H&r Block, Inc. · NYSE:HRB
H&r Block — Shareholder Meeting (September 2004)
27 slides from H&r Block's shareholder meeting presentation, Sep 8, 2004
Slide 1: Annual Shareholders' Meeting
Annual Shareholders’ Meeting September 8, 2004
Slide 2: Mark Ernst, Chairman, President and CEO
Mark Ernst Chairman, President and Chief Executive Officer
Slide 3: Proposal One: Elect Class III Directors
Proposal One Elect Class III Directors Donna R. Ecton Louis W. Smith Rayford Wilkins, Jr.
Slide 4: Proposal Two: Increase Shares of Common Stock
Proposal Two Increase Shares of Common Stock From: 500 million To: 800 million
Slide 5: Proposal Three: Amend 1989 Outside Directors Stock Option Plan
Proposal Three Amend 1989 Outside Directors Stock Option Plan Extend for five years Terminate on December 5, 2009
Slide 6: Proposal Four: Amend 1999 Seasonal Employees Stock Option Plan
Proposal Four Amend 1999 Seasonal Employees Stock Option Plan Extend plan for two years Terminate on December 31, 2006 Increase shares from 20 million to 23 million
Slide 7: Proposal Five: Ratify KPMG LLP Appointment
Proposal Five Ratify KPMG LLP Appointment for Year Ending April 30, 2005
Slide 8: Annual Shareholders' Meeting
Annual Shareholders’ Meeting September 8, 2004
Slide 9: Forward-Looking Statement
Forward-Looking Statement This presentation and various comments made in connection with this conference call include certain estimates, projections and other forward-looking statements. The words “will,” “plan,” “estimate,” “approximate,” “project,” “intend,” “remain,” “expect,” “believe,” and vari
Slide 10: Values
Values Guided and Sustained by Original Values Client focus Integrity
Slide 11: Client Focus
Client Focus Robust, individualized advice and financial services Satisfaction scores highest ever measured Price/value satisfaction also rising
Slide 12: Client Focus
Client Focus Deepen relationships with middle-market companies through expertise in: - capital markets - human resources - benefits administration - consulting services
Slide 13: Client Focus
Client Focus Builds and sustains relationships with independent brokers Pricing power Sustainable growth
Slide 14: Commitment to Shareholders
Commitment to Shareholders Transparency and candid dialogue Leading governance practices Minimize balance sheet risk Optimize free cash flow Allocate capital effectively
Slide 15: Tax Services
Tax Services Integrated 459 franchise offices Solid contributions from digital tax solutions Growth opportunity in “blended channel” Funded over 215,000 Express IRAs .
Slide 16: Financial Services
Financial Services Team-based partnerships with tax professionals to better serve clients Increase advisor base to leverage existing capacity .
Slide 17: Mortgage Services
Mortgage Services Nearly 50 percent of loans from clients of other Block businesses Develop partnerships with tax professionals to better serve clients
Slide 18: Key Business Drivers
Key Business Drivers Wholesale/National Accounts/Acquisition Origination FY01 FY02 FY03 FY04 Average Sales Associates (SA) 213 247 280 330 Apps / Day / SA 2.07 2.38 2.45 2.92 Applications 111,052 148,022 172,989 224,012 Closing Ratio 44.8% 50.1% 54.0% 57.7% # Funded 49,805 74,208 93,497 130,356 Aver
Slide 19: Business Services
Business Services Implement marketing and sales infrastructure to support business development activities Continue expansion of strategic initiatives
Slide 20: FY2004 Consolidated Results
FY2004 Consolidated Results Increase Revenues $4.2 billion 12% Net Income $698 million 20% EPS $3.86 23% Return on equity 43% .
Slide 21: Capital Allocation
Capital Allocation Acquisitions, net Share Repurchase* Dividends Free Cash Flow** $4.91 $4.33 $1.55 $3.42 $2.54 $2.13 $0.25 $1.28 $1.07 $2.05 $1.06 $0.14 $0.83 $0.14 $0.53 $0.59 $0.61 $0.68 $0.77 FY00 FY01 FY02 FY03 FY04 ($ per diluted share) * Net cash dedicated to share repurchase excluding repurc
Slide 22: Relative Shareholder Value Measures
Relative Shareholder Value Measures 1998-2003 (5 years)* S&P 500 Performance Rank Percentile Revenue growth 190% 49 90th EPS growth 316% 26 95th Shareholder return 22.4% 33 93rd (annualized) *Calendar year -Stock price data as of 12/31/2003
Slide 23: HRB Stock Price
H&R BLOCK HRB Stock Price H&R Block vs. Indexes HRB S-03 0-03 N-03 D-03 J-04 F-04 M-04 A-04 M-04 J-04 J-04 A-04 S-04
Slide 24: Key Challenges: Expansion Opportunities are Abundant
Key Challenges Expansion Opportunities are Abundant Potential Incremental Office Network density levels Growth Rates by MSA enhance client growth Low High in core segments Penetration Penetration Accessibility remains 20% an important brand attribute served by real 39% estate Third-party distr
Slide 25: Key Challenges
Key Challenges Sustain earnings during a rising interest rate environment Effectively price loans Focus on controllable drivers Expand sales and service capability to drive growth
Slide 26: Client Focus and Integrity
o Client Focus and Integrity H&R BLOCK
Slide 27: Annual Shareholders' Meeting
Annual Shareholders’ Meeting September 8, 2004