Full Description

H&R Block, Inc. has subsidiaries that provide tax, retail banking, accounting and business consulting services and products. The Company’s Tax Services segment primarily consists of its income tax preparation businesses: retail, online and software. These businesses serve the general public in the United States, Canada and Australia. Additionally, this segment includes commercial tax businesses, which provide tax preparation software to certified public accountants (CPAs) and other tax preparers in the United States. Its Business Services segment consists of a national accounting, tax and business consulting firm primarily serving middle-market companies under the RSM McGladrey, Inc. (RSM) brand. Its Consumer Financial Services segment is engaged in retail banking through H&R Block Bank (HRB Bank). Effective November 1, 2008, the Company sold H&R Block Financial Advisors, Inc. (HRBFA) to Ameriprise Financial, Inc. (Ameriprise).

Tax Services

H&R Block, Inc’s Tax Services segment is primarily engaged in providing tax return preparation and related services and products in the United States and its territories, Canada and Australia. Major revenue sources include fees earned for tax preparation services performed at Company-owned retail tax offices, royalties from franchise retail tax offices, sales of tax-related services, sales of tax preparation and other software, online tax preparation fees, participation in refund anticipation loans (RALs) and Emerald Advance lines of credit. Segment revenues constituted 74.3% of its consolidated revenues from continuing operations during the fiscal year ended April 30, 2009 (fiscal 2009). Retail income tax return preparation and related services are provided by tax professionals via a system of retail offices operated directly by the Company or by franchisees. It also offers its services through seasonal offices located inside major retailers. H&R Block, Inc. together with its franchisees, prepared approximately 24 million tax returns worldwide during fiscal year 2009.

The Company offer a number of digital tax preparation alternatives. TaxCut from H&R Block enables do-it-yourself users to prepare their federal and state tax returns. Its software products may be purchased through third-party retail stores, direct mail or online. It also offers its clients many online options: multiple versions of do-it-yourself tax preparation; professional tax review; tax advice; and tax preparation through a tax professional, whereby the client completes a tax organizer and sends it to a tax professional for preparation and/or signature. By offering professional and do-it-yourself tax preparation options through multiple channels, it seeks to serve its clients in the manner they choose to be served. It also offers clients a number of options for receiving their income tax refund, including a check directly from the Internal Revenue Service (IRS), an electronic deposit directly to their bank account, a prepaid debit card, a refund anticipation check (RAC) or a RAL.

H&R Block, Inc. develops and markets TaxCut income tax preparation software. TaxCut offers a simple step-by-step tax preparation interview, data imports from money management software and tax preparation software, calculations, completion of the appropriate tax forms, checking for errors and electronic filing. It offers a range of online tax services, from tax advice to complete professional and do-it-yourself tax return preparation and electronic filing, through its Websites at www.hrblock.com and www.taxcut.com. It offers a refund discount (CashBack) program to its customers in Canada.

Business Services

The Company’s Business Services segment offers accounting, tax and business consulting services, wealth management and capital markets services to middle-market companies. Segment revenues constituted 22% of its consolidated revenues from continuing operations during fiscal 2009. This segment consists primarily of RSM McGladrey, Inc. (RSM), which provides accounting, tax and business consulting services in 93 cities and 25 states and offers services in 21 of the 25 top United States markets.

Consumer Financial Services

The Company’s Consumer Financial Services segment is engaged in providing retail banking offerings through HRB Bank, primarily to Tax Services clients in the United States. HRB Bank offers the H&R Block Prepaid Emerald MasterCard and Emerald Advance lines of credit through its Tax Services segment. HRB Bank also offers traditional banking services including prepaid debit card accounts, checking and savings accounts, individual retirement accounts and certificates of deposit. Segment revenues constituted 3.5% of its consolidated revenues from continuing operations in fiscal 2009. The operations of HRB Bank are primarily focused on providing limited retail banking services to tax clients of H&R Block.