KANSAS CITY, MO--(Marketwired - March 04, 2015) - H&R Block, Inc. (NYSE: HRB), the world's largest consumer tax services provider, today released its financial results for the fiscal 2015 third quarter ended January 31, 2015 and U.S. tax volume through February 28.
As a result of an earlier opening of the Internal Revenue Service's (IRS) e-file system this tax season, the company reported a $309 million
The company continued its focus on driving revenue growth through improved monetization and product attach rates and believes it is on pace to achieve these goals in fiscal 2015. As of February 28, 2015, total U.S. tax returns prepared by and through H&R Block declined 4.2% as compared to the prior fiscal year. Changing tax filer timing, Affordable Care Act (ACA) form delays and errors, the carryover impact of eliminating certain promotions last tax season, competitor pricing actions and continued industry-wide fraud issues have resulted in a decline in lower-value returns.
"Despite being disappointed by the decline in early season volume, we are pleased with our monetization, overall return mix, and Tax Plus product attach rates through both our assisted channel and digital do-it-yourself products," said Bill Cobb, H&R Block's president and chief executive officer. "I'm also proud of how our organization has handled the implementation of the Affordable Care Act, which is the most significant change to the tax code in decades. Though it's too early to determine the impact of the ACA on this tax season, we are well positioned to deliver exceptional value to our clients as this plays out over the next several years."
Tax Industry Fraud
As the industry leader, H&R Block remains focused on addressing the growing industry-wide issue of tax fraud. Tax fraud is not new to the tax preparation industry and recent media coverage of fraud related to do-it-yourself tax software shows how aggressive those perpetrating fraud are becoming. The problem is growing rapidly, with the IRS estimating the total impact of tax identity fraud at greater than $5 billion in 2013. Similarly, the U.S. Treasury Department has estimated that improper payments related to the Earned Income Tax Credit (EITC) amount to $16 to $19 billion annually, up from estimates of $13 to $15 billion last year.
H&R Block will continue to advocate for change that benefits consumers by strengthening anti-fraud measures. The company's efforts are having an impact, as evidenced by Congress's direction last year to the U.S. Treasury Department to implement consistent requirements across all tax preparation methods for those applying for the EITC. H&R Block continues to advocate for a clear implementation plan from the Treasury Department that puts these new standards in place in time for the 2016 tax season. The company is also continuing to advocate for minimum federal standards for all paid tax preparers. Without minimum standards, taxpayers will continue to be victimized by individuals who are insufficiently trained or worse, knowingly commit fraud.
"We have led the conversation regarding tax return fraud and the need for reform for years, while our competitors in the tax preparation industry have just recently joined the discussion," said Cobb. "We urge the Treasury Department to implement Congress's direction in time for tax season 2016. We need all players in the industry -- the IRS, Treasury, Congress, professional tax preparers, tax preparation software makers, and taxpayers -- to join together to help create solutions. These issues are taking tens of billions of dollars out of taxpayers' pockets."
Fiscal 2015 Third Quarter Highlights
- Total revenues increased $309 million to $509 million primarily due to an earlier opening of the IRS's e-file system
- Seasonal net loss from continuing operations improved to $35 million, or $0.13 per share
- Non-GAAP adjusted loss per share
3 from continuing operations is $0.13
Fiscal 2015 Third Quarter Results From Continuing Operations
Actual Adjusted
------------------------ ------------------------
(in millions, except Fiscal Year Fiscal Year Fiscal Year Fiscal Year
EPS) 2015 2014 2015 2014
------------------------------------ ----------- ----------- -----------
Revenue $ 509 $ 200 $ 509 $ 200
----------------------------------------------------------------------------
EBITDA $ (38) $ (302) $ (37) $ (301)
----------------------------------------------------------------------------
Pretax Loss $ (91) $ (348) $ (89) $ (347)
----------------------------------------------------------------------------
Net Loss $ (35) $ (213) $ (34) $ (212)
----------------------------------------------------------------------------
Weighted-Avg. Shares -
Diluted 275.2 274.1 275.2 274.1
----------------------------------------------------------------------------
EPS $ (0.13) $ (0.78) $ (0.13) $ (0.78)
----------------------------------------------------------------------------
Business Segment Financial Results and Highlights
Tax Services
- Revenues increased 159.3% to $503 million, driven mainly by the earlier opening of the IRS's e-file system. In fiscal 2014, the IRS opened e-file on January 30, which resulted in a significant shift of revenue from the fiscal third quarter to the fiscal fourth quarter of that year.
