What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-05-09 compared with 2023-02-07 · 108 added, 99 removed, 228 unchanged (48% of the section changed)

5 unchanged sentences

We report a single segment that includes all of our continuing operations.

H&R Block, Inc.

|Q2 FY2023 Form 10-Q

Q3 FY2023 Form 10-Q| H&R Block, Inc.

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

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

Three months ended March 31, 2023 2022 $ Change % Change

tax preparation and related services:

29 unchanged sentences

Interest expense on borrowings (22,298) (23,746) 1,448 6.1 %

Pretax loss (298,003) (298,918) 915 0.3 %

Income tax benefit (77,140) (109,845) (32,705) (29.8) %

Net loss from continuing operations (220,863) (189,073) (31,790) (16.8) %

Pretax income 855,428 861,857 (6,429) (0.7) %

Income taxes 209,351 186,884 (22,467) (12.0) %

Net income from continuing operations 646,077 674,973 (28,896) (4.3) %

Net loss from discontinued operations (2,648) (1,796) (852) (47.4) %

Net loss $ (223,579) $ (190,605) $ (32,974) (17.3) %

BASIC AND DILUTED LOSS PER SHARE:

Net income $ 643,429 $ 673,177 $ (29,748) (4.4) %

DILUTED EARNINGS PER SHARE

Continuing operations $ 4.14 $ 4.06 $ 0.08 2.0 %

6 unchanged sentences

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

Q2 FY2023 Form 10-Q| H&R Block, Inc.

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

H&R Block, Inc.

|Q3 FY2023 Form 10-Q

Three months ended March 31, 2023 compared to March 31, 2022

Revenues increased $31.9 million, or 1.5%, from the prior year.

assisted tax preparation revenues increased $10.4 million, or 33.6%, primarily due to higher volumes and a higher net average charge in the current year.

royalty revenue increased $1.5 million, or 45.3%, due to the timing of royalty incentives.

DIY tax preparation revenues increased $2.9 million, or 31.9%, primarily due to higher volumes in the current year.

Emerald Card revenues decreased $12.4 million, or 49.7%, due to higher card activity in the prior year, which is a result of the IRS loading Child Tax Credits monthly to Emerald Cards®.

Wave revenues increased $2.4 million, or 12.5%, due to higher small business payments processing volumes.

assisted tax preparation revenues increased $60.9 million, or 4.4%, due to a 3.7% increase in net average charge combined with higher tax return volumes in the current year.

royalty revenue decreased $8.6 million, or 5.4%, due to lower volumes, partially offset by a higher net average charge in the current year.

During the year we purchased franchise offices which results in increasing tax preparation revenues and decreasing royalties as the revenues and returns become company-owned after the acquisition.

For the three months ended March 31, our total assisted tax return volume, which includes both company-owned and franchise offices, decreased 2.0% from the prior year.

DIY tax preparation revenues decreased $8.2 million, or 4.7%, primarily due to lower software sales and a decline in online paid returns during the quarter compared to the prior year.

Refund Transfer revenues decreased $14.8 million, or 11.2%, primarily due to fewer Refund Transfers in the current year.

Emerald Card® and Spruce SM revenues decreased $6.3 million, or 12.4%, primarily due to lower card activity in the current year as a result of less funds being loaded to Emerald Cards® in the current year.

Total operating expenses increased $52.8 million, or 4.5%, from the prior year.

Field wages increased $6.1 million, or 8.8%, due to higher tax professional and field management wages due to increased volumes and higher hourly rates in the current period.

Other wages increased $6.5 million, or 10.1%, due to higher corporate wages in the current year.

Benefits and other compensation increased $4.1 million, or 13.5%, due to higher stock based compensation.

Bad debt expense increased $8.8 million, or 64%, due to higher Emerald Card® losses and higher Emerald Advance SM volumes compared to the prior year.

Field wages increased $45.4 million, or 10.4%, primarily due to higher wages in the current year.

Benefits and other compensation increased $9.3 million, or 10.2%, due to higher payroll taxes, employee insurance and stock-based compensation.

Occupancy expense increased $6.7 million, or 6.0%, primarily due to higher office repairs and rent.

Marketing and advertising expense increased $13.9 million, or 7.1%, due to higher television advertising.

Bad debt expense decreased $10.8 million, or 23.9%, due to fewer Refund Transfers compared to the prior year.

Other operating expenses decreased $3.0 million, or 1.6%.

