Operating Statistics % Change Better/ Year ended April 30, 2021 2020 (Worse) Represents two Represents a partial partial tax seasons' tax season TAX RETURNS PREPARED : (in 000s) ! United States: Company-owned operations 9,120 6,745 352 % Franchise operations 3,507 2,798 253 % Total assisted 12827 9543 323 % Desktop 2,002 1,553 289 % Online 6,976 5,932 17.6 % Total DIY - s8ers 7485 19.9 % Total U.S. returns 21,605 17,028 26.9 % International operations: Canada 2,901 1,908 520 % Australia 672 745 (9.8)% Other - 73 ok Total international operations returns 3,573 2,7'26 311 % Tax returns prepared worldwide 25,178 19,754 275% NET AVERAGE CHARGE (U.S. ONLY): Company-owned operations S 223.14 S 227.83 (2.1)% Franchise operations $ 211.27 217.07 (2.7)% DIy $ 34.87 S 27.91 249 % TAX OFFICES (as of January 31): U.S. offices: Company-owned offices 6,512 6,552 (0.6)% Franchise offices 2,759 2,909 (5.2)% Total U.S. offices 9,271 9,461 (2.0)% International offices: Canada 983 1,086 (9.5)% Australia 421 464 (9.3)% Total international offices 1,404 1,550 (9.4)% Tax offices worldwide 10,675 11,011 (3.1)% " Represents a partial 2019 individual tax filing season, which was extended until July 15, 2020 and a partial 2020 individual tax filing season, which was extended until May 17, 2021. ) Represents a partial 2019 individual tax filing season, which was extended until July 15, 2020. ) An assisted tax return is defined as a current or prior year individual or business tax return that has been accepted by the client. A DIY online return is defined as a current year individual or business tax return that has been accepted by the client. A DIY desktop return is defined as a current year individual or business tax return that has been electronically submitted to the IRS. ) Net average charge is calculated as total tax preparation fees divided by tax returns prepared. &) 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 an 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. | 2021 Form 10-K H Consolidated - Financial Results (in 000s, except per share amounts) S Change % Change Year ended April 30, 2021 2020 Better/(Worse) Better/(Worse) Revenues: U.S. assisted tax preparation $ 2,035,107 S 1,533,303 S 501,804 327 % U.S. royalties 226,253 193,411 32,842 17.0 % U.S. DIY tax preparation 313,055 208,901 104,154 49.9 % International 249,868 180,065 69,803 388 % Refund Transfers 163,329 154,687 8,642 56 % Emerald Card 136,717 92,737 43,980 47.4 % Peace of Mind Extended Service Plan 98,882 105,185 (6,303) (6.0)% Tax Identity Shield 40,624 31,797 8,827 27.8% Interest and fee income on Emerald Advance 53,430 60,867 (7,437) (12.2)% Wave 58,277 36,711 21,566 58.7 % Other 38,445 42,056 (3,611) (8.6)% Total revenues 3,413,987 2,639,720 774,267 293 % Compensation and benefits: Field wages 797,262 678,813 (118,449) (17.4)% Other wages 272,664 218,548 (54,116) (24.8)% Benefits and other compensation 208,147 175,535 (32,612) (18.6)% 1,278,073 1,072,896 (205,177) (19.1)% Occupancy 414,389 410,402 (3,987) (1.0)% Marketing and advertising 261,960 255,094 (6,866) (2.7)% Depreciation and amartization 156,852 169,536 12,684 75 % Bad debt 78,763 77,470 (1,293) (L.7)% Impairment of goodwill - 106,000 106,000 100.0 % Other 454,323 471,239 16,916 36% Total operating expenses 2,644,360 2,562,637 (81,723) (3.2)% Other income (expense), net 5,979 15,637 (9,658) (61.8)% Interest expense on borrowings (106,870) (96,094) (10,776) (11.2)% Income (loss) from continuing operations before income taxes (benefit) 668,736 (3,374) 672,110 Income taxes (benefit) 78,524 (9,530) (88,054) . Net income from continuing operations 590,212 6,156 584,056 9,487.6 % Net loss from