H&R Block Announces Fiscal 2016 Third Quarter Results
/EINPresswire.com/ -- KANSAS CITY, MO--(Marketwired - March 03, 2016) - H&R Block, Inc. (NYSE: HRB), the world's largest consumer tax services provider, today released its financial results for the fiscal 2016 third quarter ended January 31, 2016 and key operating data through February 28, 2016. The company typically reports a third quarter operating loss due to the seasonality of its tax business.
Third Quarter 2016 Highlights
- Significant delays seen in U.S. tax industry as consumers modify tax filing behaviors and federal and state governments take new actions to combat tax fraud
- Total revenues decreased $34.5 million to $474.5 million primarily due to lower client volumes in U.S. assisted offices, the impact of the divestiture of H&R Block Bank, and the impact of foreign currency exchange rate fluctuations, partially offset by increased pricing and improved form mix
-
Non-GAAP adjusted loss per share from continuing operations of $0.34
2, 3 - Repurchased approximately 12.0 million shares during the quarter, at an average price of $32.72; fiscal year-to-date repurchases through January 31, 2016 total 52.5 million shares, or approximately 19% of outstanding shares
"This tax season has been marked by the continued impact of fraud on the industry, the continuing trend of taxpayers filing their returns later in the season and tax refunds taking longer to process," said Bill Cobb, H&R Block's president and chief executive officer. "Significant initiatives by both federal and state governments to combat tax fraud are creating material changes in the industry. While we believe that there are additional efforts that need to be taken, such as EITC form parity and minimum standards for tax return preparers, we fully support the efforts being made this season."
The company reported a decrease in revenues of $34.5 million to $474.5 million, primarily due to lower client volumes in its U.S. assisted tax offices, the impact of the divestiture of H&R Block Bank, and the impact of foreign currency exchange rate fluctuations. The decline in volume was offset by improved pricing and form mix in both assisted and DIY categories. A majority of the company's revenues and all of its fiscal 2016 earnings will occur during its fiscal fourth quarter, and thus fiscal third quarter financial results are not indicative of expected performance for the full year.
The decline in the company's U.S. tax return volumes followed the industry-wide decline in filings through mid-February, which the company believes are primarily the result of the ongoing impact of tax fraud and related prevention measures, delayed refunds, and the effect of the Affordable Care Act (ACA). Total returns prepared by and through H&R Block declined 6.1% percent through February 28, 2016, to 10.6 million, which represented a 0.3% point improvement from the decline as of January 31, 2016, indicating positive momentum in the effort to reduce early season client loss. Additionally, the improved pricing and form mix noted in the fiscal third quarter continued through February 28.
"Despite the impact these challenges have had on our early season volumes, I'm pleased with our monetization efforts as we've seen improvements in both form mix and price. Turning the early season client loss around will take time, but our results are starting to indicate that our efforts are working," said Cobb. "There is still a significant amount of the tax season remaining and we are focused on executing our Tax Plus strategy to help deliver a strong second half."
Fiscal 2016 Third Quarter Results From Continuing Operations
Actual Adjusted 2
-------------------------------------------
Fiscal Fiscal Fiscal Fiscal
(in millions, except EPS) Year 2016 Year 2015 Year 2016 Year 2015
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Revenue $ 475 $ 509 $ 475 $ 509
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EBITDA $ (78) $ (38) $ (77) $ (37)
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Pretax Loss $ (147) $ (91) $ (146) $ (89)
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Net Loss $ (79) $ (35) $ (79) $ (34)
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Weighted-Avg. Shares - Diluted 231.9 275.2 231.9 275.2
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EPS $ (0.34) $ (0.13) $ (0.34) $ (0.13)
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CFO Perspective
"As we are no longer regulated as a savings and loan holding company, we have been able to return to our historical practice of repurchasing shares opportunistically to create shareholder value," said Greg Macfarlane, H&R Block's chief financial officer. "In the last two fiscal quarters, we repurchased 52.5 million shares, or $1.9 billion of H&R Block stock, representing 19 percent of total outstanding shares. We are confident in the future of H&R Block and look forward to continuing as the leading tax preparation company for years to come."