The components of other expenses are as follows:

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

Three months ended March 31, 2023 2022 $ Change % Change

Consulting and outsourced services $ 42,130 $ 46,402 $ 4,272 9.2 %

9 unchanged sentences

$ 179,292 $ 182,258 $ 2,966 1.6 %

Consulting and outsourced services expense decreased $5.2 million, or 18.7%, due to lower call center expenses and lower data processing fees related to lower activity on Emerald Cards®.

Employee and travel expenses increased $5.3 million, or 56.1%, due to more travel in the current year.

Insurance expense decreased $4.7 million due to favorable developments in insurance loss reserves.

Interest expense on borrowings decreased $4.1 million, or 17.8%, due to the repayment of our $500 million 5.500% Senior Notes in May 2022, partially offset by higher interest expense on our CLOC borrowings in the current year.

We recorded an income tax benefit of $77.1 million in the current year compared to $109.8 million in the prior year.

The effective tax rate for the three months ended December 31, 2022, and 2021 was 25.9% and 36.7%, respectively.

H&R Block, Inc.

|Q2 FY2023 Form 10-Q

Other income (expense), net increased $13.0 million primarily due to income from a legal settlement and interest in the current year.

We recorded an income tax expense of $209.4 million in the current year compared to $186.9 million in the prior year.

The effective tax rate for the three months ended March 31, 2023, and 2022 was 24.5% and 21.7%, respectively.

Diluted earnings per share from continuing operations increased 2.0% from the prior year due to fewer shares outstanding from share repurchases, partially offset by lower net income compared to the prior year.

Q3 FY2023 Form 10-Q| H&R Block, Inc.

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

Six months ended December 31, 2022 2021 $ Change % Change

Nine months ended March 31, 2023 2022 $ Change % Change

tax preparation and related services:

29 unchanged sentences

Interest expense on borrowings (57,107) (69,661) 12,554 18.0 %

Pretax loss (519,327) (496,236) (23,091) (4.7) %

Income tax benefit (131,097) (157,218) (26,121) (16.6) %

Net loss from continuing operations (388,230) (339,018) (49,212) (14.5) %

Pretax income 336,101 365,621 (29,520) (8.1) %

Income taxes 78,254 29,666 (48,588) (163.8) %

Net income from continuing operations 257,847 335,955 (78,108) (23.2) %

Net loss from discontinued operations (6,418) (4,984) (1,434) (28.8) %

Net loss $ (392,000) $ (342,206) $ (49,794) (14.6) %

BASIC AND DILUTED LOSS PER SHARE:

Net income $ 251,429 $ 330,971 $ (79,542) (24.0) %

DILUTED EARNINGS PER SHARE

Continuing operations $ 1.62 $ 1.92 $ (0.30) (15.6) %

6 unchanged sentences

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

Q2 FY2023 Form 10-Q| H&R Block, Inc.

Six months ended December 31, 2022 compared to December 31, 2021

Revenues decreased $5.1 million, or 1.4%, from the prior year.

assisted tax preparation revenues increased $13.1 million, or 20.3%, due to higher volumes and a higher net average charge in the current year.

Emerald Card® revenues decreased $29.0 million, or 54.6%, due to higher card activity in the prior year, which is a result of the IRS loading Child Tax Credits monthly to Emerald Cards®.

H&R Block, Inc.

|Q3 FY2023 Form 10-Q

Nine months ended March 31, 2023 compared to March 31, 2022

Revenues increased $26.8 million, or 1.1%, from the prior year.

assisted tax preparation revenues increased $74.0 million, or 5.1%, due to a 3.4% increase in net average charge combined with higher tax return volumes in the current year.

royalties revenue decreased $8.2 million, or 4.8%, due to lower volumes, partially offset by a higher net average charge in the current year.

During the year we purchased franchise offices which results in increasing tax preparation revenues and decreasing royalties as the revenues and returns become company-owned after the acquisition.

Through the nine months ended March 31, our total assisted tax return volume, which includes both company-owned and franchise offices, decreased 1.6% from the prior year.

DIY tax preparation revenues decreased $6.1 million, or 3.3%, primarily due to lower software sales and a decline in online paid returns during the quarter compared to the prior year.

Refund Transfer revenues decreased $14.5 million, or 10.7%, due to fewer Refund Transfers in the current year.

Emerald Card® and Spruce SM revenues decreased $35.3 million, or 34.0%, primarily due to higher card activity in the prior year, which is the result of the IRS loading Child Tax Credits monthly to Emerald Cards®.