discontinued operations (6,421) (13,682) 7,261 53.1% Net income (loss) S 583,791 S (7,526) S 591,317 s Basic earnings (loss) per share: Continuing operations S 3.15 S 0.03 S 3.12 10,400.0 % Discontinued operations (0.04) (0.07) 0.03 42.9 % Consolidated $ 311 (0.04) S 3.15 1 Diluted earnings (loss) per share: Continuing operations S 3.11 S 0.03 S 3.08 10,266.7 % Discontinued operations (0.03) (0.07) 0.04 57.1% Consolidated $ 3.08 S (0.04) S 3.12 ** Adjusted diluted EPS $ 339 084 $ 2.55 303.6 % EBITDAY 932,458 262,256 670,202 255.6 % Adjusted EBITDA 932,458 368,256 564,202 153.2 % Adjusted EBITDA margin 273 % 14.0 % 13.3 % 95.0 % W All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP measures. RESULTS OF OPERATIONS - YEAR ENDED APRIL 30, 2021 COMPARED TO YEAR ENDED APRIL 30, 2020 Consolidated - Financial Results (in 000s, except per share amounts) Year ended April 30, Revenues: U.S. assisted tax preparation U.S. royalties U.S. DIY tax preparation International Refund Transfers Emerald Card Peace of Mind Extended Service Plan Tax Identity Shield Interest and fee income on Emerald Advance" Wave Other Total revenues Compensation and benefits: Field wages Other wages Benefits and other compensation Occupancy Marketing and advertising Depreciation and amortization Bad debt Impairment of goodwill Other Total operating expenses Other income (expense), net Interest expense on borrowings Income (loss) from continuing operations before income taxes (benefit) Income taxes (benefit) Net income from continuing operations Net loss from discontinued operations Net income (loss) DILUTED EARNINGS (LOSS) PER SHARE: Continuing operations Discontinued operations Consolidated Adjusted diluted EPSY EBITDA" Adjusted EBITDA S 2,035,107 226,253 313,055 249,868 163,329 136,717 98,882 40,624 53,430 58,277 38,445 3,413,987 797,262 272,664 208,147 1,278,073 414,389 261,960 156,852 78,763 454,323 2,644,360 5,979 (106,870) 668,736 78,524 590,212 (6,421) S 583,791 S 311 (0.03) 3.08 932,458 S $ 3.39 S S 932,458 5 $ 5 o 1,533,303 193,411 208,901 180,065 154,687 92,737 105,185 31,797 60,867 36,711 42,056 2,639,720 678,813 218,548 175,535 1,072,896 410,402 255,094 169,536 77,470 106,000 471,239 2,562,637 15,637 (96,094) (3,374) (9,530) 6,156 (13,682) (7,526) 0.03 (0.07) (0.04) 0.84 262,256 368,256 5 $ $ 5 S Change 501,804 32,842 104,154 69,803 8,642 43,980 (6,303) 8,827 (7,437) 21,566 (3,611) 774,267 (118,449) (54,116) (32,612) (205,177) (3,987) (6,866) 12,684 (1,293) 106,000 16,916 (81,723) (9,658) (10,776) 672,110 (88,054) 584,056 7,261 591,317 3.08 0.04 3.12 2.55 670,202 564,202 % Change 32.7% 17.0 % 49.9 % 38.8 % 5.6 % 47.4 % (6.0)% 278 % (12.2)% 58.7 % (8.6)% 293 % (17.4)% (24.8)% (18.6)% (19.1)% (1.0)% 2.7% 75% (1.7)% 100.0 % 36% (3.2)% (61.8)% (11.2)% *% * % 9,487.6 % 53.1% * % 10,266.7 % 571 % *% 303.6 % 255.6 % 153.2 % W All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Information\" at the end of this item for a reconciliation of non-GAAP measures. Emerald Advances decreased $9.3 million, or 17.4%, due to a decline in Emerald Advances. Wave revenues increased $17.8 million, or 28.2%, due to higher small business payments processing volumes. Total operating expenses increased $21.4 million, or 0.8%, from the prior year. Marketing and advertising expense increased $19.5 million, or 7.4%, due to higher online advertising and agency fees in the current year. Depreciation and amortization expense decreased $12.6 million, or 8.2%, due primarily to lower amortization of acquired intangibles. Bad debt expense decreased $10.6 million, or 12.8%, due to lower Refund Transfer volume and lower bad debt rates. Other operating expenses increased $28.7 million, or 6.0%. The components of other expenses are as follows: (in 000s) Year ended June 30, 2022 2021 S Change % Change Consulting and outsourced services S 136,397 S 136,288 S (109) (0.1)% Bank partner fees 26,648 22,616 (4,032) (17.8)% Client claims and refunds 31,814 29,857 (1,957) (6.6)% Employee and travel expenses 31,714 23,959 (7,755) (32.4)% Technology-related expenses 97,934 85,499 (12,435) (14.5)% Credit card/bank charges 90,209 86,203 (4,006) (4.6)% Insurance 15,224 11,528 (3,696) (32.1)% Legal fees and settlements 19,625 21,993 2,368 108 % Supplies 28,846 31,927 3,081 9.7 % Other 28,106 27,915 (191) (0.7)% $ 506,517 $ 477,785 $ (28,732) (6.0)% Employee and travel expenses increased $7.8 million, or 32.4%, due to less travel in the prior year as a result of COVID-19 travel restrictions. Technology-related expenses increased $12.4 million, or 14.5%, due to increased investments in information technology. Interest expense on borrowings decreased $11.2 million, or 11.3%, primarily due to lower borrowings on our CLOC in the current year. We recorded income tax expense of $98.4 million in the current year compared to $106.7 million in the prior year. The decrease is primarily related to lower pretax income in the current year. See Item 8, note 9 to the consolidated financial statements for additional discussion. See the discussion of loss contingencies related to our discontinued operations in Item 1A, Risk Factors and in ltem 8, note 12 to the consolidated financial statements. Consolidated - Financial Results (in 000s, except per share amounts) Year ended June 30, 2023 2022 S Change % Change Revenues: U.S. tax preparation and related services: Assisted tax preparation $ 2,167,138 S 2,094,612 S 72,526 35% Royalties 210,631 225,242 (14,611) (6.5)% DIY tax preparation 314,758 319,086 (4,328) (1.4)% Refund Transfers 143,310 162,893 (19,583) (12.0)% Peace of Mind Extended Service Plan 95,181 94,637 544 0.6 % Tax Identity Shield 38,265 39,114 (849) (2.2)% Other 45,252 45,961 (709) (1.5)% Total U.S. tax preparation and related services 3,014,535 2,981,545 32,990 11% Financial services: Emerald Card and Spruce 84,651 125,444 (40,793) (32.5)% Interest and fee income on Emerald Advance 47,554 43,981 3,573 8.1% Total financial services 132,205 169,425 (37,220) (22.0)% International 235,131 231,335 3,796 1.6 % Wave 90,314 80,965 9,345 11.5 % Total revenues $ 3,472,185 S 3,463,270 S 8,915 03% Compensation and benefits: Field wages 841,742 808,903 (32,839) (4.1)% Other wages 273,850 284,689 10,839 3.8% Benefits and other compensation 220,530 206,902 (13,628) (6.6)% 1,336,122 1,300,494 (35,628) (2.7)% Occupancy 428,167 413,162 (15,005) (3.6)% Marketing and advertising 286,255 284,244 (2,011) (0.7)% Depreciation and amortization 130,501 142,178 11,677 8.2 % Bad debt 60,401 71,778 11,377 159 % Other 482,041 506,517 24,476 4.8 % Total operating expenses 2,723,487 2,718,373 (5,114) (0.2)% Other income (expense), net 35,492 2,454 33,038 1,346.3 % Interest expense on borrowings (72,978) (88,282) 15,304 173 % Income from continuing operations befare income taxes 711,212 659,069 52,143 79 % Income taxes 149,412 98,423 (50,989) (51.8)% Net income from continuing operations 561,800 560,646 1,154 0.2 % Net loss from discontinued operations (8,100) (6,972) (1,128) (16.2)% Net income S 553,700 S 553,674 S 26 % DILUTED EARNINGS PER SHARE: Continuing operations S 3.56 S 326 S 0.30 9.2 % Discontinued operations (0.05) (0.04) (0.01) (25.0)% Consolidated S 3.51 S 322 S 0.29 9.0% Adjusted diluted EPS $ 382 351 0.31 8.8% EBITDAM $ 914691 889,529 $ 25,162 2.8% 1 All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP measures