What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-08-15 compared with 2023-08-17 · 194 added, 269 removed, 720 unchanged (39% of the section changed)

8 unchanged sentences

The independent auditor and the Vice President, Audit Services have full access to the Audit Committee and meet with the committee, both with and without management present, to discuss the scope and results of their audits, including internal controls and financial matters.

Deloitte & Touche LLP audited our consolidated financial statements for the fiscal years ended June 30, 2023 and 2022, the two months ended June 30, 2021 (Transition Period), and for the fiscal year ended April 30, 2021.

Deloitte & Touche LLP audited our consolidated financial statements for the fiscal years 2024 , 2023 and 2022.

The audits were conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States).

8 unchanged sentences

President and Chief Executive Officer Chief Financial Officer

H&R Block, Inc.

| 2023 Form 10-K

2024 Form 10-K | H&R Block, Inc.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2 unchanged sentences

We have audited the accompanying consolidated balance sheets of H&R Block, Inc.

and subsidiaries (the "Company") as of June 30, 2023, and June 30, 2022, the related consolidated statements of operations and comprehensive income (loss), stockholders' equity, and cash flows, for the years ended June 30, 2023, and June 30, 2022, the two months ended June 30, 2021 (Transition Period) and the year ended April 30, 2021, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2023, and June 30, 2022, and the results of its operations and its cash flows for the years ended June 30, 2023 and June 30, 2022, the two months ended June 30, 2021 (Transition Period) and the year ended April 30, 2021, in conformity with accounting principles generally accepted in the United States of America.

and subsidiaries (the "Company") as of June 30, 2024 and 2023, the related consolidated statements of operations and comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended June 30, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 15, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

10 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Income Taxes - Uncertain Tax Positions - Refer to Note 9 to the consolidated financial statements

4 unchanged sentences

The Company accrues a liability for unrecognized tax benefits arising from uncertain tax positions reflecting their judgment as to the ultimate resolution of the applicable issues.

For each position, management considers all applicable information including relevant tax laws, the taxing authorities' potential position, management’s tax return position, and the

2023 Form 10-K | H&R Block, Inc.

possible settlement outcomes to determine the amount of liability to record.

The Company’s unrecognized tax benefits as of June 30, 2023, were $240 million.

We identified the Company’s determination of uncertain tax positions measured in accordance with the Company’s transfer pricing policies as a critical audit matter because of the significant judgment in the application of the tax law in applying the arm’s length standard to intercompany transactions and scrutiny by local tax authorities.

For each position, management considers all applicable information including relevant tax laws, the taxing authorities' potential position, management’s tax return position, and the possible settlement outcomes to determine the amount of liability to record.

H&R Block, Inc.

| 2024 Form 10-K

of the tax law in applying the arm’s length standard to intercompany transactions and scrutiny by local tax authorities.

The significant level of judgment increases the uncertainty in evaluating the valuation of tax balances, including any uncertain tax positions that relate to the Company’s transfer pricing.

9 unchanged sentences

◦ Evaluated management’s approach to identifying uncertain tax positions related to changes in the transfer pricing terms and conditions and tested the calculation of the tax positions at the individual legal entity level and at the consolidated level.

Goodwill - Wave Reporting Unit - Refer to Note 6 to the consolidated financial statements

Critical Audit Matter Description

The Company tests goodwill for impairment annually as of February 1 ("measurement date"), or more frequently if events occur or circumstances change which would, more likely than not, reduce the fair value of a reporting unit below its carrying value.

The Company determines the fair value of the Wave reporting unit using the income approach ("discounted cash flow model") and the market approach ("guideline public company method").

The determination of the fair value using the discounted cash flow model requires management to make significant estimates and assumptions related to forecasts of future revenues, operating margins, and the discount rate.

The determination of the fair value using the guideline public company method requires management to make significant assumptions related to the selection of market multiples of comparable publicly traded companies.

The goodwill balance was $780 million as of February 1, 2024, of which $180 million relates to the Wave reporting unit.

The estimated fair value of the Wave reporting unit exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized.

We identified the Company's goodwill impairment assessment for the Wave reporting unit as of the measurement date as a critical audit matter because of the significant judgments made by management to estimate the fair value of Wave.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of future revenues and operating margins and selection of market multiples of comparable publicly traded companies and the discount rate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasts of future revenues and operating margins ("forecasts") and selection of market multiples of comparable publicly traded companies and the discount rate for the Wave reporting unit included the following, among others:

2024 Form 10-K | H&R Block, Inc.

• We tested the effectiveness of the control over management’s evaluation and determination of estimates and assumptions related to the forecast of future revenues and operating margins and selection of market multiples of comparable publicly traded companies and the discount rate.

• We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s revenue and operating margin forecasts by comparing the forecasts to (1) the Company's historical revenue growth and operating margin rates, (2) internal communications to management and the Board of Directors, (3) forecasted information included in industry reports, applicable market data, and guideline public company information, and (4) underlying analyses detailing business strategies and growth plans.

• With the assistance of our fair value specialists, we evaluated the discount rate, including testing the mathematical accuracy of the calculations, developing a range of independent estimates, and comparing those to the discount rate selected by management.

• With the assistance of our fair value specialists, we evaluated the market multiples, including comparing the reporting unit’s growth and profitability to the guideline public companies, testing the underlying source information and mathematical accuracy of the calculations, and comparing the multiples selected by management to the guideline companies.

/s/ Deloitte & Touche LLP

33 unchanged sentences

AND COMPREHENSIVE INCOME (in 000s, except per share amounts)

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Year ended June 30, 2024 2023 2022

Service revenues $ 3,302,337 $ 3,156,921 $ 3,134,686

24 unchanged sentences

Change in foreign currency translation adjustments ( 11,746 ) ( 15,454 ) ( 21,733 )

Other comprehensive income (loss) ( 15,454 ) ( 21,733 ) (4,698) 56,362

Other comprehensive loss ( 11,746 ) ( 15,454 ) ( 21,733 )

Comprehensive income $ 583,571 $ 538,246 $ 531,941

2 unchanged sentences

| 2024 Form 10-K

CONSOLIDATED BALANCE SHEETS (in 000s, except share and per share amounts)

CONSOLIDATED BALANCE SHEETS (in 000s, except share

and per share amounts)

As of June 30, 2024 June 30, 2023

3 unchanged sentences

69,075 59,987

Income taxes receivable 35,910 202,838

Prepaid expenses and other current assets 95,208 112,183

33 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (in 000s)

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Year ended June 30, 2024 2023 2022

CASH FLOWS FROM OPERATING ACTIVITIES:

19 unchanged sentences

Other, net 7,143 10,838 8,902

Net cash provided by (used in) investing activities ( 101,389 ) ( 76,541 ) 3,692 ( 45,523 )

Net cash used in investing activities ( 93,858 ) ( 101,389 ) ( 76,541 )

CASH FLOWS FROM FINANCING ACTIVITIES:

2 unchanged sentences

Repayments of long-term debt — — ( 500,000 )

Proceeds from issuance of long-term debt — — 494,435 647,965

Dividends paid ( 179,775 ) ( 177,925 ) ( 186,476 )

Repurchase of common stock, including shares surrendered ( 379,569 ) ( 568,952 ) ( 563,174 )

Proceeds from exercise of stock options 3,383 6,334 308 2,140

Other, net ( 4,967 ) ( 4,115 ) ( 7,696 )

Net cash provided by (used in) financing activities ( 750,992 ) ( 1,257,346 ) 484,526 ( 2,408,823 )

Net cash used in financing activities ( 564,311 ) ( 750,992 ) ( 1,257,346 )

Effects of exchange rate changes on cash ( 2,814 ) ( 4,857 ) ( 8,101 )

18 unchanged sentences

Shares Amount Shares Amount

Balances as of May 1, 2020 228,207 $ 2,282 $ 775,387 $ ( 51,576 ) $ 42,965 ( 35,731 ) $ ( 698,017 ) $ 71,041

Net income — — — — 583,791 — — 583,791

Other comprehensive income — — — 56,362 — — — 56,362

Stock-based compensation — — 26,138 — — — — 26,138

Stock-based awards exercised or vested — — ( 11,417 ) — ( 1,900 ) 755 14,748 1,431

Acquisition of treasury shares (2)

— — — — — ( 214 ) ( 3,081 ) ( 3,081 )

Repurchase and retirement of common shares ( 11,551 ) ( 115 ) ( 6,816 ) — ( 181,282 ) — — ( 188,213 )

Cash dividends declared - $ 1.04 per share

— — — — ( 195,068 ) — — ( 195,068 )

Balances as of April 30, 2021 216,656 $ 2,167 $ 783,292 $ 4,786 $ 248,506 ( 35,190 ) $ ( 686,350 ) $ 352,401

Balances as of July 1, 2021 216,656 $ 2,167 $ 779,465 $ 88 $ 286,694 ( 34,842 ) $ ( 680,356 ) $ 388,058

Net income — — — — 553,674 — — 553,674

4 unchanged sentences

— — — — — ( 433 ) ( 12,828 ) ( 12,828 )

Repurchase and retirement of common shares ( 23,085 ) ( 231 ) ( 13,850 ) — ( 536,265 ) — — ( 550,346 )

Cash dividends declared - $ 1.08 per share

28 unchanged sentences

NATURE OF OPERATIONS – Our subsidiaries 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 United States (U.S.), Canada and Australia.

Tax returns are either prepared by H&R Block tax professionals (in company-owned or franchise offices, virtually or via an internet review) or prepared and filed by our clients through our DIY tax solutions.

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

Tax returns are either prepared by H&R Block tax professionals (in company-owned or franchise offices, virtually or via an online review) or prepared and filed by our clients through our DIY tax solutions.

We also offer small business solutions through our company-owned and franchise offices (including in-person, online and virtual) and online through Wave.

"H&R Block," "the Company," "we," "our" and "us" are used interchangeably to refer to H&R Block, Inc., to H&R Block, Inc.

3 unchanged sentences

DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon Corporation, previously known as Option One Mortgage Corporation (including its subsidiaries, collectively, SCC), which exited its mortgage business in fiscal year 2008.

See note 12 for additional information on loss contingencies related to our discontinued operations.

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

1 unchanged sentence

(GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Significant estimates, assumptions and judgments are applied in the evaluation of contingent losses arising from our discontinued mortgage business, contingent losses associated with pending claims and litigation, reserves for uncertain tax positions, and fair value of reporting units.

Significant estimates, assumptions and judgments are applied in the evaluation of contingent losses associated with pending claims and litigation, reserves for uncertain tax positions, and fair value of reporting units.

Estimates have been prepared based on the best information available as of each balance sheet date.

As such, actual results could differ materially from those estimates.

CHANGE IN FISCAL YEAR END – On June 9, 2021, the Board of Directors approved a change of the Company's fiscal year end from April 30 to June 30.

As a result of this change, the Company filed a Transition Report on Form 10-Q that included financial information for the transition period from May 1, 2021 to June 30, 2021 (Transition Period).

CASH AND CASH EQUIVALENTS – All non-restricted highly liquid instruments maturing within three months at acquisition are considered to be cash equivalents.

5 unchanged sentences

instead they are evaluated on a pooled basis.

At the end of the fiscal year the outstanding balances on these receivables are evaluated based on collections received and expected collections over subsequent tax seasons.

At the end of the fiscal year the outstanding balances on these receivables are evaluated based on collections received and expected collections over subsequent years.

We establish an allowance for credit losses at an amount that we believe reflects the receivable at net realizable value.

In December of each year we charge-off the receivables to an amount we believe represents the net realizable value.

H&R Block, Inc.

| 2023 Form 10-K

Our financing receivables consist primarily of participations in H&R Block Emerald Advance ® lines of Credit (EAs), loans made to franchisees, and amounts due under H&R Block's Instant Refund SM (Instant Refund).

Typically in December of each year we charge-off the receivables to an amount we believe represents the net realizable value.

Our financing receivables consist primarily of participations in H&R Block Emerald Advance® (EA) term loans, loans made to franchisees, and amounts due under H&R Block's Instant Refund ® (Instant Refund).

Our accounting policies related to receivables and related allowances are discussed further in note 4 .

PROPERTY AND EQUIPMENT – Buildings, equipment and leasehold improvements are initially recorded at cost and are depreciated over the estimated useful life of the assets using the straight-line method.

Estimated useful lives are generally 15 to 40 years for buildings, two to five years for computers and other equipment, three to five years for purchased software and up to eight years for leasehold improvements.

Estimated useful lives are generally 15 to 40 years for buildings, two to five years for computers and other equipment, three to five

H&R Block, Inc.

| 2024 Form 10-K

years for purchased software and up to eight years for leasehold improvements.

Property and equipment is retired when no longer in use.

GOODWILL AND INTANGIBLE ASSETS – Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses.

Goodwill is not amortized, but rather is tested for impairment annually during our third quarter, or more frequently if indications of potential impairment exist.

Goodwill is not amortized, but rather is tested for impairment annually as of February 1, or more frequently if indications of potential impairment exist.

Intangible assets, including internally-developed software, with finite lives are amortized over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

Intangible assets are typically amortized over the estimated useful life of the assets using the straight-line method.

Fully amortized intangible assets are retired at the end of their economic useful life.

We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

15 unchanged sentences

Translation adjustments are not included in net income, but are recorded as a separate component of other comprehensive income in stockholders' equity.

Foreign currency gains and losses included in operating results for fiscal years ended June 30, 2023, June 30, 2022, April 30, 2021 and the Transition Period were not material.

Foreign currency gains and losses included in operating results for fiscal years 2024, 2023 and 2022 were not material.

