H&r Block, Inc. · NYSE:HRB
H&r Block — Credit Suisse Global Services Conference 2012
28 slides from H&r Block's conference presentation, Mar 12, 2012
Slide 1: H&R Block at Credit Suisse Global Services Conference
Exhibit 99.1 H&R BLOCK’ NEVER SETTLE FOR LESS” Credit Suisse Global Services Conference March 12, 2012
Slide 2: Safe Harbor Statement
Safe Harbor Statement HER BLOCK. Forward Looking Statements This presentation and various comments made in connection with it may contain forward- looking statements within the meaning of the federal securities laws. Forward-looking statements can be identified by the fact that they do not relate st
Slide 3: Today's Agenda
Today’s Agenda ; Company Overview Industry Overview Recent Performance Long Term Outlook
Slide 4: H&R Block Overview
H&R Block Overview an sLocte @ Largest tax return preparer in the world = 24.5 million returns prepared worldwide in FY11 = 575+ million returns prepared since 1955 = Only tax preparer capable of serving clients across the assisted, online and software markets = 12,000+ offices worldwide with ~100,0
Slide 5: Organizational Focus
Organizational Focus a THEN NOW HRB HRB Broker- | 5 Dealer | RSM DigtalTax | | Ginancia Option One Sustainable and reliable earnings Mortgage Assisted —) Ls Consulting Me) Non-core || | Financial Digital Wi Quality earnings, high margins Significant cash flow Low capital requirements
Slide 6: Sustainable Earnings
Sustainable Earnings Consistent growth drives value iraq Wer & $1,000 eet $900 Tax Services Segment $800 $700 $600 & $600 = $400 $300 $200 severe recession F npermnaiion $100 $0 FLEE EES SEES EES EEE EEES SES GL SPE Sg POP OOS SSS SSIS I SS os PP PF ee ee =o Markel Cis buble franara ele eres “eesion
Slide 7: Stronger Margins
Stronger Margins = Margins of the core business have continued to strengthen ™ >20% pretax margin in each of past five years FY07 FY08 FY09 FY10 Evatt Note 1: Pro-forma adjusted to reflect RSM as a discontinued operation Note 2: Presented information represents non-GAAP financial measures — see reco
Slide 8: Effective Cost Management
Effective Cost Management Effective cost control delivers margin expansion 4 $1,600 9% $1,500 1 $1,400 $1,300 - $1,200 FYO7 FY08 FY09 FY10 mmExpenses -#Year-over-year change Note 1: Pro-forma adjusted to reflect RSM as a discontinued operation Note 2: Presented information represents non-GAAP financ
Slide 9: Consistent Return of Capital
Consistent Return of Capital a Returning capital to shareholders is a top priority Dividend maintained despite losses $1.2 billion = 90% of Net Income $451 $467 $353 $187 a $297 & [ig 5 $184 $199 $280 $181 $184 $99 FYO7 FY08 FYO9 FY10 FY11 m Share Repurchases = Dividends Paid
Slide 10: Dividend
Dividend ™ 33% increase to $0.80 per share effective January 2012 ™ 198 consecutive quarterly dividends $0.60 $0.60 FYOS FY06 FYO7 FYO8 FYO9 FY10 FY11 FY12 (p)FY13(p) Note: Represents cash dividends paid. e
Slide 11: Dividend Yield
Dividend Yield 33% increase a bold move for HRB Superior yield to investors Confident in business and future Compelling investment 4.9% 4.3% 2.0% 1.0% Intuit S&P 500 Dow Jones —H&R Block* Utilities Avg. Index Note: Represents yield as of March 1, 2012 * Yield includes new annual dividend rate H&R BL
Slide 12: Share Repurchase
Share Repurchase a m@ Repurchased 13 million shares in Q2 at $13.61 per share ™ 4.3% share reduction; $0.05 EPS accretion m= Lowered minimum equity covenant on committed line of credit (‘CLOC”) to $500 million on 3/2/12 Percent of Net Income Fy09-FY11 ™ Share Repurchase ™ Dividends m Retained Earnin
Slide 13: Capital Allocation Conclusion
Capital Allocation Conclusion a Confident in our business, competitive position and future prospects Regular Return of Capital Financial Prudent Flexibility Investment B
Slide 14: Industry Overview
