Good morning, everyone. I need you to take your seats really quickly. We'll get started here. Well, good morning, everyone. Thank you for braving the New York weather and coming to join us today. It's -- we're obviously based in Kansas City, where it's a balmy 55 degrees and sunny today. So I apologize for not bringing that up here with us. My name is Colby Brown. I'm the Vice President of Investor Relations. On behalf of the entire H&R Block management team, it's my pleasure to welcome all of you here as well as those of you participating via the webcast to H&R Block's December 2014 Investor Conference. We have an informative and exciting day planned and are glad you're able to join us. Before we get started, we have a few housekeeping items to take care of. Yesterday, we released our fiscal 2015 second quarter results. That release, as well as today's presentation, includes certain non-GAAP financial measures. We reconciled the comparable GAAP and non-GAAP figures in the schedules attached to the press release, and you can find both the release and the schedules on our Investor Relations web page at hrblock.com. I'd also like to remind everyone that today's presentation and various comments made in connection with it will include forward-looking statements as defined under the securities laws. Such statements are based on current information and management's expectations as of this date and are not guarantees of future performance. Forward-looking statements involve certain risks, uncertainties and assumptions that are difficult to predict. Thus, our actual and results could differ materially. You can learn more about these risks in our Form 10-K for fiscal 2014 and our other SEC filings. H&R Block undertakes no obligation to publicly update these risk factors or forward-looking statements. Shortly after this morning's presentation is concluded, we'll post the slides on our website. And later this week, as a reminder, our webcast will be available for replay. To give you a sense of the agenda for today, opening presentations will run until approximately 10:00 Eastern. We'll then take a 15-minute break. Refreshments will be available throughout the morning. And a quick logistical note, restrooms are out the door and to your right. We then expect the Q&A to begin around 11:30 Eastern. So again, welcome, everyone. We're excited that you're here. Thank you for coming and we hope you enjoy the presentations. [Presentation]

Good morning, everybody. I want to thank CNN for my star turn, my little 4 minutes of fame. But I want to welcome you to this year's investor conference. We are pleased to have you join us. We'll review our fiscal 2014 performance and share with you where we see our opportunities for this coming tax season and beyond. So today, we will share with you a recap of our performance in fiscal 2014, the opportunities we see going forward and why we believe we're well positioned to drive value for our shareholders. But first, I want to address the elephant in the room, so to speak, and that is a few words about the bank. So we've had some people asked, "Why are you even doing an investor conference this year?" The thinking being that the bank divestiture is incomplete and we have nothing else to talk about. Now we did think we'd be done in time for this tax season. And as you know, we're still waiting for a decision from the regulators. But to be absolutely clear, we remain committed to divesting our bank and we expect BofI to be a solid partner. The regulators said that they needed more time. Like I said back in October, we can scratch our heads all we want. But they have been very thorough, extremely professional and we're going to take them at their word. We still believe that, on its merits, this transaction will be approved. So the truth is we're holding this conference because we have a lot of great things to tell you. And at the end of the day, if anything is crystal clear, I hope it's what I firmly believe to be true: That no one understands taxes like we do, no one understands the…

Good morning. I'm Kathy Collins. I am the Chief Marketing Officer at H&R Block. And today, I'm going to share an evolved perspective of the tax industry through the eyes of the consumer and how our understanding of that perspective is reshaping how we approach the market today. As I thought about our approach, I wanted to start by addressing key questions floating around the tax category. Is consumer behavior changing? Has the complexity of the tax code changed how we think about filing our taxes? Are people moving to DIY as mobile devices become a way of life or to save money? Is the H&R Block retail model still relevant? As the leader in the tax preparation industry, we know this category better than anyone. In fact, we spend a great deal of time trying to truly understand the issues and questions that I just mentioned. So I plan to spend the next few minutes sharing with you our perspectives and what we have learned as we've studied the answers to these and other questions. First, let's set the stage. The tax prep industry is one of steady, but slow return growth, around 1% to 2% per year. And as you know, there is great diversity in competitors throughout the tax prep industry, with a large number of competitors in the retail category and fewer participants in the DIY category. Now Shawn and Jason are going to spend more time on the structure of the categories a little later, but I really want to focus on the consumer. H&R Block is, by far, the largest brand participating fully in 100% of the tax market. From assisted tax prep to do-it-yourself and anything in between, we serve clients the way they want to be served. Now what we've learned about…

