder dated as of May 5, 2003 by and between H&R Block Tax Services, Inc. and J.E. Dunn Construction Company, filed as Exhibit 10.2 to the quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, is incorporated herein by reference. | ||
10.44 | Sale and Servicing Agreement dated as of June 1, 2005 among Option One Mortgage Corporation, Option One Loan Warehouse Corporation, Option One Owner Trust 2005-6 and Wells Fargo Bank, N.A., filed as Exhibit 10.1 to the quarterly report on Form 10-Q for the quarter ended July 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.45 | Note Purchase Agreement dated as of June 1, 2005 among Option One Loan Warehouse Corporation, Option One Owner Trust 2005-6 and Lehman Brothers Bank., filed as Exhibit 10.2 to the quarterly report on Form 10-Q for the quarter ended July 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.46 | Indenture dated as of June 1, 2005 between Option One Owner Trust 2005-6 and Wells Fargo Bank, N.A., filed as Exhibit 10.3 to the quarterly report on Form 10-Q for the quarter ended July 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.47 | Fourth Amended and Restated Loan Purchase and Contribution Agreement dated as of September 1, 2005 between Option One Loan Warehouse Corporation and Option One Mortgage Corporation, filed as Exhibit 10.22 to the quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.48 | Amended and Restated Sales and Servicing Agreement dated November 12, 2004 among Option One Owner Trust 2003-5, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.4 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.49 | Amendment Number One to the Amended and Restated Sale and Servicing Agreement dated November 11, 2005 among Option One Mortgage Corporation, Option One Loan Warehouse Corporation, Option One Owner Trust 2003-5 and Wells Fargo Bank, N.A., filed as Exhibit 10.1 to the quarterly report on Form 10-Q for the quarter ended January 31, 2006, file number 1-6089, is incorporated herein by reference. | |
10.50 | Note Purchase Agreement dated November 14, 2003 between Option One Owner Trust 2003-5, Option One Loan Warehouse Corporation and Citigroup Global Markets Realty Corp., filed as Exhibit 10.5 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.51 | Amendment Number One to the Note Purchase Agreement, dated November 14, 2004, among Option One Owner Trust 2003-5, Option One Loan Warehouse Corporation and Citigroup Global Markets Realty Corp., filed as Exhibit 10.6 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.52 | Indenture dated as of November 1, 2003 between Option One Owner Trust 2003-5 and Wells Fargo Bank Minnesota, National Association, filed as Exhibit 10.7 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.53 | Second Amended and Restated Sale and Servicing Agreement dated as of March 8, 2005 among Option One Owner Trust 2001-2, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank Minnesota, National |
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filed as Exhibit 10.40 to the Company’s annual report on Form 10-K for the year ended April 30, 2005, file number, 1-6089, is incorporated by reference. | ||
10.54 | Amendment No. 1 to Second Amended and Restated Sale and Servicing Agreement dated March 8, 2005 among Option One Owner Trust 2001-2, Option One Mortgage Corporation, Option One Loan Warehouse Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.4 to the Company’s quarterly report on Form 10-Q for the quarter ended July 31, 2005, file number, 1-6089, is incorporated by reference. | |
10.55 | Amendment Number Two to the Second Amended and Restated Sale and Servicing Agreement dated March 8, 2005 among Option One Owner Trust 2001-2, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.12 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number, 1-6089, is incorporated by reference. | |
10.56 | Amendment Number Three to the Second Amended and Restated Sale and Servicing Agreement dated March 8, 2005 among Option One Owner Trust 2001-2, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.12 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number, 1-6089, is incorporated by reference. | |
10.57 | Amendment Number Four to the Second Amended and Restated Sale and Servicing Agreement dated March 8, 2005 among Option One Owner Trust 2001-2, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.2 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2006, file number, 1-6089, is incorporated by reference. | |
