Press Release Details

KANSAS CITY, MO -- (Marketwired) -- 12/07/16 -- H&R Block, Inc. (NYSE: HRB) today released its financial results for the fiscal 2017 second quarter ended October 31, 2016. The company normally reports a second quarter operating loss due to the seasonality of its tax business. The fiscal second quarter typically represents less than 5% of annual revenues and approximately 15% of annual expenses.

Second Quarter Financial Summary¹

• Total revenues increased $3 million as a result of favorable foreign exchange rates and the recognition of deferred revenues associated with the Peace of Mind product
• Total operating expenses declined $23 million due to one-time costs incurred in the prior year related to the divestiture of H&R Block Bank and capital structure transactions, coupled with savings from cost reduction efforts
• Net loss from continuing operations was flat to prior year; loss per share increased $0.13 due entirely to reduction in share count, which will be accretive on a full year basis, but negatively impacts those quarters with a net loss
• Repurchased approximately 7.6 million shares for an aggregate purchase price of $168 million during the second quarter, bringing total share repurchases for fiscal 2017 to 9.6 million shares

CEO Perspective

"I'm pleased with our second quarter results, as revenues were up and expenses were down. I'm also extremely excited for the upcoming tax season. We have been hard at work developing and implementing a comprehensive and aggressive plan designed to deliver stronger results in tax season 2017," said Bill Cobb, H&R Block's president and chief executive officer. "Our associates and franchisees are excited about our new promotional offerings, including the previously announced interest-free Refund Advance loan and planned changes to our service delivery models. We are ready for the tax season to begin."

Fiscal 2017 Second Quarter Results From Continuing Operations

		Actual								Adjusted 3
(in millions, except EPS)		Fiscal Year 2017				Fiscal Year 2016				Fiscal Year 2017				Fiscal Year 2016
Revenue		$	131			$	128			$	131			$	128
Pretax Loss		$	(228	)		$	(238	)		$	(229	)		$	(225	)
Net Loss		$	(143	)		$	(143	)		$	(144	)		$	(135	)
Weighted-Avg. Shares - Diluted			215.5				266.3				215.5				266.3
EPS2		$	(0.67	)		$	(0.54	)		$	(0.67	)		$	(0.51	)
EBITDA3		$	(160	)		$	(181	)		$	(161	)		$	(169	)

Income Statement

• Total revenues increased $2.9 million to $131.3 million, partially as a result of favorable foreign exchange rates and tax preparation revenues in international operations. Additionally, deferred revenue recognition from increased Peace of Mind product sales in prior fiscal years also positively impacted revenues. These increases were partially offset by lower domestic tax preparation revenues as well as the impact of the divestiture of H&R Block Bank.
• Total operating expenses decreased $22.9 million to $339.4 million. Contributing to the decline were the prior year one-time costs associated with the divestiture of H&R Block Bank and the subsequent capital structure transactions. Lower compensation expense resulting from the company's cost reduction efforts also positively impacted expenses. These were partially offset by increased occupancy and amortization expenses related to competitor and franchise acquisitions in the prior year.
• Interest expense increased $8.4 million to $22.6 million primarily due to $1 billion of long-term debt issued in September 2015.
• Pretax loss decreased $9.3 million to $228.5 million.
• Loss per share from continuing operations increased $0.13 to $0.67, due entirely to the reduction in share count, which will be accretive on a full year basis, but negatively impacts those quarters with a net loss.

CFO Perspective

"Our expense reduction efforts are starting to bear results," said Tony Bowen, H&R Block's chief financial officer. "These reductions will enable us to fund client growth initiatives to deliver a successful fiscal year 2017."

Balance Sheet

• Mortgage loans previously classified as held for investment were reclassified to mortgage loans held for sale as the company intends to liquidate the portfolio during the third fiscal quarter and receive approximately $190 million in cash proceeds.
• Long-term debt increased due to line of credit borrowings of $475 million. Although these amounts are intended to cover short-term offseason liquidity needs, they are classified as long-term debt due to the maturity date of the line of credit agreement.
• Stockholders' equity from October 31, 2015 was reduced by share repurchase and subsequent retirement of 25.5 million shares of common stock for approximately $717 million.
• Details regarding the divestiture of H&R Block Bank and related agreements, capital structure transactions and share repurchase program can be found in previously filed press releases, and Forms 8-K filed with the Securities and Exchange Commission, in September and October of 2015.