- Total operating expenses increased 12.3% to $571 million, driven by the variable costs associated with tax return preparation and increased training costs.
- Adjusted non-GAAP pretax loss decreased 77.1% to $74 million, primarily due to the timing shift in revenues mentioned above.
Corporate
- Pretax loss decreased by $10 million to $15 million, primarily as a result of lower interest expense due to the repayment of a $400 million note in October 2014 and reduced legal and consulting fees.
Discontinued Operations
- Sand Canyon Corporation (SCC), a separate legal entity from H&R Block, Inc., continued to engage in constructive settlement discussions with counterparties that have made and are expected to assert a significant majority of previously denied and possible future representation and warranty claims.
- During the third quarter, SCC entered into a settlement agreement to resolve certain of these claims. The settlement amount was fully covered by prior accruals and was paid in the fiscal third quarter.
- SCC's accrual for contingent losses related to representation and warranty claims was $144 million at January 31.
Dividends
As just announced, a quarterly cash dividend of 20 cents per share is payable on April 1, 2015 to shareholders of record as of March 16, 2015. The April 1 dividend payment will be H&R Block's 210
Fiscal Third Quarter Conference Call
http://investors.hrblock.comhttp://investors.hrblock.com.
About H&R Block http://newsroom.hrblock.com/.
About Non-GAAP Financial Information
This press release and the accompanying tables include non-GAAP financial information. 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 "Non-GAAP Financial Information."
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, 2014 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) All amounts in this release are unaudited. Unless otherwise noted, all
comparisons refer to the current period compared to the corresponding
prior year period.
(2) All per share amounts are based on fully diluted shares.
(3) The company reports adjusted financial performance, which it believes is
a better indication of the company's recurring operations. The company
also reports EBITDA (earnings before interest, taxes, depreciation and
amortization), a non-GAAP financial measure, which the company finds
relevant when measuring its performance. See "About Non-GAAP Financial
Information" below for more information regarding financial measures not
prepared in accordance with generally accepted accounting principles
(GAAP).
----------------------------------------------------------------------------
(unaudited, in 000s - except per share
KEY OPERATING RESULTS data)
----------------------------------------------------------------------------
Three months ended January 31,
-----------------------------------------
Revenues Income (loss)
------------------- ---------------------
2015 2014 2015 2014
--------- --------- ---------- ----------
Tax Services $ 503,008 $ 193,996 $ (75,428) $(322,099)
Corporate and Eliminations 6,066 5,774 (15,437) (25,726)
--------- --------- ---------- ----------
$ 509,074 $ 199,770 (90,865) (347,825)
--------- ---------
Income tax benefit (55,554) (135,074)
---------- ----------
Net loss from continuing
operations (35,311) (212,751)
Net loss from discontinued
operations (1,637) (1,960)
---------- ----------
Net loss $ (36,948) $(214,711)
---------- ----------
Basic and diluted loss per share:
Continuing operations $ (0.13) $ (0.78)
Discontinued operations - -
---------- ----------
Consolidated $ (0.13) $ (0.78)
---------- ----------
Basic and diluted shares 275,190 274,110
-----------------------------------------
Nine months ended January 31,
-----------------------------------------
Revenues Income (loss)
------------------- ---------------------
2015 2014 2015 2014
--------- --------- ---------- ----------
Tax Services $ 760,771 $ 443,727 $(402,630) $(625,807)
Corporate and Eliminations 16,517 17,578 (64,624) (85,874)
--------- --------- ---------- ----------
$ 777,288 $ 461,305 (467,254) (711,681)
--------- ---------
Income tax benefit (209,865) (282,645)
---------- ----------
Net loss from continuing
operations (257,389) (429,036)
Net loss from discontinued
operations (7,789) (5,805)
---------- ----------
Net loss $(265,178) $(434,841)
---------- ----------
