H&R BLOCK INC

Previous wording

International tax preparation revenues increased $4.3 million, or 7.1%, primarily due to higher tax return volumes in Australia combined with favorable foreign currency exchange rates. Wave revenues increased $2.5 million, or 10.3%, due to higher accounting, invoicing and receipts subscriptions and small business payments processing volumes.

Current wording

International tax preparation revenues increased $2.2 million, or 7.6%, primarily due to higher tax return volumes in Australia combined with favorable foreign currency exchange rates. Wave revenues increased $3.4 million, or 14.8%, due to higher accounting, invoicing and receipts subscriptions and small business payments processing volumes.

Previous wording

Other operating expenses increased $14.6 million, or 18.1%. The components of other expenses are as follows:

Current wording

Other operating expenses increased $11.6 million, or 12.4%. The components of other expenses are as follows:

Previous wording

We recorded an income tax benefit of $60.8 million in the current year compared to $49.5 million in the prior year. The effective tax rate for the three months ended September 30, 2024, and 2023 was 26.2% and 23.3%, respectively.

Current wording

We recorded an income tax benefit of $69.8 million in the current year compared to $93.8 million in the prior year. The effective tax rate for the three months ended December 31, 2024, and 2023 was 22.4% and 33.1%, respectively.

Previous wording

Revenues increased $10.0 million, or 5.4%, from the prior year. U.S. assisted tax preparation revenues increased $3.7 million, or 9.4%, due to higher company-owned tax return volumes combined with an increase in net average charge in the current year. Other revenues increased $2.8 million, or 25.8%, primarily due to higher bookkeeping fees.

Current wording

Revenues increased $10.0 million, or 2.8%, from the prior year. U.S. assisted tax preparation revenues increased $3.7 million, or 4.3%, primarily due to an increase in net average charge.

Previous wording

Total operating expenses increased $32.0 million, or 8.2%, from the prior year. Field wages increased $5.7 million, or 9.1%, due to higher U.S. and Australian tax professional wages due to higher volumes in the current year. Other wages increased $5.2 million, or 7.3%, due to higher corporate wages primarily due to higher headcount. Benefits and other compensation increased $3.5 million, or 9.9%, primarily due to higher stock-based compensation and severance pay in the current year. Marketing and advertising expense increased $4.5 million, or 81.9%, primarily due to lower vendor refunds for expired customer incentives and higher online advertising in the current year.

Current wording

Total operating expenses increased $57.9 million, or 6.9%, from the prior year period. Field wages increased $9.4 million, or 6.7%, due to higher tax professional wages in the current year. Other wages increased $9.3 million, or 6.3%, primarily due to higher corporate wages due to salary increases in the current year. Benefits and other compensation increased $5.8 million, or 8.2%, due to higher employee insurance and severance pay in the current year. Occupancy expense increased $5.8 million, or 2.9%, primarily due to higher lease and office-related expenses. Marketing and advertising expense increased $8.0 million, or 48.0%, due to the timing of advertising and lower vendor refunds for expired customer incentives in the current year.

Previous wording

Legal expenses increased $11.5 million primarily due to higher outside legal counsel spend.

Current wording

Legal expense increased $13.2 million primarily due to higher outside legal counsel spend.

Previous wording

Our operations are highly seasonal and substantially all of our revenues and cash flow are generated during the period from February through April in a typical year. Therefore, we normally require the use of cash to fund losses and working capital needs, periodically resulting in a working capital deficit, during the months of May through

Current wording

Our operations are highly seasonal and substantially all of our revenues and cash flow are generated during the period from February through April in a typical year. Therefore, we normally require the use of cash to fund losses and working capital needs, periodically resulting in a working capital deficit, during the months of May through January. We typically have relied on available cash balances from the prior tax season and borrowings to meet liquidity needs.

Previous wording

DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS– The following table summarizes our statements of cash flows for the three months ended September 30, 2024 and 2023. See Item 1 for the complete consolidated statements of cash flows for these periods.

Current wording

DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS– The following table summarizes our statements of cash flows for the six months ended December 31, 2024 and 2023. See Item 1 for the complete consolidated statements of cash flows for these periods.

Previous wording

Operating Activities. Cash used in operations totaled $328.6 million for the three months ended September 30, 2024 compared to $335.0 million in the prior year period. The change is primarily due to changes in accrued liabilities compared to the prior year period.

Current wording

Operating Activities. Cash used in operations totaled $895.6 million for the six months ended December 31, 2024 compared to $942.2 million in the prior year period. The change is primarily due to lower EA loans originated in the current year and changes in deferred taxes, partially offset by a higher net loss in the current year.

Previous wording

Investing Activities. Cash used in investing activities totaled $26.4 million for the three months ended September 30, 2024 compared to $23.9 million in the prior year period. The change is primarily due to higher capital expenditures in the current year.

Current wording

Investing Activities. Cash used in investing activities totaled $87.5 million for the six months ended December 31, 2024 compared to $71.0 million in the prior year period. The change is primarily due to higher capital expenditures in the current year.

Previous wording

Financing Activities. Cash used in financing activities totaled $284.5 million for the three months ended September 30, 2024 compared to $195.2 million in the prior year period. The change is primarily due to higher repurchases of common stock in the current year.