10.58 | Amended and Restated Note Purchase Agreement dated as of November 25, 2003, among Option One Owner Trust 2001-2, Option One Loan Warehouse Corporation and Bank of America, N.A., filed as Exhibit 10.11 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.59 | Amendment Number Seven to Amended and Restated Note Purchase Agreement, dated November 25, 2005, among Option One Loan Warehouse Corporation, Option One Owner Trust 2001-2 and Bank of America, N.A., filed as Exhibit 10.3 to the quarterly report on Form 10-Q for the quarter ended January 31, 2006, file number 1-6089, is incorporated herein by reference. | |
10.60 | Amended and Restated Indenture dated as of November 25, 2003 between Option One Owner Trust 2001-2 and Wells Fargo Bank Minnesota, National Association, filed as Exhibit 10.14 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | |
10.61 | Amendment Number Eight to the Amended and Restated Indenture dated as of November 25, 2003 between Option One Owner Trust 2001-2 and Wells Fargo Bank Minnesota, N.A., filed as Exhibit 10.4 to the quarterly report on Form 10-Q for the quarter ended January 31, 2006, file number 1-6089, is incorporated herein by reference. | |
10.62 | Letter Agreement dated as of April 1, 2000 among Option One Mortgage Corporation and Bank of America N.A., filed as Exhibit 10.15 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated by reference. | |
10.63 | Amended and Restated Note Purchase Agreement dated as of March 18, 2005 among Option One Owner Trust 2002-3, UBS Real Estate Securities Inc. and Option One Mortgage | |
Amended and Restated Sale and Servicing Agreement dated as of March 18, 2005, among Option One Owner Trust 2002-3, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.47 to the Company’s annual report on Form 10-K for the year ended April 30, 2005, file number, 1-6089, is incorporated by reference. | ||
Omnibus Amendment No. 1 dated as of September 8, 2005 among Option One Mortgage Corporation, Option One Owner Trust 2002-3 and Wells Fargo Bank, N.A. , filed as Exhibit 10.8 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated by reference. | ||
10.66 | Second Amended and Restated Sale and Servicing Agreement dated as of April 29, 2005 among Option One Owner Trust 2001-1A, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.48 to the Company’s annual report on Form 10-K for the year ended April 30, 2005, file number, 1-6089, is incorporated by reference. | |
Amendment Number One to Second Amended and Restated Sale and Servicing Agreement dated as of April 29, 2005 among Option One Owner Trust 2001-1A, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.6 to the quarterly report of Form 10-Q for the quarter ended July 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10.68 | Indenture dated as of April 1, 2001 between Option One Owner Trust 2001-1A and Wells Fargo Bank Minnesota, National | |
Amendment Number Four, dated April 16, 2004, to Indenture between Option One Owner Trust 2001-1A and Wells Fargo Bank Minnesota, National Association, as amended and restated through and including November 25, | ||
Amendment Number | ||
Amended and Restated Note Purchase Agreement dated as of April 16, 2004, among Option One Owner Trust 2001-1A, Option One Loan Warehouse Corporation and Greenwich Capital Financial Products, Inc., filed as Exhibit 10.53 to the Company’s annual report on Form 10-K for the year ended April 30, 2005, file number, 1-6089, is incorporated by reference. | ||
Amendment No. 1 to Amended and Restated Note Purchase Agreement dated as of April 29, 2005 among Option One Owner Trust 2001-1A, Greenwich Capital Financial Products, Inc. and |
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Option One Loan Warehouse | ||
Second Amended and Restated Sale and Servicing Agreement dated as of April 29, 2005 among Option One Owner Trust 2001-1B, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A. filed as Exhibit 10.55 to the Company’s annual report on Form 10-K for the year ended April 30, 2005, file number, 1-6089, is incorporated by reference. | ||
Amendment Number One to Second Amended and Restated Sale and Servicing Agreement dated as of April 29, 2005 among Option One Owner Trust 2001-1B, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.7 to the quarterly report of Form 10-Q for the quarter ended July 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10.75 | Indenture dated as of April 1, 2001 between Option One Owner Trust 2001-1B and Wells Fargo Bank Minnesota, National | |
