SOURCE: H & R Block

H & R Block

March 07, 2013 16:03 ET

H&R Block Reports U.S. Tax Volume Through Feb. 28; Fiscal 2013 Third Quarter Earnings Ended Jan. 31

KANSAS CITY, MO--(Marketwire - Mar 7, 2013) - H&R Block, Inc. (NYSE: HRB), the world's largest consumer tax services provider, today released U.S. tax volume through Feb. 28 and fiscal 2013 third quarter earnings ended Jan. 31. As a result of significant tax legislation being passed shortly before the traditional start of the tax season and the resulting delay in opening the Internal Revenue Service's (IRS) e-file system, the start of the 2013 U.S. tax season has been subject to an unprecedented delay that has caused changes in the timing of taxpayer filing patterns. 

In a typical year, the IRS begins accepting tax returns by mid-January. This year, the IRS opened its e-file system on Jan. 30, just before the end of H&R Block's fiscal third quarter on Jan. 31. In addition, the IRS and other taxing jurisdictions did not accept certain tax forms until early March. As a result, the company believes industry-wide tax filings through Feb. 28 have been delayed by up to two weeks versus the comparable prior year period.

Total U.S. tax returns prepared by and through H&R Block were lower by 5.8 percent through Feb. 28.(1) The company estimates that industry-wide U.S. tax filings were down approximately 8 percent on a comparable date-to-date basis through Feb. 28. The company believes industry-wide U.S. filings will fully normalize and grow 1 to 2 percent by the end of the tax season.

CEO Perspective

"We entered this tax season with a very thoughtful plan and while we've had to make some adjustments due to the unprecedented delays and competitive factors, I am pleased with our execution to date," said Bill Cobb, H&R Block's president and chief executive officer. "Our analysis of industry data gives us confidence that we are on track with our plans for fiscal 2013." 

Third Quarter 2013 Highlights

  • Total revenues were lower by 29 percent, primarily driven by timing issues from the IRS opening its e-file system on Jan. 30 and the resulting delays to the start of the U.S. tax season
  • GAAP net loss from continuing operations of $17 million, or 6 cents per share, compared to prior year loss of $4 million, or 1 cent per share,(2) driven by the revenue shortfall from the aformentioned delays, partially offset by H&R Block's previously announced cost reduction initiatives and a $43 million income tax benefit resulting from a settlement with the IRS
  • Adjusted net loss of $60 million, or 22 cents per share, compared to break-even in prior year, primarily driven by the aforementioned delays to the start of the U.S. tax season
  • H&R Block remains on pace to deliver $85 to $100 million of pretax earnings from cost reduction initiatives in fiscal 2013

Third Quarter Results From Continuing Operations

         
    Actual   Adjusted*
in millions, except EPS   Q3 FY13   Q3 FY12   Q3 FY13   Q3 FY12
Revenue   $472   $663   $472   $663
EBITDA*   ($52)   $45   ($53)   $49
Pretax Income (Loss)   ($96)   ($1)   ($97)   $3
Net Income (Loss)   ($17)   ($4)   ($60)   $0
Shares Outstanding   271.5   293.0   271.5   293.0
EPS   ($0.06)   ($0.01)   ($0.22)   $0.00
                 

*Adjusted amounts and EBITDA (earnings before interest, taxes, depreciation and amortization) are non-GAAP financial measures. See "About Non-GAAP Financial Measures" below for more information regarding financial measures not prepared in accordance with generally accepted accounting principles (GAAP). 

CFO Perspective

"The delayed start to this tax season led to a material shift of business from our fiscal third quarter to our fiscal fourth quarter," said Greg Macfarlane, H&R Block's chief financial officer. "As a result, our third quarter results are not indicative of the results we expect to achieve this fiscal year. Our cost reduction initiatives remain on track and we continue to believe that we'll deliver significant earnings and margin expansion in fiscal 2013," added Macfarlane.