Good morning. I'm Jason Houseworth, President of Global Digital Tax Solutions and Product Management. My role is to create great experiences for our tax clients, starting with our digital tax business as well as leading the client experience for all of our tax products in my dual role as Head of Product Management. Today, I plan on providing you with a brief scorecard summarizing tax season '14, before discussing the evolution of the DIY category, finishing with my perspective on what it will take to lead in digital. So let's begin by walking through our scorecard for the digital business in tax season 2014, a year highlighted by double-digit Tax Plus revenue growth, which was our primary objective for the year. The one in which we did not move the needle in terms of top of the funnel awareness that H&R Block makes tax software and therefore we saw little client growth. Growing awareness continues to be our #1 opportunity as a business. And as discussed at last year's investor conference, we launched year 1 of our product redesign last season, the first in a wave of changes that will literally change every 1 of our 6,000-page federal and state online products. Obviously, a big undertaking, but one that I believe couldn't have gone better. We improved conversion and we saw our contact rate or the percentage of contacts per registered unit materially drop. But the most important result of the redesign was the monetization we saw driving our double-digit revenue growth. I mentioned last year, during our investor conference, that we believe the redesign would improve the value perception a user has within the experience and we saw this result as a validation of our product innovation and testing process. However, it was only Phase 1. While mobile usage…

Good morning. My name is Shawn Moore, and I'm responsible for identifying competitors that fit into the H&R Block brand and acquiring and integrating those businesses into the H&R Block network. I would like to provide you a unique perspective on the competitive landscape within the assisted tax preparation category that you likely have not seen before. Then I will share with you that same landscape translates to an opportunity for H&R Block. But first, let's talk about the overall tax industry. It's a $19 billion market where assisted tax preparation makes up the lion's share. And as Kathy detailed earlier, it's a stable market, largely driven by consumer behavior. Tax filers tend not to change providers, unless there's a significant life event, which leaves the player in this industry space to literally compete on a client-by-client basis. But against whom are we competing? As you can see here, there are only a few branded competitors in the category. We certainly pay attention to what they're doing. But quite frankly, they are not the greatest threats to our market share. The CPAs and independents combined, have 78% of the assisted market. Clearly, the largest share, and thus, representing our greatest competition. And if you break it down even further, although our brand can stretch to capture share from CPAs, our true competitors are the independents, the mom and pops of the industry. This is where we invest a lot of our time and energy. So let's talk a little bit more about just who these independents are. You may not have noticed this, but you see these types of offices every day as you drive down the street. As you know, there are very low barriers of entry to the tax preparation industry. Combine that with the fact that it's…

As I mentioned in our opening comments, I'm going to talk to you now about how we are investing in our Retail business and what's next for our Tax Plus strategy. The investments we're making underscore our deep commitment to remaining the leading player in the tax preparation industry. We are the industry leader primarily for 4 reasons. Number one, our brand awareness. At 98%, we are well ahead of any competitor. Number two, our scale. We have the fifth largest retail footprint in the country. At over 10,000 offices in the U.S., no one in this industry comes close to our reach. Number three, the quality for which we are best known, our tax expertise. We have the best, most highly trained people in the business. And number four, what keeps us highly relevant, our innovation. And these factors all combine to give us a huge competitive advantage. But we know we have to continuously improve to maintain the very high relevance of this brand, to invest in key areas to make sure we continue to meet our client's expectations. And we're doing this in 4 areas: our technology, our people, our offices and our Tax Plus products. Let's start with technology. You may not realize this but H&R Block is as much a technology company as we are a retailer. We have to be. Our clients are digitally savvy and use digital channels. Further, we understand that an effective distributed network must be reliable, safe and secure, which goes toward our larger efforts of continually -- continuously enhancing the user experience. The first technology area I'll highlight is MyBlock, a great example of how we're enabling client interface, not just during the tax season, but every day of the year. You should think of MyBlock as the client's…