"Additionally, Sand Canyon took significant steps toward the resolution of its representation and warranty obligations by settling with some of the counterparties that asserted claims against them," added Macfarlane. "While we believe the wind-down of Sand Canyon will continue to take time, it's positive to see progress."
Financial Results and Highlights
- Revenues decreased 6.8% to $475 million, due primarily to lower tax preparation volumes, the impact of the divestiture of H&R Block Bank, and the impact of foreign currency exchange rate fluctuations. These decreases were partially offset by improved price and return mix in both assisted and DIY categories.
- Total operating expenses increased $10.2 million, or 1.7%. The increase was primarily due to occupancy costs and amortization expense which increased due to current year acquisitions of independent tax preparation and franchise businesses as well as the annualization of expenses related to acquisitions in the prior year and increased marketing expenses. These increases were partially offset by a decrease in field compensation resulting from lower tax preparation volume.
- Other income increased $2.8 million primarily due to the accounting changes related to the divestiture of H&R Block Bank discussed above.
- Interest expense increased $14.5 million from the prior year due to $1 billion of long-term debt issued in September 2015, and an increase in borrowings under the company's line of credit during the fiscal third quarter.
- Pretax loss increased 61.2% to $147 million.
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 a significant majority of previously denied and possible future representation and warranty claims.
- SCC's accrual for contingent losses related to representation and warranty claims decreased $89 million from the prior quarter to $65 million as a result of settlements with counterparties. The settlements were fully covered by prior accruals.
Balance Sheet
- Cash balances decreased from January 31, 2015 mainly due to the net cash payment to the company's bank partner for the transfer of deposit liabilities related to the divestiture of H&R Block Bank and the net impact of capital structure changes, including share repurchases totaling $1.9 billion during the fiscal year.
- Accounts receivable increased $52 million from January 31, 2015 due to the delayed timing of IRS funding of tax refunds.
- Upon divestiture of H&R Block Bank in the second quarter of fiscal 2016, available for sale securities, previously held to meet bank regulatory requirements, were liquidated for approximately $388 million. Additionally, certain liabilities, including all customer banking deposits, were transferred to the company's bank partner.
- Long-term debt increased $1 billion from January 31, 2015 due to the issuance of $650 million of 4.125% Senior Notes and $350 million of 5.250% Senior Notes. Long-term debt also increased as a result of outstanding borrowings under the company's line of credit, which at January 31, 2016 totaled $1.1 billion.
- Stockholders' equity was impacted by repurchases and subsequent retirements of 52.5 million shares of common stock during the fiscal year for $1.9 billion, or an average price of $36.02 per share.
- Details regarding the bank divestiture and related agreements, capital structure transactions and share repurchase program can be found in previously filed press releases issued, as well as Forms 8-K filed with the Securities and Exchange Commission, in September and October of 2015.
Share Repurchases and Dividends
During the third quarter of fiscal 2016, the company repurchased and retired approximately 12.0 million shares at an aggregate price of $392 million, or $32.72 per share. As of January 31, 2016, 224.4 million shares were outstanding.
The company completed these share repurchases under a $3.5 billion share repurchase program approved by the company's board of directors in August 2015. Under this program, the company has repurchased approximately 52.5 million shares of its common stock, or 19% of outstanding shares, for an aggregate purchase price of $1.9 billion.
As previously announced, a quarterly cash dividend of 20 cents per share is payable on April 1, 2016 to shareholders of record as of March 15, 2016. The April 1 dividend payment will be H&R Block's 214
Conference Call
Discussion of the fiscal 2016 third quarter results, future outlook and a general business update will occur during the company's previously announced fiscal third quarter earnings conference call for analysts, institutional investors, and shareholders. The call is scheduled for 4:30 p.m. Eastern time on March 3, 2016. To access the call, please dial the number below approximately 10 minutes prior to the scheduled starting time:
U.S./Canada (888) 895-5260 or International (443) 842-7595
Conference ID: 18401962
The call will also be webcast in a listen-only format for the media and public. The link to the webcast can be accessed directly at http://investors.hrblock.com.