Discontinued Operations

The accrual for contingent losses related to representation and warranty claims at Sand Canyon Corporation, a separate legal entity from H&R Block, Inc., remained unchanged at $26 million.

Share Repurchases and Dividends

During the second quarter of fiscal 2017, the company repurchased and retired approximately 7.6 million shares at an aggregate price of $168.4 million, or $22.16 per share. As of October 31, 2016, 211.5 million shares were outstanding.

The company completed these share repurchases under a $3.5 billion share repurchase program approved by the company's board of directors in August 2015, which runs through June 2019. Under this program, the company has repurchased approximately 66 million shares of its common stock, or 23.9% of outstanding shares, for an aggregate purchase price of approximately $2.2 billion.

As previously announced, a quarterly cash dividend of 22 cents per share is payable on January 3, 2017 to shareholders of record as of December 5, 2016. H&R Block has paid quarterly dividends consecutively since the company went public in 1962.

Conference Call

Discussion of the fiscal 2017 second quarter results, future outlook and a general business update will occur during the company's previously announced fiscal second quarter earnings conference call for analysts, institutional investors, and shareholders. The call is scheduled for 4:30 p.m. Eastern time on December 7, 2016. To access the call, please dial the number below approximately 10 minutes prior to the scheduled starting time:

U.S./Canada (866) 872-0323 or International (443) 842-7595

Conference ID: 89483597

The call will also be webcast in a listen-only format for the media and public. The link to the webcast can be accessed directly at http://investors.hrblock.com.

A replay of the call will be available beginning at 7:30 p.m. Eastern time on December 7, 2016, and continuing until January 7, 2017, by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (International). The conference ID is 89483597. The webcast will be available for replay December 8, 2016 at http://investors.hrblock.com.

About H&R Block

H&R Block, Inc. (NYSE: HRB) is a global consumer tax services provider. Tax return preparation services are provided by professional tax preparers in approximately 12,000 company-owned and franchise retail tax offices worldwide, and through H&R Block tax software products for the DIY consumer. H&R Block also offers adjacent Tax Plus products and services. In fiscal 2016, H&R Block had annual revenues of over $3 billion with 23.2 million tax returns prepared worldwide. For more information, visit the H&R Block Newsroom at http://newsroom.hrblock.com/.

About Non-GAAP Financial Information

This press release and the accompanying tables include non-GAAP financial information. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles, please see the section of the accompanying tables titled "Non-GAAP Financial Information."

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "goal," "could" or "may" or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, income, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure or other financial items, descriptions of management's plans or objectives for future operations, products or services, or descriptions of assumptions underlying any of the above. All forward-looking statements speak only as of the date they are made and reflect the company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, a variety of economic, competitive and regulatory factors, many of which are beyond the company's control, that are described in our Annual Report on Form 10-K for the fiscal year ended April 30, 2016 in the section entitled "Risk Factors" and additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You may get such filings for free at our website at http://investors.hrblock.com. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

¹ All amounts in this release are unaudited. Unless otherwise noted, all comparisons refer to the current period compared to the corresponding prior year period.
² All per share amounts are based on fully diluted shares at the end of the corresponding period.
³ The company reports adjusted financial performance, and other non-GAAP financial measures, which it believes are a better indication of the company's core operations. See "About Non-GAAP Financial Information" below for more information regarding financial measures not prepared in accordance with generally accepted accounting principles (GAAP).

