What changed in this filing

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Item 1. Business

2022-08-16 compared with 2021-06-15 · 69 added, 79 removed, 129 unchanged (53% of the section changed)

At H&R Block, our purpose is to provide help and to inspire confidence in our clients and communities everywhere through global tax preparation, financial products and small business solutions.

We blend digital innovation with the human expertise and care of our associates and franchisees as we help people get the best outcome at tax time, and better manage and access their money year-round.

Through Block Advisors and Wave, we help small business owners thrive with innovative products.

H&R Block provides help and inspires confidence in its clients and communities everywhere through global tax preparation services, financial products, and small business solutions.

We blend digital innovation with human expertise and care to help people get the best outcome at tax time and also be better with money by using our mobile banking app, Spruce℠.

Through Block Advisors ® and Wave ® , we help small business owners thrive with innovative products like Wave Money ® , a mobile-first, small-business bank account that manages bookkeeping automatically.

H&R Block, Inc.

was organized as a corporation in 1955 under the laws of the State of Missouri.

A complete list of our subsidiaries as of April 30, 2021 can be found in Exhibit 2 1 .

A complete list of our subsidiaries as of June 30, 2022 can be found in Exhibit 21 .

RECENT DEVELOPMENTS

During March 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic.

As a result of the COVID-19 pandemic, the federal tax filing deadline in the United States (U.S.) for individual 2019 tax returns was extended from April 15, 2020 to July 15, 2020.

Substantially all U.S.

states with an April 15 individual state income tax filing requirement extended their respective deadlines.

In Canada, the deadline for individuals to file was extended to June 1, 2020.

Consequently, a portion of revenues and expenses that would have normally been recognized in our fourth quarter of fiscal year 2020 shifted to the first two quarters of fiscal year 2021.

On June 9, 2021, the Board of Directors approved a change of the Company's fiscal year end from April 30 to June 30.

The Company's 2022 fiscal year began on July 1, 2021 and ended on June 30, 2022.

On December 20, 2021, we entered into a First Amendment to our August 2020 Program Management Agreement (PMA) with Pathward TM , N.A., formerly known as MetaBank®, N.A.

(Pathward), which, among other things, extends the PMA through June 30, 2025, and adds Spruce℠ accounts to the program.

In January 2022, we launched the Spruce℠ mobile banking platform as a part of the Financial Products imperative of our previously-announced Block Horizons 2025 strategic plan.

The Spruce℠ platform, built by H&R Block with banking products powered by Pathward, includes a spending account with a debit card, along with a connected savings account that allows for budgeting for specific goals, and other features to help customers be good with money.

In August 2022, the Board of Directors approved a $1.25 billion share repurchase program, effective through fiscal year 2025 and increased the quarterly cash dividend by 7% to $0.29 per share.

During fiscal year 2022, we prepared

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$560.6 million,

and EBITDA (2) from continuing operations of

EBITDA (2) from continuing operations of

$889.5 million,

In fiscal year 2021, we, together with our franchisees, operated

9,271 offices across the U.S.

and diluted EPS from continuing operations of

$3.26 per share.

We repurchased

23.1 million shares of our common stock.

Tax returns prepared includes tax returns prepared in U.S.

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(2) See " Non-GAAP Financial Information " section within this filing for a reconciliation of non-GAAP measures.

Due to the ongoing impacts of the pandemic, on March 17, 2021, the IRS extended the federal tax filing deadline in the U.S.

for individual 2020 tax returns from April 15, 2021 to May 17, 2021.

Substantially all U.S.

states with an April 15 individual state income tax filing requirement extended their respective deadlines.

Consequently, a portion of revenues and expenses that would have normally been recognized in our fourth quarter of fiscal year 2021 shifted to our next fiscal period.

These extensions impacted the typical seasonality of our business and the comparability of our financial results.

During fiscal year 2021, we changed our bank partner from Axos Bank to MetaBank®, N.A.

On August 5, 2020, we entered into a Program Management Agreement with Meta.

Under the Meta Program Management Agreement and its ancillary agreements and related product schedules, Meta acts as the bank provider of H&R Block-branded financial products, including Emerald Advance SM (EA), Emerald Card®, Emerald Savings, Refund Advance (RA), and Refund Transfer (RT) in the U.S.

See our Current Report filed on Form 8-K dated May 15, 2020 for additional information.

2022 Form 10-K | H&R Block, Inc.

On June 9, 2021, the Board of Directors approved a change of the Company's fiscal year end from April 30 to June 30, effective immediately.

The Company plans to file a transition report on Form 10-QT for the transition period of May 1, 2021 through June 30, 2021.

The Company's 2022 fiscal year will begin on July 1, 2021 and end on June 30, 2022.