Wave revenues increased $7.9 million, or 13.5%, due to higher small business payments processing volumes.

Total operating expenses increased $87.9 million, or 4.4%, from the prior year period.

Field wages increased $11.7 million, or 9.3%, due to higher tax professional and field management wages due to increased volumes and higher hourly rates in the current period.

Field wages increased $57.2 million, or 10.2%, primarily due to higher wages in the current year.

Other wages increased $7.1 million, or 3.5%, due to higher corporate wages in the current year.

Benefits and other compensation increased $13.5 million, or 24.2%, due to higher stock based compensation, employee insurance and payroll taxes.

Depreciation and amortization expense decreased $5.0 million, or 7.0%, due to lower amortization of acquired intangibles.

Bad debt expense increased $8.0 million, or 54.6%, due to higher Emerald Card® losses and higher Emerald Advance SM volumes compared to the prior year.

Other expenses decreased $7.4 million, or 3.9%.

Benefits and other compensation increased $22.8 million, or 15.5%, due to higher payroll taxes, employee insurance and stock-based compensation.

Occupancy expense increased $10.4 million, or 3.4%, primarily due to higher rent and office repairs.

Marketing and advertising expense increased $12.5 million, or 5.6%, due to higher television advertising.

Depreciation and amortization expense decreased $8.8 million, or 8.2%, due primarily to lower amortization of acquired intangibles.

Other operating expenses decreased $10.4 million, or 2.8%.

The components of other expenses are as follows:

Six months ended December 31, 2022 2021 $ Change % Change

Nine months ended March 31, 2023 2022 $ Change % Change

Consulting and outsourced services $ 82,635 $ 99,870 $ 17,235 17.3 %

9 unchanged sentences

$ 363,081 $ 373,458 $ 10,377 2.8 %

Consulting and outsourced services expense decreased $13.0 million, or 24.2%, due to lower call center expenses and lower data processing fees related to lower activity on Emerald Cards®.

Consulting and outsourced services expense decreased $17.2 million, or 17.3%, due to higher spend in the prior year related to our strategic imperatives, and lower call center volumes and Emerald Card® data processing in the current year.

Employee and travel expenses increased $7.5 million, or 32.1%, due to more travel in the current year.

Technology-related expenses increased $6.8 million, or 9.7%, due to increased investments in information technology.

Other income (expense) increased $6.0 million, or 345.2%, primarily due to higher interest income as a result of higher interest rates.

Legal fees and settlements expense decreased $7.1 million, or 49.7%, due to lower fees in the current year.

Other income (expense), net increased $19.0 million due to higher interest and income from a legal settlement in the current year.

Interest expense on borrowings decreased $12.6 million, or 18.0%, due to the repayment of our $500 million 5.500% Senior Notes in May 2022, partially offset by higher interest expense on our CLOC borrowings in the current year.

We recorded an income tax benefit of $131.1 million in the current year compared to $157.2 million in the prior year.

The effective tax rate for the six months ended December 31, 2022, and 2021 was 25.2% and 31.7%, respectively.

Q3 FY2023 Form 10-Q| H&R Block, Inc.

We recorded income tax expense of $78.3 million in the current year compared to $29.7 million in the prior year.

The effective tax rate for the nine months ended March 31, 2023, and 2022 was 23.3% and 8.1%, respectively.

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

return volume, which includes our assisted and DIY operations, from July 1, 2022 through April 30, 2023 decreased 1.3% compared to the prior year period.

Our business is highly seasonal and results for the nine months ended March 31, as well as results for the period ended April 30, may not be indicative of results for the fiscal year ended June 30, 2023.

FINANCIAL CONDITION

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We use our sources of liquidity primarily to fund working capital, service and repay debt, pay dividends, repurchase shares of our common stock, and acquire businesses.

H&R Block, Inc.

|Q2 FY2023 Form 10-Q

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.

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

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, 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 six months ended December 31, 2022 and 2021.

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, 2023 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, 2023 and 2022.

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

Six months ended December 31, 2022 2021

Nine months ended March 31, 2023 2022

Net cash provided by (used in):

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Operating Activities.

Cash used in operations totaled $780.5 million for the six months ended December 31, 2022 compared to $913.6 million in the prior year period.

The change is primarily due to the receipt of income tax receivables in the current year, partially offset by an increase in our net loss in the current year.

