H&R Block Annual Report 2017

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FY2017 Annual Report · H&R Block

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2017

A N N U A L R E P O R T

H&R BLOCK

is a global consumer tax services provider, having prepared more

than 750 million tax returns since 1955. In fiscal year 2017, H&R

Block had revenues of just over $3.0 billion and prepared 23.0 mil-

lion tax returns worldwide.

Tax return preparation services are provided in approximately

12,000 company-owned and franchise retail tax offices worldwide

by professional tax preparers, and through H&R Block digital

do-it-yourself products. H&R Block also offers affordable financial

products and services to its clients.

H&R BLOCK:

YEAR
IN REVIEW

23.0M

Prepared 23
million tax returns
worldwide, including
1 in every 7 U.S. tax
returns

$3.0B

Revenues just
over $3 billion

29.8%

Improved EBITDA
margin by over
300 basis points
to 29.8%

$1.96

Delivered earnings
per share of $1.96,
the highest level in
over a decade

$504M

Returned over $500
million of capital to
shareholders, includ-
ing a 10% increase in
the quarterly dividend

Fellow Shareholders:

Fiscal year 2017 was a year of positive change for H&R Block.
We promised a very different H&R Block, which is exactly what we
delivered. We outlined a comprehensive plan to improve our results
through meaningful changes to our business, which included:

TOM GERKE
Interim President
& CEO

Realigning our promotional offerings to drive client volumes,
Bringing innovative solutions to market, designed to leverage our ability to serve
clients any way they want to be served, and
Enacting significant cost reduction measures across our business, which allowed us
to invest in initiatives and promotional offerings and helped improve our bottom line.

I’m pleased that we delivered on what we promised, significantly improving our client
trajectory and delivering substantially better financial results.

In fiscal year 2017,we:

Served 23.0 million clients worldwide,
Generated just over $3.0 billion in revenue,
Improved our EBITDA margin by over 300 basis points, to 29.8%,
Delivered earnings per share of $1.96, our highest level in over a decade, and
Returned $504 million of capital to shareholders through share repurchases and an
increased quarterly dividend.

Tax Season 2017
The performance of the U.S. tax industry was unique given that returns declined following
a year with employment growth for only the fourth time in the past 60-plus years. Despite this
overall industry decline, H&R Block performed well.

U.S. Assisted
In the Assisted category, we saw a significant improvement over last season, driven by
successful promotions and our memorable marketing campaign, Get Your Taxes Won.

We successfully launched Refund Advance, our interest-free, no-fee, early season loan that
bridges the gap for clients between the time they file their returns and receive their refunds.
This product was especially relevant to those filers who faced delays in receiving their refunds
in the early part of the season.

We also re-introduced our Free Federal 1040EZ promotion, another offering that appealed to
early-season filers. This successful re-launch was effectively timed, positioning us well against
our competitors in what was an extremely competitive season.

Additionally, we enhanced our client service delivery model by redesigning the tax preparation
process, centered around our partnership with IBM Watson. We saw noticeable improvements
on key client service metrics, as we demonstrated our ability to maximize clients’ refunds in a
new and engaging way.

These efforts translated to improved Assisted results as we achieved the highest level of new
client growth in years, a two-point improvement in our retention rate, and an increase in our over-
all net average charge of approximately 2%.

H & R BLOCK, INC . 2017 ANNUAL REPORT

U.S. DIY
For the DIY category, this was a reset year for us. We realigned our product lineup and pricing
to effectively compete in the category and made significant enhancements to our product. We
didn’t just want to compete in the category, we wanted to win. And that’s exactly what we did.

We were aggressive in the market with our H&R Block More ZeroSM promotion. This helped
drive tax filers to our online product, with new client growth increasing 28% and retention
increasing over 350 basis points.

And while H&R Block More ZeroSM helped us increase client volume, so too did the significant
improvements we made to our product. Among these improvements were enhanced import
capabilities for current year tax forms and prior year tax returns. Our clients can now import
their W-2 information by photo capture right from their phone. They can also drag-and-drop
prior year returns, which allows them to pre-populate over 90 fields of data in their tax return.
By allowing filers to import prior year returns completed by competitors, we’re removing the
barrier of switching to H&R Block.

The net result was that we got our DIY business back on track, growing online returns 6.8%
and taking market share.

Capital Return
Our strong performance continued beyond our operational results. During fiscal year 2017, we
repurchased 14 million shares for an aggregate purchase price of $317 million. Additionally, we
returned $187 million to our shareholders in the form of dividends. And in June 2017 our Board
of Directors approved a 9% increase in our quarterly dividend, to 24 cents per share.

Tax Season 2018 and Beyond
While we are very pleased with our operational and financial results for the year, we are already
looking ahead to 2018 and beyond. Our strong performance this year positions us well going
into 2018 but we must continue to execute our strategy.

So, what can you expect from H&R Block next year?

We will continue to aggressively pursue an improvement in our client trajectory.

We will continue to invest in innovative solutions designed to leverage our ability to serve
our clients any way they want to be served.

And we will continue to improve the value we provide to our clients and we’ll effectively
communicate that value.

With this solid foundation, we will ensure a seamless transition to the permanent CEO. The
Board is currently conducting its search for the right leader to build on the great momentum
we established in fiscal 2017.

We are excited about the plans we have developed for the upcoming tax season and the
future of H&R Block and look forward to sharing our success with our shareholders for years
to come. Thank you for your investment.

Sincerely yours,

Tom Gerke
Interim President & CEO, H&R Block, Inc.

2017 F O RM 10 - K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended April 30, 2017

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-06089

H&R Block, Inc.
(Exact name of registrant as specified in its charter)

MISSOURI
(State or other jurisdiction of
incorporation or organization)

44-0607856
(I.R.S. Employer
Identification No.)

One H&R Block Way, Kansas City, Missouri 64105
(Address of principal executive offices, including zip code)

(816) 854-3000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, without par value

Name of each exchange on which registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, without par value
(Title of Class)

Indicate by check mark whether the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post such files). Yes

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the
Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

The aggregate market value of the registrant's Common Stock (all voting stock) held by non-affiliates of the registrant, computed by reference to
the price at which the stock was sold on October 31, 2016, was $4,806,004,628.

Number of shares of the registrant's Common Stock, without par value, outstanding on May 31, 2017: 207,178,139.

Documents incorporated by reference
The definitive proxy statement for the registrant's Annual Meeting of Shareholders, to be held September 14, 2017, is incorporated by reference
in Part III to the extent described therein.

2017 FORM 10-K AND ANNUAL REPORT
TABLE OF CONTENTS

INTRODUCTION AND FORWARD-LOOKING STATEMENTS

BUSINESS

ITEM 1.
ITEM 1A. RISK FACTORS
ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 2.
ITEM 3.
ITEM 4. MINE SAFETY DISCLOSURES

PROPERTIES
LEGAL PROCEEDINGS

PART I

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND

ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 6.

SELECTED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

ITEM 7.

OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8.
ITEM 9.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE

ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9B. OTHER INFORMATION

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND

RELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

PART IV

SIGNATURES
EXHIBIT INDEX

1
7
18
18
18
18

33
34
70

70
71

71
71
72

72
72

72
73
74

INTRODUCTION

"H&R Block," "the Company," "we," "our" and "us" are used interchangeably to refer to H&R Block, Inc. or to H&R
Block, Inc. and its subsidiaries, as appropriate to the context.

Specified portions of our proxy statement are "incorporated by reference" in response to certain items. Our proxy
statement will be made available to shareholders no later than 120 days after April 30, 2017, and will also be available
on our website at www.hrblock.com.

FORWARD-LOOKING STATEMENTS

This report and other documents filed with the Securities and Exchange Commission (SEC) may contain forward-
looking statements. In addition, our senior management may make forward-looking statements orally to analysts,
investors, the media and others. 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,"
"could," "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, capital expenditures, dividends, stock repurchase, liquidity, capital
structure, market share, industry volumes or other financial items, descriptions of management's plans or objectives
for future operations, services or products, 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, operational and regulatory factors, many of which
are beyond the Company's control. Investors should understand that it is not possible to predict or identify all such
factors and, consequently, should not consider any such list to be a complete set of all potential risks or uncertainties.

Details about risks, uncertainties and assumptions that could affect various aspects of our business are included
throughout this Form 10-K. Investors should carefully consider all of these risks, and should pay particular attention
to Item 1A, "Risk Factors," and Item 7 under "Critical Accounting Estimates" of this Form 10-K.

PART I

ITEM 1. BUSINESS

GENERAL DEVELOPMENT OF BUSINESS

H&R Block, Inc. was organized as a corporation in 1955 under the laws of the State of Missouri and has subsidiaries
that provide tax preparation and other services. A complete list of our subsidiaries as of April 30, 2017 can be found
in Exhibit 21.

We provide assisted income tax return preparation, digital do-it-yourself (DIY) tax solutions and other services and
products related to income tax return preparation to the general public primarily in the United States (U.S.), Canada,
Australia, and their respective territories.

RECENT DEVELOPMENTS –

Refund Advance Loans. We began offering interest-free Refund Advance loans (RAs) during the 2017 tax season.
RAs were available to eligible assisted U.S. tax preparation clients of the Company and participating franchise locations.
On October 25, 2016, subsidiaries of the Company entered into a Refund Advance Program Agreement with MetaBank,
a federal savings bank (MetaBank), and Specialty Consumer Services, L.P., a Texas limited partnership (SCS), pursuant
to which MetaBank originated RAs and SCS provided technology, software, and underwriting support services.

H&R Block, Inc. | 2017 Form 10-K

MetaBank and BofI Federal Bank (BofI) provided funding for the loans, with BofI also performing certain disbursement
and repayment services.