On June 11, 2021, we entered into a Fourth Amended and Restated Credit and Guarantee Agreement, which amended and restated the existing unsecured committed line of credit (CLOC), extending the scheduled maturity date to June 11, 2026, decreasing the aggregate principal amount to $1.5 billion, revising the applicable rate table, and adjusting the covenant measurement dates due to our fiscal year end change.

Other material terms remain substantially unchanged from our existing CLOC.

See our Current Report filed on Form 8-K dated June 15, 2021 for additional information.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

We report a single segment that includes all of our continuing operations, which includes tax preparation and small business services.

See discussion below and in Item 8 , within the notes to the consolidated financial statements.

During fiscal year 2021, we introduced our Block Horizons Strategy, the next phase of our strategic transformation, which builds on previous work to strengthen our foundation and position us for long term sustainable growth.

OUR STRATEGY:

BLOCK HORIZONS 2025

Block Horizons is a five year strategy that will leverage our human expertise and technological infrastructure to deliver growth by driving tax solution innovation, helping small businesses to thrive and to ease the financial burden on underbanked individuals.

Block Horizons 2025 Imperatives:

Small Business - Strengthen the spirit of entrepreneurship and enable small business owners to thrive.

Financial Products - Develop new products and experiences that create confidence and ease the financial burden.

Block Experience - Reimagine our experience for customers and tax professionals in a digital-first world by blending technology and data with human expertise and care.

Block Horizons 2025 Enablers:

Talent - Attract and retain people who act boldly, demand high standards, crave tough problems and value winning as a team.

Digital and Data - Accelerate our digital and data capabilities to drive innovation in all facets of our business.

Fund the Future - Tip the scale toward future-focused investments of resources – people and dollars – and celebrate those who drive efficiency.

We provide assisted and do-it-yourself (DIY) tax return preparation solutions through multiple channels (including in-person, online and mobile applications, virtual, and desktop software) and distribute H&R Block-branded services and products, including those of our bank partner, to the general public primarily in the U.S., Canada and Australia.

We also offer small business financial solutions through our company-owned or franchise offices and online through Wave.

We report a single segment that includes all of our continuing operations, which includes tax preparation, small business services, and financial services and products.

See discussion below.

During fiscal year 2021, we introduced Block Horizons, our five year strategy that will leverage our human expertise and technological infrastructure to deliver growth by driving tax solution innovation, helping small businesses to thrive, and support individuals where they need the most help with money.

Small Business

We are focused on growing our base of tax customers by leveraging the Block Advisors ® brand and serving more entrepreneurs through our Wave ® platform.

In small business, our strong marketing and more advanced tax pro training allowed us to grow our assisted tax clients and our net average charge as we serve more complex businesses.

In Wave, we have been successful in attracting new clients and increasing the value of existing clients, as both average revenue per user and average invoicing volume saw accelerating growth trends year over year.

Financial Products

In January 2022, we launched our new mobile banking platform, Spruce SM .

We believe there is an opportunity to combine leading technology and features with our trusted brand and established financial relationships.

Throughout the year we tested multiple iterations of our sign-up offer and continued to release updates to improve the product.

We introduced clients to Spruce SM only in the DIY channel at launch to learn and gain customer insights.

During the next fiscal year, we will test customer acquisition outside the tax season and prepare for launch in the Assisted channel.

Block Experience

The Block Experience is all about blending technology and digital tools with human expertise.

We have been successful in driving digital adoption by leveraging MyBlock features, such as uploading documents, approving returns online, and utilizing virtual chat.

We are gaining traction as virtual uptake from our clients more than tripled in the current year.

We provide assisted and do-it-yourself (DIY) tax return preparation solutions through multiple channels (including in-person, online and mobile applications, virtual, and desktop software) and distribute H&R Block-branded services and products, including those of our bank partners, to the general public primarily in the U.S., Canada and Australia.

We also offer small business financial solutions through our company-owned and franchise offices and online through Wave.

Major revenue sources include fees earned for tax preparation via our assisted and DIY channels, royalties from franchisees, and fees from related services and products.

H&R Block, Inc.

| 2021 Form 10-K

TAX PREPARATION SERVICES

Assist ed income tax return preparation and related services are provided by tax professionals via a system of retail offices operated directly by us or our franchisees.

Our tax professionals provide assistance to our clients either in person or virtually in a number of ways.

These tax professionals provide assistance to our clients either in person or virtually in a number of ways.

Clients can come into an office, digitally "drop off" their documents for their tax professional, approve their return online, have a tax professional review a return they prepared themselves through Tax Pro Review or get their questions answered as they complete their own return through Online Assist.