TREASURY SHARES – We record shares of common stock repurchased by us as treasury shares, at cost, resulting in a reduction of stockholders' equity.

2 unchanged sentences

When shares are reissued, we determine the cost using the average cost method.

2023 Form 10-K | H&R Block, Inc.

FAIR VALUE MEASUREMENT – We use the following classification of financial instruments pursuant to the fair value hierarchy methodologies for assets measured at fair value:

2 unchanged sentences

▪ Level 3 – valuation is based on significant inputs that are unobservable in the market and our own estimates of assumptions that we believe market participants would use in pricing the asset.

2024 Form 10-K | H&R Block, Inc.

Assets measured on a recurring basis are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date.

10 unchanged sentences

See note 10 for the carrying amount.

REVENUE RECOGNITION – Revenue is recognized upon satisfaction of performance obligations by the transfer of a product or service to the customer.

REVENUE RECOGNITION – Revenue is recognized when a contract has been established with a customer and when we satisfy the performance obligations by the transfer of a service or product to the customer.

Revenue is the amount of consideration we expect to receive for our services and products and excludes sales taxes.

4 unchanged sentences

We have determined that our contracts do not contain a significant financing component.

Service revenues consist of assisted and online tax preparation revenues, fees for electronic filing, revenues from RTs, Emerald Card®, Peace of Mind® (POM), Tax Identity Shield® (TIS) and Wave.

Assisted tax preparation services include tax preparation and electronic filing or printing of the completed tax return.

Service revenues consist of assisted and online tax preparation revenues, fees for electronic filing, revenues from RTs, Emerald Card®, Spruce SM , Peace of Mind® (POM), Tax Identity Shield® (TIS) and Wave.

Assisted tax preparation.

Services include tax preparation and electronic filing or printing of the completed tax return.

Revenues from tax preparation and printing for clients that choose to print and mail their returns, are recognized when a completed return is accepted by the customer.

Revenues for electronic filing are recognized when the return is electronically filed.

Royalties are based on contractual percentages of franchise gross receipts and are generally recorded in the period in which the services are provided by the franchisee to the customer.

DIY tax preparation services includes fees for online and desktop tax preparation software and for electronic filing or printing.

Revenues are based on contractual percentages of franchise gross receipts and are generally recorded in the period in which the services are provided by the franchisee to the customer.

DIY tax preparation.

Revenues include fees for online and desktop tax preparation software and for electronic filing or printing.

Revenues for online software and printing for clients that choose to print and mail their returns, are recognized when the customer uses the software to complete a return.

1 unchanged sentence

Revenues for electronic filing are recognized when the return is electronically filed.

Refund Transfer revenues are recognized when the Internal Revenue Service (IRS) filing acknowledgment is received and the bank account is established at our bank partner, Pathward TM , N.A.

Refund Transfer.

Revenues are recognized when the Internal Revenue Service (IRS) filing acknowledgment is received and the bank account is established at our bank partner, Pathward TM , N.A.

(Pathward), a wholly-owned subsidiary of Pathward Financial, Inc.

H&R Block, Inc.

| 2023 Form 10-K

Emerald Card® and Spruce SM revenues consist of interchange income from the use of debit cards and fees paid by cardholders.

Interchange income is a fee paid by merchants to our bank partner through the interchange network.

Emerald Card® and Spruce SM .

Revenues consist of interchange income from the use of debit cards and fees paid by cardholders.

Interchange income is a fee paid by merchants to our bank partner through the card networks.

Revenues associated with Emerald Card® and Spruce SM are recognized based on authorization of cardholder transactions.

Peace of Mind® Extended Service Plan revenues are initially deferred and recognized over the term of the plan, based on the historical pattern of actual claims paid, as claims paid represent the transfer of POM services to the customer.

Peace of Mind® Extended Service Plan .

Revenues are initially deferred and recognized over the term of the plan, based on the historical pattern of actual claims paid, as claims paid represent the transfer of POM services to the customer.

The plan is effective for the life of the tax return, which can be up to six years;

however, the majority of claims are incurred in years two and three after the sale of POM.

however, the majority

H&R Block, Inc.

| 2024 Form 10-K

of claims are incurred in years two and three after the sale of POM.

POM has multiple performance obligations where we represent our clients if they are audited by a taxing authority, and assume the cost, subject to certain limits, of additional taxes owed by a client resulting from errors attributable to H&R Block.

Incremental wages are also deferred and recognized over the term of the plan, in conjunction with the revenues earned.

Tax Identity Shield® revenues are initially deferred and are recognized as the various services are provided to the client, either by us or a third party, throughout the term of the contract, which generally ends on April 30th of the following year.

Tax Identity Shield® .

Revenues are initially deferred and are recognized as the various services are provided to the client, either by us or a third party, throughout the term of the contract, which generally ends on April 30th of the following year.

TIS has multiple performance obligations where we provide clients assistance in helping protect their tax identity and access to services to help restore their tax identity, if necessary.

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.

Interest and fee income on Emerald Advance SM lines of credit is recorded over the life of the underlying loan.

Wave® revenues primarily consist of fees received to process payment transactions and are generally calculated as a percentage of the transaction amounts processed.

Interest and fee income on Emerald Advance ® .

Interest income is recorded over the life of the loan and late fees are recorded when the loan becomes 15 days past due.

Revenues primarily consist of fees received to process payment transactions and are generally calculated as a percentage of the transaction amounts processed.

Revenues are recognized upon authorization of the transaction.

MARKETING AND ADVERTISING – Advertising costs for radio and television ads are expensed over the course of the tax season, with online, print and mailing advertising expensed as incurred.

Marketing and advertising expenses totaled $ 286.3 million, $ 284.2 million and $ 262.0 million for fiscal years ended June 30, 2023, June 30, 2022 and April 30, 2021, respectively, and $ 11.9 million for the Transition Period.

MARKETING AND ADVERTISING – Marketing and advertising costs are expensed as used and totaled $ 277.7 million, $ 286.3 million and $284.2 million in fiscal years 2024, 2023 and 2022, respectively.

EMPLOYEE BENEFIT PLANS – We have a 401(k) defined contribution plan in the U.S., and similar plans internationally, covering eligible full-time and seasonal employees following the completion of an eligibility period.

Employer contributions to these plans are discretionary and totaled $ 25.6 million, $ 25.1 million and $ 26.6 million for continuing operations for fiscal years ended June 30, 2023, June 30, 2022 and April 30, 2021, respectively, and $ 3.4 million for the Transition Period.

Employer contributions to these plans are discretionary and totaled $ 25.7 million, $ 25.6 million and $ 25.1 million for continuing operations in fiscal years 2024, 2023 and 2022, respectively.

We have severance plans covering executives and eligible regular full-time or part-time active employees who incur a qualifying termination.

Expenses related to severance benefits for continuing operations totaled $ 6.9 million, $ 2.6 million and $ 8.4 million for fiscal years ended June 30, 2023, June 30, 2022 and April 30, 2021, respectively, and $ 1.2 million for the Transition Period.