Business Segment Results and Highlights

Tax Services

  • Revenues were lower by $191 million, or 29 percent, primarily due to the delayed start of the U.S. tax season
  • H&R Block deferred $15 million of revenue to its fiscal fourth quarter, as the IRS did not accept returns that included certain forms prior to January 31
  • Pretax loss of $64 million compared to pretax income of $32 million in prior year, primarily due to the delayed start of the U.S. tax season

Corporate

  • Revenues of $7 million were essentially flat to prior year
  • Pretax loss improved by $1 million to $32 million

Third Quarter Results from Discontinued Operations

  • Net loss of $1 million compared to near break-even net earnings in prior year
  • Sand Canyon Corporation (SCC), a separate legal entity from H&R Block, Inc., received new claims during the quarter for alleged breaches of representations and warranties in the principal amount of $16 million
  • SCC reviewed claims in the principal amount of $9 million during the quarter, all of which were deemed invalid
  • SCC's accrual for contingent losses related to representations and warranties totaled $119 million at Jan. 31

Dividend

A previously announced quarterly cash dividend of 20 cents per share is payable on April 1, 2013 to shareholders of record as of March 18, 2013. The April 1 dividend payment will mark H&R Block's 202nd consecutive quarterly dividend since the company went public in 1962.

About H&R Block
H&R Block, Inc. (NYSE: HRB) is the world's largest consumer tax services provider. More than 600 million tax returns have been prepared worldwide by and through H&R Block since 1955. In fiscal 2012, H&R Block had annual revenues of $2.9 billion with 25.6 million tax returns prepared worldwide. Tax return preparation services are provided in company-owned and franchise retail tax offices by approximately 90,000 professional tax preparers, and through H&R Block At Home™ digital products. H&R Block Bank provides affordable banking products and services. For more information, visit the H&R Block Online Press Center.

About Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles, please see the section of the accompanying tables titled "About Non-GAAP Financial Measures."

Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "could" or "may" or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, income, earnings per share, capital expenditures, dividends, liquidity, capital structure or other financial items, descriptions of management's plans or objectives for future operations, products or services, or descriptions of assumptions underlying any of the above. All forward-looking statements speak only as of the date they are made and reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, a variety of economic, competitive and regulatory factors, many of which are beyond the Company's control and which are described in our Annual Report on Form 10-K for the fiscal year ended April 30, 2012 in the section entitled "Risk Factors," as well as additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties. 

(1) Unless otherwise noted, all comparisons, including those made to the "prior year," refer to the current period compared to the prior year period.

(2) All per share amounts are based on fully diluted shares.

                 
H&R BLOCK  
KEY OPERATING RESULTS  
Unaudited, amounts in thousands, except per share data  
                     
    Three months ended January 31,  
    Revenues   Income (loss)  
    2013   2012   2013     2012  
                             
Tax Services   $ 464,634   $ 655,701   $ (64,189 )   $ 31,716  
Corporate and Eliminations     7,345     7,579     (32,079 )     (32,742 )
    $ 471,979   $ 663,280     (96,268 )     (1,026 )
Income taxes (benefit)                 (79,353 )     2,541  
Net loss from continuing operations                 (16,915 )     (3,567 )
Net income (loss) from discontinued operations                 (793 )     218  
Net loss               $ (17,708 )   $ (3,349 )
                             
Basic and diluted loss per share:                            
  Net loss from continuing operations               $ (0.06 )   $ (0.01 )
  Net income (loss) from discontinued operations                 (0.01 )     -  
  Net loss               $ (0.07 )   $ (0.01 )
                             
Basic and diluted shares                 271,542       292,963  
                             
    Nine months ended January 31,  
    Revenues   Income (loss)  
    2013   2012   2013     2012  
                             
Tax Services   $ 684,706   $ 868,144   $ (335,203 )   $ (311,733 )
Corporate and Eliminations     21,025     24,953     (92,622 )     (93,823 )
    $ 705,731   $ 893,097     (427,825 )     (405,556 )
Income tax benefit                 (204,061 )     (159,821 )
Net loss from continuing operations                 (223,764 )     (245,735 )
Net loss from discontinued operations                 (6,628 )     (74,436 )
Net loss               $ (230,392 )   $ (320,171 )
                             
Basic and diluted loss per share:                            
  Net loss from continuing operations               $ (0.82 )   $ (0.82 )
  Net loss from discontinued operations                 (0.02 )     (0.25 )
  Net loss               $ (0.84 )   $ (1.07 )
                             
Basic and diluted shares                 273,281       299,450  
                             
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                

Basic earnings per share is computed using the two-class method and is based on the weighted average number of shares outstanding. The dilutive effect of potential common shares is included in diluted earnings per share, except in those periods with a loss from continuing operations. 