RAs were offered in amounts of $500, $750 or $1,250, based on client eligibility as determined by the loan originator.
We paid loan origination fees of $28.6 million to MetaBank based on volume and customer type which is approximately
$32 to $36 on average for each funded loan. The loan origination fees were intended to cover expected loan losses
and payments to capital providers, among other items. In addition, Block Financial LLC (Block Financial) provided
MetaBank and BofI with limited guaranties up to $73 million in the aggregate, subject to specified thresholds, which
would cover certain incremental loan losses. At April 30, 2017, we had accrued an estimated liability of $0.7 million
related to the RA program.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

We operate as a single segment that includes all of our continuing operations, which are designed to enable clients
to obtain tax preparation services seamlessly. See discussion below and in Item 8, note 15 to the consolidated financial
statements.

DESCRIPTION OF BUSINESS

GENERAL – We provide assisted and DIY tax return preparation solutions through multiple channels (including in-
person, online and mobile applications, and desktop software) and distribute H&R Block-branded financial products
and services, including those of our financial partners, to the general public primarily in the U.S., Canada, Australia,
and their respective territories. Major revenue sources include fees earned for tax preparation and related services
performed at company-owned retail tax offices, royalties from franchisees, sales of desktop tax preparation software,
fees for online tax preparation services and fees from complementary services and products. By offering assisted and
DIY tax solutions through multiple channels, we seek to serve our clients in the manner they choose to be served.

Tax Returns Prepared. During fiscal year 2017, 23.0 million tax returns were prepared by and through H&R Block
worldwide, a decline of 0.6% from 23.1 million in fiscal year 2016 and 24.1 million in fiscal year 2015. In the U.S., 19.5
million tax returns were prepared by and through H&R Block during fiscal year 2017, compared to 19.7 million in 2016
and 20.6 million in 2015.

U.S. tax returns prepared by and through us during the 2017 tax season, including those prepared by our franchisees
and through our DIY solutions, constituted approximately 14% of an Internal Revenue Service (IRS) estimate of total
individual income tax returns filed during the 2017 tax season, compared to approximately 14% in the prior year. See
Item 7, under "Results of Operations," for further discussion of changes in the number of tax returns prepared.

ASSISTED – Assisted income tax return preparation and related services are provided by tax professionals via a

system of retail offices operated directly by us or our franchisees or virtually via the internet.

Offices. During the 2017 tax season, we, together with our franchisees, operated in 10,036 offices across the U.S.
at the peak of the tax season, compared to 10,213 in the prior year. A summary of our company-owned and franchise
offices is included in Item 7, under "Operating Statistics."

Franchises. We offer franchises as a way to expand our presence in certain geographic areas. Our franchise
arrangements provide us with certain rights designed to protect our brand. Most of our franchisees receive, among
other things, the right to use our trademarks and software, access to product offerings and expertise, signs, specialized
forms, advertising, and initial and ongoing training and advisory services. Our franchisees pay us approximately 30%
of gross tax return preparation and related service revenues as a franchise royalty in the U.S. Our franchise
arrangements typically include a ten-year term and do not provide for automatic renewal.

From time to time, we have sold certain company-owned offices to existing franchisees or have acquired the assets
of existing franchisees and other tax return preparation businesses, and may continue to do so if future conditions
warrant and satisfactory terms can be negotiated.

DO-IT-YOURSELF – We develop and market DIY income tax preparation software. We offer a comprehensive range
of DIY tax services, including preparation of federal and state income tax returns, review of tax returns by a tax
professional, access to tax tips, advice and tax-related news, use of calculators for tax planning, error checking and
electronic filing. Our online software may be accessed through our website at www.hrblock.com, while our desktop
software may be purchased online, through third-party retail stores or via direct mail.

2017 Form 10-K | H&R Block, Inc.

We are a member of Free File, Inc. (FF), formerly known as the Free File Alliance. This organization was created by
the tax return preparation industry and the IRS, and allows qualified filers with an adjusted gross income of $64,000
or less to prepare and file their federal return online at no charge. We believe this program provides a valuable public
service and increases our visibility with new clients.

We develop and offer applications for mobile devices which provide tax return preparation solutions and related

services and products to clients, including tools that complement our other tax preparation services and products.

OTHER OFFERINGS – In addition to our tax services and products, we also offer U.S. clients a number of additional
services, including refund transfers (RTs), H&R Block Emerald Advance® lines of credit (EAs), H&R Block Emerald Prepaid
MasterCard®, our Peace of Mind® Extended Service Plan (POM), Tax Identity Shield® (TIS), RAs and, for our Canadian
clients, an Instant Cash Back® refund option.

Refund Transfers. RTs enable clients to receive their tax refunds by their chosen method of disbursement and
include a feature enabling clients to deduct tax preparation and service fees from their tax refunds. Clients may choose
to receive their RT proceeds by direct deposit to a deposit account, by a load to their H&R Block Emerald Prepaid
MasterCard® or by receiving a check. RTs are available to U.S. clients and are frequently obtained by those who (1)
do not have bank accounts into which the IRS can direct deposit their refunds; (2) like the convenience and benefits
of a temporary account for receipt of their refund; or (3) prefer to have their tax preparation fees paid directly out of
their refunds. RTs are offered through our relationship with BofI. We offer a similar program to our Canadian clients,
referred to as H&R Block Pay With Refund®.

H&R Block Emerald Advance® Lines of Credit. EAs are lines of credit offered to clients in our offices, typically from
late November through December, currently in an amount not to exceed $1,000. If the borrower meets certain criteria
as agreed in the loan terms, the line of credit can be utilized year-round. In addition to the required monthly payments,
borrowers may elect to pay down balances on EAs with their tax refunds. These lines of credit are offered by BofI, and
we subsequently purchase a participation interest in the outstanding balances.

H&R Block Emerald Prepaid Mastercard®. The H&R Block Emerald Prepaid MasterCard® enables clients to receive
their tax refunds from the IRS directly on a prepaid debit card, or to direct RT or EA proceeds to the card. The card
can be used for everyday purchases, bill payments and ATM withdrawals anywhere MasterCard® (MasterCard is a
registered trademark of MasterCard International Incorporated) is accepted. Additional funds can be added to the
card year-round through direct deposit or at participating retail locations. We distribute the H&R Block Emerald Prepaid
MasterCard® issued by BofI.

Peace of Mind® Extended Service Plan. In addition to our standard guarantee, we offer POM to U.S. and Canadian
clients, whereby we (1) represent our clients if they are audited by the IRS or Canada Revenue Agency (CRA), and
(2) assume the cost, subject to certain limits, of additional taxes owed by a client resulting from errors attributable
to H&R Block. The additional taxes paid under POM have a cumulative limit of $6,000 for U.S. clients and $3,000CAD
for Canadian clients with respect to the federal, state and local tax returns we prepared for applicable clients during
the taxable year protected by POM.

Tax Identity Shield®. This service program offers clients assistance obtaining additional IRS identity protection,
when eligible, to better protect against unauthorized third parties filing a fraudulent tax return with their information.
TIS also includes a pre-tax season identity theft risk assessment, notification if their information is detected on a tax
return filed through H&R Block and access to services to help restore their tax identity if necessary.

Refund Advance Loans. RAs are interest-free loans available to eligible assisted U.S. tax preparation clients in
company-owned and participating franchise locations. In tax season 2017, RAs were offered in amounts of $500, $750
or $1,250, based on client eligibility as determined by MetaBank.

Instant Cash Back®. Our Canadian operations advance refunds due to certain clients from the CRA, for a fee. The
fee charged for this service is mandated by federal legislation which is administered by the CRA. The client assigns to
us the full amount of the tax refund to be issued by the CRA and the refund amount is then sent by the CRA directly
to us.

SEASONALITY OF BUSINESS – Because most of our clients file their tax returns during the period from January
through April of each year, a substantial majority of our revenues from income tax return preparation and related

H&R Block, Inc. | 2017 Form 10-K

services and products are earned during this period. As a result, we generally operate at a loss through a majority of
the fiscal year.

COMPETITIVE CONDITIONS – We provide both assisted and DIY tax preparation services and products and face
substantial competition in and across each category. There are a substantial number of tax return preparation firms
and accounting firms offering tax return preparation services, and we face significant competition from independent
tax preparers and certified public accountants. Many tax return preparation firms are involved in providing electronic
filing services and RTs or similar services to the public. Tax return preparation firms are highly competitive with regard
to price and service, and many firms offer services that may include preparation of tax returns at no charge. Our
assisted tax preparation business also faces competition from firms offering DIY tax preparation services and products.

Our DIY tax solutions include various forms of digital electronic assistance, including online and mobile applications
and desktop software. Many other companies offer digital and online tax preparation services, including Intuit Inc.,
our largest competitor offering such services. Like all tax return preparation services and products, price and marketing
competition for digital tax preparation services is intense among value and premium product offerings and many firms
offer digital services and products at no charge. Our DIY tax solutions also compete with in-office tax preparation
services. U.S. federal and certain state and foreign taxing authorities also currently offer, or facilitate the offering of,
tax return preparation and filing options to taxpayers at no charge.

In terms of the number of offices and revenues, we believe we are the largest single provider of tax return
preparation solutions and electronic filing services in the U.S. In terms of the number of tax returns prepared, we
believe we are the second largest provider in the U.S. We also believe we operate the largest tax return preparation
businesses in Canada and Australia.

GOVERNMENT REGULATION – TAX PREPARERS – Our tax preparation business is subject to various forms of

government regulation, including the following:

U.S. Federal Tax Preparer Regulations. U.S. federal legislation requires income tax return preparers to, among
other things, set forth their signatures and identification numbers, including their Preparer Tax Identification Number
(PTIN), on all tax returns prepared by them and retain all tax returns prepared by them for three years. U.S. federal
laws also subject income tax return preparers to accuracy-related penalties in connection with the preparation of
income tax returns. Preparers may be prohibited from continuing to act as income tax return preparers if they
repeatedly engage in specified misconduct.

