What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-05-10 compared with 2022-02-04 · 106 added, 98 removed, 255 unchanged (44% of the section changed)

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The Spruce℠ solution, built by H&R Block with banking products powered by Meta, includes a spending account with a debit card, along with a connected savings account that allows for budgeting for specific goals.

On April 1, 2022, we sent a notice of redemption to the trustee to fully redeem our outstanding $500 million 5.500% Senior Notes originally due in November 2022 (2022 Senior Notes).

The redemption price is equal to 100% of the outstanding principal amount of the 2022 Senior Notes, plus accrued and unpaid interest up to, but not including, the redemption date.

The 2022 Senior Notes were redeemed on May 2, 2022.

FINANCIAL OVERVIEW

On March 21, 2020, the federal tax filing deadline in the U.S.

for individual 2019 tax returns was extended from April 15, 2020 to July 15, 2020, shifting a portion of revenues and expenses from that tax season into the six months ended December 31, 2020.

for individual 2019 tax returns was extended from April 15, 2020 to July 15, 2020, shifting a portion of revenues and expenses from that tax season into the nine months ended March 31, 2021.

This extension impacted the typical seasonality of our business and the comparability of our financial results.

Our revenues for the three months ended December 31, 2021 increased $16.9 million, or 11.9%, when compared to the prior year period, primarily due to higher Emerald Card® activity, and we recorded a pretax loss of $298.9 million compared to $300.5 million in the prior year.

Our revenues for the six months ended December 31, 2021 decreased $207.9 million, or 37.2%, when compared to the prior year, primarily due to the extension of the 2019 tax season to July 15, 2020 in the prior year period.

We recorded a pretax loss of $496.2 million compared to $333.4 million in the prior year.

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|Q2 FY2022 Form 10-Q

Q3 FY2022 Form 10-Q| H&R Block, Inc.

RESULTS OF OPERATIONS

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Operating Statistics

Six months ended December 31, 2021 2020 (1)

Nine months ended March 31, 2022 2021 (1)

Change % Change

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Our definition of Net Average Charge may not be comparable to similarly titled measures of other companies.

Q2 FY2022 Form 10-Q| H&R Block, Inc.

H&R Block, Inc.

|Q3 FY2022 Form 10-Q

RESULTS OF OPERATIONS

Consolidated – Financial Results (in 000s, except per share amounts)

Three months ended December 31, 2021 2020 $ Change % Change

Three months ended March 31, 2022 2021 $ Change % Change

assisted tax preparation $ 1,392,142 $ 1,290,892 $ 101,250 7.8 %

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Interest expense on borrowings (23,746) (22,471) (1,275) (5.7) %

Pretax loss (298,918) (300,499) 1,581 0.5 %

Income tax benefit (109,845) (46,510) 63,335 136.2 %

Net loss from continuing operations (189,073) (253,989) 64,916 25.6 %

Pretax income 861,857 829,215 32,642 3.9 %

Income taxes 186,884 69,543 (117,341) (168.7) %

Net income from continuing operations 674,973 759,672 (84,699) (11.1) %

Net loss from discontinued operations (1,796) (1,425) (371) (26.0) %

Net loss $ (190,605) $ (255,751) $ 65,146 25.5 %

BASIC AND DILUTED LOSS PER SHARE:

Net income $ 673,177 $ 758,247 $ (85,070) (11.2) %

DILUTED EARNINGS PER SHARE:

Continuing operations $ 4.06 $ 4.09 $ (0.03) (0.7) %

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See " Non-GAAP Financial Information " at the end of this item for a reconciliation of non-GAAP measures .

Three months ended December 31, 2021 compared to December 31, 2020

Three months ended March 31, 2022 compared to March 31, 2021

Revenues increased $78.2 million, or 3.9%, from the prior year.

Emerald Card® revenues increased $14.9 million, or 149.2% due to higher card activity which is a result of the IRS loading Child Tax Credits monthly to Emerald Cards®.

Revenues for U.S.

assisted tax preparation increased $101.3 million, or 7.8%, largely due to a higher net average charge in the current year combined with higher tax return volumes.

royalties revenues increased $8.7 million, or 5.8%, due to an increase in tax preparation fees.

DIY tax preparation revenues decreased $6.1 million, or 3.4%, due to lower tax return volumes.