On October 25, 2012, we issued $500.0 million of 5.50% Senior Notes. The Senior Notes are due November 1, 2022, and are not redeemable by the bondholders prior to maturity, although we have the right to redeem some or all of these notes at any time, at specified redemption prices. On October 25, 2012, we provided notice to the trustee of our intention to redeem the entire principal amount of the $600.0 million Senior Notes due in January 2013. The redemption settled on November 26, 2012 at a price of $623.0 million, which included full payment of principal, a make-whole premium of $5.8 million and interest accrued up to the redemption date of $17.2 million. Proceeds of the $500.0 million Senior Notes and other cash balances were used to repay the $600.0 million Senior Notes. We recognized a loss on the extinguishment of this debt of $5.8 million during the three months ended January 31, 2013, which primarily represents the interest that would have been paid on these notes if they had not been redeemed prior to maturity. This loss is included in other income (expense), net on our consolidated statements of operations.

                   
H&R BLOCK  
CONSOLIDATED BALANCE SHEETS  
Unaudited, amounts in thousands, except per share data  
                   
    January 31,     January 31,     April 30,  
    2013     2012     2012  
ASSETS                        
Current assets:                        
  Cash and cash equivalents   $ 418,385     $ 1,218,984     $ 1,944,334  
  Cash and cash equivalents - restricted     37,958       34,168       48,100  
  Receivables, net     949,160       1,035,902       193,858  
  Prepaid expenses and other current assets     331,046       230,612       314,702  
    Total current assets     1,736,549       2,519,666       2,500,994  
                           
  Mortgage loans held for investment, net     357,887       430,189       406,201  
  Investments in available-for-sale securities     396,312       312,183       371,315  
  Property and equipment, net     290,165       260,755       252,985  
  Intangible assets, net     271,523       268,148       264,451  
  Goodwill     435,256       433,595       427,566  
  Other assets     444,804       628,253       426,055  
Total assets   $ 3,932,496     $ 4,852,789     $ 4,649,567  
                         
LIABILITIES AND STOCKHOLDERS' EQUITY                        
Current liabilities:                        
  Commercial paper borrowings   $ 424,967     $ 230,947     $ -  
  Customer banking deposits     1,036,968       1,587,988       827,549  
  Accounts payable, accrued expenses and other current liabilities     479,660       597,644       567,079  
  Accrued salaries, wages and payroll taxes     103,538       130,245       163,992  
  Accrued income taxes     17,348       40,596       336,374  
  Current portion of long-term debt     713       630,996       631,434  
  Federal Home Loan Bank borrowings     -       25,000       -  
    Total current liabilities     2,063,194       3,243,416       2,526,428  
                           
  Long-term debt     906,012       409,241       409,115  
  Other noncurrent liabilities     328,402       393,683       388,132  
    Total liabilities     3,297,608       4,046,340       3,323,675  
                         
Stockholders' equity:                        
  Common stock, no par, stated value $.01 per share     3,166       3,994       3,979  
  Additional paid-in capital     747,398       797,853       796,784  
  Accumulated other comprehensive income     9,055       7,409       12,145  
  Retained earnings     723,676       2,018,252       2,523,997  
  Less treasury shares, at cost     (848,407 )     (2,021,059 )     (2,011,013 )
    Total stockholders' equity     634,888       806,449       1,325,892  
Total liabilities and stockholders' equity   $ 3,932,496     $ 4,852,789     $ 4,649,567  
                         
                         
H&R BLOCK  
CONSOLIDATED STATEMENTS OF OPERATIONS  
Unaudited, amounts in thousands, except per share data  
                         