Expenses related to severance benefits for continuing operations totaled $ 2.6 million, $ 6.9 million and $ 2.6 million in fiscal years 2024, 2023 and 2022, respectively.

NEW ACCOUNTING PRONOUNCEMENTS – In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No.

2023-07 (ASU 2023-07), “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which requires companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker.

ASU 2023-07 will be effective for annual periods beginning in fiscal year 2025 and interim periods beginning in fiscal year 2026.

ASU 2023-07 must be applied retrospectively to all prior periods presented in the financial statements.

2024 Form 10-K | H&R Block, Inc.

4 unchanged sentences

revenues by major service line, with revenues from our international tax services businesses and from Wave included as separate lines:

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Year ended June 30, 2024 2023 2022

assisted tax preparation $ 2,274,835 $ 2,167,138 $ 2,094,612

6 unchanged sentences

76,093 84,651 125,444

Interest and fee income on Emerald Advance SM

47,554 43,981 299 53,430

Interest and fee income on Emerald Advance® 40,933 47,554 43,981

International 247,123 235,131 231,335

2 unchanged sentences

Total revenues $ 3,610,347 $ 3,472,185 $ 3,463,270

Changes in the balances of deferred revenue for POM are as follows:

POM Deferred Revenue

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Balance, beginning of the period $ 173,486 $ 172,759 $ 183,871 $ 183,685

Amounts deferred 103,136 110,679 12,464 115,114

Amounts recognized on previous deferrals ( 109,365 ) ( 109,952 ) ( 23,576 ) ( 114,928 )

Balance, end of the period $ 167,257 $ 173,486 $ 172,759 $ 183,871

Changes in the balances of deferred wages for POM are as follows:

POM Deferred Wages

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Balance, beginning of the period $ 19,495 $ 17,867 $ 20,169 $ 21,618

Changes in the balances of deferred revenue and wages for POM are as follows:

POM Deferred Revenue Deferred Wages

Year ended June 30, 2024 2023 2024 2023

Balance, beginning of the year $ 167,257 $ 173,486 $ 21,828 $ 19,495

Amounts deferred 97,125 103,136 11,819 14,247

Amounts recognized on previous deferrals ( 107,772 ) ( 109,365 ) ( 13,435 ) ( 11,914 )

Balance, end of the period $ 21,828 $ 19,495 $ 17,867 $ 20,169

Balance, end of the year $ 156,610 $ 167,257 $ 20,212 $ 21,828

As of June 30, 2024, deferred revenue related to POM was $ 156.6 million.

5 unchanged sentences

All deferred revenue related to TIS as of June 30, 2024 will be recognized by April 2025 .

H&R Block, Inc.

| 2023 Form 10-K

A significant portion of our accounts receivable balances arise from services and products that we provide to our customers, with the exception of those related to EAs which arise from purchased participation interests with our bank partner.

The majority of our receivables are related to our RT product.

The majority of our receivables are related to RTs.

Generally the prices of our services and products are fixed and determinable at the time of sale.

For our RT product, we record a receivable for our fees which is then collected at the time the IRS issues the client’s refund.

For RTs, we record a receivable for our fees which is then collected at the time the IRS issues the client’s refund.

Our receivables from customers are generally collected on a periodic basis during and subsequent to the tax season.

4 unchanged sentences

Per share amounts are computed by dividing net income from continuing operations attributable to common shareholders by the weighted average shares outstanding during each period.

H&R Block, Inc.

| 2024 Form 10-K

The computations of basic and diluted earnings per share from continuing operations are as follows:

(in 000s, except per share amounts)

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Year ended June 30, 2024 2023 2022

Net income from continuing operations attributable to shareholders $ 597,963 $ 561,800 $ 560,646

7 unchanged sentences

Diluted 4.14 3.56 3.26

Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain restrictions or the exercise of options to purchase 0.6 million, 0.4 million and 0.8 million shares of stock for fiscal years ended June 30, 2023, June 30, 2022 and April 30, 2021, respectively, and 0.3 million shares of stock for the Transition Period as the effect would be antidilutive.

2023 Form 10-K | H&R Block, Inc.

Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain restrictions or the exercise of options to purchase 0.1 million, 0.6 million and 0.4 million shares of stock for fiscal years 2024, 2023 and 2022, respectively, as the effect would be antidilutive.

Receivables, net of their related allowance, consist of the following:

4 unchanged sentences

assisted and DIY tax preparation and related fees 18,440 5,332 11,061 6,824

H&R Block's Instant Refund SM receivables

H&R Block's Instant Refund ® receivables

2,947 207 8,499 414

H&R Block Emerald Advance ® lines of credit

Emerald Advance ®

17,867 21,360 10,834 7,089

14 unchanged sentences

Additionally, the franchise territory serves as additional protection in the event a franchisee defaults on the loan, as we may revoke franchise rights, write off the remaining balance of the loan and refranchise the territory or begin operating it as company-owned.

H&R Block's Instant Refund SM .

2024 Form 10-K | H&R Block, Inc.

H&R Block's Instant Refund®.

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

4 unchanged sentences

This serves to greatly reduce the amounts of uncollectible receivables and the risk of fraudulent returns.

H&R Block's Instant Refund SM amounts are generally received from the CRA within 60 days of filing the client's return, with the remaining balance collectible from the client.

H&R Block's Instant Refund ® amounts are generally received from the CRA within 60 days of filing the client's return, with the remaining balance collectible from the client.

Credit losses from these receivables are not specifically identified and charged off;

3 unchanged sentences

In December of each year we charge-off the receivables to an amount we believe represents the net realizable value.

H&R Block, Inc.

| 2023 Form 10-K

B alances and amounts on non-accrual status and classified as impaired, or more than 60 days past due, by tax return year of origination, as of June 30, 2023 are as follows:

B alances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by tax return year of origination, as of June 30, 2024 are as follows:

Tax return year of origination Balance More Than 60 Days Past Due

4 unchanged sentences

Net balance $ 3,154

H&R Block Emerald Advance® lines of credit .

EAs are typically offered to clients in our offices from mid-November through mid-January, in amounts up to $ 1,000 .

If the borrower meets certain criteria as agreed in the loan terms, the line of credit can be utilized year-round.

EA balances require an annual paydown on February 15 th , and any amounts unpaid are placed on non-accrual status as of March 1 st .

Payments on past due amounts are applied to principal.

These lines of credit are offered by our bank partner.

H&R Block Emerald Advance® .

Historically, Emerald Advance® lines of credit have been offered to clients in our offices from mid-November through mid-January.

If the borrower met certain criteria as agreed in the loan terms, the line of credit could be utilized year-round (Revolving Loan).

In fiscal year 2024, EAs were offered as term loans, and we discontinued EA lines of credit, including the Revolving Loans.

EA lines of credit required an annual paydown on February 15, and any amounts unpaid were placed on non-accrual status as of March 1.