Emerald Card® revenues decreased $23.0 million, or 31.2%, due to lower card activity in the current

Q3 FY2022 Form 10-Q| H&R Block, Inc.

quarter as some stimulus payments were loaded on to Emerald Cards in the prior year.

Interest and fees on Emerald Advances decreased $7.7 million, or 20.2%, due to a decline in Emerald Advances SM in the current year.

Wave revenues increased $4.0 million, or 25.1%, due to higher small business payments processing volumes.

DIY tax preparation revenues increased $3.1 million, or 50.6%, due to higher desktop software

H&R Block, Inc.

|Q2 FY2022 Form 10-Q

volumes compared to the prior year.

assisted tax preparation revenues decreased $3.2 million, or 9.3%, due to lower off-season tax return volumes and lower net average charge.

Total operating expenses increased $44.1 million, or 3.9%, from the prior year.

Field wages increased $3.8 million, or 5.7%, due to Canadian wage subsidies received in the prior year and higher bonus accruals in our Australian tax operations.

Benefits and other compensation increased $2.6 million, or 9.2%, primarily due to higher employee insurance expenses.

Field wages increased $25.6 million, or 6.2%, due to higher hourly wage rates.

Marketing expense increased $13.5 million, or 7.4%, due to higher online advertising and agency fees .

Depreciation and amortization expense decreased $3.0 million, or 7.6%, due to lower amortization on acquired intangibles and depreciation on equipment.

Bad debt decreased $2.9 million , or 17.5%, due to lower Emerald Advance SM volumes compared to the prior year.

Other expenses increased $12.7 million, or 7.5%.

The components of other expenses are as follows:

Three months ended December 31, 2021 2020 $ Change % Change

Three months ended March 31, 2022 2021 $ Change % Change

Consulting and outsourced services $ 46,402 $ 48,845 $ 2,443 5.0 %

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$ 182,258 $ 169,546 $ (12,712) (7.5) %

Consulting and outsourced services expense increased $3.3 million, or 13.7%, due to our strategic imperatives and data processing fees related to higher activity on Emerald Cards®.

Employee and travel expenses increased $4.0 million, or 72.3%, due to less travel in the prior year as a result of COVID-19 restrictions.

Technology-related expenses increased $2.9 million, or 12.6%, due to increased investments in information technology.

Credit card and bank charges increased $5.3 million, or 42.8%, due to higher Wave small business payment processing fees and fees related to Emerald Cards ® .

Supplies expense decreased $3.2 million , or 38.8% , due to office supplies purchased in the prior year in response to the COVID-19 pandemic.

We recorded an income tax benefit of $109.8 million in the current year compared to a benefit of $46.5 million in the prior year, the increase is due to discrete tax items in the current year.

The effective tax rate for the three months ended December 31, 2021, and 2020 was 36.7% and 15.5%, respectively.

See Item 1, note 7 to the consolidated financial statements for additional discussion.

Q2 FY2022 Form 10-Q| H&R Block, Inc.

Credit card and bank charges increased $2.9 million, or 10.3%, due to higher Wave small business payment processing fees.

Legal fees and settlements increased $3.8 million, or 115.2%, due to higher fees attributable to certain pending litigation matters.

We recorded an income tax expense of $186.9 million in the current year compared to $69.5 million in the prior year.

The effective tax rate for the three months ended March 31, 2022, and 2021 was 21.7% and 8.4%, respectively.

The lower rate in prior year is a result of tax benefits recorded related to our net operating loss carrybacks to 35% tax years.

federal tax filing deadline for 2021 individual income tax returns was April 18, 2022, the deadline for 2020 tax returns was May 17, 2021 and the deadline for 2019 tax returns was July 15, 2020.

Therefore, the year-over-year periods are not directly comparable.

Our business is highly seasonal and results for the three months ended March 31 may not be indicative of results for the entire tax season.