The U.S. federal government regulates the electronic filing of income tax returns in part by requiring electronic
filers to comply with all publications and notices of the IRS applicable to electronic filing. We are required to provide
certain electronic filing information to taxpayers and comply with advertising standards for electronic filers. We are
also subject to possible monitoring by the IRS, and if deemed appropriate, the IRS could impose various penalties,
including penalties for improper disclosure or use of taxpayer information, other preparer penalties or suspension
from the IRS electronic filing program.

Financial Consumer Protection and Privacy Regulations. The Gramm-Leach-Bliley Act and related Consumer
Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) regulations require income tax preparers to
(1) adopt and disclose consumer privacy notices, (2) provide consumers a reasonable opportunity to control (via "opt-
out") whether their nonpublic personal information is disclosed to unaffiliated third-parties (subject to certain
exceptions), and (3) implement reasonable safeguards to protect the security and confidentiality of nonpublic personal
information. In addition, the IRS generally prohibits the use or disclosure of taxpayer information by tax return
preparers for purposes other than tax return preparation without the prior written consent of the taxpayer. The CFPB
may issue regulations that apply to our subsidiaries, or certain of our third party service providers that provide
consumer financial services and products. The CFPB may examine, and take enforcement actions against, our
subsidiaries or our third party service providers. See Item 1A, "Risk Factors," for further information on the CFPB and
its recent actions.

State Regulations. Certain states have privacy laws and regulations in addition to the U.S. federal regulations
described above. Most states also have data security breach notice laws which may require notice to impacted
individuals and others if there is unauthorized access to certain sensitive personal information. Several states require
income tax return preparers to, among other things, register as a return preparer and comply with certain registration
requirements such as testing and continuing education requirements. State regulations may also subject income tax

2017 Form 10-K | H&R Block, Inc.

return preparers to accuracy-related penalties in connection with the preparation of income tax returns, and may
prohibit preparers from continuing to act as income tax return preparers if they engage in specified misconduct.
Certain states have regulations and requirements relating to offering income tax courses. These requirements may
include licensing, bonding and certain restrictions on advertising.

Franchise Regulations. Many of the income tax return preparation offices operating in the U.S. under the name
"H&R Block" are operated by franchisees. Our franchising activities are subject to the rules and regulations of the FTC,
potential enforcement by the CFPB, and various state laws regulating the offer and sale of franchises. The FTC and
various state laws require us to furnish to prospective franchisees a franchise disclosure document containing certain
prescribed information. A number of states in which we are currently franchising regulate the sale of franchises and
require registration of the franchise disclosure document with certain state authorities. We are currently operating
under exemptions from registration in several of these states based on our net worth and experience. Substantive
state laws regulating the franchisor/franchisee relationship presently exist in a large number of states, and bills have
been introduced in Congress from time to time that would provide for federal regulation of the franchisor/franchisee
relationship in certain respects. The state laws often limit, among other things, the duration and scope of non-
competition provisions, the ability of a franchisor to terminate or refuse to renew a franchise and the ability of a
franchisor to designate sources of supply. From time to time, we may make appropriate amendments to our franchise
disclosure document to comply with our disclosure obligations under U.S. federal and state laws.

FOREIGN REGULATIONS – We are also subject to a variety of other regulations in various foreign markets, including
anti-corruption laws, and regulations concerning privacy, data protection and data retention. Foreign regulations and
laws potentially affecting our business are evolving rapidly. We rely on external and internal counsel in the countries
in which we do business to advise us regarding compliance with applicable laws and regulations. As our international
operations grow, we continue to develop and enhance our internal legal and operational compliance programs that
guide our businesses in complying with laws and regulations applicable in the countries in which we do business.

SERVICE MARKS, TRADEMARKS AND PATENTS

We have made a practice of offering our services and products under service marks and trademarks and of securing
registration for many of these marks in the U.S. and other countries where our services and products are marketed.
We consider these service marks and trademarks, in the aggregate, to be of material importance to our business,
particularly our businesses providing services and products under the "H&R Block" brand. The initial duration of U.S.
federal trademark registrations is 10 years. Most U.S. federal registrations can be renewed perpetually at 10-year
intervals and remain enforceable so long as the marks continue to be used.

We hold a small but growing patent portfolio that we believe is important to our overall competitive position,
although we are not materially dependent on any one patent or particular group of patents in our portfolio at this
time. Our patents have remaining terms generally ranging from one to 20 years.

EMPLOYEES AND EXECUTIVE OFFICERS

We had approximately 2,300 regular full-time employees as of April 30, 2017. Our business is dependent on the
availability of a seasonal workforce, including tax professionals, and our ability to hire, train, and supervise these
employees. The highest number of persons we employed during the fiscal year ended April 30, 2017, including these
seasonal employees, was approximately 87,500.

H&R Block, Inc. | 2017 Form 10-K

Information about our executive officers is as follows:

Name, age

William C. Cobb,
age 60

Current position

President and Chief
Executive Officer

Tony G. Bowen,
age 42

Chief Financial Officer

Kellie J. Logerwell,
age 47

Chief Accounting Officer

Kathryn M. Collins,
age 53

Senior Vice President and
Chief Marketing Officer

Thomas A. Gerke,
age 61

General Counsel and Chief
Administrative Officer

Business experience since May 1, 2012

President and Chief Executive Officer since May 2011 (retiring effective July
31, 2017); retired from eBay, Inc. in 2008, having worked there from November
2000 to March 2008, where he most recently served as President of eBay
Marketplaces North America for four years; before that, he held several senior
management positions, including Senior Vice President and General Manager
of eBay International and Senior Vice President of Global Marketing.

Chief Financial Officer since May 2016; Vice President, U.S. Tax Services Finance
from May 2013 through April 2016; Vice President, Digital GM from May 2012
until May 2013; Vice President, Digital CFO from July 2011 until May 2012;
Assistant Vice President of Corporate Development from October 2009 until
July 2011.

Chief Accounting Officer since July 2016; Vice President of Corporate and Field
Accounting from December 2014 until July 2016; Assistant Controller from
December 2010 until December 2014.

Senior Vice President and Chief Marketing Officer since May 2016; Chief
Marketing Officer from October 2013 through April 2016; Vice President, Retail
Marketing from July 2012 until October 2013; Vice President, Marketing
Communications and Brand Management from January 2006 until July 2012.
Prior to 2006, Ms. Collins held various positions at Lee Jeans, a division of VF
Corporation.

General Counsel and Chief Administrative Officer since May 2016; Chief Legal
Officer (formerly titled Senior Vice President and General Counsel) from
January 2012 through April 2016; Executive Vice President, General Counsel
and Secretary of YRC Worldwide from January 2011 until April 2011; Executive
Vice Chairman, Century Link, Inc. from July 2009 until December 2010;
President and Chief Executive Officer, Embarq Corporation (in an interim
capacity from December 2007 until March 2008 and by appointment from
March 2008 until June 2009). Mr. Gerke will serve as President and Chief
Executive Officer (in an interim capacity) beginning August 1, 2017, until the
position is filled permanently.

AVAILABILITY OF REPORTS AND OTHER INFORMATION

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments
to those reports filed with or furnished to the SEC are available, free of charge, through our website at www.hrblock.com
as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. The public
may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE,
Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The SEC maintains a website at www.sec.gov containing reports, proxy and information
statements and other information regarding issuers who file electronically with the SEC.

The following corporate governance documents are posted on our website at www.hrblock.com:

The Amended and Restated Articles of Incorporation of H&R Block, Inc.;

The Amended and Restated Bylaws of H&R Block, Inc.;
The H&R Block, Inc. Corporate Governance Guidelines;
The H&R Block, Inc. Code of Business Ethics and Conduct;

The H&R Block, Inc. Board of Directors Independence Standards;

The H&R Block, Inc. Audit Committee Charter;

The H&R Block, Inc. Compensation Committee Charter;

The H&R Block, Inc. Finance Committee Charter; and

The H&R Block, Inc. Governance and Nominating Committee Charter.

If you would like a printed copy of any of these corporate governance documents, please send your request to H&R

Block, Inc., One H&R Block Way, Kansas City, Missouri 64105, Attention: Corporate Secretary.

Information contained on our website does not constitute any part of this report.

2017 Form 10-K | H&R Block, Inc.

ITEM 1A. RISK FACTORS

Our business activities expose us to a variety of risks. Identification, monitoring and management of these risks are
essential to the success of our operations and the financial soundness of H&R Block. Senior management and the
Board of Directors, acting as a whole and through its committees, take an active role in our risk management process
and have delegated certain activities related to the oversight of risk management to the Company's Risk Committee,
which is comprised of senior managers of major businesses and control functions. The Risk Committee is responsible
for identifying and monitoring risk exposures and leading the continued development of our risk management policies
and practices.

An investment in our securities involves risk, including the risk that the value of that investment may decline or
that returns on that investment may fall below expectations. There are a number of significant factors that could cause
actual conditions, events or results to differ materially from those described in forward-looking statements, many of
which are beyond management's control or its ability to accurately estimate or predict, or that could adversely affect
our financial position, results of operations, cash flows and the value of an investment in our securities.

RISKS RELATING TO CONTINUING OPERATIONS

Increased competition for tax preparation clients could adversely affect our current market share and profitability.
Offers of free tax preparation services could adversely affect our revenues and profitability.