So that 60 Minutes segment covered a lot of ground. So what you saw was a highly condensed clip of the original segment. But it captures the essence of the tax identity theft problem. So what exactly can consumers do now to prevent tax identity theft? Truthfully, not much. They can file their taxes as early as possible in hopes of beating the bad guys to the punch. But that doesn't work if they're waiting on key tax documents. They can work hard to protect their personal information, but that's often beyond their control. They can pay for general identity theft monitoring and alerts, which may be a good idea. But the truth is none of these currently protect consumers against tax identity theft, which is where H&R Block comes in. We're doing something about this growing problem and that's why we're introducing our newest Tax Plus product, Tax Identity Shield. We worked hard over the last year to develop this innovative, affordable and effective solution to tax identity theft. Tax Identity Shield is exclusive to H&R Block, and we think our clients will welcome this solution to a growing problem. Here's what our product does. One, a pretax season scan to provide awareness of tax identity theft risk. Two, custom advice on how to reduce the risk. Three, a proactive defense to help protect future tax returns. Four, early detection of any fraudulent returns submitted via H&R Block with the tax e-file notification. And five, expert guidance and support with our restoration services in the event of tax identity theft. Another interesting point in this product is that we've partnered with Equifax to enable key capabilities such as the preseason tax identity theft risk assessment. We're very excited about Tax Identity Shield and really about being able to fill a need in the market. We'll be launching Tax Identity Shield in January nationwide. So to wrap up, you can see that we continue to make significant investments in our technology, our people, our offices and in our Tax Plus products. And this is all geared toward maintaining our high relevance in a competitive market, to making sure we are well positioned for the future and that H&R Block remains the market leader. We are now going to take a 15-minute break. Please return to your seats by 10:20. Thank you. [Break]

Everybody, if you could take your seats, we will get started in just about a minute. So if you can take your seats. Thank you. [Audio Gap] [Video Presentation]

Good morning. I'm Mark Ciaramitaro, and I lead our new business and new product initiatives, including our enterprise focus on the Affordable Care Act. Since the Patient Protection and Affordable Care Act was passed in 2010, the nexus of the law has been to enable health insurance enrollment for uninsured households. Going forward however, you will soon see that the tax consequences will play an equally important role. In fact, the reality is that the Affordable Care Act has ushered in the biggest change to the federal tax code in decades. With the upcoming tax season, millions of households will experience a new intersection between 2 highly complicated consumer arenas, healthcare and taxes. This intersection will take the form of new coverage requirements, tax credit reconciliations, potential tax penalties, and associated exemptions, new tax forms in just an overall increase in tax complexity. Last year, when we discussed ACA, we outlined the law's overall objective to increase coverage quality, affordability, and access using a number of tax-base carrot and stick mechanisms, including both the individual mandate and premium tax credits. We also provided the preliminary view that a significant number of H&R Block tax clients could be directly impacted by ACA. At that time, there was and unfortunately still is, pervasive consumer confusion regarding the tax implications of this law. We also introduced our intentions to provide marketplace consumer enrollment assistance via our partnership with GoHealth. Because the impact of the Affordable Care Act on the tax code is so pervasive, we believe that the combination of ACA with taxes will create new growth opportunities for H&R Block. We also believe that we are well-positioned to capitalize, both in the tax category and with new related services. However, we are in the early stages with potential changes on the law…