Amendment Number Five, dated April 16, 2004, to Indenture between Option One Owner Trust 2001-1B and Wells Fargo Bank Minnesota, National Association, as amended and restated through and including November 25, | ||
Amendment Number | ||
Amended and Restated Note Purchase Agreement dated as of April 16, 2004, among Option One Owner Trust 2001-1B, Option One Loan Warehouse Corporation and Steamboat Funding | ||
Amendment No. 1 to Amended and Restated Note Purchase Agreement dated as of April 29, 2005 among Option One Owner Trust | ||
Amended and Restated Sale and Servicing Agreement dated as of August | ||
Indenture dated as of August 8, 2003 between Option One Owner Trust 2003-4 and Wells Fargo Bank Minnesota, National | ||
Amended and Restated Note Purchase Agreement dated as of August | ||
10.83 | Sale and Servicing Agreement dated as of September 1, 2005 among Option One | |
10.84 | Note Purchase Agreement dated as of September 1, 2005 between Option One Loan Warehouse Corporation, Option One Owner Trust 2005-7, HSBC Securities (USA) Inc., HSBC Bank USA, N.A., Bryant Park Funding LLC and HSBC Securities (USA) Inc., filed as Exhibit 10.6 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated by reference. | |
10.85 | Indenture dated as of September 1, 2005 between Option One Owner Trust 2005-7 and Wells Fargo Bank, N.A. , filed as Exhibit 10.7 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated by reference. | |
10.86 | Sale and Servicing Agreement dated as of October 1, 2005 among Option One Mortgage Corporation, Option One Loan Warehouse Corporation, Option One Owner Trust 2005-8 and Wells Fargo Bank, N.A., filed as Exhibit 10.19 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated by reference. | |
10.87 | Note Purchase Agreement dated as of October 1, 2005 among Option One Loan Warehouse Corporation, Option One Owner Trust 2005-8 and Merril Lynch Bank USA, filed as Exhibit 10.20 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated by reference. | |
10.88 | Indenture dated as of October 1, 2005 between Option One Owner Trust 2005-8 and Wells Fargo Bank, N.A. , filed as Exhibit 10.21 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2005, file number 1-6089, is incorporated by reference. | |
10.89 | Sale and Servicing Agreement dated as of December 30, 2005 among Option One Mortgage Corporation, Option One Loan Warehouse Corporation, Option One Owner Trust 2005-9 and Wells Fargo Bank, N.A., filed as Exhibit 10.6 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2006, file number 1-6089, is incorporated by reference. | |
10.90 | Note Purchase Agreement dated as of December 30, 2005 among Option One Loan Warehouse Corporation, Option One Owner Trust 2005-9 DB Structured Products, Inc., Gemini Securitization Corp., LLC, Aspen Funding Corp. and Newport Funding Corp., filed as Exhibit 10.7 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2006, file number 1-6089, is incorporated by reference. | |
10.91 | Indenture dated as of December 30, 2005 between Option One Owner Trust 2005-9 and Wells Fargo Bank, N.A. , filed as Exhibit 10.8 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2006, file number 1-6089, is incorporated by reference. | |
12 | Computation of Ratio of Earnings to Fixed Charges for the five years ended April 30, | |
21 | Subsidiaries of the Company. | |
23.1 | Consent of KPMG | |
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. |
* | |
3 | .1 | Restated Articles of Incorporation of H&R Block, Inc., as amended, filed as Exhibit 3.2 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, are incorporated herein by reference. | ||
3 | .2 | Certificate of Amendment of Articles of Incorporation effective September 30, 2004, filed as Exhibit 3.1 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, is incorporated herein by reference. | ||
3 | .3 | Amended and Restated Bylaws of H&R Block, Inc., as amended and restated as of June 9, 2004, filed as Exhibit 3.3 to the Company’s annual report on Form 10-K for the year ended April 30, 2004, file number 1-6089, is incorporated herein by reference. | ||
4 | .1 | Indenture dated as of October 20, 1997, among H&R Block, Inc., Block Financial Corporation and Bankers Trust Company, as Trustee, filed as Exhibit 4(a) to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 1997, file number 1-6089, is incorporated herein by reference. | ||