We provide both assisted and DIY tax preparation services and products and face substantial competition throughout
our businesses. All categories in the tax return preparation industry are highly competitive and additional competitors
have entered, and in the future may enter, the market to provide tax preparation products or services. In the assisted
tax services category, there are a substantial number of tax return preparation firms and accounting firms offering tax
return preparation services. Commercial tax return preparers are highly competitive with regard to price and service.
In the DIY category, options include various forms of digital electronic assistance, including online and mobile
applications, and desktop software, all of which we offer. Our DIY services and products compete with a number of
online and software companies, primarily on price and functionality. Individual tax filers may elect to change their tax
preparation method, choosing from among various assisted and DIY offerings. Technology advances quickly and in
new and unexpected ways, and it is difficult to predict the manner in which these changes will impact the tax return
preparation industry, the problems we may encounter in enhancing our products and services or the time and resources
we may need to devote to the creation, support, and maintenance of technological enhancements. If we are slow to
enhance our products, services, or technologies, if our competitors are able to achieve results more quickly than us,
or if there are new and unexpected entrants into the industry, we may fail to capture, or lose, a significant share of
the market. Additionally, we and many other tax return preparation firms are involved in providing one or more of
RTs, other financial products and services, and other tax-related services and products, many of which are subject to
regulatory scrutiny, litigation, and other risks. We can make no assurances that we will be able to offer, or continue
to offer, all of these services and a failure to do so could negatively impact our financial results and ability to compete.
Intense competition could result in a reduction of our market share, lower revenues, lower margins and lower
profitability.

U.S. federal, state and foreign governmental authorities in certain jurisdictions in which we operate currently offer,
or facilitate the offering of, tax return preparation and electronic filing options to taxpayers at no charge, and certain
volunteer organizations also prepare tax returns at no charge for low-income taxpayers. In addition, many of our
competitors offer certain tax preparation services and products at no charge. In order to compete, we have offered
certain, and may in the future offer additional, tax preparation services and related products at no charge. There can
be no assurance that we will be able to attract clients or effectively ensure the migration of clients from our free tax
service offerings to those for which we receive fees, and clients who have formerly paid for our tax service offerings
may elect to use free offerings instead. These competitive factors may diminish our revenue and profitability, or harm
our ability to acquire and retain clients.

Government tax authorities, volunteer organizations, and our competitors may also elect to implement or expand
free offerings in the future. From time to time, U.S. federal and state governments have considered various proposals
(often referred to as "Return-Free Filing" or "Pre-Populated Returns") through which the respective governmental
taxing authorities would use taxpayer information provided by employers, financial institutions, and other payers to
"pre-populate," prepare and calculate tax returns and distribute them to taxpayers. Under this approach, the taxpayer

H&R Block, Inc. | 2017 Form 10-K

could then review and contest the return or sign and return it. While the FF and other free options that are currently
offered, or may be offered in the future, may reduce the perceived need for government tax service offerings, they
foster additional online competition and may cause us to lose significant revenue opportunities. We believe that
governmental encroachment at both the U.S. federal and state levels, as well as comparable government levels in
foreign jurisdictions in which we operate, could present a continued competitive threat to our business for the
foreseeable future.

Failure to comply with laws and regulations that protect our clients' and employees' personal information could
harm our brand and reputation and could result in significant fines, penalties, and damages.

In the course of our business, we collect, use, and retain large amounts of personal client information and data,
including tax return information, financial account information, and social security numbers. In addition, we collect
and maintain personal information of our employees in the ordinary course of our business. Our third-party vendors
may hold some personal information and third parties may execute transactions utilizing this information. We use
security and business controls to limit access to and use of personal information, but unauthorized individuals or third
parties may be able to circumvent these security and business measures, which could cause us to determine that it
is required or advisable for us to notify affected clients or employees under applicable privacy laws and regulations.
In the normal course of their duties, some full-time and temporary employees, as well as some contractors and third-
party vendors, may have access to the personal information of clients and employees or execute transactions requiring
sensitive information. While we conduct employee background checks, as allowed by law, and limit access to systems
and data, it is possible that one or more of these controls could be circumvented. In addition, though we impose
certain requirements and controls on our third-party vendors, it is possible that our third-party vendors may not
appropriately employ the controls that we require of them. Improper disclosure or use of our clients' or employees'
personal information could result in damage to our brand and reputation, and actions required to remediate improper
disclosures could be costly. Additionally, we may be subject to claims and litigation by clients, employees, or
governmental agencies, which could have a material adverse effect on our business and our consolidated financial
position, results of operations, and cash flows.

We are subject to laws, rules, and regulations relating to the collection, use, disclosure, and security of consumer
and employee personal information, which have drawn increased attention from U.S. federal, state, and foreign
governmental authorities in jurisdictions in which we operate. In the U.S., the IRS generally requires a tax return
preparer to obtain the prior written consent of the taxpayer to use or disclose the taxpayer's information for certain
purposes other than tax return preparation. In addition, other regulations require financial institutions to adopt and
disclose their consumer privacy notice and generally provide consumers with a reasonable opportunity to "opt-out"
of having nonpublic personal information disclosed to unaffiliated third parties. Numerous jurisdictions have passed,
and may in the future pass, new laws related to the use and retention of consumer information and this area continues
to be an area of interest for U.S. federal, state, and foreign governmental authorities. These laws may be interpreted
and applied inconsistently from jurisdiction to jurisdiction, and our current data protection policies and practices may
not be consistent with all of those interpretations and applications. In addition, changes in U.S. federal and state
regulatory requirements, as well as requirements imposed by governmental authorities in foreign jurisdictions in
which we operate, could result in more stringent requirements and in a need to change business practices, including
the types of information we can use and the manner in which we can use such information. Establishing systems and
processes to achieve compliance with these new requirements may increase our costs or limit our ability to pursue
certain business opportunities.

A security breach of our systems, or third party systems on which we rely, resulting in unauthorized access to
personal client information, may adversely affect the demand for our services and products, our reputation, and
financial performance.

We offer a range of services and products to our clients, including assisted and DIY tax return preparation solutions,
and financial products and services. Due to the nature of these services and products, we use multiple digital
technologies to collect, transmit, and store high volumes of personal client information. Information security risks to
companies that use digital technologies continue to increase due in part to the increased adoption of and reliance
upon these technologies by companies and consumers. Our risk and exposure to these matters remain heightened
due to a variety of factors including, among other things, the evolving nature of these threats and related regulation,
the increased sophistication of organized crime, cyber criminals and hackers, the prominence of our brand, our and

2017 Form 10-K | H&R Block, Inc.

our franchisees' extensive office footprint, our plans to continue to implement strategies for our online and mobile
applications and our desktop software, and our use of third-party vendors.

Cybersecurity risks may result from fraud or malice (a cyber attack), human error, or accidental technological failure.
Cyber attacks are designed to electronically circumvent network security for malicious purposes such as unlawfully
obtaining personal client information, disrupting our ability to offer services, damaging our brand and reputation,
stealing our intellectual property, and advancing social or political agendas. We face a variety of cyber attack threats
including computer viruses, malicious codes, worms, phishing attacks, social engineering, denial of service attacks,
ransomware, and other sophisticated attacks.

We maintain multiple levels of protection in order to address or otherwise mitigate the risk of a security breach.
We regularly test our systems to discover and address potential vulnerabilities, and we rely on training and testing of
our employees regarding heightened phishing and social engineering threats. Due to the structure of our business
model, we also rely on our franchisees and other private and governmental third parties to maintain secure systems
and respond to cybersecurity risks. Cybersecurity and the continued development and enhancement of our controls,
processes, and practices designed to protect our systems, computers, software, data, and networks from attack,
damage, or unauthorized access remain a high priority for us. As risks and regulations continue to evolve, we may be
required to expend significant additional resources to continue to modify or enhance our protective measures or to
investigate and remediate any information security vulnerabilities. Notwithstanding these efforts, there can be no
assurance that a security breach, intrusion, or loss or theft of personal client information will not occur.

A breach of our security measures or those of our franchisees or third parties on whom we rely, or other fraudulent
activity, could result in unauthorized access to personal client information. If such an event were to occur, it could
have serious short and long term negative consequences. Security breach remediation could require us to expend
significant resources to notify or assist impacted clients, repair damaged systems, implement improved information
security measures, and maintain client and business relationships. Other consequences could include reduced client
demand for our services and products, loss of valuable intellectual property, reduced growth and profitability and
negative impacts to future financial results, loss of our ability to deliver one or more services or products (e.g., inability
to provide financial transaction services or to accept and process client credit card orders or tax returns), litigation,
harm to our reputation and brands, fines, penalties, and other damages, and further regulation and oversight by U.S.
federal, state, or foreign governmental authorities.

A security breach or other unauthorized access to our systems could have a material adverse effect on our business

and our consolidated financial position, results of operations, and cash flows.

Stolen identity refund fraud could impede our clients' ability to timely and successfully file their tax returns and
receive their tax refunds, and could diminish consumers' perceptions of the security and reliability of our products
and services, resulting in negative publicity. Increased governmental regulation to attempt to combat that fraud
could adversely affect our revenues and profitability.

Companies offering tax preparation services (especially those offering DIY solutions) have seen a rise in instances of
criminals utilizing stolen information obtained through hacking, phishing, and other means of identity theft in order
to electronically file fraudulent federal and state tax returns. As a result, impacted taxpayers must complete additional
forms and go through additional steps in order to report to appropriate authorities that their identities have been
stolen and their tax returns were filed fraudulently. Though we offer assistance in the refund recovery process and
offer our Tax Identity Shield® product to help protect clients, stolen identity refund fraud could impede our clients'
ability to timely and successfully file their returns and receive their tax refunds, and could diminish consumers'
perceptions of the security and reliability of our products and services, resulting in negative publicity, despite there
having been no breach in the security of our systems. In addition, if stolen identity refund fraud is perpetrated at a
material level through our products or services, state, federal or foreign tax authorities may refuse to allow us to
continue to process our clients' tax returns electronically. As a result, stolen identity refund fraud could harm our
revenue, results of operations, and reputation.

Federal, state, and foreign governmental authorities in jurisdictions in which we operate have taken action, and
may in the future take additional action, in an attempt to combat stolen identity refund fraud, which may require
changes to our systems and business practices, in ways that we cannot anticipate. These actions may have a material
adverse effect on our business and our consolidated financial position, results of operations, and cash flows.