    Three months ended January 31,     Nine months ended January 31,  
    2013     2012     2013     2012  
Revenues:                                
  Service revenues   $ 362,194     $ 524,240     $ 558,528     $ 717,243  
  Product and other revenues     71,485       99,564       89,171       116,117  
  Interest income     38,300       39,476       58,032       59,737  
      471,979       663,280       705,731       893,097  
                                 
Expenses:                                
  Cost of revenues:                                
    Compensation and benefits     160,081       207,480       254,430       316,139  
    Occupancy and equipment     84,710       93,024       247,059       263,078  
    Depreciation and amortization of property and equipment     20,067       17,770       54,299       50,894  
    Provision for bad debt and loan losses     43,028       52,932       51,398       68,423  
    Interest     19,428       23,543       64,895       69,352  
    Other     50,304       60,491       110,972       127,551  
      377,618       455,240       783,053       895,437  
  Impairment of goodwill     -       -       -       4,257  
  Selling, general and administrative expenses     186,997       211,736       352,802       408,144  
      564,615       666,976       1,135,855       1,307,838  
                                 
Operating loss     (92,636 )     (3,696 )     (430,124 )     (414,741 )
Other income (expense), net     (3,632 )     2,670       2,299       9,185  
                                 
Loss from continuing operations before taxes (benefit)     (96,268 )     (1,026 )     (427,825 )     (405,556 )
Income taxes (benefit)     (79,353 )     2,541       (204,061 )     (159,821 )
                                 
Net loss from continuing operations     (16,915 )     (3,567 )     (223,764 )     (245,735 )
Net income (loss) from discontinued operations     (793 )     218       (6,628 )     (74,436 )
                                 
Net loss   $ (17,708 )   $ (3,349 )   $ (230,392 )   $ (320,171 )
                                 
Basic and diluted loss per share:                                
  Net loss from continuing operations   $ (0.06 )   $ (0.01 )   $ (0.82 )   $ (0.82 )
  Net income (loss) from discontinued operations     (0.01 )     -       (0.02 )     (0.25 )
  Net loss   $ (0.07 )   $ (0.01 )   $ (0.84 )   $ (1.07 )
                                   
  Basic and diluted shares     271,542       292,963       273,281       299,450  
         
         
H&R BLOCK  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
Unaudited, amounts in thousands  
             
    Nine months ended January 31,  
    2013     2012  
                 
Net cash used in operating activities   $ (1,311,926 )   $ (1,382,771 )
                 
Cash flows from investing activities:                
  Purchases of available-for-sale securities     (108,351 )     (178,014 )
  Sales, maturities and payments received on available-for-sale securities     86,808       40,473  
  Principal repayments on mortgage loans held for investment, net     31,205       35,460  
  Purchases of property and equipment, net     (96,063 )     (71,549 )
  Payments made for acquisitions of businesses and intangibles, net     (20,662 )     (16,022 )
  Proceeds from sales of businesses, net     1,212       533,055  
  Franchise loans:                
    Loans funded     (68,874 )     (43,649 )
    Payments received     9,594       8,455  
  Other, net     (15,185 )     15,321  
    Net cash provided by (used in) investing activities     (180,316 )     323,530  
                 
Cash flows from financing activities:                
  Repayments of commercial paper     (789,271 )     (413,221 )
  Proceeds from commercial paper     1,214,238       644,168  
  Repayments of long-term debt     (636,621 )     -  
  Proceeds from issuance of long-term debt     497,185       -  
  Customer banking deposits, net     208,753       735,252  
  Dividends paid     (162,692 )     (150,058 )
  Repurchase of common stock, including shares surrendered     (340,298 )     (180,566 )
  Proceeds from exercise of stock options, net     11,529       (324 )
  Other, net     (36,113 )     (31,424 )
      Net cash provided by (used in) financing activities     (33,290 )     603,827  
                 
Effects of exchange rates on cash     (417 )     (3,446 )
                 
Net decrease in cash and cash equivalents     (1,525,949 )     (458,860 )
Cash and cash equivalents at beginning of the period     1,944,334       1,677,844  
Cash and cash equivalents at end of the period   $ 418,385     $ 1,218,984  
                 