EA term loans are interest bearing with principal and interest due in full on March 31, late fees assessed as of April 15, and any amounts unpaid are placed on non-accrual status as of April 30.

EA term loans are offered by our bank partner.

We purchase participation interests in their loans, as discussed further in note 10 .

Credit losses from EAs are not specifically identified and charged off;

instead we review the credit quality of these receivables on a pooled basis, segregated by the fiscal year of origination with older years being deemed more unlikely to be repaid.

At the end of the fiscal year, the outstanding balances on these receivables are evaluated based on collections received and expected collections over subsequent tax seasons.

instead we review the credit quality of our purchased participation interest in EA receivables on a pooled basis, which are segregated by the fiscal year of origination with older years being deemed more unlikely to be repaid.

At the end of the fiscal year, the outstanding balances on these receivables are evaluated based on collections received and expected collections over subsequent years.

We establish an allowance for credit losses at an amount that we believe reflects the receivable at net realizable value.

In December of each year we charge-off the receivables to an amount we believe represents the net realizable value.

B alances and amounts on non-accrual status and classified as impaired, or more than 60 days past due, by fiscal year of origination as of June 30, 2023, are as follows:

Typically, in December of each year, we charge-off the receivables and the related allowance for EA lines of credit, excluding Revolving Loans, to an amount we believe represents the net realizable value.

However, due to the discontinuation of EA lines of credit, we charged-off the receivables and the related allowance of EA lines of credit and Revolving Loans during the quarter ended September 30, 2023 to an amount that we believe represents net realizable value.

H&R Block, Inc.

| 2024 Form 10-K

B alances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by fiscal year of origination as of June 30, 2024, are as follows:

Fiscal year of origination Balance Non-Accrual

2024 $ 64,847 $ 64,847

2022 and prior 3,040 3,040

Revolving loans 14,238 13,118

2023 and prior – Lines of credit and Revolving Loans 7,916 7,916

72,763 $ 72,763

1 unchanged sentence

Net balance $ 39,227

2023 Form 10-K | H&R Block, Inc.

Allowance for Credit Losses.

Activity in the allowance for credit losses for EAs and all other short-term and long-term receivables for the periods ended June 30, 2023, June 30, 2022, June 30, 2021 and April 30, 2021 is as follows:

Activity in the allowance for credit losses for EAs and all other short-term and long-term receivables for the years ended June 30, 2024, 2023 and 2022 is as follows:

EAs All Other Total

Balances as of May 1, 2020 $ 32,034 $ 50,446 $ 82,480

Provision for credit losses 14,319 59,132 73,451

Charge-offs, recoveries and other ( 18,649 ) ( 53,774 ) ( 72,423 )

Balances as of April 30, 2021 27,704 55,804 83,508

Balances as of July 1, 2021 $ 27,704 $ 60,272 $ 87,976

Provision for credit losses 14,814 51,993 66,807

7 unchanged sentences

Balances as of June 30, 2024 $ 33,536 $ 45,327 $ 78,863

Gross charge-offs of EAs were $27.7 million for the year ended June 30, 2024, of which $15.4 million related to EA lines of credit originated in fiscal year 2023 and $12.3 million related to Revolving Loans.

PROPERTY AND EQUIPMENT

7 unchanged sentences

$ 131,319 $ 130,015

Depreciation expense of property and equipment for continuing operations for fiscal years ended June 30, 2023, June 30, 2022 and April 30, 2021 was $ 58.5 million, $ 64.7 million and $ 73.4 million, respectively and was $ 10.8 million for the Transition Period.

Depreciation expense of property and equipment from continuing operations for fiscal years 2024, 2023 and 2022 was $ 60.7 million, $ 58.5 million and $ 64.7 million, respectively.

The carrying value of long-lived assets held outside the U.S., which is comprised of property and equipment, totaled $ 20.0 million and $ 19.2 million as of June 30, 2024 and 2023 respectively.

H&R Block, Inc.

| 2023 Form 10-K

2024 Form 10-K | H&R Block, Inc.

GOODWILL AND INTANGIBLE ASSETS

3 unchanged sentences

Acquisitions (1)

23,832 — 23,832

Disposals and foreign currency changes, net ( 8,780 ) — ( 8,780 )

16 unchanged sentences

Noncompete agreements 21,977 ( 19,494 ) 2,483

Franchise agreements 19,201 ( 18,668 ) 533

Purchased technology 70,100 ( 51,432 ) 18,668

10 unchanged sentences

$ 1,067,824 $ ( 790,781 ) $ 277,043

Amortization of intangible assets for continuing operations for the fiscal years ended June 30, 2023, June 30, 2022 and April 30, 2021 was $ 72.0 million, $ 77.5 million and $ 83.4 million, respectively, and was $ 13.8 million for the Transition Period.

Amortization of intangible assets from continuing operations for the fiscal years ended June 30, 2024, 2023 and 2022 was $ 61.1 million, $ 72.0 million and $ 77.5 million, respectively.

Estimated amortization of intangible assets for fiscal years 2025 , 2026, 2027, 2028 and 2029 is $ 43.3 million, $ 33.6 million, $ 27.0 million, $ 19.1 million and $ 11.1 million, respectively.

We made payments to acquire businesses totaling $ 48.2 million, $ 35.9 million and $ 15.6 million during the fiscal years ended June 30, 2023, June 30, 2022 and April 30, 2021, respectively, and $ 0.8 million for the Transition

2023 Form 10-K | H&R Block, Inc.

The amounts and weighted-average lives of assets acquired during fiscal year 2023, including amounts capitalized related to internally-developed software, are as follows:

H&R Block, Inc.

| 2024 Form 10-K

We made payments to acquire businesses totaling $ 43.4 million, $ 48.2 million and $ 35.9 million during the fiscal years ended June 30, 2024, 2023 and 2022, respectively.

The amounts and weighted-average lives of assets acquired during fiscal year 2024 are as follows:

(dollars in 000s)

Amount Weighted-Average Life (in years)

Internally-developed software $ 3,354 2

Customer relationships $ 35,040 5

31 unchanged sentences

OTHER INFORMATION – The aggregate payments required to retire long-term debt are $ 350.0 million in fiscal year 2026, $ 500.0 million in fiscal year 2029 and $ 650.0 million in fiscal year 2031.

H&R Block, Inc.

| 2023 Form 10-K

2024 Form 10-K | H&R Block, Inc.

STOCK-BASED COMPENSATION

1 unchanged sentence

Stock-based compensation expense and related tax items are as follows:

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Year ended June 30, 2024 2023 2022

Stock-based compensation expense $ 34,277 $ 31,326 $ 34,252

9 unchanged sentences

The number of performance-based share units that ultimately vest can range from zero up to 200 percent of the number granted, based on the form of the award, which can vary by year of grant.