Current wording

Financing Activities. Cash provided by financing activities totaled $258.6 million for the six months ended December 31, 2024 compared to $335.4 million in the prior year period. The change is primarily due to higher repurchases of common stock in the current year.

Previous wording

We have consistently paid quarterly dividends. Dividends paid totaled$44.7 million and$43.0 million for the three months ended September 30, 2024 and 2023, 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.

Current wording

We have consistently paid quarterly dividends. Dividends paid totaled$97.0 million and$89.9 million for the six months ended December 31, 2024 and 2023, 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.

Previous wording

On August 15, 2024, the Board of Directors approved a $1.5 billion share repurchase program. The repurchase program does not have an expiration date and replaced the previously existing share repurchase program. During the three months ended September 30, 2024, we repurchased $209.6 million of our common stock at an average price of $63.51 per share, excluding excise taxes in connection with such repurchases. In the prior year period, we repurchased $132.0 million of our common stock at an average price of $40.43 per share, excluding excise taxes in connection with such repurchases. Our current share repurchase program has remaining authorization of $1.3 billion and does not have an expiration date.

Current wording

On August 15, 2024, the Board of Directors approved a $1.5 billion share repurchase program. The repurchase program does not have an expiration date and replaced the previously existing share repurchase program. During the six months ended December 31, 2024, we repurchased $400.1 million of our common stock at an average price of $61.10 per share, excluding excise taxes in connection with such repurchases. In the prior year period, we repurchased $350.1 million of our common stock at an average price of $43.66 per share, excluding excise taxes in connection with such repurchases. Our current share repurchase program has remaining authorization of $1.1 billion and does not have an expiration date.

Previous wording

Share repurchases may be effectuated through open market transactions, some of which may be effectuated under SEC Rule 10b5-1. The Company may cancel, suspend, or extend the period for the purchase of shares at any time. Any repurchases will be funded primarily through available cash and cash from operations. Although we may continue to repurchase shares, there is no assurance that we will purchase up to the full Board authorization.

Current wording

Share repurchases may be effectuated through open market transactions, some of which may be effectuated under SEC Rule 10b5-1. The Company may cancel, suspend, or extend the period for the purchase of shares at any

Previous wording

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 $5.9 million and $6.9 million during the three months ended September 30, 2024 and 2023, respectively. See Item 1, note 5 for additional information on our acquisitions.

Current wording

Capital Investment. Capital expenditures totaled $49.1 million and $32.7 million for the six months ended December 31, 2024 and 2023, 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 $28.0 million and $27.2 million during the six months ended December 31, 2024 and 2023, respectively. See Item 1, note 5 for additional information on our acquisitions.

Previous wording

FINANCING RESOURCES– The CLOC has capacity up to $1.5 billion and is scheduled to expire in June 2026. Proceeds under the CLOC may be used for working capital needs or for other general corporate purposes. We had no outst anding balance under our CLOC and amounts available to borrow were not limited by the debt-to-EBITDA covenant as of September 30, 2024.

Current wording

FINANCING RESOURCES– The CLOC has capacity up to $1.5 billion and is scheduled to expire in June 2026. Proceeds under the CLOC may be used for working capital needs or for other general corporate purposes. We had an outst anding balance of$790.0 million under our CLOC and amounts available to borrow were not limited by the debt-to-EBITDA covenant as of December 31, 2024.

Previous wording

CASH AND OTHER ASSETS– As of September 30, 2024, we held cash and cash equivalents, excluding restricted amounts, of $415.9 million, including $183.5 million held by our foreign subsidiaries.

Current wording

CASH AND OTHER ASSETS– As of December 31, 2024, we held cash and cash equivalents, excluding restricted amounts, of $320.1 million, including $158.6 million held by our foreign subsidiaries.

Previous wording

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in an increase of $3.2 million during the three months ended September 30, 2024 and in a decrease of $3.7 million during the three months ended September 30, 2023.

Current wording

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in a decrease of $9.1 million during the six months ended December 31, 2024 and in an increase of $0.7 million during the six months ended December 31, 2023.

Previous wording

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – The Company entered into an agreement to purchase federal Investment tax credits (“ITC”). During the three months ended September 30, 2024, we paid $22.9 million for ITCs. As of September 30, 2024, the Company has a remaining commitment to purchase additional ITCs, estimated to be $74.0 million, with the final closing payment anticipated to occur by June 30, 2025.

Current wording

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – The Company entered into an agreement to purchase federal Investment tax credits (“ITC”). During the six months ended December 31, 2024, we paid $22.9 million for ITCs. As of December 31, 2024, the Company has a remaining commitment to purchase additional ITCs, for approximately $80.0 million if certain conditions set forth in the agreement are satisfied, with the final closing payment anticipated to occur by June 30, 2025.

Previous wording

Effective October 18, 2024, we amended our Program Management Agreement (PMA) with Pathward®, N.A to extend the term of the PMA for two years until June 30, 2027. There have been no other material changes in our contractual obligations and commercial commitments from those reported in our June 30, 2024 Annual Report on Form 10-K.

Current wording

There have been no other material changes in our contractual obligations and commercial commitments from those reported in our June 30, 2024 Annual Report on Form 10-K.

Previous wording

The table above reflects $1.7 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of September 30, 2024 and June 30, 2024, respectively.

Current wording

The table above reflects $2.3 billion and $1.7 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of December 31, 2024 and June 30, 2024, respectively.