H&R Block Signs Letter of Intent to Sell RSM McGladrey to McGladrey & Pullen, LLP

H&R Block, Inc. HRB Total consideration of approximately $610 million H&R Block to record non-cash, after-tax charge of approximately $53 million, or $0.17 per share in fiscal first quarter Transaction expected to close by calendar year end H&R Block, Inc. HRB today announced that it has signed a non-binding letter of intent to sell substantially all of the assets of RSM McGladrey ("RSM") to McGladrey & Pullen, LLP ("M&P"). Based upon values as of July 31, 2011, total consideration is approximately $610 million, of which approximately $65 million will be financed by H&R Block. These amounts will adjust at closing based on fluctuations in the balance sheet. M&P will also assume substantially all liabilities, including contingent payments and lease obligations. "After a thorough review of the alternatives, we believe the sale of RSM is in the best interest of H&R Block and its shareholders," said Bill Cobb, H&R Block's president and CEO. "This transaction is an important step in refocusing the company on growing clients and market share in our core tax business and improving our margins." In connection with this sale, as well as the sale or closure of RSM's remaining operations that are not part of this transaction, H&R Block will record a non-cash, after-tax charge of approximately $53 million, or $0.17 per share in the fiscal first quarter ended July 31, 2011. The sale of RSM is expected to close by calendar year end and is subject to a number of conditions, including the signing of a definitive agreement, finalization of M&P's financing for the transaction, and customary closing conditions. H&R Block acquired RSM in 1999. Today, RSM employs approximately 5,000 associates and professionals in more than 80 offices nationwide.