The performance metrics for these awards typically consist of earnings before interest, taxes, depreciation and amortization (EBITDA), EBITDA growth, return on invested capital, total shareholder return or our stock price.

The performance metrics for these awards typically consist of earnings before interest, taxes, depreciation and amortization (EBITDA), total shareholder return or our stock price.

Deferred stock units granted to non-employee directors vest when they are granted and are settled six months after the director separates from service as a director of the Company, except in the case of death.

4 unchanged sentences

Restricted Share Units and Deferred Stock Units

Performance-Based Share Units

Performance-Based

Shares Weighted-Average

1 unchanged sentence

Outstanding, beginning of the year 1,750 $ 30.96 1,687 $ 25.04

Granted 625 43.96 487 48.09

673 40.30 1,041 43.62

Released ( 423 ) 33.99 ( 1,641 ) 16.56

1 unchanged sentence

Outstanding, end of the year 1,867 $ 33.31 1,021 $ 37.91

The total fair value of shares vesting during fiscal years ended June 30, 2023, June 30, 2022 and April 30, 2021 was $ 33.6 million, $ 33.3 million and $ 16.1 million, respectively, and was $ 12.3 million for the Transition Period.

2023 Form 10-K | H&R Block, Inc.

of June 30, 2023, we had $ 41.3 million of total unrecognized compensation cost related to these shares.

(1) Includes adjustments for performance achievement and dividend equivalents.

The total fair value of shares vesting during fiscal years 2024, 2023 and 2022 was $ 39.1 million, $ 33.6 million and $ 33.3 million, respectively.

As of June 30, 2024, we had $ 40.8 million of total unrecognized compensation cost related to these shares.

This cost is expected to be recognized over a weighted-average period of two years .

H&R Block, Inc.

| 2024 Form 10-K

When valuing our performance-based share units on the grant date, we typically estimate the expected volatility using historical volatility for H&R Block, Inc.

4 unchanged sentences

Both expected volatility and the risk-free interest rate are based on a period that approximates the expected term.

There were no performance-based share units issued during the Transition Period.

The following assumptions were used to value performance-based share units using the Monte Carlo valuation model during the periods:

June 30, 2023 Year Ended

June 30, 2022 Year Ended

April 30, 2021

Year ended June 30, 2024 2023 2022

Expected volatility 10.17 % - 157.11 %

24.80% - 163.58% 23.19 % - 88.48 %

21.14 % - 84.49 %

Expected term 3 years 3 years 3 years

1 unchanged sentence

Risk-free interest rate 4.54 %

0.37 % 0.14% - 0.18%

Weighted-average fair value $ 44.06 $ 48.58 $ 27.07

8 unchanged sentences

The components of income from continuing operations upon which domestic and foreign income taxes have been provided are as follows:

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Year ended June 30, 2024 2023 2022

Domestic $ 489,912 $ 447,900 $ 478,166

5 unchanged sentences

Although these intercompany transactions reflect arm’s length terms and the proper transfer pricing documentation is in place, transfer pricing terms and conditions may be scrutinized by local tax authorities during an audit and any resulting changes may impact our mix of earnings in countries with differing statutory tax rates.

H&R Block, Inc.

| 2023 Form 10-K

2024 Form 10-K | H&R Block, Inc.

The reconciliation between the statutory U.S.

federal tax rate and our effective tax rate from continuing operations is as follows:

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Year ended June 30, 2024 2023 2022

statutory tax rate 21.0 % 21.0 % 21.0 %

5 unchanged sentences

tax on income from foreign affiliates 4.1 % 3.1 % 2.0 %

Remeasurement of deferred tax assets and liabilities — % ( 0.2 ) % ( 1.0 ) % ( 0.1 ) %

Changes in prior year estimates ( 0.2 ) % 0.1 % — % ( 0.5 ) %

Federal income tax credits ( 2.4 ) % ( 1.3 ) % ( 2.6 ) %

Tax benefit due to NOL carryback under CARES Act ( 0.2 ) % ( 0.1 ) % — % ( 17.5 ) %

Tax deductible write-down of foreign investment — % 0.6 % ( 0.2 ) % ( 1.7 ) %

Foreign investment recapture 2.6 % — % 0.6 %

Change in valuation allowance - domestic — % ( 0.4 ) % 0.2 %

2 unchanged sentences

Effective tax rate 21.6 % 21.0 % 14.9 %

Our effective tax rate from continuing operations was 21.0 %, 14.9 % and 11.7 % for fiscal years ended June 30, 2023, June 30, 2022 and April 30, 2021, respectively, and was 24.7 % for the Transition Period.

The increase in the effective tax rate for the year ended June 30, 2023 compared to the year ended June 30, 2022 is primarily due to lower benefits in the current year resulting from the expiration of statutes of limitations related to uncertain tax positions.

The components of income tax expense for continuing operations are as follows:

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Year ended June 30, 2024 2023 2022

Federal $ 191,664 $ 97,430 $ 121,319

7 unchanged sentences

Total income taxes for continuing operations $ 164,359 $ 149,412 $ 98,423

2023 Form 10-K | H&R Block, Inc.

H&R Block, Inc.

| 2024 Form 10-K

We account for income taxes under the asset and liability method, which requires us to record deferred income tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis.

14 unchanged sentences

Property and equipment 2,260 —

Internally developed software 15,063 —

Intangibles - intellectual property 71,367 80,879

14 unchanged sentences

Net deferred tax asset $ 203,697 $ 148,755

H&R Block, Inc.

| 2023 Form 10-K

Changes in our valuation allowance for fiscal years ended June 30, 2023, June 30, 2022 and April 30, 2021 and for the Transition Period are as follows:

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Balance, beginning of the period $ 55,172 $ 55,784 $ 55,401 $ 45,124

2024 Form 10-K | H&R Block, Inc.

Changes in our valuation allowance for fiscal years 2024, 2023 and 2022 are as follows:

Year ended June 30, 2024 2023 2022

Balance, beginning of the year $ 57,566 $ 55,172 $ 55,784

Additions charged to costs and expenses 4,584 6,438 4,752

Deductions ( 45,581 ) ( 4,044 ) (5,364)

Balance, end of the period $ 57,566 $ 55,172 $ 55,784 $ 55,401

Our valuation allowance on deferred tax assets has a net increase of $ 2.4 million during the current period.

The gross increase in valuation allowance of $ 6.4 million is primarily related to net operating loss deferred tax assets generated in foreign jurisdictions that we do not expect to utilize in future years.

This increase is offset by a $ 4.0 million decrease to our valuation allowance balance for adjustments to certain domestic and foreign net operating losses utilized in the current fiscal year and changes in future projections of net operating loss utilization.

Balance, end of the year $ 16,569 $ 57,566 $ 55,172

Our valuation allowance on deferred tax assets has a net decrease of $ 41.0 million during the current period.

The $ 4.6 million of additions charged to costs and expenses were due to net operating loss deferred tax assets generated by current year foreign and domestic losses that we do not expect to utilize in future years.

