H&R Block Announces Interim Tax Season Results

Mar 15, 2007

KANSAS CITY, Mo.--(BUSINESS WIRE)--March 15, 2007--H&R Block Inc. (NYSE: HRB) today reported tax season results for the interim period from Nov. 1, 2006, through Feb. 28, 2007.

Total clients served (for both the company's retail operations and digital tax solutions business) was 12.7 million, an increase of 468,000, or 3.8 percent, from the prior year period. Digital tax clients served advanced 15 percent over 2006 while office based clients increased 1 percent.

"Our year to date results are solid and continue to reflect a slightly slower start to the tax season industrywide," said Mark A. Ernst, chairman and chief executive officer. "We are well positioned to serve the needs of our clients as we look to the April 17 filing deadline."

H&R Block plans to release additional interim tax season results for its U.S. tax operations before the NYSE market opening on March 29, April 19 and May 10.

About H&R Block

H&R Block Inc. (NYSE: HRB) is a leading provider of tax, financial, and accounting and business consulting services and products. H&R Block is the world's largest tax services provider, having prepared more than 400 million tax returns since 1955. The company and its subsidiaries generated revenues of $3.6 billion and net income of $287 million from continuing operations in fiscal year 2006. The company currently operates in three principal business segments: Tax Services (income tax preparation and advice via in-office, online and software solutions); Business Services (accounting, tax and business consulting services for midsized companies); and Consumer Financial Services (investment and financial advisory services and banking services). Headquartered in Kansas City, Mo., H&R Block markets its continuing services and products under two leading brands - H&R Block and RSM McGladrey. For more information visit our Online Press Center at www.hrblock.com.

H&R BLOCK
Preliminary U.S. Tax Operating Data
----------------------------------------------------------------------
   (in thousands, except average fee and number of offices)

                                       February                YTD
                 ---------- ------------------------------ -----------
                 11/1-1/31  2/1-2/15  2/16-2/28    Total    11/1-2/28
                 ---------- --------- ---------- --------- -----------
Net tax
 preparation
 fees: (1)
   Fiscal year
    2007
    Company-
     owned
     operations   $424,770  $427,286   $185,989  $613,275  $1,038,045
    Franchise
     operations    218,894   211,811     86,685   298,496     517,390
                 ---------- --------- ---------- --------- -----------
                  $643,664  $639,097   $272,674  $911,771  $1,555,435
                 ========== ========= ========== ========= ===========
   Fiscal year
    2006 (2)
    Company-
     owned
     operations   $376,419  $421,813   $184,265  $606,078    $982,497
    Franchise
     operations    190,535   200,555     81,572   282,127     472,662
                 ---------- --------- ---------- --------- -----------
                  $566,954  $622,368   $265,837  $888,205  $1,455,159
                 ========== ========= ========== ========= ===========
   Percent
    change
   -------------------------------------------------------------------
    Company-
     owned
     operations       12.8%      1.3%       0.9%      1.2%        5.7%
    ------------------------------------------------------------------
    Franchise
     operations       14.9%      5.6%       6.3%      5.8%        9.5%
    ------------------------------------------------------------------
    Total retail
     operations       13.5%      2.7%       2.6%      2.7%        6.9%
    ------------------------------------------------------------------

Total clients
 served: (3)
   Fiscal year
    2007
    Company-
     owned
     operations      2,729     2,413      1,122     3,535       6,264
    Franchise
     operations      1,607     1,359        589     1,948       3,555
                 ---------- --------- ---------- --------- -----------
      Total
       retail
       offices       4,336     3,772      1,711     5,483       9,819
    Digital tax
     solutions       1,279     1,144        476     1,620       2,899
                 ---------- --------- ---------- --------- -----------
                     5,615     4,916      2,187     7,103      12,718
                 ========== ========= ========== ========= ===========
   Fiscal year
    2006 (2)
    Company-
     owned
     operations      2,390     2,678      1,176     3,854       6,244
    Franchise
     operations      1,406     1,486        595     2,081       3,487
                 ---------- --------- ---------- --------- -----------
      Total
       retail
       offices       3,796     4,164      1,771     5,935       9,731
    Digital tax
     solutions       1,157       823        539     1,362       2,519
                 ---------- --------- ---------- --------- -----------
                     4,953     4,987      2,310     7,297      12,250
                 ========== ========= ========== ========= ===========
   Percent
    change
   -------------------------------------------------------------------
    Company-
     owned
     operations       14.2%     -9.9%      -4.6%     -8.3%        0.3%
    ------------------------------------------------------------------
    Franchise
     operations       14.3%     -8.5%      -1.0%     -6.4%        2.0%
    ------------------------------------------------------------------
    Total retail
     operations       14.2%     -9.4%      -3.4%     -7.6%        0.9%
    ------------------------------------------------------------------
    Digital tax
     solutions        10.5%     39.0%     -11.7%     18.9%       15.1%
    ------------------------------------------------------------------
    Total             13.4%     -1.4%      -5.3%     -2.7%        3.8%
    ------------------------------------------------------------------

Net average fee
 - retail: (4)
   Fiscal year
    2007
    Company-
     owned
     operations    $169.47   $166.58    $164.22   $165.86     $167.32
    Franchise
     operations     147.42    146.16     145.88    146.08      146.65
                 ---------- --------- ---------- --------- -----------
                   $161.27   $159.21    $157.91   $158.82     $159.82
                 ========== ========= ========== ========= ===========
   Fiscal year
    2006 (2)
    Company-
     owned
     operations    $157.48   $157.50    $156.68   $157.25     $157.34
    Franchise
     operations     135.51    134.92     137.07    135.54      135.53
                 ---------- --------- ---------- --------- -----------
                   $149.35   $149.44    $150.09   $149.64     $149.52
                 ========== ========= ========== ========= ===========
   Percent
    change
   -------------------------------------------------------------------
    Company-
     owned
     operations        7.6%      5.8%       4.8%      5.5%        6.3%
    ------------------------------------------------------------------
    Franchise
     operations        8.8%      8.3%       6.4%      7.8%        8.2%
    ------------------------------------------------------------------
    Total retail
     operations        8.0%      6.5%       5.2%      6.1%        6.9%
    ------------------------------------------------------------------


(1)Gross tax preparation fees less coupons and discounts.

(2)Prior year numbers have been reclassified between company-owned and
    franchise offices for offices which commenced company-owned
    operations during fiscal year 2007.

(3)Tax preparation clients for which revenue was earned and Instant
    Money Advance Loan (IMAL) clients.

(4)Calculated as net tax preparation fees divided by retail tax
    preparation clients served.

CONTACT: H&R Block Inc.
Media Relations:
Nick Iammartino, 816-854-4556
nick.iammartino@hrblock.com
or
Investor Relations:
Scott Dudley, 816-854-4505
scott.dudley@hrblock.com

SOURCE: H&R Block Inc.