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Consolidated - Financial Results (in 000s, except per share amounts)

Six months ended December 31, 2021 2020 $ Change % Change

Nine months ended March 31, 2022 2021 $ Change % Change

assisted tax preparation $ 1,456,594 $ 1,532,079 $ (75,485) (4.9) %

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Interest expense on borrowings (69,661) (78,657) 8,996 11.4 %

Pretax loss (496,236) (333,445) (162,791) (48.8) %

Income tax benefit (157,218) (18,546) 138,672 747.7 %

Net loss from continuing operations (339,018) (314,899) (24,119) (7.7) %

Pretax income 365,621 495,770 (130,149) (26.3) %

Income taxes 29,666 50,997 21,331 41.8 %

Net income from continuing operations 335,955 444,773 (108,818) (24.5) %

Net loss from discontinued operations (4,984) (4,533) (451) (9.9) %

Net loss $ (342,206) $ (318,007) $ (24,199) (7.6) %

BASIC AND DILUTED LOSS PER SHARE:

Net income $ 330,971 $ 440,240 $ (109,269) (24.8) %

DILUTED EARNINGS PER SHARE:

Continuing operations $ 1.92 $ 2.35 $ (0.43) (18.3) %

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See " Non-GAAP Financial Information " at the end of this item for a reconciliation of non-GAAP measures.

Six months ended December 31, 2021 compared to December 31, 2020

Nine months ended March 31, 2022 compared to March 31, 2021

Revenues decreased $129.7 million, or 5.1%, from the prior year.

The decrease in revenue is due to lower tax return volumes in the current year as the 2019 tax season was extended to July 15, 2020 in the prior year period, whereas the 2020 tax season deadline of May 17, 2021 did not extend into the six month period ended December 31, 2021.

This resulted in a decrease in U.S.

tax preparation, royalty and Refund Transfer revenues.

H&R Block, Inc.

|Q2 FY2022 Form 10-Q

Emerald Card® revenues increased $30.7 million, or 137.0%, due to higher card activity which is a result of the IRS loading Child Tax Credits monthly to Emerald Cards®.

Q3 FY2022 Form 10-Q| H&R Block, Inc.

Emerald Card® revenues increased $7.7 million, or 8.0%, due to higher card activity which is a result of the IRS loading Child Tax Credits monthly to Emerald Cards® in July through December 2021.

Interest and fees on Emerald Advances decreased $9.4 million, or 17.7%, due to a decline in Emerald Advances.

Wave revenues increased $14.1 million, or 31.6%, due to higher small business payments processing volumes.

Total operating expenses decreased $36.1 million, or 4.3%, from the prior year period.

Total operating expenses increased $8.0 million, or 0.4%, from the prior year period.

Field wages decreased $7.1 million, or 1.3%, due to lower tax preparation volumes in the current year as a result of the tax season extension in the prior year.

Other wages decreased $4.5 million, or 3.6%, due to an adjustment to prior year bonus accruals in the current year.

Benefits and other compensation decreased $7.6 million, or 4.9%, due to lower payroll taxes as a result of lower wages.

Marketing and advertising expense increased $9.7 million, or 4.5%, due to higher online advertising and agency fees in the current year.

Depreciation and amortization expense decreased $9.6 million, or 8.2%, due primarily to lower amortization of acquired intangibles.

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The components of other expenses are as follows:

Six months ended December 31, 2021 2020 $ Change % Change

Nine months ended March 31, 2022 2021 $ Change % Change

Consulting and outsourced services $ 99,870 $ 91,888 $ (7,982) (8.7) %

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$ 373,458 $ 340,328 $ (33,130) (9.7) %

Consulting and outsourced services expense increased $10.4 million, or 24.2%, due to our strategic imperatives and data processing fees related to higher activity on Emerald Cards®.

Consulting and outsourced services expense increased $8.0 million, or 8.7%, due to higher call center expenses and data processing fees related to higher activity on Emerald Cards®.

Technology-related expenses increased $8.4 million, or 13.6%, due to increased investments in information technology.

Credit card and bank charges increased $9.7 million, or 17.9%, due to higher Wave small business payment processing fees and fees related to Emerald Cards ® .

Legal fees and settlements decreased $5.2 million, or 42.5%, due to a legal accrual in the prior year.

Interest expense on borrowings decreased $9.0 million, or 11.4%, primarily due to higher CLOC borrowings in the prior year.

We recorded an income tax benefit of $157.2 million in the current year compared to a benefit of $18.5 million in the prior year, the increase is due to discrete tax items in the current year.

The effective tax rate for the six months ended December 31, 2021, and 2020 was 31.7% and 5.6%, respectively.

We recorded an income tax expense of $29.7 million in the current year compared to $51.0 million in the prior year, the decrease is primarily related to lower pretax income in the current year.