Basic and diluted loss per share:
Continuing operations $ (0.94) $ (1.57)
Discontinued operations (0.03) (0.02)
---------- ----------
Consolidated $ (0.97) $ (1.59)
---------- ----------
Basic and diluted shares 274,957 273,699
-------------------------------------------------------------------------------
(unaudited, in 000s - except per
CONSOLIDATED BALANCE SHEETS share data)
-------------------------------------------------------------------------------
January January April
As of 31, 2015 31, 2014 30, 2014
------------------------------------------- ----------- ----------- -----------
ASSETS
Cash and cash equivalents $1,321,134 $ 437,404 $2,185,307
Cash and cash equivalents - restricted 51,085 44,855 115,319
Receivables, net 777,453 677,221 191,618
Prepaid expenses and other current assets 260,802 345,231 198,267
Investments in available-for-sale
securities 367,845 - 423,495
----------- ----------- -----------
Total current assets 2,778,319 1,504,711 3,114,006
Mortgage loans held for investment, net 245,663 282,149 268,428
Investments in available-for-sale
securities 7,883 443,770 4,329
Property and equipment, net 308,805 314,565 304,911
Intangible assets, net 443,329 318,719 355,622
Goodwill 442,961 437,386 436,117
Other assets 151,981 213,987 210,116
----------- ----------- -----------
Total assets $4,378,941 $3,515,287 $4,693,529
----------- ----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Commercial paper borrowings $ 591,486 $ 194,984 $ -
Customer banking deposits 1,286,216 806,887 769,785
Accounts payable, accrued expenses and
other current liabilities 472,490 520,121 569,007
Accrued salaries, wages and payroll taxes 118,512 108,583 167,032
Accrued income taxes 1,619 23,375 406,655
Current portion of long-term debt 781 400,570 400,637
----------- ----------- -----------
Total current liabilities 2,471,104 2,054,520 2,313,116
Long-term debt 505,460 505,959 505,837
Other noncurrent liabilities 255,992 268,049 318,027
----------- ----------- -----------
Total liabilities 3,232,556 2,828,528 3,136,980
----------- ----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, stated value $.01
per share 3,166 3,166 3,166
Convertible preferred stock, no par,
stated value $0.01 per share - - -
Additional paid-in capital 778,845 762,102 766,654
Accumulated other comprehensive income
(loss) (1,263) (4,776) 5,177
Retained earnings 1,158,376 734,233 1,589,297
Less treasury shares, at cost (792,739) (807,966) (807,745)
----------- ----------- -----------
Total stockholders' equity 1,146,385 686,759 1,556,549
----------- ----------- -----------
Total liabilities and stockholders'
equity $4,378,941 $3,515,287 $4,693,529
----------- ----------- -----------
-------------------------------------------------------------------------------
----------------------------------------------------------------------------
(unaudited, in 000s -
except per share
CONSOLIDATED STATEMENTS OF OPERATIONS amounts)
----------------------------------------------------------------------------
Three months ended Nine months ended
January 31, January 31,
-------------------- -----------------------
2015 2014 2015 2014
--------- ---------- ----------- -----------
REVENUES:
Service revenues $406,441 $ 138,613 $ 637,356 $ 358,845
Royalty, product and other
revenues 63,335 23,788 81,905 43,268
Interest income 39,298 37,369 58,027 59,192
--------- ---------- ----------- -----------
509,074 199,770 777,288 461,305
--------- ---------- ----------- -----------
OPERATING EXPENSES:
Cost of revenues:
Compensation and benefits 186,656 160,830 307,892 267,668
Occupancy and equipment 92,303 88,387 263,235 249,481
Provision for bad debt and
loan losses 39,283 31,420 44,032 45,760
Depreciation and
amortization 29,181 25,267 82,695 65,982
Other 47,255 43,761 116,247 124,087
--------- ---------- ----------- -----------
394,678 349,665 814,101 752,978
Selling, general and
administrative:
Marketing and advertising 87,569 77,943 108,227 98,667
Compensation and benefits 60,380 60,211 175,697 168,076
Depreciation and amortization 14,110 6,544 33,211 15,371
Other selling, general and
administrative 27,488 29,750 66,991 83,123
--------- ---------- ----------- -----------
189,547 174,448 384,126 365,237
--------- ---------- ----------- -----------
Total operating expenses 584,225 524,113 1,198,227 1,118,215