H&R Block, Inc. | 2017 Form 10-K

Our clients may access our services and products from personal or public computers and mobile devices and may
install and use our DIY desktop software on their computers. Those computers and other devices may have outdated
systems, may run software that is no longer supported, or may not have security patches installed on a timely basis.
As a result, a person with malicious intent could obtain user account and password information from our clients
through hacking, phishing, or other means of cyber attack, in order to perpetrate stolen identity refund fraud and
otherwise cause losses for our clients. It has been reported that a number of companies, including some in the tax
return preparation industry, have experienced instances where criminals gained unauthorized and illegal access to
their systems by using stolen identity information obtained from sources other than those companies. The
unauthorized and illegal access to those systems was used by criminals to perpetrate a variety of crimes, including
stolen identity refund fraud. We could experience this form of unauthorized and illegal access to our systems, despite
there having been no breach in the security of our systems, which could negatively impact our clients and harm our
revenue, results of operations and reputation. Additionally, if such unauthorized or illegal access occurs, we may be
subject to claims and litigation by clients, non-clients, or governmental agencies.

An interruption in our information systems, or those of our franchisees or a third party on which we rely, or an
interruption in the internet, could have a material adverse effect on our business and our consolidated financial
position, results of operations, and cash flows.

We and our franchisees rely heavily upon communications, networks, and information systems and the internet to
conduct our business. These networks, systems, and operations are potentially vulnerable to damage or interruption
from upgrades and maintenance, network failure, hardware failure, software failure, power or telecommunications
failures, cyber attacks involving the penetration of our network by hackers or other unauthorized users (e.g., through
computer viruses and worms, malicious code, phishing attacks, denial of service attacks, information security breaches,
or other negative disruptions to the operation of the internet), human error and natural disasters. As our businesses
are seasonal, our systems must be capable of processing high volumes during our peak periods. Therefore, any failure
or interruption in our information systems, or information systems of our franchisees or a private or government third
party on which we rely, or an interruption in the internet or other critical business capability, could negatively impact
our business operations and increase our risk of loss.

There can be no assurance that system or internet failures, or interruptions in critical business capabilities will not
occur, or, if they do occur, that we, our franchisees or the private or governmental third parties on whom we rely, will
adequately address them. The precautionary measures that we have implemented to avoid systems outages and to
minimize the effects of any data or communication systems interruptions or failures may not be adequate in all
circumstances, and we may not have anticipated or addressed all of the potential events that could threaten or
undermine our information systems or other critical business capabilities.

The occurrence of any systems or internet failure, or business interruption could negatively impact our ability to
serve our clients, which in turn could have a material adverse effect on our business and our consolidated financial
position, results of operations, and cash flows.

Government tax reform initiatives that simplify or otherwise modify tax return preparation requirements or
expedite refunds could have a material effect on our business and our consolidated financial position, results of
operations, and cash flows.

Tax reform is a focus of the federal government, but it is not clear what form tax reform proposals or related legislation
or regulatory action may take, or whether any such legislation or regulatory action will ultimately be adopted and
passed into law. There are various initiatives seeking to simplify or otherwise modify the preparation and filing of
federal tax returns, including preparation of tax returns directly by the IRS, and to provide additional assistance with
respect to preparing and filing such tax returns or expediting refunds. H&R Block is a member of Free File, which
provides the ability for low-income taxpayers to prepare and file their own federal tax returns online for free.

The IRS has in the past explored the possibility of allowing taxpayers to allocate a portion of their tax refunds to
pay tax preparation fees, which could reduce the demand for RTs, but the IRS has not advanced this initiative. Taxing
authorities in various state, local, and foreign jurisdictions in which we operate have also introduced measures seeking
to simplify or otherwise modify the preparation and filing of tax returns in their respective jurisdictions.

The adoption or expansion of any measures that significantly modify the Internal Revenue Code, simplify tax return
preparation, expedite refunds, or otherwise reduce the need for third-party tax return preparation services could

2017 Form 10-K | H&R Block, Inc.

reduce demand for our services and products and could have a material adverse effect on our business and our
consolidated financial position, results of operations and cash flows.

The Dodd-Frank Act created the CFPB to administer and, in some cases, enforce U.S. federal financial consumer
protection laws and expanded the role of state regulators with respect to consumer protection laws. Regulations
promulgated by the CFPB or other regulators may affect our financial services businesses in ways we cannot predict,
which may require changes to our financial products, services, and contracts.

The Dodd-Frank Act created the CFPB and gave it broad powers to administer, investigate compliance with, and, in
some cases, enforce U.S. federal financial consumer protection laws. The CFPB has broad rule-making authority for a
wide range of financial consumer protection laws that apply to banks and other financial services companies, including
the authority to prohibit "unfair, deceptive, or abusive" acts and practices.

The CFPB may examine, investigate, and take enforcement actions against our subsidiaries that provide consumer
financial services and products, as well as financial institutions and service providers upon which our subsidiaries rely
to provide consumer financial services and products. The Dodd-Frank Act also expanded the role of state regulators
in enforcing and promulgating financial consumer protection laws, the results of which could be states issuing new
and broader financial consumer protection laws, some of which could be more comprehensive than existing U.S.
federal regulations. Currently proposed or new CFPB and state regulations may require changes to our financial
products, services and contracts, and this could have a material adverse effect on our business and our consolidated
financial position, results of operations, and cash flows. Examples of recent CFPB action include the following:

On May 5, 2016, the CFPB issued a request for comments on its proposal to prohibit mandatory consumer
arbitration clauses in consumer financial product contracts. We, and certain of our third party service
providers, utilize consumer arbitration clauses in connection with all of our consumer financial services
products. It is not clear when the CFPB will publish the final version of these rules, or what their content will
be. It is possible that, if the CFPB issues final rules that prohibit our use of consumer arbitration clauses, the
risk of litigation involving our consumer financial products could increase, and the revenue that we derive
from our consumer financial products could decline, as the result of adverse outcomes of litigation, increased
volume of litigation, and the expense of defending such litigation.

On June 2, 2016, the CFPB issued proposed rules that would change the regulation of many forms of consumer
credit. It is not clear when the CFPB will publish the final version of these rules, or what their content will
be. It is possible that the final rules, when enacted, could impact EAs and RAs. It is also possible that, depending
on the form of the final rules, changes would be necessary to EAs and RAs to comply with the final rules, and
that such changes could have a material adverse effect on the revenue that we derive from EAs.

On October 5, 2016, the CFPB released its final rules regulating prepaid products (Final Rules). The Final Rules
are scheduled to take effect on April 1, 2018, with certain provisions phased in over time following that date.
If the Final Rules become effective as released, they will apply to the H&R Block Emerald Prepaid MasterCard®,
but we do not believe they will apply to EAs or RA loans due to their nature as non-covered separate credit
products. The Final Rules, among other things: (i) establish required consumer disclosures to be made prior
to acquiring a prepaid account in most situations; (ii) require periodic statements or online access to specified
account information; and (iii) require online posting of the Cardholder Agreement and submission of new
and revised Cardholder Agreements to the CFPB. We are continuing to assess the impact of these changes
on the H&R Block Emerald Prepaid MasterCard® and our consolidated financial statements.

The nature of our tax service and product offerings requires timely product launches. Any significant delays in
launching our tax service and product offerings, changes in government regulations or processes that affect how
we provide such offerings to our clients, or significant problems with such offerings or the manner in which we
provide them to our clients may harm our revenue, results of operations, and reputation.

Tax laws and tax forms are subject to change each year, and the nature and timing of such changes are unpredictable.
As a part of our business, we must incorporate any changes to tax laws and tax forms into our tax service and product
offerings, including our online and mobile applications and desktop software. The unpredictable nature and timing
of changes to tax laws and tax forms can result in condensed development cycles for our tax service and product
offerings because our clients expect high levels of accuracy and a timely launch of such offerings to prepare and file
their taxes by the tax filing deadline and, in turn, receive any tax refund amounts on a timely basis. In addition,

H&R Block, Inc. | 2017 Form 10-K

governmental authorities regularly change their processes for accepting tax filings and related tax forms. Further,
changes in governmental administrations or regulations could result in a delay of the start of the tax season or in
further and unanticipated changes in requirements or processes. Changes in governmental regulations and processes
that affect how we provide services and products to our clients may require us to make corresponding changes to our
client service systems and procedures. Furthermore, unanticipated changes in governmental processes for accepting
tax filings and related forms, or the ability of taxing authorities to accept electronic tax return filings, may result in
delays in our processing of our clients' tax filings, or delays in tax authorities accepting electronic tax return filings,
and, in turn, delay any tax refund amounts to which such clients may be entitled. From time to time, we review and
enhance our quality controls for preparing accurate tax returns, but there can be no assurance that we will be able
to prevent all inaccuracies. Any significant delays in launching our tax service and product offerings, changes in
government regulations or processes that affect how we provide such offerings to our clients, or significant problems
with such offerings or the manner in which we provide them to our clients may harm our revenue, results of operations,
and reputation.

If we encounter development challenges or discover errors in our systems, services or products, we may elect to
delay or suspend our offerings. Any major defects or launch delays, or failure to anticipate changes in governmental
processes for accepting tax filings and related forms, may lead to loss of clients and revenue, negative publicity, client
and employee dissatisfaction, a deterioration in our business relationships with our franchisees, reduced retailer shelf
space and promotions, exposure to litigation, and increased operating expenses. Any of the risks described above
could have a material adverse effect on our business and our consolidated financial position, results of operations,
and cash flows.

Regulatory actions could have an adverse effect on our business and our consolidated financial position, results of
operations, and cash flows.

The Company is subject to additional federal, state, local, and foreign laws and regulations that affect the Company,
including, without limitation, in the areas of franchise, labor, immigration, advertising, consumer protection, financial
services and products, payment processing, privacy, anti-competition, environmental, health and safety, insurance,
and healthcare. There have been significant new regulations and heightened focus by the government in some of
these areas, including, for example, healthcare, consumer financial services and products, and labor, including
overtime and exemption regulations and state and local laws on minimum wage and other labor-related issues. There
may be additional regulatory actions or enforcement priorities, or new interpretations of existing requirements that
differ from ours. These developments could impose unanticipated limitations or require changes to our business,
which may make elements of our business more expensive, less efficient, or impossible to conduct, and may require
us to modify our current or future services or products, which effects may be heightened given the nature, broad
geographic scope, and seasonality of our business.