Cash provided by operations totaled $498.4 million for the nine months ended March 31, 2023 compared to $373.1 million in the prior year period.

The change is primarily due to the receipt of income tax receivables in the current year, partially offset by a decrease in our net income in the current year.

Investing Activities.

Cash used in investing activities totaled $99.1 million for the six months ended December 31, 2022 compared to $57.4 million in the prior year period.

The change is primarily due to payments to acquire businesses in the current year.

Cash used in investing activities totaled $101.3 million for the nine months ended March 31, 2023 compared to $71.1 million in the prior year period.

The change is primarily due to higher payments to acquire businesses in the current year.

Financing Activities.

Cash provided by financing activities totaled $128.8 million for the six months ended December 31, 2022 compared to cash used in financing activities of $149.9 million in the prior year period.

The change is primarily due to higher draws on our CLOC in the current year.

Cash used in financing activities totaled $505.6 million for the nine months ended March 31, 2023 compared to $707.5 million in the prior year period.

The change is primarily due to higher repurchases of common stock in the prior year.

H&R Block, Inc.

|Q3 FY2023 Form 10-Q

CASH REQUIREMENTS –

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We have consistently paid quarterly dividends.

Dividends paid totaled $89.2 million and $96.9 million for the six months ended December 31, 2022 and 2021, respectively.

Dividends paid totaled $133.8 million and $143.4 million for the nine months ended March 31, 2023 and 2022, 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.

In August 2022, the Board of Directors approved a $1.25 billion share repurchase program, effective through fiscal year 2025.

During the six months ended December 31, 2022, we repurchased $350.1 million of our common stock at an average price of $42.86 per share.

During the nine months ended March 31, 2023, we repurchased $350.1 million of our common stock at an average price of $42.86 per share.

In the prior year period, we repurchased $550.3 million of our common stock at an average price of $23.84 per share.

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Capital Investment.

Capital expenditures totaled $41.5 million and $39.4 million for the six months ended December 31, 2022 and 2021, respectively.

Our capital expenditures relate primarily to recurring improvements to

Q2 FY2023 Form 10-Q| H&R Block, Inc.

retail offices, as well as investments in computers, software and related assets.

Capital expenditures totaled $56.7 million and $52.7 million for the nine months ended March 31, 2023 and 2022, 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 $39.8 million and $19.3 million during the six months ended December 31, 2022 and 2021, respectively.

We acquired franchisee and competitor businesses totaling $47.7 million and $25.5 million during the nine months ended March 31, 2023 and 2022, respectively.

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

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

We had an outstanding balance of $580.0 million under our CLOC as of December 31, 2022.

Amounts available to borrow were not limited by the debt-to-EBITDA covenant as of December 31, 2022.

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

As of December 31, 2022 June 30, 2022

We had no outstanding balance under our CLOC and amounts available to borrow were limited by the debt-to-EBITDA covenant to approximately $1.4 billion as of March 31, 2023.

The following table provides ratings for debt issued by Block Financial LLC (Block Financial) as of March 31, 2023 and June 30, 2022:

As of March 31, 2023 June 30, 2022

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 as of June 30, 2022 in our Annual Report to Shareholders on Form 10-K.

CASH AND OTHER ASSETS – As of December 31, 2022, we held cash and cash equivalents, excluding restricted amounts, of $264.5 million, including $113.7 million held by our foreign subsidiaries.

CASH AND OTHER ASSETS – As of March 31, 2023, we held cash and cash equivalents, excluding restricted amounts, of $909.1 million, including $82.8 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, 2022.

There were no forward contracts outstanding as of March 31, 2023.

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 a decrease of $7.8 million and $3.3 million during the six months ended December 31, 2022 and 2021, respectively.

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in a decrease of $7.9 million and $1.7 million during the nine months ended March 31, 2023 and 2022, respectively.

Q3 FY2023 Form 10-Q| H&R Block, Inc.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – Emerald Advance SM lines of credit (EAs) are originated by Pathward TM N.A.

We purchase a 90% participation interest, at par, in all EAs originated by Pathward in accordance with our participation agreement.

At December 31, 2022, the principal balance of purchased participation interests totaled $270.4 million.

See Item 1, note 4 to the consolidated financial statements for additional information about these balances.

There have been no other material changes in our contractual obligations and commercial commitments from those reported in our June 30, 2022 Annual Report to Shareholders on Form 10-K.