We offer a comprehensive range of DIY tax services and products, including federal and state income tax return solutions, access to tax tips, advice and tax-related news, use of calculators for tax planning, error checking and electronic filing.

H&R Block, Inc.

| 2022 Form 10-K

Our online software may be accessed through our website at www.hrblock.com or in a mobile application, while our desktop software may be purchased online and through third-party retail stores.

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We also offer U.S.

clients a number of additional services, including RTs, our Peace of Mind® Extended Service Plan (POM), H&R Block Emerald Prepaid Mastercard® (Emerald Card), EAs, Tax Identity Shield® (TIS), RAs, and small business financial solutions.

For our Canadian clients we also offer POM, H&R Block Instant Refund SM , H&R Block Pay With Refund®, and small business financial solutions.

clients a number of additional services, including Refund Transfers (RT), our Peace of Mind® Extended Service Plan (POM), H&R Block Emerald Prepaid Mastercard® (Emerald Card ® ), Emerald Advances (EA), Tax Identity Shield® (TIS), Refund Advances (RA), and small business financial solutions.

For our Canadian clients, we also offer POM, H&R Block's Instant Refund SM , H&R Block Pay With Refund®, and small business financial solutions.

Refund Transfers.

RTs enable clients to receive their tax refunds by their chosen method of disbursement and include a feature enabling clients to deduct tax preparation and related fees from their tax refunds.

Depending on circumstances, clients may choose to receive their RT proceeds by a load to their Emerald Card, by receiving a check or by direct deposit to an existing account.

Depending on circumstances, clients may choose to receive their RT proceeds by a load to their Emerald Card, a deposit to their Spruce Spending Account, by receiving a check or by direct deposit to an existing account.

RTs are available to U.S.

clients and are frequently obtained by those who (1) do not have bank accounts into which the IRS can direct deposit their refunds;

clients and are frequently obtained by those who:

(1) do not have bank accounts into which the IRS can direct deposit their refunds;

(2) like the convenience and benefits of a temporary account for receipt of their refund;

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We offer POM to U.S.

and Canadian clients, whereby we (1) represent our clients if they are audited by a taxing authority, and (2) assume the cost, subject to certain limits, of additional taxes owed by a client resulting from errors attributable to H&R Block.

and Canadian clients who obtain assisted tax preparation services, whereby we (1) represent our clients if they are audited by a taxing authority, and (2) assume the cost, subject to certain limits, of additional taxes owed by a client resulting from errors attributable to H&R Block.

The additional taxes paid under POM have a cumulative limit of $6,000 for U.S.

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These lines of credit are offered by our bank partner, and we subsequently purchase a participation interest in all EAs originated by our bank partner.

2021 Form 10-K | H&R Block, Inc.

Tax Identity Shield®.

Our TIS program offers clients assistance in helping protect their tax identity and access to services to help restore thei r tax identity, if necessary.

Protection services include a daily scan of the dark web for personal information, a monthly scan for social security number in credit header data, notifying clients if their information is detected on a tax return filed through H&R Block, and obtaining additional IRS identity protections when eligible.

Our TIS program offers clients assistance in helping protect their tax identity and access to services to help restore thei r tax identity, and if necessary, access to services to help restore their tax identity.

Protection services include a daily scan of the dark web for personal information, a monthly scan for the client's social security number in credit header data, notifying clients if their information is detected on a tax return filed through H&R Block, and obtaining additional IRS identity protections when eligible.

Refund Advance Loans.

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assisted clients in company-owned and participating franchise locations, including virtual clients.

In tax season 2021, RAs were offered in amounts of $250, $500, $750, $1,250 and $3,500, based on client eligibility as determined by our bank partner.

H&R Block Instant Refund SM .

In tax season

2022 Form 10-K | H&R Block, Inc.

2022, RAs were offered in amounts of $250, $500, $750, $1,250 and $3,500, based on client eligibility as determined by our bank partner.

H&R Block's Instant Refund SM .

Our Canadian operations advance refunds due to certain clients from the Canada Revenue Agency (CRA), for a fee.

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Small Business Financial Solutions.

Our Block Advisor certified tax professionals provide small businesses with financial expertise in taxes, bookkeeping, payroll and financial audit support through our office network.

Our Block Advisor certified tax professionals provide small businesses with financial expertise in taxes, bookkeeping and payroll through our office network.

Wave provides small business owners with an online solution to manage their finances, including payment processing, payroll and bookkeeping services.

SEASONALITY OF BUSINESS

Because the majority of our clients file their tax returns during the period from February through April in a typical year, a substantial majority of our revenues from income tax return preparation and related services and products are earned during this period.

As a result, we generally operate at a loss through the first three quarters of our fiscal year.