CONSOLIDATED STATEMENTS OF OPERATIONS													(unaudited, in 000s - except per share amounts)
					Three months ended October 31,								Six months ended October 31,
					2016				2015				2016				2015
REVENUES:
	Service revenues				$	118,940			$	113,420			$	231,324			$	231,854
	Royalty, product and other revenues					12,392				14,995				25,193				34,279
						131,332				128,415				256,517				266,133
OPERATING EXPENSES:
	Cost of revenues:
		Compensation and benefits				57,728				62,694				110,083				118,483
		Occupancy and equipment				99,067				95,051				193,492				184,906
		Provision for bad debt				(131	)			1,182				1,286				3,187
		Depreciation and amortization				29,911				28,358				57,378				55,442
		Other				39,127				39,116				74,549				77,891
						225,702				226,401				436,788				439,909
	Selling, general and administrative:
		Marketing and advertising				12,001				12,965				19,562				21,496
		Compensation and benefits				58,293				61,593				115,815				116,262
		Depreciation and amortization				15,839				13,991				29,654				27,001
		Other selling, general and administrative				27,519				47,298				47,444				69,280
						113,652				135,847				212,475				234,039
			Total operating expenses			339,354				362,248				649,263				673,948
Other income, net						2,180				10,505				5,148				10,938
Interest expense on borrowings						(22,620	)			(14,181	)			(44,086	)			(22,756	)
Other expenses, net						(7	)			(210	)			(334	)			(5,195	)
Loss from continuing operations before income tax benefit						(228,469	)			(237,719	)			(432,018	)			(424,828	)
Income tax benefit						(85,054	)			(95,201	)			(167,577	)			(185,805	)
Net loss from continuing operations						(143,415	)			(142,518	)			(264,441	)			(239,023	)
Net loss from discontinued operations						(2,805	)			(2,489	)			(5,452	)			(5,643	)
NET LOSS					$	(146,220	)		$	(145,007	)		$	(269,893	)		$	(244,666	)
BASIC AND DILUTED LOSS PER SHARE:
	Continuing operations				$	(0.67	)		$	(0.54	)		$	(1.21	)		$	(0.88	)
	Discontinued operations					(0.01	)			(0.01	)			(0.03	)			(0.02	)
	Consolidated				$	(0.68	)		$	(0.55	)		$	(1.24	)		$	(0.90	)
WEIGHTED AVERAGE BASIC AND DILUTED SHARES						215,535				266,267				218,009				271,016

CONSOLIDATED BALANCE SHEETS						(unaudited, in 000s - except per share data)
As of						October 31, 2016				October 31, 2015				April 30, 2016
ASSETS
	Cash and cash equivalents					$	232,510			$	360,681			$	896,801
	Cash and cash equivalents - restricted						109,538				42,781				104,110
	Receivables, net						104,764				94,760				153,116
	Deferred tax assets and income taxes receivable						-				145,912				-
	Prepaid expenses and other current assets						73,555				80,764				66,574
	Mortgage loans held for sale, net						183,107				-				-
			Total current assets				703,474				724,898				1,220,601
	Mortgage loans held for investment, net						-				220,671				202,385
	Property and equipment, net						293,060				298,602				293,565
	Intangible assets, net						433,135				466,224				433,885
	Goodwill						477,360				442,068				470,757
	Deferred tax assets and income taxes receivable						81,755				11,264				120,123
	Other noncurrent assets						93,394				114,746				105,909
			Total assets			$	2,082,178			$	2,278,473			$	2,847,225
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
	Accounts payable and accrued expenses					$	139,808			$	141,070			$	259,586
	Accrued salaries, wages and payroll taxes						40,754				37,512				161,786
	Accrued income taxes and reserves for uncertain tax positions						68,832				67,732				373,754
	Current portion of long-term debt						903				808				826
	Deferred revenue and other current liabilities						184,560				319,426				243,653
			Total current liabilities				434,857				566,548				1,039,605
	Long-term debt and line of credit borrowings						1,967,206				1,490,514				1,491,375
	Deferred tax liabilities and reserves for uncertain tax positions						117,553				140,539				132,960
	Deferred revenue and other noncurrent liabilities						120,033				108,115				160,182
			Total liabilities				2,639,649				2,305,716				2,824,122
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
	Common stock, no par, stated value $.01 per share						2,506				2,761				2,602
	Additional paid-in capital						751,229				757,816				758,230
	Accumulated other comprehensive loss						(17,122	)			(16,208	)			(11,233	)
	Retained earnings (deficit)						(538,242	)			3,573				40,347
	Less treasury shares, at cost						(755,842	)			(775,185	)			(766,843	)
			Total stockholders' equity (deficiency)				(557,471	)			(27,243	)			23,103
				Total liabilities and stockholders' equity		$	2,082,178			$	2,278,473			$	2,847,225