The effective tax rate for the nine months ended March 31, 2022, and 2021 was 8.1% and 10.3% , respectively.

See Item 1, note 7 to the consolidated financial statements for additional discussion.

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Our operations are highly seasonal and substantially all of our revenues and cash flow are generated during the period from February through April in a typical year.

Therefore, we normally require the use of cash to fund losses and working capital needs, periodically resulting in a working capital deficit, during the months of May through January.

Therefore, we normally require the use of cash to fund losses and working capital needs, periodically resulting in a working capital deficit, during the months of May through

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|Q3 FY2022 Form 10-Q

We typically have relied on available cash balances from the prior tax season and borrowings to meet liquidity needs.

Q2 FY2022 Form 10-Q| H&R Block, Inc.

Given the likely availability of a number of liquidity options discussed herein, we believe that, in the absence of any unexpected developments, our existing sources of capital as of December 31, 2021 are sufficient to meet our operating, investing and financing needs.

DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS – The following table summarizes our statements of cash flows for the six months ended December 31, 2021 and 2020.

Given the likely availability of a number of liquidity options discussed herein, we believe that, in the absence of any unexpected developments, our existing sources of capital as of March 31, 2022 are sufficient to meet our operating, investing and financing needs.

DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS – The following table summarizes our statements of cash flows for the nine months ended March 31, 2022 and 2021.

See Item 1 for the complete consolidated statements of cash flows for these periods.

Six months ended December 31, 2021 2020

Nine months ended March 31, 2022 2021

Net cash provided by (used in):

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Operating Activities.

Cash used in operations totaled $913.6 million for the six months ended December 31, 2021 compared to $702.8 million in the prior year period.

The change is primarily due to higher bonus payments, changes due to the expiration of tax statutes of limitations and an increase in our net loss in the current year as a result of the timing of the extended tax season in the prior year.

Cash provided by operations totaled $373.1 million for the nine months ended March 31, 2022 compared to $501.4 million in the prior year period.

The change is primarily due to higher bonus and payroll tax payments and a decrease in net income in the current year, partially offset by the timing of receivables collections in the current year.

Investing Activities.

Cash used in investing activities totaled $57.4 million for the six months ended December 31, 2021 compared to $58.7 million in the prior year period.

The change is primarily due to a decrease in EA revolving loans funded and franchise loans funded.

Cash used in investing activities totaled $71.1 million for the nine months ended March 31, 2022 compared to $50.0 million in the prior year period.

The change is primarily due to an increase in capital expenditures and payments to acquire businesses in the current year.

Financing Activities.

Cash used in financing activities totaled $149.9 million for the six months ended December 31, 2021 compared to $1.3 billion in the prior year period.

The change is primarily due to the repayment of the $2.0 billion draw on our CLOC in the prior year, partially offset by new draws on our CLOC and the repurchase of shares in the current year.

Cash used in financing activities totaled $707.5 million for the nine months ended March 31, 2022 compared to $2.4 billion in the prior year period.

The change is primarily due to the repayment of the $2.0 billion draw on our CLOC in the prior year, partially offset by higher share repurchases in the current year.

CASH REQUIREMENTS –

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We have consistently paid quarterly dividends.

Dividends paid totaled $96.9 million and $100.2 million for the six months ended December 31, 2021 and 2020, respectively.

Dividends paid totaled $143.4 million and $147.9 million for the nine months ended March 31, 2022 and 2021, respectively.

Although we have historically paid dividends and plan to continue to do so, there can be no assurances that circumstances will not change in the future that could affect our ability or decisions to pay dividends.

Our current share repurchase program has remaining authorization of $239.4 million which is effective through June 2022.

During the six months ended December 31, 2021, we repurchased $324.6 million of our common stock at an average price of $24.24 per share.

During the nine months ended March 31, 2022, we repurchased $550.3 million of our common stock at an average price of $23.84 per share.

In the prior year period, we repurchased $188.2 million of our common stock at an average price of $16.29 per share.

Our current share repurchase program has remaining authorization of $13.8 million which is effective through June 2022.

Share repurchases may be effectuated through open market transactions, some of which may be effectuated under SEC Rule 10b5-1.

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Capital Investment.

Capital expenditures totaled $39.4 million and $34.8 million for the six months ended December 31, 2021 and 2020, respectively.

Capital expenditures totaled $52.7 million and $44.2 million for the nine months ended March 31, 2022 and 2021, respectively.