--------- ---------- ----------- -----------
Other expense, net 6,666 9,610 9,629 13,295
Interest expense on borrowings
(1) 9,048 13,872 36,686 41,476
--------- ---------- ----------- -----------
Loss from continuing operations
before income tax benefit (90,865) (347,825) (467,254) (711,681)
Income tax benefit (55,554) (135,074) (209,865) (282,645)
--------- ---------- ----------- -----------
Net loss from continuing
operations (35,311) (212,751) (257,389) (429,036)
Net loss from discontinued
operations (1,637) (1,960) (7,789) (5,805)
--------- ---------- ----------- -----------
NET LOSS $(36,948) $(214,711) $ (265,178) $ (434,841)
--------- ---------- ----------- -----------
BASIC AND DILUTED LOSS PER
SHARE:
Continuing operations $ (0.13) $ (0.78) $ (0.94) $ (1.57)
Discontinued operations - - (0.03) (0.02)
--------- ---------- ----------- -----------
Consolidated $ (0.13) $ (0.78) $ (0.97) $ (1.59)
--------- ---------- ----------- -----------
----------------------------------------------------------------------------
(1) The presentation of interest expense from borrowings has been restated
to correct errors in presentation, whereby we reclassified such interest
expense from cost of revenues to a separate caption.
----------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in 000s)
----------------------------------------------------------------------------
Nine months ended January 31, 2015 2014
-------------------------------------------------- ------------ ------------
NET CASH USED IN OPERATING ACTIVITIES $(1,247,200) $(1,120,322)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale securities (100) (45,158)
Maturities of and payments received on
available-for-sale securities 68,013 72,502
Principal payments on mortgage loans held for
investment, net 18,098 35,320
Capital expenditures (98,876) (125,654)
Payments made for business acquisitions, net of
cash acquired (112,163) (37,865)
Proceeds received on notes receivable - 64,865
Franchise loans:
Loans funded (48,013) (62,039)
Payments received 34,164 17,893
Other, net 6,179 12,227
------------ ------------
Net cash used in investing activities (132,698) (67,909)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of commercial paper (457,576) (80,930)
Proceeds from issuance of commercial paper 1,049,062 275,914
Repayments of long-term debt (400,000) -
Customer banking deposits, net 515,015 (124,947)
Dividends paid (164,905) (164,134)
Proceeds from exercise of stock options 16,026 28,083
Other, net (26,348) (35,919)
------------ ------------
Net cash provided by (used in) financing
activities 531,274 (101,933)
------------ ------------
Effects of exchange rate changes on cash (15,549) (20,016)
Net decrease in cash and cash equivalents (864,173) (1,310,180)
Cash and cash equivalents at beginning of the
period 2,185,307 1,747,584
------------ ------------
Cash and cash equivalents at end of the period $ 1,321,134 $ 437,404
------------ ------------
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net of refunds received $ 201,374 $ 87,672
Interest paid on borrowings 43,561 43,297
Interest paid on deposits 523 1,696
Transfers of foreclosed loans to other assets 3,240 6,389
Accrued additions to property and equipment 1,986 4,113
Conversion of investment in preferred stock to
available-for-sale common stock 5,000 -
Transfer of mortgage loans held for investment
to held for sale - 7,608
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(unaudited, amounts in
TAX SERVICES - FINANCIAL RESULTS 000s)
----------------------------------------------------------------------------
Three months ended Nine months ended
January 31, January 31,
--------------------- -----------------------
2015 2014 2015 2014
---------- ---------- ----------- -----------
Tax preparation fees:
U.S. assisted $ 283,692 $ 72,108 $ 341,107 $ 123,145
International 10,021 9,253 94,308 82,915
U.S. digital 36,720 17,339 42,545 23,211
---------- ---------- ----------- -----------
330,433 98,700 477,960 229,271
Royalties 52,284 15,061 68,508 31,150
Revenues from Refund Transfers 50,899 15,542 56,472 21,282
Revenues from Emerald Card(R) 13,910 12,689 39,479 37,299
Revenues from Peace of Mind(R)
guarantees 13,492 12,684 54,308 59,661
Interest and fee income on
Emerald Advance 30,288 27,656 31,439 28,602
Other 11,702 11,664 32,605 36,462