4 | .2 | First Supplemental Indenture, dated as of April 18, 2000, among H&R Block, Inc., Block Financial Corporation, Bankers Trust Company and the Bank of New York, filed as Exhibit 4(a) to the Company’s current report on Form 8-K dated April 13, 2000, file number 1-6089, is incorporated herein by reference. | ||
4 | .3 | Officer’s Certificate, dated October 26, 2004, in respect of 5.125% Notes due 2014 of Block Financial Corporation, filed as Exhibit 4.1 to the Company’s current report on Form 8-K dated October 21, 2004, file number 1-6089, is incorporated herein by reference. | ||
4 | .4 | Form of 81/2% Senior Note due 2007 of Block Financial Corporation, filed as Exhibit 4(b) to the Company’s current report on Form 8-K dated April 13, 2000, file number 1-6089, is incorporated herein by reference. | ||
4 | .5 | Form of 5.125% Note due 2014 of Block Financial Corporation, filed as Exhibit 4.2 to the Company’s current report on Form 8-K dated October 21, 2004, file number 1-6089, is incorporated herein by reference. | ||
4 | .6 | Copy of Rights Agreement dated March 25, 1998, between H&R Block, Inc. and ChaseMellon Shareholder Services, L.L.C., filed on July 22, 1998 as Exhibit 1 to the Company’s Registration Statement on Form 8-A, file number 1-6089, is incorporated herein by reference. | ||
4 | .7 | Form of Certificate of Designation, Preferences and Rights of Participating Preferred Stock of H&R Block, Inc., filed as Exhibit 4(e) to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 1995, file number 1-6089, is incorporated by reference. | ||
4 | .8 | Form of Certificate of Amendment of Certificate of Designation, Preferences and Rights of Participating Preferred Stock of H&R Block, Inc., filed as Exhibit 4(j) to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 1998, file number 1-6089, is incorporated by reference. | ||
4 | .9 | Form of Certificate of Designation, Preferences and Rights of Delayed Convertible Preferred Stock of H&R Block, Inc., filed as Exhibit 4(f) to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 1995, file number 1-6089, is incorporated by reference. | ||
10 | .1 * | The Company’s 2003 Long-Term Executive Compensation Plan, as amended and restated as of September 10, 2003, filed as Exhibit 10.2 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2003, file number 1-6089, is incorporated by reference. | ||
10 | .2 | Form of 2003 Long-Term Executive Compensation Plan Award Agreement. | ||
10 | .3 * | The H&R Block Deferred Compensation Plan for Directors, as Amended and Restated effective July 1, 2002, filed as Exhibit 10.2 to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2002, file number 1-6089, is incorporated by reference. | ||
10 | .4 * | The H&R Block Deferred Compensation Plan for Executives, as Amended and Restated July 1, 2002, filed as Exhibit 10.3 to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2002, file number 1-6089, is incorporated by reference. | ||
10 | .5 * | Amendment No. 1 to the H&R Block Deferred Compensation Plan for Executives, as Amended and Restated, effective as of March 12, 2003, filed as Exhibit 10.5 to the company’s annual report on Form 10-K for the fiscal year ended April 30, 2003, file number 1-6089, is incorporated herein by reference. | ||
10 | .6 * | The H&R Block Short-Term Incentive Plan, filed as Exhibit 10.1 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2000, file number 1-6089, is incorporated herein by reference. | ||
10 | .7 * | Summary of Non-Employee Director Cash Compensation, filed as Exhibit 10.1 to the Company’s current report on Form 8-K dated March 16, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .8 * | The Company’s 1989 Stock Option Plan for Outside Directors, as amended and restated as of September 8, 2004, filed as Exhibit 10.5 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, is incorporated herein by reference. | ||
10 | .9 | Form of 1989 Stock Option Plan for Outside Directors Stock Option Agreement. | ||
10 | .10 * | The H&R Block Stock Plan for Non-Employee Directors, as amended August 1, 2001, filed as Exhibit 10.3 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2001, file number 1-6089, is incorporated herein by reference. | ||
10 | .11 * | The H&R Block, Inc. 2000 Employee Stock Purchase Plan, as amended August 1, 2001, filed as Exhibit 10.2 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2001, file number 1-6089, is incorporated herein by reference. | ||