Supplementary cash flow data:                
  Income taxes paid, net   $ 104,986     $ 163,471  
  Interest paid on borrowings     62,160       55,266  
  Interest paid on deposits     4,377       5,170  
  Transfers of foreclosed loans to other assets     7,208       6,521  
                             
                             
H&R BLOCK  
U.S. TAX OPERATING DATA  
(in thousands)  
                             
    1/31/13 FYTD 2013   1/31/12 FYTD 2012   Percent change     2/28/13 FYTD 2013   2/28/12 FYTD 2012   Percent change  
Total returns prepared: (1)                            
                             
  H&R Block Company-owned operations   1,695   2,352   -27.9 %   5,194   5,672   -8.4 %
  H&R Block Franchise operations   1,143   1,579   -27.6 %   3,406   3,658   -6.9 %
    Total H&R Block retail operations   2,838   3,931   -27.8 %   8,600   9,330   -7.8 %
                               
  H&R Block At Home Desktop   538   664   -19.0 %   1,218   1,372   -11.2 %
  H&R Block At Home Online   1,057   1,330   -20.5 %   3,041   2,892   5.2 %
    Sub-total   1,595   1,994   -20.0 %   4,259   4,264   -0.1 %
                               
  H&R Block Free File Alliance   86   209   -58.9 %   426   508   -16.1 %
    Total H&R Block At Home   1,681   2,203   -23.7 %   4,685   4,772   -1.8 %
    Total H&R Block Returns   4,519   6,134   -26.3 %   13,285   14,102   -5.8 %
                             
(1) Prior year numbers have been reclassified between company-owned and franchise operations for offices which were refranchised during either year.  
                         
   
H&R BLOCK  
NON-GAAP FINANCIAL MEASURES  
Unaudited, amounts in thousands, except per share amounts  
                         
    Three months ended January 31,     Nine months ended January 31,  
EBITDA and Adjusted EBITDA (1)   2013     2012     2013     2012  
                                 
Net loss from continuing operations - as reported   $ (16,915 )   $ (3,567 )   $ (223,764 )   $ (245,735 )
                                 
Add back :                                
  Income taxes     (79,353 )     2,541       (204,061 )     (159,821 )
  Interest expense     19,428       23,543       64,895       69,352  
  Depreciation and amortization     24,638       22,506       67,242       66,127  
      (35,287 )     48,590       (71,924 )     (24,342 )
                                 
EBITDA from continuing operations     (52,202 )     45,023       (295,688 )     (270,077 )
                                 
Adjustments:                                
  Loss contingencies - litigation charges     (190 )     4,171       (4,943 )     27,528  
  Impairment of goodwill and intangible assets     -       -       1,421       8,237  
  Severance     (582 )     (190 )     475       1,920  
  Loss (gain) on sales of tax offices     (352 )     229       (876 )     1,141  
      (1,124 )     4,210       (3,923 )     38,826  
                                 
Adjusted EBITDA from continuing operations   $ (53,326 )   $ 49,233     $ (299,611 )   $ (231,251 )
                                 
Non-GAAP Pretax Results                                
                                 
Pretax loss from continuing operations - as reported   $ (96,268 )   $ (1,026 )   $ (427,825 )   $ (405,556 )
                                 
Add back :                                
  Loss contingencies - litigation charges     (190 )     4,171       (4,943 )     27,528  
  Impairment of goodwill and intangible assets     -       -       1,421       8,237  
  Severance     (582 )     (190 )     475       1,920  
  Loss (gain) on sales of tax offices     (352 )     229       (876 )     1,141  
      (1,124 )     4,210       (3,923 )     38,826  
                                 
Pretax income (loss) from continuing operations - as adjusted   $ (97,392 )   $ 3,184     $ (431,748 )   $ (366,730 )
                                 
Non-GAAP After-Tax Results                                
                                 
Net loss from continuing operations - as reported   $ (16,915 )   $ (3,567 )   $ (223,764 )   $ (245,735 )
                                 
Add back (net of tax) :                                
  Loss contingencies - litigation charges     (126 )     2,643       (3,032 )     16,767  
  Impairment of goodwill and intangible assets     3       36       872       5,017  
  Severance     (355 )     (107 )     291       1,169  
  Loss (gain) on sales of tax offices     (217 )     144       (537 )     695  
  Discrete tax items     (42,852 )     1,162       (38,679 )     (1,289 )
      (43,547 )     3,878       (41,085 )     22,359  
                                 
Net income (loss) from continuing operations - as adjusted   $ (60,462 )   $ 311     $ (264,849 )   $ (223,376 )
                                 
                         
(1) Earnings before interest, taxes, depreciation and amortization.  
                         