A replay of the call will be available beginning at 7:30 p.m. Eastern time on March 3, 2016, and continuing until April 3, 2016, by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (International). The conference ID is 18401962. The webcast will be available for replay March 4, 2016 at http://investors.hrblock.com.
About H&R Block
H&R Block, Inc. (NYSE: HRB) is the world's largest consumer tax services provider. More than 680 million tax returns have been prepared worldwide by and through H&R Block since 1955. In fiscal 2015, H&R Block had annual revenues of nearly $3.1 billion with 24.2 million tax returns prepared worldwide. Tax return preparation services are provided by professional tax preparers in approximately 12,000 company-owned and franchise retail tax offices worldwide, and through H&R Block tax software products. H&R Block also offers adjacent Tax Plus products and services. For more information, visit the H&R Block Newsroom at 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 contains 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, cost savings, capital expenditures, dividends, share repurchases, 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, that are described in our Annual Report on Form 10-K for the fiscal year ended April 30, 2015 in the section entitled "Risk Factors" and additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You may get such filings for free at our website at http://investors.hrblock.com. 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.
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(unaudited, in 000s -
except per share
CONSOLIDATED STATEMENTS OF OPERATIONS amounts)
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Three months ended Nine months ended
January 31, January 31,
----------------------- -----------------------
2016 2015 2016 2015
----------- ----------- ----------- -----------
REVENUES:
Service revenues $ 389,502 $ 406,441 $ 621,356 $ 637,356
Royalty, product and other
revenues 85,041 102,633 119,320 139,932
----------- ----------- ----------- -----------
474,543 509,074 740,676 777,288
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Cost of revenues:
Compensation and
benefits 181,915 186,656 300,398 307,892
Occupancy and equipment 96,201 92,303 281,107 263,235
Provision for bad debt
and loan losses 35,734 39,283 38,921 44,032
Depreciation and
amortization 28,795 29,181 84,237 82,695
Other 49,868 47,255 127,759 116,247
----------- ----------- ----------- -----------
392,513 394,678 832,422 814,101
Selling, general and
administrative:
Marketing and
advertising 93,708 87,569 115,204 108,227
Compensation and
benefits 63,653 60,380 179,915 175,697
Depreciation and
amortization 16,508 14,110 43,509 33,211
Other selling, general
and administrative 28,003 27,488 97,283 66,991
----------- ----------- ----------- -----------
201,872 189,547 435,911 384,126
----------- ----------- ----------- -----------
Total operating
expenses 594,385 584,225 1,268,333 1,198,227
----------- ----------- ----------- -----------
Other income, net 3,055 304 13,993 827
Interest expense on
borrowings (23,573 ) (9,048) (46,329 ) (36,686)
Other expenses, net (6,140 ) (6,970) (11,335 ) (10,456)
----------- ----------- ----------- -----------
Loss from continuing
operations before income
tax benefit (146,500 ) (90,865) (571,328 ) (467,254)
Income tax benefit (67,851 ) (55,554) (253,656 ) (209,865)
----------- ----------- ----------- -----------
Net loss from continuing
operations (78,649 ) (35,311) (317,672 ) (257,389)
Net loss from discontinued
operations (3,080 ) (1,637) (8,723 ) (7,789)
----------- ----------- ----------- -----------
NET LOSS $ (81,729 ) $ (36,948) $(326,395 ) $ (265,178)
----------- ----------- ----------- -----------
BASIC AND DILUTED LOSS PER
SHARE:
Continuing operations $ (0.34 ) $ (0.13) $ (1.23 ) $ (0.94)
Discontinued operations (0.01 ) - (0.04 ) (0.03)
----------- ----------- ----------- -----------
Consolidated $ (0.35 ) $ (0.13) $ (1.27 ) $ (0.97)
----------- ----------- ----------- -----------
WEIGHTED AVERAGE BASIC AND
DILUTED SHARES 231,904 275,190 257,979 274,957
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(unaudited, in 000s - except per
CONSOLIDATED BALANCE SHEETS share data)