So I've watched Mark do that presentation several times and I have to tell you, I learn something new every time and it continues to amaze me. The complexity that this country's going to be going through in the near term. The other thing I should point out before I begin my presentation is, I think this is the first time that all of you come to our Investor Meeting, we're actually giving you tax forms to take with you. So you can thank us later for that. Anyway, I'm Greg Macfarlane. I'm really here to take my time with you to wrap up everything together from what you've heard today. We've gone through a lot of material with you, but we do have an organization and a theme to it that I'll share with you. Before I do that, though, I do want to talk about our second quarter results that we released last evening. A lot of you had the chance to read that. So with that, I'll start here with revenue. So revenues for the first quarter were $135 million. They were up slightly from the prior year. We had higher tax prep fees during the off-season in United States and Australia. Where in Australia, we actually just completed our 44th tax season and delivered another strong year, so congratulations to our Australia team. We also continue to improve our off-season usage of the Emerald Card, building on a Tax Plus momentum that you heard Bill talk about extensively earlier today. Next, adjusted pretax loss from continuing operations was $202 million, which was an increase of $19 million compared to the prior year. This increase in revenue was offset by an increase in operating expenses. This was primarily due to higher depreciation, amortization from acquisitions and planned…

So we are set up here and we'll get started here in just 1 second. Just wanted to quickly remind everyone that the slides for today's presentations will be posted to our Investor Relations website later this afternoon and the transcript will be posted Monday. As we come around, so we will have microphones for all those of you who are asking questions. We just like for you to state your name, your company and then ask your question. We'll call on you at that time. Okay. So if you have a question, just raise your hand, we'll come around and get you. Scott?

Scott Schneeberger with Oppenheimer. I guess we'll start off with the news of last evening with regard to Sand Canyon. Greg, could you just elaborate a little bit more on that? I don't think it's fully understood what the development is that you reported last night. So any further color will be helpful.

Yes, so it's an awkward time-line because it kind of happened after the end of the quarter, but before we released the quarterly report. But that doesn't really matter. What matters is obviously Sand Canyon's making forward progress on this issue. We are restricted in actually the specifics in which we can talk about, so unfortunately, I have to be a little bit vague. But specifically, there was a material development from a settlement with a counter party, that was involved from a [indiscernible] warrant claim, in our view in a positive way. I can't quantify that other than say it was a material amount of the reserve and the actual reserve in itself was fully contemplated in the reserves. There's no broader implication of the reserve amount.

And just to follow up. I'm not sure if you can answer this, but it represents past claimants and those who may still be pursuing. Should we infer that this would cover all as of this date who are putting forth claims, and therefore, could be a permanent solution? Or would there still be incremental opportunity for others once this agreement is concluded?

So let me backtrack a little bit if that's okay. When we had shared this with you, which is probably 1.5 years ago the 6-year statute of limitations, which is what we believe is a matter of law has well expired at this point in time. So any new claimant that may show up at this point will have a very difficult time and the reality has been really no new claims to talk about. So really what this issue with Sand Canyon is focused on a limited number of counter parties that have a asserted claims that Sand Canyon felt was productive to enter into these towing [ph] arrangements, which was a way to stop the clock, and what we've announced yesterday was really one of those situations resolving.

Thomas?

So there's been a lot of chatter in the investment bank community about immigration reform and the potential benefits to you. You didn't touch much on it. Can we just get a little more -- couple of more thoughts on it?

So couple of things on that. First of all, the President came out with that speech a couple of weeks ago. There's a lot of conversation about that whole area. So -- excuse me, we're still watching that to see what that is. What I wouldn't say is I think we're really well positioned here because we are the #1. [Audio Gap] We are the leader in terms of the number of Latino returns that we do today. We have made a big step up over the last 2 years in terms of the number of bilingual tax pros we have. And I think similar to ACA, we had anticipated that something like this would come. I do think this will happen. I think it's to the benefit of, frankly, both parties, that something happen before 2016. But specific to the proposal that came out a couple of weeks ago, we're going to wait and see where that settles out. But we think, in general, this is going to be a net benefit to us.

If you look at the details of their announcement, it's hard to understand how there'd be a direct benefit this tax season, specifically.

And then follow-up. So on the bank sale, I mean there's been some chatter that the increased scrutiny of prepaid debit cards by the CFPB, and maybe some other regulatory changes is what's slowing down the process. Can you answer that comment or those thoughts?

