RECENT DEVELOPMENTS On July 1, 2020, we provided written notice to Axos Bank ("Axos") of the termination of the Program Management Agreement by and between Emerald Financial Services, LLC , a wholly-owned indirect subsidiary of the Company, and Axos, effective July 1, 2020. On August 5, 2020, we entered into a Program Management Agreement with MetaBank, N.A. ("Meta"), a wholly-owned subsidiary of Meta Financial Group, Inc. Under the Meta Program Management Agreement and its ancillary agreements and related product schedules, Meta will act as the bank

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provider of H&R Block-branded financial products, including Emerald AdvanceTM,
Emerald Card, Emerald Savings, Refund Advance, and Refund Transfer in the United
States.
FINANCIAL OVERVIEW
As a result of the COVID-19 pandemic, on March 21, 2020, the federal tax filing
deadline in the U.S. for individual 2019 tax returns was extended from April 15,
2020 to July 15, 2020, and substantially all U.S. states with an April 15
individual state income tax filing requirement extended their respective
deadlines. In Canada, the deadline for individuals to file was extended to June
1, 2020. In addition, governments around the world have taken a variety of
actions to contain the spread of COVID-19. Jurisdictions in which we operate
imposed, and continue to impose, various restrictions on our business, including
capacity and other operational limitations, social distancing requirements, and
in limited instances required us to close certain offices. One of our top
priorities has been providing for the health and safety of our clients,
associates, and franchisees, while still providing taxpayers access to help in
getting their refunds during this difficult economic time. These events have
impacted the typical seasonality of our business and the comparability of our
financial results. Consequently, a portion of revenues and expenses that would
have normally been recognized in our fourth quarter of fiscal year 2020 shifted
to the first two quarters of fiscal year 2021.
As we continued to finish out the tax season in the first quarter of fiscal year
2021, we had more offices open, increased office hours, and had more tax
professionals than we would typically have during this period. However, this was
less than we would typically have during a tax season to serve clients.
Due to the extension of the tax season, our revenues for the six months ended
October 31, 2020, increased $466.4 million, or 149.9%, when compared to the
prior year period and we recorded pretax loss of $113.0 million compared to
$468.4 million in the prior year.
RESULTS OF OPERATIONS
Our subsidiaries provide assisted and DIY tax preparation solutions through
multiple channels (including in-person, online and mobile applications, virtual,
and desktop software) and distribute H&R Block-branded products and services,
including those of our financial partners, to the general public primarily in
the 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 financial solutions through our
company-owned or franchise offices and online through Wave. We report a single
segment that includes all of our continuing operations.

20 Q2 FY2021 Form 10-Q | H&R Block, Inc.

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     U.S. Operating Statistics
     Six months ended October 31,                     2020          2019        Change      % Change
     Tax returns prepared: (in 000s) (1)

     Company-owned operations                      1,632           289         1,343        464.7  %
     Franchise operations                            641           160           481        300.6  %
     Total assisted                                2,273           449         1,824        406.2  %

     Desktop                                         521            50           471        942.0  %
     Online                                        1,079           100           979        979.0  %
     Total DIY                                     1,600           150         1,450        966.7  %

     Total U.S. Returns                            3,873           599         3,274        546.6  %

     Net Average Charge: (2)
     Company-owned operations                   $ 237.49      $ 268.37      $ (30.88)       (11.5) %
     Franchise operations (3)                     226.69        263.47        (36.78)       (14.0) %
     DIY                                           45.41         52.97         (7.56)       (14.3) %


(1)   An assisted tax return is defined as a current or prior year individual
tax return that has been accepted and paid for by the client. Also included are
Tax Pro GoSM, Tax Pro Review®, and business returns. A DIY return is defined as
a return that has been electronically filed and accepted by the IRS, including
online returns paid and printed. Returns of 208 thousand and 21 thousand for the
periods ending October 31, 2020 and 2019, respectively, filed using the IRS Free
File program have been excluded as we will no longer participate in the program
after October 2020.
(2)  Net average charge is calculated as tax preparation fees divided by tax
returns prepared.
(3)  Net average charge related to H&R Block Franchise operations represents tax
preparation fees collected by H&R Block franchisees divided by returns prepared
in franchise offices. H&R Block will recognize a portion of franchise revenues
as franchise royalties based on the terms of franchise agreements.

We provide net average charge as a key operating metric because we consider it an important supplemental measure useful to analysts, investors, and other interested parties as it provides insights into pricing and tax return mix relative to our customer base, which are significant drivers of revenue. Our definition of net average charge may not be comparable to similarly titled measures of other companies.

H&R Block, Inc. | Q2 FY2021 Form 10-Q  21

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