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January 31, January 31, April 30,
As of 2016 2015 2015
------------------------------------- ------------ ------------ ------------
ASSETS
Cash and cash equivalents $ 189,511 $ 1,321,134 $ 2,007,190
Cash and cash equivalents -
restricted 69,649 51,085 91,972
Receivables, net 829,774 777,453 167,964
Deferred tax assets and income
taxes receivable 29,411 167,826 174,267
Prepaid expenses and other current
assets 101,169 92,976 70,283
Investments in available-for-sale
securities 1,145 367,845 439,625
------------ ------------ ------------
Total current assets 1,220,659 2,778,319 2,951,301
Mortgage loans held for investment,
net 212,106 245,663 239,338
Property and equipment, net 290,202 308,805 311,387
Intangible assets, net 473,732 443,329 432,142
Goodwill 443,418 442,961 441,831
Deferred tax assets and income
taxes receivable 113,887 13,441 13,461
Other noncurrent assets 120,042 146,423 125,960
------------ ------------ ------------
Total assets $2,874,046 $ 4,378,941 $ 4,515,420
------------ ------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Commercial paper borrowings $ - $ 591,486 $ -
Customer banking deposits - 1,286,216 744,241
Accounts payable and accrued
expenses 205,981 172,328 231,322
Accrued salaries, wages and payroll
taxes 123,289 118,512 144,744
Accrued income taxes and reserves
for uncertain tax positions 8,099 1,619 434,684
Current portion of long-term debt 817 781 790
Deferred revenue and other current
liabilities 250,846 300,162 322,508
------------ ------------ ------------
Total current liabilities 589,032 2,471,104 1,878,289
Long-term debt 2,626,933 505,460 505,298
Deferred tax liabilities and
reserves for uncertain tax
positions 88,377 144,036 142,586
Deferred revenue and other
noncurrent liabilities 106,438 111,956 156,298
------------ ------------ ------------
Total liabilities 3,410,780 3,232,556 2,682,471
------------ ------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, stated value
$.01 per share 2,641 3,166 3,166
Additional paid-in capital 758,491 778,845 783,793
Accumulated other comprehensive
income (loss) (20,849 ) (1,263) 1,740
Retained earnings (deficit) (510,000 ) 1,158,376 1,836,442
Less treasury shares, at cost (767,017 ) (792,739) (792,192)
------------ ------------ ------------
Total stockholders' equity
(deficiency) (536,734 ) 1,146,385 1,832,949
------------ ------------ ------------
Total liabilities and
stockholders' equity $2,874,046 $ 4,378,941 $ 4,515,420
------------ ------------ ------------
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in 000s)
----------------------------------------------------------------------------
Nine months ended January 31, 2016 2015
-------------------------------------------------- ------------ ------------
NET CASH USED IN OPERATING ACTIVITIES $(1,426,949) $(1,247,200)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales, maturities of and payments received on
available-for-sale securities 436,380 68,013
Principal payments on mortgage loans held for
investment, net 24,664 18,098
Capital expenditures (66,418 ) (98,876)
Payments made for business acquisitions, net of
cash acquired (85,329 ) (112,163)
Franchise loans:
Loans funded (21,377 ) (48,013)
Payments received 22,234 34,164
Other, net 3,887 6,079
------------ ------------
Net cash provided by (used in) investing
activities 314,041 (132,698)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of commercial paper - (457,576)
Proceeds from issuance of commercial paper - 1,049,062
Repayments of long-term debt (225,000 ) (400,000)
Proceeds from issuance of long-term debt 2,346,831 -
Customer banking deposits, net (326,705 ) 515,015
Transfer of HRB Bank deposits (419,028 ) -
Dividends paid (157,530 ) (164,905)
Repurchase of common stock, including shares
surrendered (1,888,595) (10,355)
Proceeds from exercise of stock options 25,803 16,026
Other, net (43,972 ) (15,993)
------------ ------------
Net cash provided by (used in) financing
activities (688,196 ) 531,274
------------ ------------
Effects of exchange rate changes on cash (16,575 ) (15,549)
Net decrease in cash and cash equivalents (1,817,679) (864,173)
Cash and cash equivalents at beginning of the