As a result of the COVID-19 pandemic and delayed federal tax filing deadlines in both the current and prior fiscal years, there has been a shift in the typical seasonality of our business and the comparability of our financial results.

As a result, we generally operate at a loss through the first two quarters of our fiscal year.

As a result of the COVID-19 pande mic and a delayed federal tax filing deadline in the prior year, there has been a shift in the typical seasonality of our business and the comparability of our financial results.

COMPETITIVE CONDITIONS

We provide assisted and DIY tax preparation services and products, as well as small business financial solutions, and face substantial competition in and across each category from tax return preparation firms and software providers, accounting firms, independent tax preparers, and certified public accountants.

We are one of the largest providers of tax return preparation solutions and electronic filing services in the U.S., Canada, and Australia with over 25.2 million returns filed by or through H&R Block in fiscal year 2021 via 10,675 tax offices and our virtual tax preparation services, mobile applications, and online and desktop DIY solutions.

We are one of the largest providers of tax return preparation solutions and electronic filing services in the U.S., Canada, and Australia with 23.6 million returns filed by or through H&R Block in fiscal year 2022 via 10,488 tax offices and our virtual tax pr eparation services, mobile applications, and online and desktop DIY solutions.

GOVERNMENT REGULATION

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These commitments extend to both our year-round and seasonal associates.

We had approximately 3,600 regular full-time associates as of April 30, 2021.

We had approxima tely 3,800 regular full-time associates as of June 30, 2022.

Our business is dependent on the availability of a seasonal workforce, including tax professionals, and our ability to hire, train, and supervise these associates.

The highest number of persons we employed during the fiscal year ended April 30, 2021, including seasonal associates, was approximately 72,400.

H&R Block, Inc.

| 2021 Form 10-K

The highest number of persons we employed during the fiscal year ended June 30, 2022, including seasonal associates, was approximately 69,900.

Associate Engagement.

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Our equitable and comprehensive benefits offerings provide access to benefits to help both regular and seasonal associates plan for the health and security of their families.

H&R Block provides comprehensive medical insurance to our associates, and extends the opportunity for medical insurance to our seasonal workforce who satisfy the eligibility guidelines of the Affordable Care Act (ACA).

Subject to meeting eligibility requirements, associates can also choose to participate in the H&R Retirement Savings Plan 401(k) and Employee Stock Purchase Plan.

H&R Block provides comprehensive medical insurance to our associates,

H&R Block, Inc.

| 2022 Form 10-K

and extends the opportunity for medical insurance to our seasonal workforce who satisfy the eligibility guidelines of the Affordable Care Act (ACA).

Subject to meeting eligibility requirements, associates can also choose to participate in the H&R Block Retirement Savings Plan 401(k) and Employee Stock Purchase Plan.

Training and Development.

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In preparation for the upcoming tax season, our tax professionals receive training on H&R Block products, soft skills and tax office best practices.

Each year, our tax professionals receive on average over 30 hours of Tax Education and over 16 hours of Continuing Professional Education.

Each year, our tax professionals receive on average ov er 30 hours of Tax Education and over 16 hours of Conti nuing Professional Education.

Diversity, Inclusion and Belonging.

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Prior to that, she served as our Vice President of Corporate and Field Accounting from December 2014 until July 2016 and as our Assistant Controller from December 2010 until December 2014.

Gerke , 65, became our General Counsel and Chief Administrative Officer in May 2016.

Prior to that, he served as our Chief Executive Officer (in an interim capacity) from August 2017 until October 2017;

our Chief Legal Officer (formerly titled Senior Vice President and General Counsel) from January 2012 through April 2016.

Before joining the Company, he served as the Executive Vice President, General Counsel and Secretary of YRC Worldwide from January 2011 until April 2011 Executive Vice Chairman, Century Link, Inc.

from July 2009 until December 2010;

President and Chief Executive Officer, Embarq Corporation (in an interim capacity from December 2007 until March 2008 and by appointment from March 2008 until June 2009).

Redler , 55, became our Chief Legal Officer in January 2022.

Prior to joining the Company, she served as General Counsel and Corporate Secretary for Tilray, Inc.

from January 2019 until September 2021.

She also held various legal roles of increasing responsibility with The Coca-Cola Company from September 2001 until December 2018.

Karen Orosco , 51, became our President, Global Consumer Tax and Service Delivery in June 2021.

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Governance and Nominating Committee Charter.

H&R Block, Inc.

| 2021 Form 10-K

If you would like a printed copy of any of these corporate governance documents, please send your request to H&R Block, Inc., One H&R Block Way, Kansas City, Missouri 64105, Attention:

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Information contained on our website does not constitute any part of this report.

H&R Block, Inc.

| 2022 Form 10-K

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-K

Item 1. Business