10 | .12 * | The H&R Block, Inc. Executive Survivor Plan (as Amended and Restated) filed as Exhibit 10.4 to the Company’s quarterly report on Form 10-Q for the quarter ended October 31, 2000, file number 1-6089, is incorporated herein by reference. |
10 | .13 * | First Amendment to the H&R Block, Inc. Executive Survivor Plan (as Amended and Restated), filed as Exhibit 10.9 to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2002, file number 1-6089, is incorporated by reference. | ||
10 | .14 * | Second Amendment to the H&R Block, Inc. Executive Survivor Plan (as Amended and Restated), effective as of March 12, 2003, filed as Exhibit 10.12 to the company’s annual report on Form 10-K for the fiscal year ended April 30, 2003, file number 1-6089, is incorporated herein by reference. | ||
10 | .15 * | Employment Agreement dated July 16, 1998, between the Company and Mark A. Ernst, filed as Exhibit 10(a) to the Company’s quarterly report on Form 10-Q for the quarter ended July 31, 1998, file number 1-6089, is incorporated herein by reference. | ||
10 | .16 * | Amendment to Employment Agreement dated June 30, 2000, between HRB Management, Inc. and Mark A. Ernst, filed as Exhibit 10.1 to the Company’s quarterly report on Form 10-Q for the quarter ended July 31, 2000, file number 1-6089, is incorporated herein by reference. | ||
10 | .17 * | Employment Agreement dated September 7, 1999, between HRB Management, Inc. and Jeffery W. Yabuki, filed as Exhibit 10.4 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2000, file number 1-6089, is incorporated herein by reference. | ||
10 | .18 * | Employment Agreement dated as of October 4, 2004 between HRB Management, Inc. and William L. Trubeck, filed as Exhibit 10.2 to the Company’s current report on Form 8-K/A Amendment No. 1 dated September 9, 2004, file number 1-6089, is incorporated herein by reference. | ||
10 | .19 | Employment Agreement dated as of February 2, 2004, between HRB Management, Inc. and Nicholas J. Spaeth, filed as Exhibit 10.16 to the company’s annual report on Form 10-K for the fiscal year ended April 30, 2004, file number 1-6089, is incorporated herein by reference. | ||
10 | .20 * | Employment Agreement dated September 2, 2003, between HRB Management, Inc. and Brad C. Iversen, filed as Exhibit 10.1 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2004, file number 1-6089, is incorporated herein by reference. | ||
10 | .21 * | Employment Agreement between Option One Mortgage Corporation and Robert E. Dubrish, executed on February 9, 2002, filed as Exhibit 10.2 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2002, file number 1-6089, is incorporated herein by reference. | ||
10 | .22 * | Employment Agreement dated December 2, 2002 between HRB Management, Inc. and Tammy S. Serati, filed as Exhibit 10.4 to the quarterly report on Form 10-Q for the quarter ended January 31, 2003, file number 1-6089, is incorporated herein by reference. | ||
10 | .23 * | Employment Agreement dated as of April 1, 2003 between HRB Business Services, Inc. and Steven Tait, filed as Exhibit 10.23 to the annual report on Form 10-K for the fiscal year ended April 30, 2003, file number 1-6089, is incorporated herein by reference. | ||
10 | .24 * | Employment Agreement dated as of September 15, 2004 between HRB Management, Inc. and Marc West, filed as Exhibit 10.1 to the quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, is incorporated herein by reference. | ||
10 | .25 * | Employment Agreement dated as of June 28, 2004 between H&R Block Services, Inc. and Timothy C. Gokey, filed as Exhibit 10.4 to the quarterly report on Form 10-Q for the quarter ended July 31, 2004, file number 1-6089, is incorporated herein by reference. | ||
10 | .26 * | Termination Agreement dated January 7, 2005 between H&R Block, Inc., H&R Block Financial Advisors, Inc. and Brian L. Nygaard, filed as Exhibit 10.1 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .27 | Second Amended and Restated Refund Anticipation Loan Operations Agreement dated as of June 9, 2003, between H&R Block Services, Inc., Household Tax Masters, Inc. and Beneficial Franchise Company, filed as Exhibit 10.27 to the annual report on Form 10-K for the fiscal year ended April 30, 2003, file number 1-6089, is incorporated herein by reference. | ||