Our capital expenditures relate primarily to recurring improvements to retail offices, as well as investments in computers, software and related assets.

In addition to our capital expenditures, we also made payments to acquire businesses.

We acquired franchisee and competitor businesses totaling $19.3 million and $12.2 million during the six months ended December 31, 2021 and 2020, respectively.

We acquired franchisee and competitor businesses

Q3 FY2022 Form 10-Q| H&R Block, Inc.

totaling $25.5 million and $15.5 million during the nine months ended March 31, 2022 and 2021, respectively.

See Item 1, note 5 for additional information on our acquisitions.

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|Q2 FY2022 Form 10-Q

FINANCING RESOURCES – The CLOC has cap acity up to $1.5 billion and is scheduled to expire in June 2026.

Proceeds under the CLOC may be used for working capital needs or for other general corporate purposes.

We ha d an outstanding balance of $275.0 million under the CLOC as of December 31, 2021 and amounts available to borrow were not limited by the debt-to-EBITDA covenant as of December 31, 2021.

We intend to redeem the $500.0 million in principal outstanding of our 5.500% notes due November 2022 by the end of the fiscal year.

The following table provides ratings for debt issued by Block Financial LLC (Block Financial) as of December 31, 2021 and June 30, 2021:

As of December 31, 2021 June 30, 2021

We ha d no outstanding balance under our CLOC and amounts available to borrow were limited by the debt-to-EBITDA covenant to approximately $427.5 million as of March 31, 2022.

On April 1, 2022, we sent a notice of redemption to the trustee to fully redeem our outstanding 2022 Senior Notes originally due in November 2022.

The redemption price is equal to 100% of the outstanding principal amount of the 2022 Senior Notes, plus accrued and unpaid interest up to, but not including, the redemption date.

The 2022 Senior Notes were redeemed on May 2, 2022.

The following table provides ratings for debt issued by Block Financial LLC (Block Financial) as of March 31, 2022 and June 30, 2021:

As of March 31, 2022 June 30, 2021

Short-term Long-term Outlook Short-term Long-term Outlook

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Other than described above, there have been no material changes in our borrowings from those reported in our April 30, 2021 Annual Report to Shareholders on Form 10-K or our June 30, 2021 Transition Report filed on Form 10-Q.

CASH AND OTHER ASSETS – As of December 31, 2021, we held cash and cash equivalents, excluding restricted amounts, of $336.3 million, including $164.3 million held by our foreign subsidiaries.

CASH AND OTHER ASSETS – As of March 31, 2022, we held cash and cash equivalents, excluding restricted amounts, of $1.0 billion, including $131.8 million held by our foreign subsidiaries.

Foreign Operations.

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To mitigate foreign currency risk, we sometimes enter into foreign exchange forward contracts.

There were no forward contracts outstanding as of December 31, 2021.

There were no forward contracts outstanding as of March 31, 2022.

We do not currently intend to repatriate non-borrowed funds held by our foreign subsidiaries in a manner that would trigger a material tax liability.

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in an decrease of $3.3 million during the six months ended December 31, 2021 and in an increase of $11.0 million during the six months ended December 31, 2020.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – Except as described in Recent Developments related to our amended PMA agreement with Meta and in Item 1, note 8 related to the Emerald Advance℠ purchase participation interest, there have been no material changes in our contractual obligations and commercial commitments from those reported in our April 30, 2021 Annual Report to Shareholders on Form 10-K or our June 30, 2021 Transition Report filed on Form 10-Q.

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in an decrease of $1.7 million during the nine months ended March 31, 2022 and in an increase of $10.4 million during the nine months ended March 31, 2021.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – Except as described in Recent Developments related to our amended PMA agreement with Meta, there have been no material changes in our contractual obligations and commercial commitments from those reported in our April 30, 2021 Annual Report to Shareholders on Form 10-K or our June 30, 2021 Transition Report filed on Form 10-Q.

SUMMARIZED GUARANTOR FINANCIAL STATEMENTS – Block Financial is a 100% owned subsidiary of H&R Block, Inc.

