Before we begin our prepared remarks, I'd like to remind everyone that this call 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. And as a result, our actual outcomes and results could differ materially.You can learn more about these risks in our Form 10-K for fiscal 2012 and our other SEC filings. H&R Block undertakes no obligation to publicly update these risk factors or forward-looking statements. With that, I'll now turn the call over to Bill. William C. Cobb Thank you, Derek, and thanks to everyone for joining us on the call. I hope all of you had a great Labor Day weekend. During the second half of fiscal 2012, we completed a thorough review of our organization and made some very difficult decisions to reduce our cost structure and to drive efficiency. While our off-season results typically don't offer a lot of insight into our performance for the year given the seasonality of our business and that most of our revenues and earnings are generated in our fiscal fourth quarter, I'm pleased by the impact our cost-reduction initiatives have had to date. On an adjusted basis, our net loss from continuing operations improved by 6% to $105 million, primarily due to reduced operating costs. Greg will take you through our results later on the call, but this quarter's key takeaway is that we continue to believe our cost-reduction initiatives will add $85 million to $100 million of pretax earnings in fiscal 2013, leading to earnings and margin expansion. In addition to these initiatives, we've had several recent and positive developments. First, several weeks ago, we announced a new $1.5 billion 5-year committed line of credit agreement. The new agreement provides us significant financial flexibility and more closely aligns to our business needs. The prior agreements' net worth covenant and clean down requirements have been replaced in the new agreement with leverage and interest coverage tests, which better align with a consumer services company like ours.
We also recently announced a significant milestone in the company's history. Our 200th consecutive quarterly dividend will be paid on October 1 to shareholders of record on September 14. Since Henry and Richard Bloch took the company public 50 years ago, the resiliency and consistency of our business has allowed us to generate substantial free cash flow, and that has enabled us to continue this dividend streak. Since 1962, H&R Block has paid a total of $3.5 billion in dividends. This is a strong testament to our business, and I am proud to be affiliated with a company that has a long tradition of returning capital to shareholders. We expect to deliver appropriate returns of capital to shareholders for many years to come.Next, I'm pleased to announce today that we've entered into a new partnership with Sears, which we believe will be slightly accretive to fiscal 2013 earnings. Under the new agreement, we've elected to reduce the number of Sears locations in which we operate in to focus on 112 of our best performing Sears locations. The agreement also allows us to open seasonal offices in other Sears locations throughout the country during peak tax season. In the Sears locations where we'll no longer operate, we believe we'll retain the vast majority of our clients based on our historical experience. In fact, since 2008, we've exited more than 200 Sears locations and we've retained nearly 75% of the clients served in these locations. To put this in perspective, our retention of all Sears clients last year was 76%. So we do not expect this agreement will have a material impact on the number of returns we prepare going forward. That said, we're very pleased to maintain our long-standing relationship with Sears, and we believe the new agreement benefits both parties and our clients. Read the rest of this transcript for free on seekingalpha.com