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

As of December 31, 2022 June 30, 2022

As of March 31, 2023 June 30, 2022

Current assets $ 43,069 $ 38,922

2 unchanged sentences

Noncurrent liabilities 1,493,576 1,495,732

H&R Block, Inc.

|Q2 FY2023 Form 10-Q

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

Six months ended December 31, 2022 Twelve months ended June 30, 2022

Nine months ended March 31, 2023 Twelve months ended June 30, 2022

Total revenues $ 137,676 $ 199,683

Income (loss) from continuing operations before income taxes (53,653) 44,404

Net income (loss) from continuing operations (53,364) 41,979

Net income (loss) (57,134) 35,007

The table above reflects $1.9 billion and $1.6 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of December 31, 2022 and June 30, 2022, respectively.

Income from continuing operations before income taxes 23,904 44,404

Net income from continuing operations 21,027 41,979

Net income 14,609 35,007

The table above reflects $1.7 billion and $1.6 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of March 31, 2023 and June 30, 2022, respectively.

REGULATORY ENVIRONMENT

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On October 19, 2022, the appellate court found that the funding mechanism for the CFPB was unconstitutional and vacated the Payday Rule.

On November 14, 2022, the CFPB filed a petition for review with the United States Supreme Court.

On November 14, 2022, the CFPB filed a petition for review with the United States Supreme Court, which the Supreme Court granted on February 27, 2023.

We are unsure whether, when, or in what form the Payday Rule will go into effect.

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There have been no other material changes in our regulatory environment from what was reported in our June 30, 2022 Annual Report to Shareholders on Form 10-K.

H&R Block, Inc.

|Q3 FY2023 Form 10-Q

NON-GAAP FINANCIAL INFORMATION

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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.

Q2 FY2023 Form 10-Q| H&R Block, Inc.

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

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

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,

2023 2022 2023 2022

Net loss - as reported $ (223,579) $ (190,605) $ (392,000) $ (342,206)

Net income - as reported $ 643,429 $ 673,177 $ 251,429 $ 330,971

Discontinued operations, net 2,648 1,796 6,418 4,984

Net loss from continuing operations - as reported (220,863) (189,073) (388,230) (339,018)

Income tax benefit (77,140) (109,845) (131,097) (157,218)

Net income from continuing operations - as reported 646,077 674,973 257,847 335,955

Income taxes 209,351 186,884 78,254 29,666

Interest expense 22,298 23,746 57,107 69,661

2 unchanged sentences

EBITDA from continuing operations $ 910,039 $ 921,719 $ 491,868 $ 542,744

Q3 FY2023 Form 10-Q| H&R Block, Inc.

The following is a reconciliation of our results from continuing operations to our adjusted results from continuing operations, which is a non-GAAP financial measure:

(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,

2023 2022 2023 2022

Net loss from continuing operations - as reported $ (220,863) $ (189,073) $ (388,230) $ (339,018)

Net income from continuing operations - as reported $ 646,077 $ 674,973 $ 257,847 $ 335,955

Amortization of intangibles related to acquisitions (pretax) 13,011 13,979 38,546 43,141

1 unchanged sentence

(3,190) (4,545) (9,198) (10,102)

Adjusted net loss from continuing operations $ (210,811) $ (176,703) $ (368,703) $ (315,413)

Diluted loss per share from continuing operations - as reported $ (1.43) $ (1.09) $ (2.48) $ (1.93)

Adjusted net income from continuing operations $ 655,898 $ 684,407 $ 287,195 $ 368,994

Diluted earnings per share from continuing operations - as reported $ 4.14 $ 4.06 $ 1.62 $ 1.92

Adjustments, net of tax 0.06 0.05 0.18 0.19

Adjusted diluted loss per share from continuing operations $ (1.37) $ (1.02) $ (2.36) $ (1.80)

Adjusted diluted earnings per share from continuing operations $ 4.20 $ 4.11 $ 1.80 $ 2.11

(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

H&R Block, Inc.

|Q2 FY2023 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.

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 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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Investors should understand that it is not possible to predict or identify all such factors and, consequently, should not consider any such list to be a complete set of all potential risks or uncertainties.

H&R Block, Inc.

|Q3 FY2023 Form 10-Q

Details about risks, uncertainties and assumptions that could affect various aspects of our business are included throughout our Annual Report on Form 10-K for the fiscal year ended June 30, 2022 and are also described from time to time in other filings with the SEC.

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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