Greg, help me out if I don't phrase this right. I don't think it has any impact on the -- that's the CFPB and we're dealing with the OCC.

The CFPB guidance just came out. Obviously, we looked at it in detail and the good thing about product is we are pretty much in full compliance right now. There's always been broader concerns, in general, about debit cards, but specific to our application, we think they're independent.

All right.

And there's no increased scrutiny by -- on any of your other financial products, or you think any changes in regulatory frameworks that could have an impact?

I couldn't hear the questions.

Just in terms of changes in the regulatory process, on your other products and on Emerald Advance and Emerald One, and I guess, refund transfer. No changes in the environment that should be slowing down?

I mean these has been regulated for a number of years. We're operating the bank. Obviously, we're operating all those products. So no, I don't see any change to structure of our products or that this has any impact on the pending bank transaction.

And just to be clear, I mean, I completely agree with Bill. I mean, we don't think there's an issue. But we've said very clear, to the regulator -- if there is an issue, you need to tell us because and we'd be happy to change the product very quickly to accommodate that.

And the regulators have said anything to you?

There's been no request to do anything.

As a reminder, if you don't mind, state your name and your company before asking the question. That'd be helpful.

[indiscernible]. Could you discuss the decision-making factors and the relative economics between buying an independent, taking in a franchise and adding a new store, first? And then secondly, can we assume that following the '15 tax season, you will have commensurately more excess capital relative to the $850 million to $1 billion that you discussed previously?

So Greg, why don't you -- I realize it's in Shawn's area, but I think this is more a financial question. So why don't you take that and Shawn, if there's anything you want to add at the end. Why don't you let Greg lead?

Yes, I mean specifically the first part you've got, do we open a new store? Do we buy back -- or do we buy an independent buy back a franchise? All 3 represent compelling financial returns from our perspective and one thing about us right now is we have an abundance of capital. So realistically, on the second of the -- on items 2 and 3, it's really -- well I should say really on the independents it's really a quality issue, so we work hard to find a limited number of deals because the quality is such a big issue for us, the franchise really is a onetime opportunity. This was a refranchise strategy the company pursued several years back. That was mistaken. We're fixing that and we're pretty much fixed at this point. So that's kind of close as an issue. In terms of opening up new stores, what we have learned from our history of opening up stores is slow and methodical is better than fast and hasty, because the operational structure, the quality tax professionals, the supervision of the district managers are very important. So we're going to be methodical and slow in that area, and as we continue to develop this as a muscle, we'll talk about maybe going a little bit faster.

But if the company is within 5 miles of 85% of the population, is it fair to say that acquiring independents is a higher priority than opening new stores?

It's going to be a combination of the two. And this is actually when Kathy did a really nice job of talking about how we're taking our data and understanding at a much level of greater detail with better analysis, and we're able to identify sides of the street corners, what part of town -- we're able to extrapolate projections of population shifting and have a much more finite view of opportunity. And when we identify opportunity, you have to be growing new store, do we buy a local entrepreneur or some combination of the two.

And the thing is, in the retail business, trade area has changed and the like, and with the large footprint we have, you are correct, we are -- we're in a lot of locations, but we also want to be where populations expand. We certainly, with the changing demographics of the country, want to be in certain locations. So there's still opportunity for us to grow the footprint. But I think Greg's point is the right one, which is we don't see and we don't have a dramatic, "I'm going to come out with a number" and make sure you get that number. I think it's better. I think we've really evolved, similar to what we talked about in Shawn's area with the -- what we call the acquisition and development process, our real estate process is much more sophisticated now as we go forward. So I think we have a good sense that there are incremental opportunities. Obviously, from a net perspective, we pulled out of Sears and Walmart and we think that was the right decision on every level.

Gil Luria, Wedbush Securities. In terms of your vision for how the digital market is going to evolve. You talked a little bit about the fact that Intuit is bifurcating, it's lowering the price on the low-end, raising the price for a new chunk of -- new type of filings. But I think your commentary was that you expect in the future for the categories to converge. Could you explain why you think that would happen, and if it does, and if the category gets even more bifurcated, how does that impact your vision?