10 | .28 | Fourth Amended and Restated Refund Anticipation Loan Participation Agreement dated as of December 31, 2004, between Block Financial Corporation, HSBC Taxpayer Financial Services, Inc. and Household Tax Masters Acquisition Corporation, filed as Exhibit 10.2 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .29 | 2004 Amendment to Second Amended and Restated Refund Anticipation Loan Operations Agreement dated as of August 20, 2004, by and among H&R Block Services, Inc., Household Tax Masters, Inc., and Beneficial Franchise Company, filed as Exhibit 10.3 to the quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, is incorporated herein by reference.** | ||
10 | .30 | 364-Day Credit and Guarantee Agreement dated as of August 11, 2004 among Block Financial Corporation, H&R Block, Inc., Bank of America, N.A., Barclays Bank PLC, HSBC Bank USA, National Association, The Royal Bank of Scotland PLC, JPMorgan Chase Bank, J.P. Morgan Securities, Inc. and other lending parties thereto, filed as Exhibit 10.1 to the quarterly report on Form 10-Q for the quarter ended July 31, 2004, file number 1-6089, is incorporated herein by reference. | ||
10 | .31 | Five-Year Credit and Guarantee Agreement dated as of August 11, 2004 among Block Financial Corporation, H&R Block, Inc., Bank of America, N.A., Barclays Bank PLC, HSBC Bank USA, National Association, The Royal Bank of Scotland PLC, JPMorgan Chase Bank, J.P. Morgan Securities, Inc. and other lending parties thereto, filed as Exhibit 10.2 to the quarterly report on Form 10-Q for the quarter ended July 31, 2004, file number 1-6089, is incorporated herein by reference. | ||
10 | .32 | License Agreement dated as of June 30, 2004 by and between Sears, Roebuck and Co. and H&R Block Services, Inc., filed as Exhibit 10.3 to the quarterly report on Form 10-Q for the quarter ended July 31, 2004, file number 1-6089, is incorporated herein by reference. | ||
10 | .33 | Leasing Operations Supplier Agreement (Products and/or Services) dated as of September 11, 2003 between Wal*Mart Stores, Inc. and H&R Block Services, Inc. | ||
10 | .34 | Standard Form of Agreement Between Owner and Designer/Builder dated as of May 5, 2003 by and between H&R Block Tax Services, Inc. and J.E. Dunn Construction Company, filed as Exhibit 10.2 to the quarterly report on Form 10-Q for the quarter ended October 31, 2004, file number 1-6089, is incorporated herein by reference. |
10 | .35 | Second Amended and Restated Loan Purchase and Contribution Agreement dated as of November 14, 2003 between Option One Loan Warehouse Corporation and Option One Mortgage Corporation, filed as Exhibit 10.3 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .36 | Amended and Restated Sales and Servicing Agreement dated November 12, 2004 among Option One Owner Trust 2003-5, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.4 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .37 | Note Purchase Agreement dated November 14, 2003 between Option One Owner Trust 2003-5, Option One Loan Warehouse Corporation and Citigroup Global Markets Realty Corp., filed as Exhibit 10.5 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .38 | Amendment Number One to the Note Purchase Agreement, dated November 14, 2004, among Option One Owner Trust 2003-5, Option One Loan Warehouse Corporation and Citigroup Global Markets Realty Corp., filed as Exhibit 10.6 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .39 | Indenture dated as of November 1, 2003 between Option One Owner Trust 2003-5 and Wells Fargo Bank Minnesota, National Association, filed as Exhibit 10.7 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .40 | Second Amended and Restated Sale and Servicing Agreement dated as of March 8, 2005 among Option One Owner Trust 2001-2, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank Minnesota, National Association. | ||
10 | .41 | Amended and Restated Note Purchase Agreement dated as of November 24, 2003, among Option One Owner Trust 2001-2, Option One Loan Warehouse Corporation and Bank of America, N.A., filed as Exhibit 10.11 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .42 | Amendment Number One to the Amended and Restated Note Purchase Agreement, dated as of December 17, 2004, among Option One Owner Trust 2001-2, Option One Loan Warehouse Corporation and Bank of America, N.A., filed as Exhibit 10.12 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .43 | Amendment Number Two to the Amended and Restated Note Purchase Agreement, dated as of February 15, 2005, among Option One Owner Trust 2001-2, Option One Loan Warehouse Corporation and Bank of America, N.A., filed as Exhibit 10.13 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .44 | Amended and Restated Indenture dated as of November 25, 2003 between Option One Owner Trust 2001-2 and Wells Fargo Bank Minnesota, National Association, filed as Exhibit 10.14 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated herein by reference. | ||