This increase is offset by a $ 45.6 million decrease for adjustments to certain foreign net operating losses utilized in the current fiscal year or for adjustments to net operating losses that are no longer available due to expiration.

Of the net $ 41.0 million decrease in valuation allowance, $ 21.6 million impacted the effective tax rate due to state and foreign net operating losses we were able to utilize in the current period or now expect to utilize in future periods.

The remaining $ 19.4 million decrease in valuation allowance was offset by decreases to net operating loss deferred tax assets and therefore did not impact the effective tax rate.

Certain of our subsidiaries file stand-alone returns in various state, local and foreign jurisdictions, and others join in filing consolidated or combined returns in such jurisdictions.

As of June 30, 2023, we had net operating losses in various states and foreign jurisdictions.

As of June 30, 2024, we had net operating losses of $ 63.4 million in various states and foreign jurisdictions.

The amount of state and foreign net operating losses varies by taxing jurisdiction.

We maintain a valuation allowance of $ 5.6 million on state net operating losses and $ 5.6 million on foreign net operating losses for the portion of such loses that, more likely than not, will not be realized.

Of the $ 117.0 million of net operating loss deferred tax assets, $ 25.7 million will expire in varying amounts during fiscal years 2024 through 2041 and the remaining $ 91.3 million have no expiration.

Of the total net operating loss deferred tax assets, $ 52.2 million are more likely than not to be realized.

Net operating loss deferred tax assets of $ 11.2 million will expire in varying amounts during fiscal years 2025 through 2042 and the remaining $ 52.2 million have no expiration.

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

1 unchanged sentence

The amount of unrecognized tax liability on these foreign earnings, net of expected foreign tax credits, is immaterial as of June 30, 2024.

Changes in unrecognized tax benefits for fiscal years ended June 30, 2023, June 30, 2022 and April 30, 2021 and for the Transition Period are as follows:

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Balance, beginning of the period $ 232,004 $ 264,323 $ 264,810 $ 168,062

Changes in unrecognized tax benefits for fiscal years 2024, 2023 and 2022 are as follows:

Year ended June 30, 2024 2023 2022

Balance, beginning of the year $ 240,063 $ 232,004 $ 264,323

Additions based on tax positions related to prior years 1,232 1,252 2,499

3 unchanged sentences

Expiration of statute of limitations ( 17,495 ) ( 25,862 ) ( 52,634 )

Balance, end of the period $ 240,063 $ 232,004 $ 264,323 $ 264,810

Included in the total gross unrecognized tax benefit ending balance as of June 30, 2023, June 30, 2022, June 30, 2021 and April 30, 2021, are $ 209.0 million, $ 203.7 million, $ 224.5 million and $ 214.9 million, respectively, which if recognized, would impact our effective tax rate.

Balance, end of the year $ 251,787 $ 240,063 $ 232,004

Included in the total gross unrecognized tax benefit ending balance as of June 30, 2024, 2023 and 2022 are $ 207.5 million, $ 209.0 million and $ 203.7 million respectively, which if recognized, would impact our effective tax rate.

Increases from prior year are primarily related to additions based on current year tax positions offset by expirations of statute of limitations and settlements with taxing authorities.

2 unchanged sentences

For such matters where a change in the balance of unrecognized tax benefits is not yet deemed reasonably possible, no estimate has been included.

2023 Form 10-K | H&R Block, Inc.

Interest and penalties, if any, accrued on the unrecognized tax benefits are reflected in income tax expense.

H&R Block, Inc.

| 2024 Form 10-K

Interest and penalties, if any, accrued on the unrecognized ta x benefits are reflected in income tax expense.

The total gross interest recorded to income tax expense for periods ending June 30, 2024, 2023 and 2022 totaled $ 14.1 million, $ 10.1 million and $ 3.7 million, respectively.

The total penalties, if any, recorded for the same periods were immaterial.

The total gross interest and penalties accrued as of June 30, 2024 and 2023 totaled $ 42.0 million and $ 32.6 million, respectively.

COMMITMENTS AND CONTINGENCIES

and Canadian businesses offer our 100% accuracy guarantee.

Assisted tax returns are covered by our 100% accuracy guarantee, whereby we will reimburse a client for penalties and interest attributable to an H&R Block error on a return.

3 unchanged sentences

Liabilities related to acquisitions for (1) estimated contingent consideration based on expected financial performance of the acquired business and economic conditions at the time of acquisition and (2) estimated accrued compensation related to continued employment of key employees were $ 26.9 million and $ 18.3 million as of June 30, 2024 and 2023, respectively, with amounts recorded in deferred revenue and other liabilities.

These liabilities will be settled within the next ten years.

These liabilities will be settled within the nine years.

Should actual results differ from our estimates, future payments made will differ from the above estimate and any differences will be recorded in results from continuing operations.

4 unchanged sentences

The CARES Act includes, among other items, provisions relating to refundable employee retention payroll tax credits.

Due to the complex nature of the employee retention credit computations, any benefits we may receive are uncertain and may significantly differ from our current estimates.

We plan to record any benefit related to these credits upon both the receipt of the benefit and the resolution of the uncertainties, including, but not limited to, the completion of any potential audit or examination, or the expiration of the related statute of limitations.

During the year ended June 30, 2023, we received $ 15.4 million related to these credits and recognized $ 5.1 million as an offset to related operating expense.

During the year ended June 30, 2022, we received $ 7.3 million related to these credits and recognized $ 2.2 million as an offset to related operating expense.

As of June 30, 2023 and 2022 we had deferred balances of $ 15.4 million and $ 5.1 million, respectively, which is recorded in deferred revenue and other current liabilities.

Due to the complex nature of the employee retention credit computations, we deferred benefits related to these credits until both the receipt of the benefit and the resolution of the uncertainties, including, but not limited to, the completion of any potential audit or examination, or the ex piration of the related statute of limitations.

As of June 30, 2023, we had deferred $ 15.4 million relat ed to these credits which were recorded in deferred revenue and other current liabilities.

D ue to the expiration of the statute of limitations, w e recognized the deferred credits during fiscal year 2024 as an offset to related operating expenses.

We are self-insured for certain risks, including employer provide d medical benefits, workers' compensation, property, general liability, tax errors and omissions, and claims related to POM.

2 unchanged sentences

We have a deferred compensation plan that permits certain employees to defer portions of their compensation and accrue income on the deferred amounts.

As of June 30, 2023 and 2022, $ 10.5 million is included in deferred revenue and other liabilities reflecting our obligation under this plan.

Emerald Advances are originated by Pathward, and pursuant to our participation agreement, we purchase a 90 % participation interest in each advance made by Pathward.

Included in deferred revenue and other liabilities is $ 10.1 million and $10.5 million as of June 30, 2024 and 2023, respectively, reflecting our obligation under this plan.

Effective October 20, 2023, we amended the Program Management Agreement and entered into a new participation agreement related to EA term loans originated by Pathward.