---------- ---------- ----------- -----------
Total revenues 503,008 193,996 760,771 443,727
---------- ---------- ----------- -----------
Compensation and benefits:
Field wages 161,921 136,885 264,822 226,320
Other wages 41,157 41,629 117,598 112,029
Benefits and other
compensation 35,625 34,696 74,349 72,811
---------- ---------- ----------- -----------
238,703 213,210 456,769 411,160
Occupancy and equipment 92,700 88,148 260,016 250,332
Marketing and advertising 87,569 77,852 106,477 97,435
Depreciation and amortization 43,287 31,808 115,896 81,242
Bad debt 38,928 31,420 42,942 38,535
Supplies 6,963 7,387 17,534 14,355
Other 63,012 58,982 152,204 160,505
---------- ---------- ----------- -----------
Total operating expenses 571,162 508,807 1,151,838 1,053,564
---------- ---------- ----------- -----------
Other expense, net 6,751 6,756 9,986 14,366
Interest expense on borrowings 523 532 1,577 1,604
---------- ---------- ----------- -----------
Pretax loss $ (75,428) $(322,099) $ (402,630) $ (625,807)
---------- ---------- ----------- -----------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
U.S. TAX OPERATING DATA (in 000s)
----------------------------------------------------------------------------
Nine months ended Ten months ended
January 31, February 28,
----------------- -------- ----------------- --------
% %
2015 2014 Change 2015 2014 Change
------------------------------- -------- -------- -------- -------- --------
Tax Returns Prepared:
(1,2)
H&R Block Company-
Owned Operations 1,532 1,595 (3.9)% 4,464 4,926 (9.4)%
H&R Block Franchise
Operations 947 958 (1.1)% 2,679 2,894 (7.4)%
-------- -------- -------- --------
Total H&R Block
Assisted 2,479 2,553 (2.9)% 7,143 7,820 (8.7)%
-------- -------- -------- --------
H&R Block Desktop 180 137 31.4% 875 833 5.0%
H&R Block Online 1,027 654 57.0% 2,876 2,683 7.2%
-------- -------- -------- --------
Total H&R Block
Tax Software 1,207 791 52.6% 3,751 3,516 6.7%
-------- -------- -------- --------
H&R Block Free File
Alliance 129 64 101.6% 383 436 (12.2)%
-------- -------- -------- --------
Total H&R Block
U.S. Returns 3,815 3,408 11.9% 11,277 11,772 (4.2)%
-------- -------- -------- --------
----------------------------------------------------------------------------
(1) Prior year numbers have been reclassified between company-owned and
franchise for offices which were refranchised or repurchased by the
company during either year.
(2) Assisted returns for at January 31, 2014 include 1.8 million returns
which were completed as of that date but not yet electronically filed.
Revenue for these returns was recognized in the fourth quarter of fiscal
year 2014.
----------------------------------------------------------------------------
NON-GAAP FINANCIAL MEASURES
----------------------------------------------------------------------------
Three months ended January 31, 2015
----------------------------------------
Pretax
EBITDA loss Net loss EPS
---------- ---------- ---------- -------
As reported - from continuing
operations $ (38,302) $ (90,865) $ (35,311) $(0.13)
Adjustments:
Loss contingencies - litigation 337 337 207 -
Professional fees related to HRB
Bank transaction 6 6 3 -
Loss on sales of tax
offices/businesses 1,451 1,451 901 -
---------- ---------- ---------- -------
1,794 1,794 1,111 -
---------- ---------- ---------- -------
As adjusted - from continuing
operations $ (36,508) $ (89,071) $ (34,200) $(0.13)
---------- ---------- ---------- -------
----------------------------------------
Three months ended January 31, 2014
----------------------------------------
Pretax
EBITDA loss Net loss EPS
---------- ---------- ---------- -------
As reported - from continuing
operations $(301,571) $(347,825) $(212,751) $(0.78)
Adjustments:
Loss contingencies - litigation 346 346 207 -
Severance 1,092 1,092 648 -
Professional fees related to HRB
Bank transaction 171 171 95 -
Gain on sales of tax
offices/businesses (616) (616) (372) -
---------- ---------- ---------- -------
993 993 578 -
---------- ---------- ---------- -------
As adjusted - from continuing
operations $(300,578) $(346,832) $(212,173) $(0.78)
---------- ---------- ---------- -------
----------------------------------------
Nine months ended January 31, 2015
----------------------------------------
Pretax
EBITDA loss Net loss EPS
---------- ---------- ---------- -------