Note: Effective May 1, 2016, we adopted the provisions of Accounting Standards Update No. 2015-3, "Interest - Imputation of Interest," (ASU 2015-3) on a retrospective basis. Accordingly, debt issuance costs related to our Senior Notes are included in long-term debt in the consolidated balance sheets. Amounts for prior periods have been retrospectively adjusted to conform to the current period presentation.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS						(unaudited, in 000s)
Six months ended October 31,						2016				2015
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net loss					$	(269,893	)		$	(244,666	)
	Adjustments to reconcile net loss to net cash used in operating activities:
		Depreciation and amortization					87,032				82,443
		Provision for bad debt					1,286				3,187
		Deferred taxes					6,489				20,282
		Stock-based compensation					12,472				13,876
		Changes in assets and liabilities, net of acquisitions:
			Cash and cash equivalents - restricted				(5,421	)			49,113
			Receivables				48,653				67,373
			Prepaid expenses and other current assets				(7,386	)			(6,173	)
			Other noncurrent assets				7,713				7,518
			Accounts payable and accrued expenses				(99,378	)			(79,918	)
			Accrued salaries, wages and payroll taxes				(120,672	)			(106,504	)
			Deferred revenue and other current liabilities				(46,531	)			(3,188	)
			Income tax receivables, accrued income taxes and income tax reserves				(282,234	)			(334,245	)
			Deferred revenue and other noncurrent liabilities				(52,548	)			(49,669	)
			Other, net				(5,379	)			(22,142	)
				Net cash used in operating activities			(725,797	)			(602,713	)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Sales, maturities of and payments received on available-for-sale securities						144				434,261
	Principal payments on mortgage loans, net						16,706				17,006
	Capital expenditures						(44,918	)			(38,779	)
	Payments made for business acquisitions, net of cash acquired						(36,151	)			(61,846	)
	Franchise loans funded						(10,171	)			(10,281	)
	Payments received on franchise loans						14,263				17,473
	Other, net						4,336				7,246
				Net cash provided by (used in) investing activities			(55,791	)			365,080
CASH FLOWS FROM FINANCING ACTIVITIES:
	Repayments of line of credit borrowings						(50,000	)			-
	Proceeds from line of credit borrowings						525,000				-
	Proceeds from issuance of long-term debt						-				996,831
	Customer banking deposits, net						-				(326,705	)
	Transfer of HRB Bank deposits						-				(419,028	)
	Dividends paid						(95,971	)			(110,338	)
	Repurchase of common stock, including shares surrendered						(215,511	)			(1,517,786	)
	Proceeds from exercise of stock options						1,630				16,875
	Other, net						(43,734	)			(37,820	)
			Net cash provided by (used in) financing activities				121,414				(1,397,971	)
Effects of exchange rate changes on cash							(4,117	)			(10,905	)
Net decrease in cash and cash equivalents							(664,291	)			(1,646,509	)
Cash and cash equivalents at beginning of the period							896,801				2,007,190
Cash and cash equivalents at end of the period						$	232,510			$	360,681
SUPPLEMENTARY CASH FLOW DATA:
	Income taxes paid, net of refunds received					$	112,339			$	132,096
	Interest paid on borrowings						40,670				15,606
	Accrued additions to property and equipment						12,920				4,573
	Accrued purchase of common stock						7,143				-

