H&R Block Announces Tax Season Results Through March 31

Apr 14, 2008

KANSAS CITY, Mo.--(BUSINESS WIRE)--April 14, 2008--H&R Block Inc. (NYSE: HRB) today reported tax season results for the interim periods March 16-31, 2008 and Nov. 1, 2007 - March 31, 2008. Excluding lending-products-only clients, Economic Stimulus Package (ESP) rebate filers, and the impact of an additional day due to leap year, retail clients served were estimated to be up 4.8 percent and 1.6 percent, respectively, over the prior year.

Total reported retail client growth for the March 16-31 period was 10.5 percent, of which approximately 5.8 percent was related to ESP filers. Year-to-date through March 31, total reported retail clients grew 4.2 percent of which 1.5 percent is estimated to be related to ESP filers and 1.1 percent is due to the leap year day.

The reported decrease in net average retail fee for March 16-31 was 4.8 percent, but would have decreased approximately 0.7 percent excluding ESP filers. Year-to-date, the reported increase in net average retail fee was 4.3 percent and would have been approximately 5.4 percent without ESP. The year-to-date increase in net average retail fee has moderated from 5.5 percent reported through March 15. The Company believes that this slowing of the rate of pricing growth reflects ESP filers at lower prices who would not otherwise have filed, as well as an acceleration of lower complexity returns typically filed in April into the second half of March.

ESP filers are individuals who would not otherwise be required to file an income tax return, but who are filing in 2008 in order to be eligible to receive rebate checks under the ESP program. The company is offering special low fees to ESP filers, which affects calculations of average fees.

Digital clients served were up 31 percent in the March 16-31 period and down 3.2 percent year-to-date through March 31, representing a significant improvement from a decline of 6.5 percent for the year-to-date period ending March 15.

H&R Block plans to release interim results through April 15 for its U.S. tax operations on May 12, 2008 before the NYSE market open.

About H&R Block

H&R Block Inc. (NYSE: HRB) is the world's preeminent tax services provider, having served more than 400 million clients since 1955 and generating annual revenues of $4 billion in fiscal year 2007. H&R Block provides income tax return preparation and related services and products via a nationwide network of approximately 13,000 company-owned and franchised offices and through TaxCut(R) online and software solutions. The company also provides business services through RSM McGladrey and certain consumer financial services. 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)

    ------------------------------------------------------------------
                                  Period
    ------------------------------------------------------------------

                                    Feb Total
                         11/1-1/31      (5)    YTD 2/29 (5) 3/1-3/15
                         --------------------------------------------
Net tax preparation
 fees: (1)
 Fiscal year 2008
  Company-owned
   operations            $439,757  $  690,811  $1,130,568  $ 188,660
  Franchise operations    225,035     335,522     560,557     79,372
                         --------- ----------- ----------- ----------
                         $664,792  $1,026,333  $1,691,125  $ 268,032
                         ========= =========== =========== ==========
 Fiscal year 2007 (2)
  Company-owned
   operations            $424,770  $  613,275  $1,038,045  $ 169,402
  Franchise operations    218,894     298,496     517,390     73,014
                         --------- ----------- ----------- ----------
                         $643,664  $  911,771  $1,555,435  $ 242,416
                         ========= =========== =========== ==========
 Percent change
 ---------------------------------------------------------------------
  Company-owned
   operations                 3.5%       12.6%        8.9%      11.4%
  --------------------------------------------------------------------
  Franchise operations        2.8%       12.4%        8.3%       8.7%
  --------------------------------------------------------------------
  Total retail
   operations                 3.3%       12.6%        8.7%      10.6%
  --------------------------------------------------------------------

Total clients served:
 (3)
 Fiscal year 2008
  Company-owned
   operations               2,430       3,958       6,388      1,073
  Franchise operations      1,427       2,184       3,611        541
  Lending products only       245        (157)         88         (2)
                         --------- ----------- ----------- ----------
    Total retail offices    4,102       5,985      10,087      1,612
  Digital tax solutions     1,136       1,556       2,692        384
                         --------- ----------- ----------- ----------
                            5,238       7,541      12,779      1,996
                         ========= =========== =========== ==========

 Fiscal year 2007 (2)
  Company-owned
   operations               2,512       3,701       6,213      1,003
  Franchise operations      1,485       2,049       3,534        488
  Lending products only       343        (261)         82         (3)
                        ---------- ----------- ----------- ----------
    Total retail offices    4,340       5,489       9,829      1,488
  Digital tax solutions     1,275       1,614       2,889        400
                         --------- ----------- ----------- ----------
                            5,615       7,103      12,718      1,888
                         ========= =========== =========== ==========
 Percent change
 ---------------------------------------------------------------------
  Company-owned
   operations                -3.3%        6.9%        2.8%       7.0%
  --------------------------------------------------------------------
  Franchise operations       -3.9%        6.6%        2.2%      10.9%
  --------------------------------------------------------------------
  Retail operations
   excluding lending
   products only             -3.5%        6.8%        2.6%       8.2%
  --------------------------------------------------------------------
  Total retail
   operations                -5.5%        9.0%        2.6%       8.4%
  --------------------------------------------------------------------
  Digital tax solutions     -10.9%       -3.6%       -6.8%      -4.0%
  --------------------------------------------------------------------
  Total                      -6.7%        6.2%        0.5%       5.7%

Net average fee -
 retail: (4)
 Fiscal year 2008
  Company-owned
   operations            $ 181.19  $   175.02  $   177.37  $  176.60
  Franchise operations     157.91      154.12      155.62     147.64
                         --------- ----------- ----------- ----------
                         $ 172.58  $   167.59  $   169.52  $  166.91
                         ========= =========== =========== ==========
 Fiscal year 2007 (2)
  Company-owned
   operations            $ 169.47  $   165.86  $   167.32  $  169.48
  Franchise operations     147.42      146.08      146.65     150.19
                         --------- ----------- ----------- ----------
                         $ 161.27  $   158.82  $   159.82  $  163.17
                         ========= =========== =========== ==========
 Percent change
 ---------------------------------------------------------------------
  Company-owned
   operations                 6.9%        5.5%        6.0%       4.2%
  --------------------------------------------------------------------
  Franchise operations        7.1%        5.5%        6.1%      -1.7%
  --------------------------------------------------------------------
  Total retail
   operations                 7.0%        5.5%        6.1%       2.3%
  --------------------------------------------------------------------



                             YTD 3/15  3/16-3/31 Mar Total  YTD 3/31
                           -------------------------------------------
Net tax preparation fees:
 (1)
 Fiscal year 2008
  Company-owned operations $1,319,228  $192,974  $381,634  $1,512,202
  Franchise operations        639,929    71,414   150,786     711,343
                           ----------- --------- --------- -----------
                           $1,959,157  $264,388  $532,420  $2,223,545
                           =========== ========= ========= ===========
 Fiscal year 2007 (2)
  Company-owned operations $1,207,447  $179,855  $349,257  $1,387,302
  Franchise operations        590,404    71,547   144,561     661,951
                           ----------- --------- --------- -----------
                           $1,797,851  $251,402  $493,818  $2,049,253
                           =========== ========= ========= ===========
 Percent change
 ---------------------------------------------------------------------
  Company-owned operations        9.3%      7.3%      9.3%        9.0%
  --------------------------------------------------------------------
  Franchise operations            8.4%     -0.2%      4.3%        7.5%
  --------------------------------------------------------------------
  Total retail operations         9.0%      5.2%      7.8%        8.5%
  --------------------------------------------------------------------

Total clients served: (3)
 Fiscal year 2008
  Company-owned operations      7,461     1,097     2,170       8,558
  Franchise operations          4,152       517     1,058       4,669
  Lending products only            86        (1)       (3)         85
                           ----------- --------- --------- -----------
    Total retail offices       11,699     1,613     3,225      13,312
  Digital tax solutions         3,076       406       790       3,482
                           ----------- --------- --------- -----------
                               14,775     2,019     4,015      16,794
                           =========== ========= ========= ===========

 Fiscal year 2007 (2)
  Company-owned operations      7,216     1,003     2,006       8,219
  Franchise operations          4,022       458       946       4,480
  Lending products only            79        (1)       (4)         78
                          ------------ --------- --------- -----------
    Total retail offices       11,317     1,460     2,948      12,777
  Digital tax solutions         3,289       310       710       3,599
                           ----------- --------- --------- -----------
                               14,606     1,770     3,658      16,376
                           =========== ========= ========= ===========
 Percent change
 ---------------------------------------------------------------------
  Company-owned operations        3.4%      9.4%      8.2%        4.1%
  --------------------------------------------------------------------
  Franchise operations            3.2%     12.9%     11.8%        4.2%
  --------------------------------------------------------------------
  Retail operations
   excluding lending
   products only                  3.3%     10.5%      9.3%        4.2%
  --------------------------------------------------------------------
  Total retail operations         3.4%     10.5%      9.4%        4.2%
  --------------------------------------------------------------------
  Digital tax solutions          -6.5%     31.0%     11.3%       -3.2%
  --------------------------------------------------------------------
  Total                           1.2%     14.1%      9.8%        2.6%

Net average fee - retail:
 (4)
 Fiscal year 2008
  Company-owned operations $   177.26  $ 176.96  $ 176.78  $   177.22
  Franchise operations         154.58    138.77    143.30      152.83
                           ----------- --------- --------- -----------
                           $   169.15  $ 164.71  $ 165.81  $   168.61
                           =========== ========= ========= ===========
 Fiscal year 2007 (2)
  Company-owned operations $   167.62  $ 180.16  $ 174.82  $   169.15
  Franchise operations         147.07    157.10    153.54      148.10
                           ----------- --------- --------- -----------
                           $   160.27  $ 172.94  $ 168.00  $   161.72
                           =========== ========= ========= ===========
 Percent change
 ---------------------------------------------------------------------
  Company-owned operations        5.8%     -1.8%      1.1%        4.8%
  --------------------------------------------------------------------
  Franchise operations            5.1%    -11.7%     -6.7%        3.2%
  --------------------------------------------------------------------
  Total retail operations         5.5%     -4.8%     -1.3%        4.3%
  --------------------------------------------------------------------



(1)Gross tax preparation fees less coupons and discounts.
(2)Prior year numbers have not been reclassified between company-owned
    and franchise offices for offices which commenced company-owned
    operations during fiscal year 2008. Prior year numbers have been
    reclassified between company-owned offices and Digital tax
    solutions for certain products.
(3)Tax preparation clients for which revenue was earned and Emerald
    Advance (EA) or Instant Money Advance Loan (IMAL) clients.
(4)Calculated as net tax preparation fees divided by retail tax
    preparation clients served.
(5)Results are through 2/29/08 and 2/28/07 due to leap year. The
    additional day represents approximately 91,000 company and 48,000
    franchise clients served as of 3/31/08.

CONTACT: H&R Block Inc.
Media Desk, 816-854-4287 (Media Relations)
mediadesk@hrblock.com
Scott Dudley, 816-854-4505 (Investor Relations)
scott.dudley@hrblock.com

SOURCE: H&R Block Inc.