10 | .45 | Letter Agreement dated as of April 1, 2000 among Option One Mortgage Corporation and Bank of America N.A., filed as Exhibit 10.15 to the quarterly report on Form 10-Q for the quarter ended January 31, 2005, file number 1-6089, is incorporated by reference. | ||
10 | .46 | Amended and Restated Note Purchase Agreement dated as of March 18, 2005 among Option One Owner Trust 2002-3, UBS Real Estate Securities Inc. and Option One Mortgage Corporation. | ||
10 | .47 | Amended and Restated Sale and Servicing Agreement dated as of March 18, 2005, among Option One Owner Trust 2002-3, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A. | ||
10 | .48 | Second Amended and Restated Sale and Servicing Agreement dated as of April 29, 2005 among Option One Owner Trust 2001-1A, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A. | ||
10 | .49 | Indenture dated as of April 1, 2001 between Option One Owner Trust 2001-1A and Wells Fargo Bank Minnesota, National Association. | ||
10 | .50 | Amendment Number Four, dated April 16, 2004, to Indenture between Option One Owner Trust 2001-1A and Wells Fargo Bank Minnesota, National Association, as amended and restated through and including November 25, 2003. | ||
10 | .51 | Amendment Number Five, dated April 30, 2004, to Indenture between Option One Owner Trust 2001-1A and Wells Fargo Bank Minnesota, National Association, as amended and restated through and including November 25, 2003. | ||
10 | .52 | Amendment Number Six, dated April 29, 2005, to Indenture between Option One Owner Trust 2001-1A and Wells Fargo Bank Minnesota, National Association, as amended and restated through and including November 25, 2003. | ||
10 | .53 | Amended and Restated Note Purchase Agreement dated as of April 16, 2004, among Option One Owner Trust 2001-1A, Option One Loan Warehouse Corporation and Greenwich Capital Financial Products, Inc. | ||
10 | .54 | Amendment No. 1 to Amended and Restated Note Purchase Agreement dated as of April 29, 2005 among Option One Owner Trust 2001-1A, Greenwich Capital Financial Products, Inc. and Option One Loan Warehouse Corporation. | ||
10 | .55 | Second Amended and Restated Sale and Servicing Agreement dated as of April 29, 2005 among Option One Owner Trust 2001-1B, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank, N.A. | ||
10 | .56 | Indenture dated as of April 1, 2001 between Option One Owner Trust 2001-1B and Wells Fargo Bank Minnesota, National Association. | ||
10 | .57 | Amendment Number Five, dated April 16, 2004, to Indenture between Option One Owner Trust 2001-1B and Wells Fargo Bank Minnesota, National Association, as amended and restated through and including November 25, 2003. | ||
10 | .58 | Amendment Number Six, dated April 30, 2004, to Indenture between Option One Owner Trust 2001-1B and Wells Fargo Bank Minnesota, National Association, as amended and restated through and including November 25, 2003. |
10 | .59 | Amendment Number Six, dated April 29, 2005, to Indenture between Option One Owner Trust 2001-1B and Wells Fargo Bank Minnesota, National Association, as amended and restated through and including November 25, 2003. | ||
10 | .60 | Amended and Restated Note Purchase Agreement dated as of April 16, 2004, among Option One Owner Trust 2001-1B, Option One Loan Warehouse Corporation and Steamboat Funding Corporation. | ||
10 | .61 | Amendment No. 1 to Amended and Restated Note Purchase Agreement dated as of April 29, 2005 among Option One Owner Trust 2001-1B, Steamboat Funding Corporation and Option One Loan Warehouse Corporation. | ||
10 | .62 | Sale and Servicing Agreement dated as of August 8, 2003 among Option One Owner Trust 2003-4, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank Minnesota, National Association. | ||
10 | .63 | Amendment No. 1 to Sale and Servicing Agreement dated as of August 6, 2004 among Option One Owner Trust 2003-4, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank Minnesota, National Association. | ||
10 | .64 | Amendment No. 2 to Sale and Servicing Agreement dated as of August 24, 2004 among Option One Owner Trust 2003-4, Option One Loan Warehouse Corporation, Option One Mortgage Corporation and Wells Fargo Bank Minnesota, National Association. | ||