period 2,007,190 2,185,307
------------ ------------
Cash and cash equivalents at end of the period $ 189,511 $ 1,321,134
------------ ------------
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net of refunds received $ 157,691 $ 201,374
Interest paid on borrowings 32,772 43,561
Transfers of foreclosed loans to other assets 2,515 3,240
Accrued additions to property and equipment 4,385 1,986
Conversion of investment in preferred stock to
available-for-sale common stock - 5,000
Accrued purchase of common stock 21,167 -
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(unaudited, in 000s - except per
FINANCIAL RESULTS share amounts)
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Three months ended Nine months ended
January 31, January 31,
--------------------- -----------------------
2016 2015 2016 2015
---------- ---------- ----------- -----------
Tax preparation fees:
U.S. assisted $268,775 $ 283,692 $ 332,463 $ 341,107
International 8,575 10,021 79,633 94,308
U.S. digital 39,251 36,720 45,899 42,545
---------- ---------- ----------- -----------
316,601 330,433 457,995 477,960
Royalties 40,387 52,284 59,245 68,508
Revenues from Refund Transfers 49,419 50,899 54,782 56,472
Revenues from Emerald Card® 13,356 13,910 38,853 39,479
Revenues from Peace of Mind®
Extended Service Plan 15,736 13,492 62,764 54,308
Interest and fee income on
Emerald Advance 31,603 30,288 32,334 31,439
Other 7,441 17,768 34,703 49,122
---------- ---------- ----------- -----------
Total revenues 474,543 509,074 740,676 777,288
---------- ---------- ----------- -----------
Compensation and benefits:
Field wages 154,098 161,921 253,561 264,822
Other wages 48,786 45,983 136,782 131,544
Benefits and other
compensation 42,684 39,132 89,970 87,223
---------- ---------- ----------- -----------
245,568 247,036 480,313 483,589
Occupancy and equipment 96,157 92,855 280,953 260,231
Marketing and advertising 93,708 87,569 115,204 108,227
Depreciation and amortization 45,303 43,291 127,746 115,906
Bad debt 35,734 39,283 38,921 44,032
Supplies 6,219 6,981 13,346 17,582
Other 71,696 67,210 211,850 168,660
---------- ---------- ----------- -----------
Total operating expenses 594,385 584,225 1,268,333 1,198,227
---------- ---------- ----------- -----------
Other income, net 3,055 304 13,993 827
Interest expense on borrowings (23,573 ) (9,048) (46,329 ) (36,686)
Other expenses, net (6,140 ) (6,970) (11,335 ) (10,456)
---------- ---------- ----------- -----------
Pretax loss (146,500) (90,865) (571,328 ) (467,254)
Income tax benefit (67,851 ) (55,554) (253,656 ) (209,865)
---------- ---------- ----------- -----------
Net loss from continuing
operations (78,649 ) (35,311) (317,672 ) (257,389)
Net loss from discontinued
operations (3,080 ) (1,637) (8,723 ) (7,789)
---------- ---------- ----------- -----------
Net loss $(81,729 ) $ (36,948) $(326,395 ) $ (265,178)
---------- ---------- ----------- -----------
Basic and diluted loss per
share:
Continuing operations $ (0.34 ) $ (0.13) $ (1.23 ) $ (0.94)
Discontinued operations (0.01 ) - (0.04 ) (0.03)
---------- ---------- ----------- -----------
Consolidated $ (0.35 ) $ (0.13) $ (1.27 ) $ (0.97)
---------- ---------- ----------- -----------
Weighted average basic and
diluted shares 231,904 275,190 257,979 274,957
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(in
U.S. TAX OPERATING DATA 000s)
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Fiscal Year- Fiscal Year-
to-Date to-Date
January 31, February 28,
------------- -------- ------------- --------
% %
2016 2015 Change 2016 2015 Change
------------------------------ ------ ------ -------- ------ ------ --------
Tax Returns Prepared: (1)
Company-Owned Operations 1,413 1,600 (11.7)% 4,266 4,643 (8.1)%
Franchise Operations 766 879 (12.9)% 2,316 2,500 (7.4)%
------ ------ ------ ------
Total H&R Block Assisted 2,179 2,479 (12.1)% 6,582 7,143 (7.9)%
------ ------ ------ ------
Desktop 189 180 5.0% 825 875 (5.7)%
Online 1,075 1,027 4.7% 2,801 2,876 (2.6)%
------ ------ ------ ------
Total H&R Block Tax
Software 1,264 1,207 4.7% 3,626 3,751 (3.3)%
------ ------ ------ ------
Free File Alliance 127 129 (1.6)% 377 383 (1.6)%
------ ------ ------ ------
Total H&R Block U.S.