FINANCIAL RESULTS					(unaudited, in 000s - except per share amounts)
					Three months ended October 31,								Six months ended October 31,
					2016				2015				2016				2015
Revenues:
	U.S. assisted tax preparation fees				$	35,339			$	36,403			$	60,768			$	63,688
	U.S. royalties					6,828				6,680				13,353				13,406
	U.S. DIY tax preparation fees					3,089				3,469				6,003				6,648
	International revenues					43,539				40,071				82,414				80,665
	Revenues from Refund Transfers					757				821				3,991				2,992
	Revenues from Emerald Card®					8,644				9,808				21,709				25,497
	Revenues from Peace of Mind® Extended Service Plan					22,689				19,325				49,720				47,028
	Interest and fee income on Emerald Advance					655				417				1,459				731
	Other					9,792				11,421				17,100				25,478
						131,332				128,415				256,517				266,133
Compensation and benefits:
	Field wages					50,096				53,525				95,139				99,463
	Other wages					42,207				46,127				84,307				87,996
	Benefits and other compensation					23,718				24,635				46,452				47,286
						116,021				124,287				225,898				234,745
Occupancy and equipment						99,037				94,997				193,408				184,796
Marketing and advertising						12,001				12,965				19,562				21,496
Depreciation and amortization						45,750				42,349				87,032				82,443
Bad debt						(131	)			1,182				1,286				3,187
Supplies						4,937				4,728				7,014				7,127
Other						61,739				81,740				115,063				140,154
			Total operating expenses			339,354				362,248				649,263				673,948
Other income, net						2,180				10,505				5,148				10,938
Interest expense on borrowings						(22,620	)			(14,181	)			(44,086	)			(22,756	)
Other expenses, net						(7	)			(210	)			(334	)			(5,195	)
Pretax loss						(228,469	)			(237,719	)			(432,018	)			(424,828	)
Income tax benefit						(85,054	)			(95,201	)			(167,577	)			(185,805	)
Net loss from continuing operations						(143,415	)			(142,518	)			(264,441	)			(239,023	)
Net loss from discontinued operations						(2,805	)			(2,489	)			(5,452	)			(5,643	)
Net loss					$	(146,220	)		$	(145,007	)		$	(269,893	)		$	(244,666	)
Basic and diluted loss per share:
	Continuing operations				$	(0.67	)		$	(0.54	)		$	(1.21	)		$	(0.88	)
	Discontinued operations					(0.01	)			(0.01	)			(0.03	)			(0.02	)
	Consolidated				$	(0.68	)		$	(0.55	)		$	(1.24	)		$	(0.90	)
Weighted average basic and diluted shares						215,535				266,267				218,009				271,016
EBITDA from continuing operations (1)					$	(160,099	)		$	(181,145	)		$	(300,900	)		$	(319,449	)
EBITDA from continuing operations - adjusted (1)						(160,676	)			(168,760	)			(300,665	)			(306,106	)

⁽¹⁾ See "Non-GAAP Financial Information" for a reconciliation of non-GAAP measures.

NON-GAAP FINANCIAL MEASURES
			Three months ended October 31,								Six months ended October 31,
EBITDA			2016				2015				2016				2015
Net loss - as reported			$	(146,220	)		$	(145,007	)		$	(269,893	)		$	(244,666	)
Add back :
	Discontinued operations, net			2,805				2,489				5,452				5,643
	Income taxes of continuing operations			(85,054	)			(95,201	)			(167,577	)			(185,805	)
	Interest expense of continuing operations			22,620				14,225				44,086				22,936
	Depreciation and amortization of continuing operations			45,750				42,349				87,032				82,443
				(13,879	)			(36,138	)			(31,007	)			(74,783	)
EBITDA from continuing operations			$	(160,099	)		$	(181,145	)		$	(300,900	)		$	(319,449	)
Three months ended October 31,				2016
				Pretax loss				Net loss				EBITDA
From continuing operations			$	(228,469	)		$	(143,415	)		$	(160,099	)
Adjustments (pretax):
	Loss contingencies - litigation			(577	)			(577	)			(577	)
	Tax effect of adjustments			-				217				-
				(577	)			(360	)			(577	)
	As adjusted - from continuing operations		$	(229,046	)		$	(143,775	)		$	(160,676	)
EPS - as reported							$	(0.67	)
Impact of adjustments								-
EPS - adjusted							$	(0.67	)
Three months ended October 31,				2015
				Pretax loss				Net loss				EBITDA
From continuing operations			$	(237,719	)		$	(142,518	)		$	(181,145	)
Adjustments (pretax):
	Loss contingencies - litigation			71				71				71
	Costs related to HRB Bank and recapitalization transactions			20,766				20,766				20,766
	Gains on AFS securities			(8,426	)			(8,426	)			(8,426	)
	Gain on sales of tax offices/businesses			(26	)			(26	)			(26	)
	Tax effect of adjustments			-				(4,642	)			-
				12,385				7,743				12,385
	As adjusted - from continuing operations		$	(225,334	)		$	(134,775	)		$	(168,760	)
EPS - as reported							$	(0.54	)
Impact of adjustments								0.03
EPS - adjusted							$	(0.51	)

Six months ended October 31,				2016
				Pretax loss				Net loss				EBITDA
From continuing operations				$	(432,018	)		$	(264,441	)		$	(300,900	)
Adjustments (pretax):
	Loss contingencies - litigation				235				235				235
	Tax effect of adjustments				-				(85	)			-
					235				150				235
	As adjusted - from continuing operations			$	(431,783	)		$	(264,291	)		$	(300,665	)
EPS - as reported								$	(1.21	)
Impact of adjustments									-
EPS - adjusted								$	(1.21	)
Six months ended October 31,					2015
					Pretax loss				Net loss				EBITDA
From continuing operations				$	(424,828	)		$	(239,023	)		$	(319,449	)
Adjustments (pretax):
	Loss contingencies - litigation				689				689				689
	Costs related to HRB Bank and recapitalization transactions				20,818				20,818				20,818
	Gains on AFS securities				(8,138	)			(8,138	)			(8,138	)
	Gain on sales of tax offices/businesses				(26	)			(26	)			(26	)
	Tax effect of adjustments				-				(5,000	)			-
					13,343				8,343				13,343
	As adjusted - from continuing operations			$	(411,485	)		$	(230,680	)		$	(306,106	)
								$	(0.88	)
									0.03
Adjusted EPS								$	(0.85	)
					Three months ended October 31,								Six months ended October 31,
Supplemental Information					2016				2015				2016				2015
Stock-based compensation expense:
		Pretax		$	6,931			$	7,858			$	12,472			$	13,876
		After-tax			4,467				4,910				7,946				8,677
Amortization of intangible assets:
		Pretax		$	20,051			$	17,865			$	38,037			$	34,479
		After-tax			12,940				11,161				24,233				21,560

NON-GAAP FINANCIAL INFORMATION

The accompanying press release contains non-GAAP financial measures. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.

We consider our non-GAAP financial measures to be performance measures and a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business on a consistent basis across reporting periods, as it eliminates the effect of items that are not indicative of our core operating performance.

The following are descriptions of adjustments we make for our non-GAAP financial measures:

• We exclude losses from settlements and estimated contingent losses from litigation and favorable reserve adjustments. This does not include legal defense costs.
• We exclude material non-cash charges to adjust the carrying values of goodwill, intangible assets, other long-lived assets and investments to their estimated fair values.
• We exclude material severance and other restructuring charges in connection with the termination of personnel, closure of offices and related costs.
• We exclude the material gains and losses on business dispositions, including investment banking, legal and accounting fees from both business dispositions and acquisitions.
• We exclude the gains and losses on extinguishment of debt.

We may consider whether other significant items that arise in the future should also be excluded from our non-GAAP financial measures.

We measure the performance of our business using a variety of metrics, including EBITDA from continuing operations and adjusted EBITDA from continuing operations, adjusted pretax and net income of continuing operations, and adjusted diluted earnings per share from continuing operations. Adjusted EBITDA from continuing operations, adjusted pretax and net income from continuing operations, and adjusted diluted earnings per share from continuing operations eliminate the impact of items that we do not consider indicative of our core operating performance and, we believe, provide meaningful information to assist in understanding our financial results, analyzing trends in our underlying business, and assessing our prospects for future performance. We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.

For Further Information
Investor Relations:
Colby Brown
(816) 854-4559
Email contact

Media Relations:
Gene King
(816) 854-4672
Email contact

Source: H & R Block