We rely on a single vendor or a limited number of vendors to provide certain key services or products, and the
inability of these key vendors to meet our needs could have a material adverse effect on our business and our
consolidated financial position, results of operations, and cash flows.

Historically, we have contracted, and in the future we will likely continue to contract, with a single vendor or a limited
number of vendors to provide certain key services or products for our tax, financial, and other services and products.
Two examples of this type of reliance are our relationships with Fidelity National Information Services, Inc. (FIS), for
data processing and card production services, and BofI, as discussed in Item 1. In certain instances, we are vulnerable
to vendor error, service inefficiencies, service interruptions, or service delays. Our sensitivity to any of these issues
may be heightened (1) due to the seasonality of our business, (2) with respect to any vendor that we utilize for the
provision of any product or service that has specialized expertise, (3) with respect to any vendor that is a sole or
exclusive provider, or (4) with respect to any vendor whose indemnification obligations are limited or that does not
have the financial capacity to satisfy its indemnification obligations. Some of our vendors are subject to the oversight
of regulatory bodies and, as a result, our product or service offerings may be affected by the actions or decisions of
such regulatory bodies. Vendor failures could occur in various ways including (1) vendor error, (2) inability to meet
our needs in a timely manner, or (3) termination or delay in the services or products provided by a vendor because
the vendor fails to perform adequately, is no longer in business, experiences shortages, or discontinues a certain
product or service that we utilize. If our vendors are unable to meet our needs and we are not able to develop

2017 Form 10-K | H&R Block, Inc.

alternative sources for these services and products quickly and cost-effectively, it could result in a material and adverse
impact on our business and our consolidated financial position, results of operations, and cash flows.

The specialized and highly seasonal nature of our business presents financial risks and operational challenges,
which, if not satisfactorily addressed, could materially affect our business and our consolidated financial position,
results of operations, and cash flows.

Our business is highly seasonal, with the substantial portion of our revenue earned in the fourth quarter of our fiscal
year. Success in our industry depends on our ability to attract, develop, motivate, and retain key personnel in a timely
manner, including members of our executive team, and those in seasonal tax preparation positions or with other
required specialized expertise, including technical positions. The market for such personnel is extremely competitive,
and there can be no assurance that we will be successful in our efforts to attract and retain the required personnel
within necessary timeframes. If we are unable to attract, develop, motivate, and retain key personnel, our business,
operations, and financial results could be negatively impacted.

The concentration of our revenue-generating activity during this relatively short period presents a number of
additional challenges for us, including (1) cash and resource management during the first nine months of our fiscal
year, when we generally operate at a loss and incur fixed costs and costs of preparing for the upcoming tax season,
(2) ensuring compliance with financial covenants under our First Amended and Restated Credit and Guarantee
Agreement (2016 CLOC), particularly if the timing of our revenue generation deviates from this seasonal period, (3)
responding to changes in competitive conditions, including marketing, pricing, and new product offerings, which could
affect our position during the tax season, (4) disruptions in a tax season, including any customer dissatisfaction issues,
which may not be timely discovered or satisfactorily addressed, and (5) ensuring optimal uninterrupted operations
and service delivery during the tax season. If we experience significant business disruptions during the tax season or
if we are unable to satisfactorily address the challenges described above and related challenges associated with a
seasonal business, we could experience a loss of business, which could have a material adverse effect on our business
and our consolidated financial position, results of operations, and cash flows.

We face litigation in connection with our various business activities, and current or future litigation may damage
our reputation, impair our product offerings, or result in material liabilities and losses.

We have been named, and from time to time will likely continue to be named, in various legal actions, including
arbitrations, class or representative actions, actions or inquiries by state attorneys general, and other litigation arising
in connection with our various business activities, including relating to our various service and product offerings. We
also grant our franchisees a limited license to use our registered trademarks and, accordingly, there is risk that one
or more of the franchisees may be alleged to be controlled by us. Third parties, regulators or courts may seek to hold
us responsible for the actions or failures to act by our franchisees. Adverse outcomes related to litigation could result
in substantial damages and could cause our earnings to decline. Negative public opinion could also result from our
subsidiaries' or franchisees' actual or alleged conduct in such claims, possibly damaging our reputation, which, in turn,
could adversely affect our business prospects and cause the market price of our securities to decline.

In addition, we have been sued, and certain of our competitors have been sued, in connection with the offering
of different types of RT products. Further, we have received an inquiry from the California Attorney General requesting
information regarding our RT product. In a case involving one of our competitors, a California appellate court affirmed
a trial court's ruling that the competitor's specific version of a RT product was subject to truth-in-lending and other
related laws. Following the appellate court's ruling, the case was denied further appellate review. We believe there
are differences that distinguish our RT product from the product that was the subject of the competitor's case described
above. Revenues from our RT product totaled $148 million in fiscal year 2017; any requirement that materially alters
our offering of RTs, including limitations on the fees we charge or disclosure requirements that could reduce the
demand for these products, could have a material adverse impact on our business and our consolidated financial
position, results of operations, and cash flows.

Our access to liquidity may be negatively impacted as disruptions in credit markets occur, if credit rating downgrades
occur, or if we fail to meet certain covenants. Funding costs may increase, leading to reduced earnings.

We need liquidity to meet our off-season working capital requirements, to service debt obligations including
refinancing of maturing obligations, and for general corporate purposes. Our access to and the cost of liquidity could

H&R Block, Inc. | 2017 Form 10-K

be negatively impacted in the event of credit rating downgrades or if we fail to meet existing financial covenants. In
addition, events could occur which could increase our need for liquidity above current levels.

If rating agencies downgrade our credit rating, the cost of debt under our existing financing arrangements, as well
as future financing arrangements, could increase and capital market access could decrease or become unavailable.
Our 2016 CLOC is subject to various covenants, and a violation of a covenant could impair our access to liquidity
currently available through the 2016 CLOC. The 2016 CLOC includes provisions that allow for the issuance of equity
to comply with the financial covenant calculations as a means to avoid a shortfall. If current sources of liquidity were
to become unavailable, we would need to obtain additional sources of funding, which may not be available or may
only be available under less favorable terms. This could have a material adverse effect on our business and our
consolidated financial position, results of operations, and cash flows.

The continued payment of dividends on our common stock and repurchases of our common stock are dependent
on a number of factors, and future payments and repurchases cannot be assured.

We need liquidity sufficient to fund payments of dividends on our common stock and repurchases of our common
stock. In addition, holders of our common stock are only entitled to receive such dividends as our Board of Directors
may declare out of funds legally available for such payments, and our Board of Directors may only authorize the
Company to repurchase shares of our common stock with funds legally available for such repurchases. The payment
of future dividends and future repurchases will depend upon our earnings, economic conditions, liquidity and capital
requirements, and other factors, including our debt leverage. Accordingly, we cannot make any assurance that future
dividends will be paid, or future repurchases will be made, at levels comparable to our historical practices, if at all.
Due to the seasonal nature of our business and the fact that our business is not asset-intensive, there may be periods
of time during our fiscal year in which the payment of dividends or stock repurchases may cause us to have a negative
net worth under accounting principles generally accepted in the U.S. (GAAP).

Our businesses may be adversely affected by difficult economic conditions, in particular, high unemployment levels.

Difficult economic conditions are frequently characterized by high unemployment levels and declining consumer and
business spending. These poor economic conditions may negatively affect demand and pricing for our services and
products. In the event of difficult economic conditions that include high unemployment levels, especially within client
segments we serve, clients may elect not to file tax returns or seek lower cost preparation and filing alternatives.
Sustained levels of high unemployment may negatively impact our ability to increase or retain tax preparation clients.

Our business depends on our strong reputation and the value of our brands.

Developing and maintaining awareness of our brands is critical to achieving widespread acceptance of our existing
and future services and products and is an important element in attracting new clients. In addition, our franchisees
may operate their businesses under our brands. Adverse publicity (whether or not justified) relating to events or
activities involving or attributed to us, our franchisees, employees, or agents or our services or products, which may
be enhanced due to the nature of social media, may tarnish our reputation and reduce the value of our brands. Damage
to our reputation and loss of brand equity may reduce demand for our services and products and thus have an adverse
effect on our future financial results, as well as require additional resources to rebuild our reputation and restore the
value of our brands.

Failure to protect our intellectual property rights may harm our competitive position and litigation to protect our
intellectual property rights or defend against third party allegations of infringement may be costly.

Despite our efforts to protect our intellectual property and proprietary information, we may be unable to do so
effectively in all cases. Our intellectual property could be wrongfully acquired as a result of a cyber attack or other
wrongful conduct by employees or third parties. To the extent that our intellectual property is not protected effectively
by trademarks, copyrights, patents, or other means, other parties with knowledge of our intellectual property, including
former employees, may seek to exploit our intellectual property for their own or others' advantage. Competitors may
also misappropriate our trademarks, copyrights or other intellectual property rights or duplicate our technology and
products. Any significant impairment or misappropriation of our intellectual property or proprietary information could
harm our business and our brand, and may adversely affect our ability to compete.

In addition, third parties may allege we are infringing their intellectual property rights, and we may face intellectual
property challenges from other parties. We may not be successful in defending against any such challenges or in

2017 Form 10-K | H&R Block, Inc.

obtaining licenses to avoid or resolve any intellectual property disputes and, in that event, we could lose significant
revenues, incur significant license, royalty, or technology development expenses, suffer harm to our reputation, or
pay significant monetary damages.

Failure to maintain sound business relationships with our franchisees may have a material adverse effect on our
business and our consolidated financial position, results of operations, and cash flows.