It's definitely based on the idea that price is no longer a differentiator, because if you look at the value competitors, there's very little to them except price and that was why I think I said it 3 or 4 times and I said these are really web for -- tax forms as a webpage. There's very little more than that. And so you might say that that is of value to me if it's the lowest price, but if price is no longer something that differentiates, then my view is that those consumers have the same expectations at that point as the premium consumer. And then to your point about the bifurcation of the market leaders pricing strategy, that pricing strategy last year was used in online to both have a lower entry-level price for simple filers and then to the charge more for the more complex. And we're seeing it again in desktop. This year, the desktop SKUs have already launched. There in some stores, but they're already online, and if you look, there are multiple changes in the basic and deluxe product SKUs for the market leader, but the basic is probably the most pronounced and it's the example that I'll give you, but that product was $29.99 last year. This year, it's opening at $14.99. But it's only 1040EZ and 1040A. The schedule A and the 1040 was taken out of the basic product. So if I go in and buy that, I may see it as a good value, but there's a lot less there. At $14.99 now, if I'm a schedule A user, which 30% DIY-ers are, then I'm forced to upgrade to the $59.99 deluxe product. So that's really why I believe that in both the value and the premium that there are changes going on that leave us very well positioned, Gil.

Last year, the result of Intuit taking this strategy, was that they had a double-digit volume increase, but revenue per filing for them and by definition, for the industry came down. Aren't you concerned that, that's the trend going forward if they continue on this strategy?

Well, I think Bill said that we look at our own metric around growing. Tax Plus revenue is our primary objective. We've gained share in revenue 4 years in a row. Where I view the categories going is you've got to do both. I think that in order to lead in this area, you're going to have to do both and price as a lever is only really a onetime shot.

Anj Singh from Credit Suisse. This is for Greg and Shawn. I think I heard you guys say you're looking to acquire 650 franchised urban centers. I was wondering if you can discuss what sort of pace you anticipate that rolling out and if you can quantify a revenue opportunity there. More importantly, I was wondering, were these stores originally company-owned, then franchised, now company-owned again? Sort of what are the decisions that have driven that back and forth?

So why don't you guys -- why don't you start, Greg?

So I'll give you a bit of history. Block, as it began to expand 50 years ago, really said we're going to control the cities and the suburbs and franchising is the right solution for rural development. And there's real good reasons for that: Our average franchise only has 1 or 2 stores because the distance between them is 40, 50 miles. Husband runs one, the wife runs the other one. We find real synergies of management and control by being in the suburbs and cities. As times gone on, obviously, suburbs continue to expand. 4, 5 years ago, there was a decision that in some of the smaller markets like Raleigh, North Carolina, Scottsdale, Arizona, Springfield, Missouri, to take that city and its suburbs and sell them to franchise. As a gain on sale opportunity that obviously we didn't think created real value. That was a mistake from our perspective. Our franchisees do not run the stores better than we do. We believe that we can actually run a little bit better than they can. We don't have to put a lot of capital into it. So we're going back and looking at all those sales and saying, we think there's opportunity for us to create value here. This past 12 months, we've actually gone back and taken care most of those refranchising that happened, and so as we go into this tax season, not all them but the majority of them that were refranchised 4, 5 years ago are now back part of the H&R Block company system. So that means there are few sort of this transaction to go next year. We're not going to quantify much more than $100 million for now. I think at the end of the tax season, we'll give you some more information on that.

Got it. And as a follow-up, I'm not sure if I missed it, but at this juncture, do you have any better thinking around the incremental leverage opportunity that you've talked about, or is that something that's still too early to discuss?

You're talking about the leverage for the whole company?

Yes.

Yes, I mean the answer is, unfortunately, similar to what we've talked about before, we're a low investment-grade rating rated company. We spend a lot of time thinking about that. We've announced publicly that we think there's value in maintaining that investment grade rating. We haven't given very specific guidance what exactly that means other than we want to maintain that investment grade rating post the bank transaction.