In fiscal year 2024, EAs were offered as term loans and we discontinued EA lines of credit.

We continue to purchase a 90 % participation interest in each loan made by Pathward in accordance with the participation agreement.

See note 4 for additional information about these balances.

2 unchanged sentences

We pay fees primarily based on loan size and customer type.

2024 Form 10-K | H&R Block, Inc.

We have provided a guarantee up to $ 18.0 million related to certain loans to clients prior to the IRS accepting electronic filing.

We accrued an estimated liability of $ 1.4 million at June 30, 2024 related to this guarantee.

H&R Block, Inc.

| 2023 Form 10-K

June 30, 2022 we had $ 0.6 million accrued under the RA guarantee agreement, and we paid $ 0.5 million, net of recoveries, related to that guarantee during the fiscal year ended June 30, 2023.

As of June 30, 2023 we had $ 0.7 million accrued under the Refund Advance guarantee agreement, and we paid $ 0.7 million, net of recoveries, related to that guarantee during the fiscal year ended June 30, 2024.

We offer POM to U.S.

5 unchanged sentences

(dollars in 000s)

June 30, 2023 Year Ended

June 30, 2022 Two Months Ended

June 30, 2021

(Transition Period) Year Ended

April 30, 2021

Year ended June 30, 2024 2023 2022

Operating lease costs $ 242,372 $ 238,899 $ 233,004

20 unchanged sentences

We believe that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value due to this variability in pleadings and our experience in handling and resolving numerous claims over an extended period of time.

H&R Block, Inc.

| 2024 Form 10-K

The outcome of a matter and the amount or range of potential loss at particular points in time may be difficult to ascertain.

Among other things, uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how courts and arbitrators will apply the law.

2023 Form 10-K | H&R Block, Inc.

Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will view the relevant evidence and applicable law.

22 unchanged sentences

in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our business and our consolidated financial position, results of operations, and cash flows.

H&R Block, Inc.

| 2023 Form 10-K

LITIGATION, CLAIMS OR OTHER LOSS CONTINGENCIES PERTAINING TO CONTINUING OPERATIONS –

On May 6, 2019, the Los Angeles City Attorney filed a lawsuit on behalf of the People of the State of California in the Superior Court of California, County of Los Angeles (Case No.

19STCV15742).

The case is styled The People of the State of California v.

HRB Digital LLC, et al.

The complaint alleges that H&R Block, Inc.

and HRB Digital LLC engaged in unfair, fraudulent and deceptive business practices and acts in connection with the IRS Free File Program in violation of the California Unfair Competition Law, California Business and Professions Code §§17200 et seq.

The complaint seeks injunctive relief, restitution of monies paid to H&R Block by persons in the State of California who were eligible to file under the IRS Free File Program for the time period startin g 4 years prior to the date of the filing of the complaint, pre-judgment interest, civil penalties and costs.

The City Attorney subsequently dismissed H&R Block, Inc.

from the case and amended its complaint to add HRB Tax Group, Inc.

We filed a motion for summary judgment, which was denied.

The August 14, 2023 trial date was continued.

A new trial date has not yet been set.

We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter.

We have received and are responding to certain governmental inquiries relating to the IRS Free File Program and our DIY tax preparation services.

In February 2023, we received a demand and draft complaint from the Federal Trade Commission (FTC) relating to our DIY tax preparation services.

If the parties are not able to reach amicable resolution, the FTC may seek resolution through litigation.

We have not concluded that a loss related to these matters is probable, nor have we accrued a liability related to these matters.

DISCONTINUED MORTGAGE OPERATIONS – Although SCC ceased its mortgage loan origination activities in December 2007 and sold its loan servicing business in April 2008, SCC or the Company has been and may in the future be, subject to litigation and other loss contingencies, including indemnification and contribution claims, pertaining to SCC's mortgage business activities that occurred prior to such termination and sale.

Parties, including underwriters, depositors, and securitization trustees, have been, remain, or may in the future be, involved in lawsuits, threatened lawsuits, or settlements related to securitization transactions in which SCC participated.

A variety of claims are alleged in these matters, including violations of federal and state securities laws and common law fraud, breaches of representations and warranties, or violations of statutory requirements.

SCC has received notices of potential indemnification or contribution obligations relating to such matters.

Additional lawsuits against the parties to the securitization transactions may be filed in the future, and SCC may receive additional notices of potential indemnification, contribution or similar obligations with respect to existing or new lawsuits or settlements of such lawsuits or other claims.

In June 2023, a settlement was paid resolving certain of these matters.

We have not concluded that a loss related to any other potential indemnification or contribution claims is probable, nor have we accrued a liability related to these matters.

It is difficult to predict either the likelihood of new matters being initiated or the outcome of existing matters.

In many of these matters it is not possible to estimate a reasonably possible loss or range of loss due to, among other things, the inherent uncertainties involved in these matters and the indeterminate damages sought.

If the amount that SCC is ultimately required to pay with respect to loss contingencies, together with payment of SCC's related administration and legal expense, exceeds SCC's net assets, the creditors of SCC, other potential claimants, or a bankruptcy trustee if SCC were to file or be forced into bankruptcy, may attempt to assert claims against us for payment of SCC's obligations.

Claimants also may attempt to assert claims against or seek payment directly from the Company even if SCC's assets exceed its liabilities.

SCC's principal assets, as of June 30, 2023, total approximately $ 262 million and consist of an intercompany note receivable.

We believe our legal position is strong on any potential corporate veil-piercing arguments;

however, if this position is challenged and not upheld, it could have a material adverse effect on our business and our consolidated financial position, results of operations, and cash flows.

OTHER — We are from time to time a party to litigation, arbitration and other loss contingencies not discussed herein arising out of our business operations.

These matters may include actions by state attorneys general, other state regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent others who may be similarly situated.

2024 Form 10-K | H&R Block, Inc.

On February 23, 2024, the Federal Trade Commission (FTC) filed an administrative complaint before the FTC alleging unfair or deceptive business acts or practices in connection with certain aspects of our DIY tax preparation services.

A hearing before an administrative law judge (ALJ) of the FTC is scheduled for October 23, 2024.

We filed a complaint in federal court in the Western District of Missouri challenging the constitutionality of the ALJ’s removal protections and seeking to enjoin the ALJ’s participation in the adjudication of the matter.

The federal court denied our motion for a preliminary injunction on August 1, 2024.

We filed an appeal with the Eighth Circuit Court of Appeals, which is pending.

We have also received and are responding to certain governmental inquiries and other matters relating to the IRS Free File Program and other aspects of our DIY tax preparation services, including the use of pixels.

An accrual related to these matters is included in our loss contingency accrual.

We are from time to time a party to litigation, arbitration and other loss contingencies not discussed herein arising out of our business operations.

While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on our business and our consolidated financial position, results of operations, and cash flows.

2 unchanged sentences

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 8. Financial Statements and Supplementary Data