As reported - from continuing
operations $(314,153) $(467,254) $(257,389) $(0.94)
Adjustments:
Loss contingencies - litigation 609 609 376 -
Severance 1,051 1,051 654 -
Professional fees related to HRB
Bank transaction 120 120 74 -
Gain on sales of AFS securities (24) (24) (15) -
Loss on sales of tax
offices/businesses 552 552 342 -
---------- ---------- ---------- -------
2,308 2,308 1,431 -
---------- ---------- ---------- -------
As adjusted - from continuing
operations $(311,845) $(464,946) $(255,958) $(0.94)
---------- ---------- ---------- -------
-------------------------------------------
Nine months ended January 31, 2014
-------------------------------------------
Pretax
EBITDA loss Net loss EPS
---------- ---------- ---------- ----------
As reported - from continuing
operations $(587,125) $(711,681) $(429,036) $ (1.57)
Adjustments:
Loss contingencies -
litigation 1,069 1,069 650 -
Severance 4,025 4,025 2,447 0.01
Professional fees related to
HRB Bank transaction 1,978 1,978 1,203 -
Gain on sales of tax
offices/businesses (1,215) (1,215) (739) -
---------- ---------- ---------- ----------
5,857 5,857 3,561 0.01
---------- ---------- ---------- ----------
As adjusted - from continuing
operations $(581,268) $(705,824) $(425,475) $ (1.56)
---------- ---------- ---------- ----------
--------------------- ---------------------
Three months ended Nine months ended
January 31, January 31,
-------------------------------- --------------------- ---------------------
EBITDA 2015 2014 2015 2014
-------------------------------- ---------- ---------- ---------- ----------
Net loss - as reported $ (36,948) $(214,711) $(265,178) $(434,841)
Add back:
Discontinued operations 1,637 1,960 7,789 5,805
Income taxes (55,554) (135,074) (209,865) (282,645)
Interest expense 9,272 14,443 37,195 43,203
Depreciation and amortization 43,291 31,811 115,906 81,353
---------- ---------- ---------- ----------
(1,354) (86,860) (48,975) (152,284)
---------- ---------- ---------- ----------
EBITDA from continuing
operations $ (38,302) $(301,571) $(314,153) $(587,125)
---------- ---------- ---------- ----------
--------------------- ---------------------
Three months ended Nine months ended
January 31, January 31,
-------------------------------- --------------------- ---------------------
Supplemental Information 2015 2014 2015 2014
-------------------------------- ---------- ---------- ---------- ----------
Stock-based compensation
expense:
Pretax $ 6,090 $ 4,715 $ 20,689 $ 15,477
After-tax 3,678 2,809 12,763 9,410
Amortization of intangible
assets:
Pretax $ 16,743 $ 8,757 $ 41,206 $ 21,351
After-tax 10,197 5,256 25,420 12,981
----------------------------------------------------------------------------
NON-GAAP FINANCIAL INFORMATION
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 GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.
We consider non-GAAP financial measures to be a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business on a consistent basis across reporting periods, as it eliminates the effect of items that are not indicative of our core operating performance.
The following are descriptions of adjustments we make for our non-GAAP financial measures:
- We exclude losses from settlements and estimated contingent losses from litigation and favorable reserve adjustments. This does not include legal defense costs.
- We exclude non-cash charges to adjust the carrying values of goodwill, intangible assets, other long-lived assets and investments to their estimated fair values.
- We exclude severance and other restructuring charges in connection with the termination of personnel, closure of offices and related costs.
- We exclude the gains and losses on business dispositions, including investment banking, legal and accounting fees from both business dispositions and acquisitions.
- We exclude the gains and losses on extinguishment of debt.
We 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 and adjusted pretax income of continuing operations. Adjusted EBITDA and adjusted pretax income 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. We also use EBITDA and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.
For Further Information
Investor Relations:
Colby Brown
(816) 854-4559
Email contact
Media Relations:
Gene King
(816) 854-4672
Email contact