Returns 3,570 3,815 (6.4)% 10,585 11,277 (6.1)%
------ ------ ------ ------
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(1) Amounts have been reclassified between company-owned and franchise for
offices which were refranchised or repurchased by the company during
either year.
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NON-GAAP FINANCIAL MEASURES
----------------------------------------------------------------------------
Three months ended January 31, 2016 2015
-------------------------------- --------------------- ---------------------
EBITDA Loss EBITDA Loss
---------- ---------- ---------- ----------
As reported - from continuing
operations $(77,626 ) $(78,649 ) $ (38,302) $ (35,311)
Adjustments (pretax):
Loss contingencies -
litigation 328 328 337 337
Professional fees related to
HRB Bank and recapitalization
transactions (96 ) (96 ) 6 6
Gain on sales of tax
offices/businesses (101 ) (101 ) 1,451 1,451
Tax effect of adjustments - (129 ) - (683)
---------- ---------- ---------- ----------
131 2 1,794 1,111
---------- ---------- ---------- ----------
As adjusted - from continuing
operations $(77,495 ) $(78,647 ) $ (36,508) $ (34,200)
---------- ---------- ---------- ----------
Adjusted EPS $ (0.34 ) $ (0.13)
-------------------------------- --------------------- ---------------------
Nine months ended January 31, 2016 2015
-------------------------------- --------------------- ---------------------
EBITDA Loss EBITDA Loss
---------- ---------- ---------- ----------
As reported - from continuing
operations $(397,075) $(317,672) $(314,153) $(257,389)
Adjustments (pretax):
Loss contingencies -
litigation 1,017 1,017 609 609
Severance - - 1,051 1,051
Professional fees related to
HRB Bank and recapitalization
transactions 20,722 20,722 120 120
Gains on AFS securities, net (8,138 ) (8,138 ) (24) (24)
Gain on sales of tax
offices/businesses (127 ) (127 ) 552 552
Tax effect of adjustments - (5,129 ) - (877)
---------- ---------- ---------- ----------
13,474 8,345 2,308 1,431
---------- ---------- ---------- ----------
As adjusted - from continuing
operations $(383,601) $(309,327) $(311,845) $(255,958)
---------- ---------- ---------- ----------
Adjusted EPS $ (1.20 ) $ (0.94)
--------------------- ---------------------
Three months ended Nine months ended
January 31, January 31,
-------------------------------- --------------------- ---------------------
EBITDA 2016 2015 2016 2015
-------------------------------- ---------- ---------- ---------- ----------
Net loss - as reported $(81,729 ) $ (36,948) $(326,395) $(265,178)
Add back :
Discontinued operations 3,080 1,637 8,723 7,789
Income taxes (67,851 ) (55,554) (253,656) (209,865)
Interest expense 23,571 9,272 46,507 37,195
Depreciation and amortization 45,303 43,291 127,746 115,906
---------- ---------- ---------- ----------
4,103 (1,354) (70,680 ) (48,975)
---------- ---------- ---------- ----------
EBITDA from continuing
operations $(77,626 ) $ (38,302) $(397,075) $(314,153)
---------- ---------- ---------- ----------
--------------------- ---------------------
Three months ended Nine months ended
January 31, January 31,
-------------------------------- --------------------- ---------------------
Supplemental Information 2016 2015 2016 2015
-------------------------------- ---------- ---------- ---------- ----------
Stock-based compensation
expense:
Pretax $ 7,230 $ 6,090 $ 21,106 $ 20,689
After-tax 4,396 3,678 13,073 12,763
Amortization of intangible
assets:
Pretax $ 20,153 $ 16,743 $ 54,632 $ 41,206
After-tax 12,279 10,197 33,839 25,420
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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
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