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SUMMARIZED BALANCE SHEET - GUARANTOR AND ISSUER (in 000s)

As of December 31, 2021 June 30, 2021

As of March 31, 2022 June 30, 2021

Current assets $ 60,543 $ 50,737

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Noncurrent liabilities 1,496,156 1,994,582

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|Q3 FY2022 Form 10-Q

SUMMARIZED STATEMENTS OF OPERATIONS - GUARANTOR AND ISSUER (in 000s)

Six months ended December 31, 2021 Two months ended June 30, 2021

Nine months ended March 31, 2022 Two months ended June 30, 2021

Total revenues $ 169,944 $ 22,978

Income (loss) from continuing operations before income taxes (22,214) 2,504

Net income (loss) from continuing operations (12,811) 2,953

Net income (loss) (16,000) 1,444

The table above reflects $2.1 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of December 31, 2021 and June 30, 2021.

Income from continuing operations before income taxes 39,127 2,504

Net income from continuing operations 34,745 2,953

Net income 29,760 1,444

The table above reflects $2.1 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of March 31, 2022 and June 30, 2021.

REGULATORY ENVIRONMENT

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We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.

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|Q2 FY2022 Form 10-Q

The following is a reconciliation of net income (loss) to EBITDA from continuing operations, which is a non-GAAP financial measure:

Three months ended December 31, Six months ended December 31,

Q3 FY2022 Form 10-Q| H&R Block, Inc.

The following is a reconciliation of net income to EBITDA from continuing operations, which is a non-GAAP financial measure:

Three months ended March 31, Nine months ended March 31,

2022 2021 2022 2021

Net loss - as reported $ (190,605) $ (255,751) $ (342,206) $ (318,007)

Net income - as reported $ 673,177 $ 758,247 $ 330,971 $ 440,240

Discontinued operations, net 1,796 1,425 4,984 4,533

Net loss from continuing operations - as reported (189,073) (253,989) (339,018) (314,899)

Income tax benefit (109,845) (46,510) (157,218) (18,546)

Net income from continuing operations - as reported 674,973 759,672 335,955 444,773

Income taxes 186,884 69,543 29,666 50,997

Interest expense 23,746 22,471 69,661 78,657

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(in 000s, except per share amounts)

Three months ended December 31, Six months ended December 31,

Three months ended March 31, Nine months ended March 31,

2022 2021 2022 2021

Net loss from continuing operations - as reported $ (189,073) $ (253,989) $ (339,018) $ (314,899)

Net income from continuing operations - as reported $ 674,973 $ 759,672 $ 335,955 $ 444,773

Amortization of intangibles related to acquisitions (pretax) 13,979 16,229 43,141 50,398

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(4,545) (11,699) (10,102) (11,467)

Adjusted net loss from continuing operations $ (176,703) $ (235,372) $ (315,413) $ (280,498)

Diluted loss per share from continuing operations - as reported $ (1.09) $ (1.38) $ (1.93) $ (1.68)

Adjusted net income from continuing operations $ 684,407 $ 764,202 $ 368,994 $ 483,704

Diluted earnings per share from continuing operations - as reported $ 4.06 $ 4.09 $ 1.92 $ 2.35

Adjustments, net of tax 0.05 0.02 0.19 0.21

Adjusted diluted loss per share from continuing operations $ (1.02) $ (1.28) $ (1.80) $ (1.49)

Adjusted diluted earnings per share from continuing operations $ 4.11 $ 4.11 $ 2.11 $ 2.56

(1) Tax effect of adjustments is the difference between the tax provision calculated on a GAAP basis and on an adjusted non-GAAP basis.

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They may include estimates of revenues, client trajectory, income, effective tax rate, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volumes or other financial items, descriptions of management's plans or objectives for future operations, services or products, or descriptions of assumptions underlying any of the above.

They may also include the expected impact of the coronavirus (COVID–19) pandemic, including, without limitation, the impact on economic and financial markets, the Company's capital resources and financial condition, future expenditures, potential

Q2 FY2022 Form 10-Q| H&R Block, Inc.

regulatory actions, such as extensions of tax filing deadlines or other related relief, changes in consumer behaviors and modifications to the Company's operations relating thereto.

They may also include the expected impact of the coronavirus (COVID–19) pandemic, including, without limitation, the impact on economic

H&R Block, Inc.

|Q3 FY2022 Form 10-Q

and financial markets, the Company's capital resources and financial condition, future expenditures, potential regulatory actions, such as extensions of tax filing deadlines or other related relief, changes in consumer behaviors and modifications to the Company's operations relating thereto.

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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis