Investor Relations


Press Release Details

H&R Block Reports Interim Tax Season Data Through Feb. 28

March 14, 2002
KANSAS CITY, Mo., Mar 14, 2002 /PRNewswire via COMTEX/ --

Re-Affirms FY02 Earnings Guidance

H&R Block Inc. (NYSE: HRB) said interim results for the current tax season through Feb. 28 indicate that the company remains on track to meet expectations set by its previously announced guidance for revenue and earnings.

H&R Block reported $1.2 billion in fees from tax preparation and related services from Jan. 1 through Feb. 28, up 12.4 percent for the same period last year. Total clients served increased 3.8 percent to 11.2 million. The average fee per client served rose 9 percent to $115.93.

"These results are right on target for where we expected to be at this point in the tax season. While several important weeks of the tax season remain, filing trends suggest that the tax business will meet our previously announced revenue and earnings goals for the full year," said Mark A. Ernst, president and chief executive officer.

Through Feb. 28, tax professionals in H&R Block offices prepared 10.3 million returns, an increase of 4.9 percent. During this period, H&R Block filed 92 percent of returns processed by the company electronically.

When H&R Block announced its third quarter earnings on Feb. 27, the company said it expected its fiscal year earnings to be in the range of $2.20- to-$2.30 per share, an increase of 45-to-50 percent over last year's earnings. The company said it expected overall revenue growth to be within a target range of 10-to-15 percent for the year.

In an unrelated matter, the company noted that its third quarter earnings release attributed 66 percent of H&R Block Mortgage Corp.'s retail mortgage originations to referrals from H&R Block's tax client base. In fact, 40 percent of these referrals came from tax clients, while 26 came from H&R Block Financial Advisors and Option One Servicing clients.

Except for historical information contained herein, the matters set forth in this press release are forward-looking statements based upon current information and expectations. Such statements speak only as of the date on which they are made, are not guarantees of future performance, and involve certain risks, uncertainties and assumptions that could cause actual results to differ materially from what is expressed, implied or forecast in such forward-looking statements. Such differences could be caused by a number of factors, including, but not limited to, the uncertainties that the company will achieve its revenue, earnings and earnings per share goals for fiscal year 2002, that the level of growth experienced in U.S. tax operations through February 28, 2002 will continue throughout the remainder of the tax season and fiscal year, that actual financial results for fiscal year 2002 will fall within the guidance provided by the company, and of the continued strong performance of the mortgage operations segment; changes in economic, political or regulatory environments; and risks described from time to time in reports and registration statements filed by H&R Block Inc. and its subsidiaries with the Securities and Exchange Commission. Readers should take these factors into account in evaluating such forward-looking statements.

About H&R Block

H&R Block Inc. is a diversified company with subsidiaries providing a range of financial products and services. In 2001, H&R Block served 19.2 million taxpayers - more than any tax or accounting firm -- through its more than 10,400 offices located in the United States, Canada, Australia and the United Kingdom. H&R Block served another 2.3 million tax clients through its award-winning TaxCut(R) software program and through its online tax preparation services. Investment services and securities products are offered through H&R Block Financial Advisors Inc., member NYSE, SIPC. H&R Block, Inc. is not a registered broker-dealer. H&R Block Mortgage Corporation and Option One Mortgage Corporation offer a range of home mortgage products. RSM McGladrey Inc. is a national accounting, tax and consulting firm with 100 offices nationwide, as well as an affiliation with 550 offices in 75 countries as the U.S. member of RSM International. Additional information is available on the company's Web site at www.hrblock.com .

    H&R Block, Inc.
    Preliminary U.S. Tax Operating Data
    Amounts in thousands, except average charge and number of offices

    Period
                          1/1-1/31      2/1-2/15     2/16-2/28     YTD 2/28
    Tax preparation &
     related fees
      Fiscal year 2002
        Company owned
         offices          $259,783      $355,534     $156,840      $772,157
        Franchised
         offices           149,078       199,762       91,427       440,267
                          $408,861      $555,296     $248,267    $1,212,424
      Fiscal year 2001
        Company owned
         offices          $226,830      $321,949     $144,275      $693,054
        Franchised
         offices           124,116       181,301       80,551       385,968
                          $350,946      $503,250     $224,826    $1,079,022
      Percent change
        Company owned
         offices             14.5%         10.4%         8.7%         11.4%
        Franchised offices   20.1%         10.2%        13.5%         14.1%
        Total                16.5%         10.3%        10.4%         12.4%

    Tax returns prepared
      Fiscal year 2002
        Company owned
         offices             2,129         2,873        1,253         6,255
        Franchised
         offices             1,354         1,815          837         4,006
                             3,483         4,688        2,090        10,261
      Fiscal year 2001
        Company owned
         offices             2,029         2,796        1,231         6,056
        Franchised
         offices             1,214         1,740          773         3,727
                             3,243         4,536        2,004         9,783
      Percent change
        Company owned
         offices              4.9%          2.8%         1.8%          3.3%
        Franchised offices   11.5%          4.3%         8.3%          7.5%
        Total                 7.4%          3.4%         4.3%          4.9%

    Total clients served
      Fiscal year 2002
        Company owned
         offices             2,149         2,902        1,264         6,315
        Franchised offices   1,406         1,877          860         4,143
        E-commerce *           143           414          219           776
                             3,698         5,193        2,343        11,234
      Fiscal year 2001
        Company owned
         offices             2,069         2,852        1,252         6,173
        Franchised offices   1,303         1,853          812         3,968
        E-commerce *           109           367          202           678
                             3,481         5,072        2,266        10,819
      Percent change
        Company owned
         offices              3.9%          1.8%         1.0%          2.3%
        Franchised offices    7.9%          1.3%         5.9%          4.4%
        E-commerce *         31.2%         12.8%         8.4%         14.5%
        Total                 6.2%          2.4%         3.4%          3.8%

    Tax returns filed
     electronically**
      Fiscal year 2002
        Company owned
         offices             2,081         2,726        1,109         5,916
        Franchised offices   1,333         1,675          693         3,701
        E-commerce *           119           382          214           715
                             3,533         4,783        2,016        10,332
      Fiscal year 2001
        Company owned
         offices             1,977         2,613        1,065         5,655
        Franchised offices   1,204         1,578          597         3,379
        E-commerce *            96           352          194           642
                             3,277         4,543        1,856         9,676
      Percent change
        Company owned
         offices              5.3%          4.3%         4.1%          4.6%
        Franchised offices   10.7%          6.2%        16.1%          9.5%
        E-commerce *         24.0%          8.5%        10.3%         11.4%
        Total                 7.8%          5.3%         8.6%          6.8%

    Percent filed electronically
      Fiscal year 2002
        Company owned
         offices             96.8%         93.9%        87.7%         93.7%
        Franchised offices   94.8%         89.2%        80.6%         89.3%
        E-commerce *         83.2%         92.3%        97.7%         92.1%
                             95.5%         92.1%        86.0%         92.0%
      Fiscal year 2001
        Company owned
         offices             95.6%         91.6%        85.1%         91.6%
        Franchised offices   92.4%         85.2%        73.5%         85.2%
        E-commerce *         88.1%         95.9%        96.0%         94.7%
                             94.1%         89.6%        81.9%         89.4%

    Average fee per client served
      Fiscal year 2002
        Company owned
         offices           $120.89       $122.51      $124.08      $ 122.27
        Franchised offices $106.03       $106.43      $106.31      $ 106.27
                           $115.01       $116.20      $116.89      $ 115.93
      Fiscal year 2001
        Company owned
         offices           $109.63       $112.89      $115.24      $ 112.27
        Franchised offices $ 95.25       $ 97.84      $ 99.20        $97.27
                           $104.08       $106.96      $108.93      $ 106.40
      Percent change
        Company owned
         offices             10.3%          8.5%         7.7%          8.9%
        Franchised offices   11.3%          8.8%         7.2%          9.3%
        Total                10.5%          8.6%         7.3%          9.0%

    Refund anticipation loans
      Fiscal year 2002
        Company owned
         offices             1,196         1,318          298         2,812
        Franchised offices     767           824          172         1,763
        E-commerce *             8            17            7            32
                             1,971         2,159          477         4,607
      Fiscal year 2001
        Company owned
         offices             1,020         1,177          272         2,469
        Franchised offices     647           704          150         1,501
        E-commerce *             5            17            8            30
                             1,672         1,898          430         4,000
      Percent change
        Company owned
         offices             17.3%         12.0%         9.6%         13.9%
        Franchised offices   18.6%         17.1%        14.7%         17.5%
        E-commerce *         60.0%          0.0%       -12.5%          6.7%
        Total                17.9%         13.8%        10.9%         15.2%

    Offices                FY 2002       FY 2001     % Change
        Company owned
         offices             5,017         5,060        -0.8%
        Franchised offices   3,998         4,012        -0.3%
                             9,015         9,072        -0.6%

    *   Includes on-line completed and paid returns and e-filings for software
        clients.
    **  Includes Federal only.  State returns also electronically filed are
        not included in this total.

                    
SOURCE H&R Block Inc.

CONTACT: Robert Schneider, Media Relations, +1-816-932-4835, or Mark Barnett, Investor Relations, +1-816-701-4443, both of H&R Block URL: http://www.hrblock.com

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