But we have said that upon completion of that, the board and I have agreed that we're going to -- we will -- we were taking on incremental net debt. So we've talked about the excess capital and the incremental net debt and that's really the position we've taken at this point.

Michael?

I'm Michael Millman from Millman Research Associates. Kind of following up on some of the questions, particularly, the franchisee. Can you give us an idea of what the free cash flow is for a franchised system as opposed to an owned system?

Are you talking about from the company perspective, Mike?

From a company perspective.

Well, the economics are different. I mean right now, Block, on a franchise agreement, typically has a 30% royalty off revenues. We do incur costs around that, so it's not just doesn't go right to the bottom line. In fact, we've spent a fair amount of money on supporting our franchise. When it comes into the system, there's an initial outlay to buy that, but the ongoing fixed assets are relatively modest. You've seen 2% to 3% of revenues is the right model to think about. So we're trying to balance revenue growth at appropriate levels of margin, which translates still to superior ROIC, and so when we are well above our cost to capital, we think that's a compelling return for investors of excess capital.

And I think the other thing I would add in term of this decision, I mean, in the simplest terms, we do think that there is operating efficiency that having franchisees focus primarily in rural areas, while the company focuses urban and suburban does create a lot of efficiencies of management in the system. And on top of that, with the margin structure we're fortunate to have in this company, the ability to get 100% of the revenue from a company perspective, yet still return a very -- have a very healthy return at the bottom makes it pretty attractive for us equally to lean to the company side versus the franchise side. Having said that, 30% royalty rate with the efficiencies of them operating in small towns and communities really is a great combination for us. So a lot of times, people ask about the mix, we think the mix will stay, generally, how it is today.

And to change the subject a little bit, price -- can you talk about what you see over the next few years as your revenue per return, excluding some of these extras that we discussed today?

You want to take that, Greg?

Yes, I mean we've talked about this. We have pricing leverage and synergies are one of the benefits. We talked about the price last [indiscernible] number. What we have realized in the last 10 years at Block is greater than the rate of inflation. We're not going to give specific guidance for competitive reasons, but you should expect greater than the rate of inflation from pricing going forward on -- just all things being equal.

Can we go back to Scott.

Scott Schneeberger again from Oppenheimer. Two if I could sneak it in. One on Identity Shield. Its new, it's differentiated versus your peers. I'm curious, what type of revenue opportunity, I know you may not want to speak to this year, but over the longer term, sounds like it might be a kin to your warranty product, which is about a $35 price point, $90 million of revenue a year. Is that the way to think about it? Trying to sell into the population and grow it as such?

Yes, let me kick it off and then let Jason or Greg want to add anything. The context for this is the growing problem in the country that tax identity theft has suddenly emerged, as bad guys have figured out, "Wow! There's $4,800 and $35 according to the 60-minute segment that I can get in what seems to be in pretty simple terms." So part of this is tied to what steps are taken to combat this particular issue. If it continues the way it is trending right now, we think it will be a very good addition to our Tax Plus strategy. But in terms of revenue projections or exactly what the pricing is, we're not prepared, we're not ready to go into that right yet. I don't know if anybody's got anything to add.

Well I think we're really excited about this product. What it gives the consumer is it gives them prevention, protection and remediation in case this happens. It's a growing problem. We're excited because we've got a great partner who knows a lot about the identity space and the identity theft space, but not specifically tax identity, which is really where we, specifically, see this hitting and it's similar to [indiscernible] and that it will really go out and be something that consumers like at all segments. This is the ones that Kathy mentioned earlier.

And then just a separate topic altogether. Bill, I'm curious, usually Latin market gets a lot of lip service every year at Investor Day and from all companies across the business. We saw at tobacco, across the presentations. Could you tie it together perhaps with regard to this buying back or this expansion of office strategy and the hiring numbers you provided and if you could just kind of put a bow on what the approach is this year and how you think you'll be differentiated there?