Our financial success depends in significant part on our ability to maintain sound business relationships with our
franchisees. The support of our franchisees is also critical for the success of our marketing programs and any new
strategic initiatives we seek to undertake. Deterioration in our relationships with our franchisees or the failure of our
franchisees to support our marketing programs and strategic initiatives could have a material adverse effect on our
business and our consolidated financial position, results of operations, and cash flows.

Our international operations are subject to risks which may harm our business and our consolidated financial
position, results of operations, and cash flows.

We have international operations, including in Canada and Australia, and may consider expansion opportunities in
additional countries in the future. There is uncertainty about our ability to generate revenues from new or emerging
foreign operations and expand into other international markets. Additionally, there are risks inherent in doing business
internationally, including: (1) changes in trade regulations; (2) difficulties in managing foreign operations as a result
of distance, language, and cultural differences; (3) profit repatriation restrictions, and fluctuations in foreign currency
exchange rates; (4) geopolitical events, including acts of war and terrorism, and economic and political instability; (5)
compliance with U.S. laws such as the Foreign Corrupt Practices Act and other applicable foreign anti-corruption laws;
(6) compliance with U.S. and international laws and regulations, including those concerning privacy, and data
protection and retention; and (7) risks related to other government regulation or required compliance with local laws.
These risks inherent in our international operations and expansion could increase our costs of doing business
internationally and could have a material adverse effect on our business and our consolidated financial position, results
of operations, and cash flows.

In addition, we prepare tax returns for taxpayers residing in foreign jurisdictions, including the European Union
(EU), and we operate and have franchisees who operate in foreign jurisdictions. As a result, certain aspects of our
operations are subject to the laws, regulations, and policies of those jurisdictions that regulate the collection, use,
and transfer of personal data, and in the future we may be subject to additional, more stringent requirements, including
those found in the EU General Data Protection Regulation. Costs for us to comply with such laws, regulations, and
policies that are applicable to us could be significant. We may also face audits or investigations by one or more foreign
government agencies relating to these laws, regulations, and policies that could result in the imposition of penalties
or fines.

We may be adversely impacted by changes in corporate tax rates, the adoption of new tax legislation in the
jurisdictions in which we operate, and exposure to additional tax liabilities.

As a multinational corporation, we are subject to taxes in the U.S. and numerous foreign jurisdictions where our
subsidiaries are organized and conduct their operations. Significant judgment is required in determining our worldwide
provision for income taxes and other tax liabilities. Tax rates in the various jurisdictions in which our subsidiaries are
organized and conduct their operations may change significantly as a result of political or economic factors beyond
our control. Additionally, our future effective tax rates could be adversely affected by changes in the valuation of
deferred tax assets and liabilities or changes in tax laws or their interpretation. Our tax returns and other tax matters
are periodically examined by tax authorities and governmental bodies, including the IRS, which may disagree with
positions taken by us in determining our tax liability. There can be no assurance as to the outcome of these
examinations. We regularly assess the likelihood of an adverse outcome resulting from these examinations to
determine the adequacy of our provision for taxes.

As described above, tax reform is a focus of the federal government, and there are competing proposals regarding
changes to the corporate tax rate. If enacted, corporate tax reform may significantly change the U.S. corporate tax
rate and the tax rules to which we are subject. In addition, projects undertaken by international organizations may
change international tax norms relating to each country’s jurisdiction to tax cross-border international trade. Given
the unpredictability of these and other possible changes to tax laws and related regulations, it is difficult to assess

H&R Block, Inc. | 2017 Form 10-K

the overall effect of such potential changes, but any such changes could, if adopted and applicable to us, adversely
impact our effective tax rates.

If our effective tax rates were to increase, or if the ultimate determination of our taxes owed is for an amount in
excess of amounts previously accrued, our operating results, cash flows, and financial condition could be adversely
affected.

RISKS RELATING TO DISCONTINUED OPERATIONS

Sand Canyon Corporation, previously known as Option One Mortgage Corporation (including its subsidiaries,
collectively, SCC) is subject to potential contingent losses related to representation and warranty claims, which may
have an adverse effect on our business and our consolidated financial condition, results of operations, and cash
flows. SCC has accrued, and may in the future accrue, an estimated liability related to these contingent losses, which
may not be adequate.

SCC exited its mortgage business in fiscal year 2008. SCC remains exposed to losses relating to mortgage loans it
previously originated. Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers
or in the form of residential mortgage-backed securities (RMBSs).

In connection with the sale of loans or RMBSs, SCC made certain representations and warranties. Claims under
these representations and warranties together with any settlement arrangements related to these losses are
collectively referred to as "representation and warranty claims." These representations and warranties varied based
on the nature of the transaction and the buyer's or insurer's requirements, but generally pertained to the ownership
of the loan, the validity of the lien securing the loan, borrower fraud, the loan's compliance with the criteria for
inclusion in the transaction, including compliance with SCC's underwriting standards or loan criteria established by
the buyer, ability to deliver required documentation, and compliance with applicable laws. Representations and
warranties related to borrower fraud in whole loan sale transactions to institutional investors, which were generally
securitized by such investors and represented approximately 68% of the disposal of loans originated in calendar years
2005, 2006 and 2007, included a "knowledge qualifier" limiting SCC's liability to those instances where SCC had
knowledge of the fraud at the time the loans were sold. Representations and warranties made in other sale transactions
effectively did not include a knowledge qualifier as to borrower fraud. To the extent that any remaining repurchase
obligations exist, SCC believes it would have an obligation to repurchase a loan only if it breached a representation
and warranty and such breach materially and adversely affects the value of the mortgage loan or certificate holder's
interest in the mortgage loan.

The statute of limitations for a contractual claim to enforce a representation and warranty obligation is generally
six years or such shorter limitations period that may apply under the law of a state where the economic injury occurred.
On June 11, 2015, the New York Court of Appeals, New York's highest court, held in ACE Securities Corp. v. DB Structured
Products, Inc., that the six-year statute of limitations under New York law starts to run at the time the representations
and warranties are made, not the date when the repurchase demand was denied. This decision applies to claims and
lawsuits brought against SCC where New York law governs. New York law governs many, though not all, of the
transactions into which SCC entered. However, this decision would not affect representation and warranty claims and
lawsuits SCC has received or may receive, for example, where the statute of limitations has been tolled by agreement
or a suit was timely filed.

For example, a 2016 ruling by a New York intermediate appellate court allowed a counterparty to pursue litigation
on additional loans in the same trust even though only some of the loans complied with the condition precedent of
timely pre-suit notice and opportunity to cure or repurchase. Additionally, plaintiffs in litigation to which SCC is not
party have alleged breaches of an independent contractual duty to provide notice of material breaches of
representations and warranties, and pursued separate claims to which, they argue, the statute of limitations ruling
in the ACE case does not apply. The impact on SCC, if any, from alternative legal theories seeking to avoid or distinguish
the ACE decision, or judicial limitations on the ACE decision, is unclear.

2017 Form 10-K | H&R Block, Inc.

SCC has concluded that a loss related to certain representation and warranty claims is probable and has accrued
a liability as of April 30, 2017, of $4.5 million. If SCC were required to pay material amounts with respect to contingent
losses arising from representation and warranty claims, it could have a material adverse effect on our business and
our consolidated financial position, results of operations, and cash flows, as SCC's financial condition, results of
operations and cash flows are included in our consolidated financial statements. Except where specified, the accrued
liability does not include potential losses related to litigation matters discussed in the risk factor below and in Item 8,
note 13 to the consolidated financial statements. Also see Item 8, note 14 to the consolidated financial statements.

SCC is subject to potential contingent losses related to securitization transactions in which SCC participated as a
depositor or loan originator, which may result in significant financial losses.

Between January 2005 and November 2007, SCC originated mortgage loans totaling approximately $80 billion.
Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers, who generally securitized
such loans, or in the form of RMBSs. SCC estimates approximately 90% of the loans it originated in 2005, 2006, and
2007 were securitized in approximately 110 securitization transactions. In most of these securitization transactions,
SCC agreed, subject to certain conditions and limitations, to indemnify the underwriters or depositors for certain
losses and expenses that the underwriters or depositors may incur as a result of certain claims made against them
relating to loans originated by SCC, including certain legal expenses the underwriters or depositors incur in their
defense of such claims. Some of those underwriters and depositors are defendants in lawsuits where various other
parties allege a variety of claims, including violations of U.S. federal and state securities law and common law fraud
based on alleged materially inaccurate or misleading disclosures, arising out of the activities of such underwriters or
depositors in their sale of RMBSs or mortgage loans. Based on information currently available to SCC, it believes that
the 21 lawsuits in which notice of a claim for indemnification has been made involve 39 securitization transactions
with original investments of approximately $14 billion (of which the outstanding principal amount is approximately
$4 billion). Certain of the notices received included, and future notices may include, a reservation of rights to assert
claims for contribution, which are referred to herein as "contribution claims." Contribution claims may become
operative if indemnification is unavailable or insufficient to cover all of the losses and expenses involved. These
indemnification and contribution claims are frequently not subject to a contractual term or limit.

In addition, securitization trustees are, or have been, involved in lawsuits related to securitization transactions in
which SCC participated. Plaintiffs in these lawsuits allege, among other things, that originators, depositors, servicers
or other parties breached their representations and warranties or otherwise failed to fulfill their obligations, including
that securitization trustees breached their contractual obligations, breached their fiduciary duties, or violated statutory
requirements by failing to properly protect the certificate holders’ interests.

Additional lawsuits against the underwriters, depositors, or securitization trustees may be filed in the future, and
SCC may receive additional notices of claims for indemnification or contribution from underwriters, depositors, or
securitization trustees with respect to existing or new lawsuits or settlements of such lawsuits.