    Three months ended January 31,     Nine months ended January 31,  
Non-GAAP EPS   2013     2012     2013     2012  
                                 
EPS from continuing operations - as reported   $ (0.06 )   $ (0.01 )   $ (0.82 )   $ (0.82 )
                                 
Add back :                                
  Loss contingencies - litigation charges     -       0.01       (0.01 )     0.05  
  Impairment of goodwill and intangible assets     -       -       -       0.02  
  Severance     -       -       -       -  
  Loss (gain) on sales of tax offices     -       -       -       -  
  Discrete tax items     (0.16 )     -       (0.14 )     -  
      (0.16 )     0.01       (0.15 )     0.07  
                                 
EPS from continuing operations - as adjusted   $ (0.22 )   $ -     $ (0.97 )   $ (0.75 )
                                 
Non-GAAP Pretax Results - Tax Services segment                                
                                 
Pretax income (loss) - as reported   $ (64,189 )   $ 31,716     $ (335,203 )   $ (311,733 )
                                 
Add back :                                
  Loss contingencies - litigation charges     (440 )     4,171       (5,193 )     27,527  
  Impairment of goodwill and intangible assets     -       -       1,421       8,237  
  Severance     (612 )     (350 )     480       1,760  
  Loss (gain) on sales of tax offices     (352 )     229       (876 )     1,141  
      (1,404 )     4,050       (4,168 )     38,665  
                                 
Pretax income (loss) - as adjusted   $ (65,593 )   $ 35,766     $ (339,371 )   $ (273,068 )
                                 
                                 
Supplemental Information                                
                                 
Stock-based compensation expense:                                
  Pretax   $ 3,677     $ 3,223     $ 11,414     $ 11,047  
  After-tax     2,271       1,998       7,001       6,729  
Amortization of intangible assets:                                
  Pretax   $ 4,570     $ 4,736     $ 12,942     $ 15,233  
  After-tax     2,821       2,930       7,939       9,278  

About Non-GAAP Financial Measures

The accompanying press release contains non-GAAP financial measures. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with accounting principles generally accepted in the United States (GAAP). Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures in other companies.

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

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

  • We exclude from our non-GAAP financial measures litigation charges we incur and favorable reserve adjustments. This does not include normal legal defense costs.
  • We exclude from our non-GAAP financial measures non-cash charges to adjust the carrying values of goodwill, intangible assets, other long-lived assets and investments to their estimated fair values.
  • We exclude from our non-GAAP financial measures severance and other restructuring charges in connection with the termination of personnel, closure of facilities and related costs.
  • We exclude from our non-GAAP financial measures the gains and losses on business dispositions, including investment banking, legal and accounting fees.
  • We exclude from our non-GAAP financial measures the effects of discrete income tax reserve and related adjustments recorded in a specific quarter.

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

We measure the performance of our business using a variety of metrics, including EBITDA, adjusted EBITDA, adjusted pretax and net income of continuing operations, adjusted EPS and adjusted pretax results of our Tax Services segment. We also use EBITDA and pretax income of continuing operations as factors in incentive compensation calculations for our employees. These adjusted results eliminate the impact of items that we do not consider indicative of our core operating performance and, we believe, provide meaningful information to assist in understanding our financial results, analyzing trends in our underlying business, and assessing our prospects for future performance.

Contact Information

  • For Further Information
    Investor Relations:
    Derek Drysdale
    (816) 854-4513
    Email Contact

    Media Relations:
    Gene King
    (816) 854-4672
    Email Contact