Yes, and then I'll let Kathy add some information from the segmentation perspective. But I think that you've got the thesis. We have invested in our offices and a lot of those are in -- we have something called Latino designated offices where we have a number of a bilingual tax pros, we have a lot of materials that are bilingual. We're hiring more tax pros, we're training them, they're becoming more experienced, and then there's certainly a marketing investment.

So interestingly enough, when we looked at the segmentation results, what we saw is that Latinos were spread equally across all the segments. Again, because the segmentation is based on needs and it's not a demographic segmentation. We saw that there were Latinos, very equally distributed across all of the segments, which really helps us, again, in our marketing efforts to those people; knowing who they are, what is relevant to them and how to best reach them.

And in our marketing efforts, you saw the one -- we have José who's kind of the emblem in the Latino community, we buy national media and UniVision and extensive radio efforts.

So we have our Latino air coverage just like we have our general market air cover.

I think there is time for another question, down at the back there?

This is Steve Rogers with Citi. Can you talk more about the simple filer tax market that people that would file a 1040EZ or 1040A and just talk about how do you win there and how do you see the market dynamics currently?

So do you want to start with that, Kathy? And then maybe Jason or Mark, if you want to add something, because, obviously, Mark brought up the point that the 1040EZ market, probably by definition, almost will shrink this year because of -- you won't be able to file if you're in the Marketplace. Why don't you start for the segmentation?

So again, if you look back at the segmentation and I mentioned this, but behavior or I guess, I should say form type or demographics do not really -- are not indicative of consumer behavior. So what we've seen, again, is that regardless of age, regardless of income and regardless of form type, consumers behave different ways. And so we're able to really reach them more on how we think that they're going to behave. You'll see that we have, effectively, with our one-to-one marketing, we've been able to identify who those early-season or those 1040EZ filers may be and reach them with the right message and the right offer at the right time, just to make sure that we're hitting them when it's most relevant, most timely.

And really, when we think about designing our products, we do think first in terms of the needs based and what jobs the consumers want. And so for instance, we don't just think about an EZ, we think about all the taxpayers who are DIY and their interest primarily in getting a refund. And so for instance this year, we have a new feature, it's called Refund Reveal. And this will be unique a product innovation that's unique to Block in the marketplace and it not only shows the consumer what their refund is, but it shows them how it was calculated. This is really -- that box in the upper left-hand corner that the user watches, they see it go up and down, but what we found during our research was there's a mystery about how it goes. What makes it go up and down so that was one of the insects as we think about the needs-based approach as opposed to a forms-based approach that led us to that innovation.

I would just also say don't confuse simple forms with what consumer's perception is about their taxes and just because you're using an EZ doesn't necessarily mean you would see your taxes as simple, and with the Affordable Care Act, Bill already mentioned, obviously, some of those EZ clients are no longer qualify for those forms and that number's going to go up as more people enroll in the Marketplace. Eventually, if it hits the HHS number of 25 million, you're going to see a substantial shrinking of the EZ market. But importantly, even EZ clients are going to be faced with potential refund effects from either penalty calculations, verification of their insurance coverage or exemptions. And so that's going to confront them as well even though they may be using what we call a simple-based tax form, and so we expect some of those do-it-yourself people that are confronting with that are going to have questions and they're going to need answers because their refund's going to be affected.

Okay, maybe one more in the back there?

This is Jesse Rosenthal from CreditSights. Just a very quick question for Greg. Follow up on the leverage issue, I appreciate that you're just kind of getting through the bank deal first, but I was wondering if you had any preliminary discussions with the rating agencies or any plans to discuss with them once you kind of get to the point where you're trying to dimension exactly where you want to be.

Yes and just to be clear, the ratings agency's joined us today, although I think I saw Ed [ph] sneak out, but anyway, we have regular conversations with the ratings agencies. It's part of just our relationship with them. We've had good open dialogue with them. We're proactive in sharing our ideas and thoughts with them, but we're not going to talk about specifics at this point.

Okay, there are no other questions. Just want to say, once again, thank you so much for coming out. We do appreciate your involvement today, and you all have a great day. Thank you.

Thank you.