10 | .65 | Indenture dated as of August 8, 2003 between Option One Owner Trust 2003-4 and Wells Fargo Bank Minnesota, National Association. | ||
10 | .66 | Note Purchase Agreement dated as of August 8, 2003 among Option One Mortgage Corporation, Option One Loan Warehouse Corporation, Option One Owner Trust 2003-4, Falcon Asset Securitization Corporation, Jupiter Securitization Corporation, Preferred Receivables Funding Corporation, financial institutions thereto and Bank One, NA. | ||
10 | .67 | Amendment No. 1 to Note Purchase Agreement dated as of August 6, 2004 among Option One Mortgage Corporation, Option One Loan Warehouse Corporation, Option One Owner Trust 2003-4, Falcon Asset Securitization Corporation, Jupiter Securitization Corporation, Preferred Receivables Funding Corporation, financial institutions thereto and Bank One, NA. | ||
10 | .68 | Amendment No. 2 to Note Purchase Agreement dated as of August 24, 2004 among Option One Mortgage Corporation, Option One Loan Warehouse Corporation, Option One Owner Trust 2003-4, Falcon Asset Securitization Corporation, Jupiter Securitization Corporation, Preferred Receivables Funding Corporation, financial institutions thereto and Bank One, NA. | ||
10 | .69 | Amendment No. 3 to Note Purchase Agreement dated as of October 29, 2004 among Option One Mortgage Corporation, Option One Loan Warehouse Corporation, Option One Owner Trust 2003-4, Falcon Asset Securitization Corporation, Jupiter Securitization Corporation, Preferred Receivables Funding Corporation, financial institutions thereto and Bank One, NA. | ||
10 | .70 | Amendment No. 4 to Note Purchase Agreement dated as of November 30, 2004 among Option One Mortgage Corporation, Option One Loan Warehouse Corporation, Option One Owner Trust 2003-4, Falcon Asset Securitization Corporation, Jupiter Securitization Corporation, Preferred Receivables Funding Corporation, financial institutions thereto and Bank One, NA. | ||
10 | .71 | Amendment No. 5 to Note Purchase Agreement dated January 31, 2005, among Option One Mortgage Corporation, Option One Loan Warehouse Corporation, Option One Owner Trust 2003-4, Falcon Asset Securitization Corporation, Jupiter Securitization Corporation, Preferred Receivables Funding Corporation, financial institutions thereto and Bank One, NA. | ||
12 | Computation of Ratio of Earnings to Fixed Charges for the five years ended April 30, 2005. | |||
21 | Subsidiaries of the Company. | |||
23 | .1 | Consent of KPMG LLP, Independent Registered Public Accounting Firm. | ||
23 | .2 | Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm. | ||
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. |
Indicates management contracts, compensatory plans or arrangements. | ||
** | Confidential Information has been omitted from this exhibit and filed separately with the Commission pursuant to a confidential treatment request under Rule 24b-2. |
90
Additions | |||||||||||||||||||||||
Balance at | |||||||||||||||||||||||
Beginning of | Charged to Costs | Charged to | Balance at End | ||||||||||||||||||||
Description | Period | and Expenses | Other | Deductions | of Period | ||||||||||||||||||
Allowance for Doubtful Accounts – deducted from accounts receivable in the balance sheet | |||||||||||||||||||||||
2005 | $ | 54,521,000 | $ | 52,221,000 | – | $ | 66,712,000 | $ | 40,030,000 | ||||||||||||||
2004 | $ | 23,941,000 | $ | 53,663,000 | – | $ | 23,083,000 | $ | 54,521,000 | ||||||||||||||
2003 | $ | 65,842,000 | $ | 49,748,000 | – | $ | 91,649,000 | $ | 23,941,000 | ||||||||||||||
Additions | ||||||||||||||||
Balance at | Charged to | |||||||||||||||
Beginning of | Costs and | Balance at | ||||||||||||||
Description | Period | Expenses | Deductions (1) | End of Period | ||||||||||||
Allowance for Doubtful Accounts - deducted from accounts receivable in the balance sheet | ||||||||||||||||
2006 | $ | 35,352,000 | $ | 39,746,000 | $ | 8,835,000 | $ | 66,263,000 | ||||||||
2005 | $ | 37,424,000 | $ | 52,221,000 | $ | 54,293,000 | $ | 35,352,000 | ||||||||
2004 | $ | 14,329,000 | $ | 53,663,000 | $ | 30,568,000 | $ | 37,424,000 | ||||||||
Liability related to Mortgage Services restructuring charge | ||||||||||||||||
2006 | $ | - | $ | 12,624,000 | $ | 5,066,000 | $ | 7,558,000 | ||||||||
(1) | Deductions from the Allowance for Doubtful Accounts reflect recoveries and charge-offs. Deductions from the restructuring charge liability represent payments made. |