Today’s Agenda Dees Industry Overview
Slide 15: IRS Filings
_IRSFiings A i NOVERSETEFORLESS = Total IRS filings have historically grown 1 to 2% annually* = 2011 IRS filings up 1.7% = Non-farm employment typically best indicator for IRS growth (+1.3%)** 160 140 - 40 20 i) SO OERS REE BEE OE OSE BESEREESSREEBE BERESSSSSSELKELSSSESSSRSESSSBEBE BIFSISSSSISSSSFAS
Slide 16: Assisted vs. DIY Tax Preparation
Assisted vs. DIY Tax Preparation = Assisted = Assisted remains resilient due to tax code complexity and value tax professionals provide clients = No change in proportion of Assisted vs. DIY returns in last decade = DIY = Digital online has grown at 19% CAGR over last 4 yrs at expense of pen and pape
Slide 17: Tax Filer Mix by Method, TS11 vs TS14
H&R BLOCK’ Ts11 TS14 Nearly 131 million total filers Nearly 137 million total filers Online Do-it- 32% Yourself 40% Pen& Paper Paper 7% 3% Note: Tax season defined as January 1 through April 30 7 Note: Online category includes Free File Alliance
Slide 18: Recent Performance
Today’s Agenda Dees 4 ‘ r ( Recent Performance
Slide 19: FY11 Recap
FY11 Recap I) esnmoce = Total worldwide returns up ~6% to 24.5 mm = U.S returns up 6.5% --- best client growth since 2001 = Assisted and Digital share gains — first time since 2002 @ International returns up 1%; revenues up ~8% to $206 mm m H&R Block Bank processed nearly 6 mm RACs and 2.3 mm Emeral
Slide 20: Tax Season 2012 Initiatives
Tax Season 2012 Initiatives an BLock NOVERSETEFORLESS m Assisted: = Continue growing clients = Aggressive marketing = Targeted value offerings (Free 1040 EZ, Free 2"4 Look, Free RACs) = Improve client service to drive satisfaction and retention = Block Live @ Digital: = Outpace Turbo Tax in total di
Slide 21: Interim U.S. Tax Results
Interim U.S. Tax Results: Fiscal Year to Date Thru 2/28 Total returns up 5.1% to 14.1 million (millions) Total Returns Prepared: Assisted +1.6% 9,330 9,180 FY11 - 2/28 FY12 - 2/28 m= Retail = Total assisted returns up 1.6% = 1040 EZ very effective = Well positioned to grow clients = Retention up ~ 4
Slide 22: Long Term Outlook
Today’s Agenda Dees Long Term Outlook
Slide 23: Looking Ahead — Assisted
Looking Ahead — Assisted a ™@ Well positioned to grow clients as segment leader = Segment consolidation — continued pressure on competitors * Regulatory compliance « Shrinking RAL market ™ Targeted value offerings @ Client acquisition and retention initiatives @ Block Live 23
Slide 24: Looking Ahead — Online
Looking Ahead — Online a @ Digital is an important “on-ramp” to our assisted services = Committed to aggressive client and segment share growth = Continued improvements to our website and products = Aggressively promote “Free” = Continue to improve awareness — up 13 pts through 2/28 @ Invest in mobi
Slide 25: Conclusion
Conclusion — = Positioning for long-term growth in revenue and earnings ® Significant free cash flow generation — “Death and Taxes” ™ Strong execution and cost discipline ™@ Very low capital requirements ™ Sound capital structure; financial flexibility 25
Slide 26: Appendix
a H&R BLOCK’ NEVER SETTLE FOR LESS” Appendix March 12, 2012
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation HER BLOCK. FYO7, pry a ae ie = = Peccer frame Peceey Oseaay (eeccay vera] [roman rereee| (resus come Reece sere oo feel fee $ 37a $ 2701 $ Aes S BMTZ $ AONE $ 318L1 $ 3503 5 ZOE $ 37743 5 2988 $ om3$ me $ mS om Sf 3 - S$ - S$ oF Of S$ 375 37 S$ MES 16 5 BES 245 27 27 79 79 as
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation HER BLOCK. $maions REVENUES: As Previously Reported $ 37104 $40956 $40836 $38743 $37743 Less: RSM McGladrey (9324) (941.7) (897.8) (8803) (829.8) Plus: intercompany Elrrinations 24 29 14 og Os Pro Forma Revenues $ 27e04 $3147 $3187 $30148 $29450 OPERATING EXPENSES: ‘As Previo
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