In addition, other counterparties to the securitization transactions, including certificate holders and monoline
insurance companies, have filed or may file lawsuits, or may assert indemnification claims, directly against depositors
and loan originators in securitization transactions alleging a variety of claims, including U.S. federal and state securities
law violations, common law torts and fraud and breach of contract claims, among others. Additional or new lawsuits
or claims may be filed or asserted against SCC in the future.

We have not concluded that a loss related to any of these indemnification or contribution claims is probable and
have not accrued a liability for these claims. However, if SCC were required to pay material amounts with respect to
these matters, it could have a material adverse effect on our business and our consolidated financial position, results
of operations and cash flows, as SCC's financial condition, results of operations, and cash flows are included in our
consolidated financial statements. See Item 8, note 13 to the consolidated financial statements for additional
information.

H&R Block has guaranteed the payment of certain limited claims against SCC.

SCC is subject to representation and warranty claims by counterparties to SCC whole loan sales and securitization
transactions, including certificate holders, securitization trustees, monoline insurance companies, and subsequent
purchasers of whole loans. In certain limited circumstances described below, H&R Block guaranteed payment if claims
are successfully asserted by such counterparties.

H&R Block, Inc. | 2017 Form 10-K

These guarantees include representation and warranty claims with respect to a limited number of whole loan sales
by SCC with an aggregate outstanding principal and liquidated amount of approximately $1.0 billion as of April 30,
2017, based on the data available to SCC. There have been a total of approximately $41 million of representation and
warranty claims with respect to these whole loan sales.

These guarantees also cover limited representation and warranty claims on other outstanding securitization
transactions, with a potential claims exposure of less than $200 million. In addition, as is customary in divestiture
transactions, H&R Block guaranteed the payment of any indemnification claims from the purchaser of SCC's servicing
business, including claims relating to pre-closing services (closing occurred in 2008).

We could be subject to claims by the creditors of SCC.

As discussed above, SCC is subject to representation and warranty claims, indemnification and contribution claims,
and other claims and litigation related to its past sales and securitizations of mortgage loans. Additional claims and
litigation may be asserted in the future. If the amount that SCC is ultimately required to pay with respect to these
claims and litigation, together with related administration and legal expense, exceeds its net assets, the creditors of
SCC, or a bankruptcy trustee if SCC were to file or be forced into bankruptcy, may attempt to assert claims against us
for payment of SCC's obligations. Claimants have also attempted, and may in the future attempt, to assert claims or
seek payment directly from the Company even if SCC's assets exceed its liabilities. SCC's principal assets, as of April 30,
2017, total approximately $318 million and consist primarily of an intercompany note receivable. We believe our legal
position is strong on any potential corporate veil-piercing arguments; however, if this position is challenged and not
upheld, it could have a material adverse effect on our business and our consolidated financial position, results of
operations, and cash flows. In addition, in certain limited instances, H&R Block guaranteed amounts as outlined in
the above risk factor.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Most of our tax offices are operated under leases or similar agreements throughout the U.S., Canada and Australia.

We own our corporate headquarters, which is located in Kansas City, Missouri. Our Canadian executive offices are
located in a leased office in Calgary, Alberta. Our Australian executive offices are located in a leased office in Thornleigh,
New South Wales.

All current leased and owned facilities are in reasonably good repair and adequate to meet our needs.

ITEM 3. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, see discussion in Item 8, note 13 to the consolidated
financial statements.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES

OF EQUITY SECURITIES

MARKET INFORMATION AND HOLDERS - H&R Block's common stock is traded on the New York Stock Exchange (NYSE)
under the symbol HRB. On May 31, 2017, there were 16,917 shareholders of record and the closing stock price on
the NYSE was $26.54 per share.

QUARTERLY STOCK PRICES AND DIVIDENDS - The quarterly information regarding H&R Block's common stock
prices and dividends appears in Item 8, note 16 to the consolidated financial statements. Although we have historically
paid dividends and plan to continue to do so, there can be no assurances that circumstances will not change in the
future that could affect our ability or decisions to pay dividends.

2017 Form 10-K | H&R Block, Inc.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER - A summary of our purchases of H&R Block common stock

during the fourth quarter of fiscal year 2017 is as follows:

Total Number of
(1)

Shares Purchased

— $

Average
Price Paid
per Share

21.10

20.66

23.25

21.13

(in 000s, except per share amounts)

Total Number of Shares
Purchased as Part of
Publicly Announced
(2)
Plans or Programs

Maximum Dollar Value of
Shares that May be Purchased
(2)

Under the Plans or Programs

— $

—

1,183,190

February 1 – February 28

March 1 – March 31

April 1 – April 30

(1) We purchased approximately 3 thousand shares in connection with funding employee income tax withholding obligations arising upon the lapse of restrictions on

(2)

restricted shares and restricted share units.
In September 2015, we announced that our Board of Directors approved a $3.5 billion share repurchase program, effective through June 2019.

PERFORMANCE GRAPH – The following graph compares the cumulative five-year total return provided to
shareholders on H&R Block, Inc.'s common stock relative to the cumulative total returns of the S&P 500 index and a
selected peer group. The peer group used is based on companies with similar market capitalization or public companies
in the tax return preparation industry.

An investment of $100, with reinvestment of all dividends, is assumed to have been made in our common stock

and in each of the indexes on April 30, 2012, and its relative performance is tracked through April 30, 2017.

Note: The peer group includes the following companies: Intuit Inc., Blucora, Inc., Liberty Tax, Inc., CBIZ, Inc., Resources Connection, Inc., ICF International,

Inc., Willis Towers Watson PLC, Navigant Consulting, Inc., and Huron Consulting Group Inc.

H&R Block, Inc. | 2017 Form 10-K

ITEM 6. SELECTED FINANCIAL DATA

We derived the selected consolidated financial data presented below from our audited consolidated financial
statements as of and for each of the five annual periods ending April 30, 2017. Results of operations of fiscal years
2017, 2016 and 2015 are discussed in Item 7. The data set forth below should be read in conjunction with Item 7 and
the consolidated financial statements in Item 8.

April 30,

Revenues

2017

2016

2015

2014

2013

3,036,314

3,038,153

3,078,658

3,024,295

2,905,943

(in 000s, except per share amounts)

Net income from continuing

operations

Net income

Basic earnings per share:

Net income from continuing

operations

Net income

Diluted earnings per share:

Net income from continuing

operations

Net income
Total assets (1)
Long-term debt (1) (2)

Stockholders’ equity (deficiency)

Shares outstanding

Dividends per share

420,917

408,945

383,553

374,267

486,744

473,663

500,097

475,157

465,158

433,948

1.97

1.92

1.96

1.91

2,694,108

1,493,998

(60,883)

207,171

1.54

1.50

1.53

1.49

2,847,225

1,492,201

23,103

220,517

1.77

1.72

1.75

1.71

4,512,071

502,739

1,832,949

275,275

1.82

1.73

1.81

1.72

4,689,590

902,535

1,556,549

274,228

0.88

0.80

1.70

1.59

1.69

1.58

4,533,107

902,008

1,263,547

272,635

0.80

(1)

(2)

Amounts have been restated for the adoption of Accounting Standards Update No. 2015-3, "Interest - Imputation of Interest," (ASU 2015-3) which requires that
debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability,
consistent with debt discounts.
Includes current portion of long-term debt.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FINANCIAL OVERVIEW

A summary of our fiscal year 2017 results is as follows:

Revenues decreased $1.8 million, or 0.1%, compared to the prior year. Revenues were negatively impacted by
a 2.5% decline in assisted tax returns prepared (company-owned and franchise offices combined), coupled with
our H&R Block More ZeroSM and Free 1040EZ promotions, which also reduced demand for RTs. These negative
impacts were partially offset by favorable pricing and mix changes on our assisted tax returns and better
performance of our financial products.

Operating expenses declined $84.6 million, or 3.5%, due to a combination of lower marketing spend, lower
consulting costs, and lower compensation and bad debt expense.

Pretax earnings increased $59.8 million, or 10.5%, due primarily to the expense savings mentioned above.

Net income from continuing operations increased $37.4 million or 9.7% compared with the prior year. Diluted
earnings per share from continuing operations increased 28.1% from the prior year to $1.96 due to a 14.6%
decline in diluted weighted average shares outstanding and higher net income.

Earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA) increased
$92.2 million, or 11.4%, to $904.4 million. Adjusted EBITDA increased $66.3 million, or 7.9%, to $904.9 million.
See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP measures.

RESULTS OF OPERATIONS
Our subsidiaries provide assisted and DIY tax return preparation solutions through multiple channels (including in-
person, online and mobile applications, and desktop software) and distribute the H&R Block-branded financial

2017 Form 10-K | H&R Block, Inc.

products and services, including those of our financial partners to the general public primarily in the U.S., Canada,
Australia, and their respective territories. Tax returns are either prepared by H&R Block tax professionals (in company-
owned or franchise offices or virtually via the internet) or prepared and filed by our clients through our DIY tax solutions.
We operate as a single segment that includes all of our continuing operations, which are designed to enable clients
to obtain tax preparation services seamlessly.

Operating Statistics

Year ended April 30,
TAX RETURNS PREPARED : (in 000s) (1)

United States:

Company-owned operations

Franchise operations

Total assisted returns

Desktop

Online

Free File

Total DIY tax software

Total U.S. returns

International operations:

Canada (2)

Australia

Other

Total international operations

Tax returns prepared worldwide

NET AVERAGE CHARGE (U.S. ONLY): (3)

Company-owned operations
Franchise operations (4)
Total DIY tax software

TAX OFFICES (at the peak of the tax season):

U.S. offices:

Total company-owned offices

Total franchise offices

Total U.S. offices
International offices:

Canada

Australia

Total international offices

Tax offices worldwide

2017

2016

2015

7,999

3,908

11,907

2,003

4,988

588

7,579

19,486

2,460

750

293

3,503

22,989

8,079

4,139

12,218

2,085

4,670

678

7,433

19,651

2,551

769

153

3,473

23,124

237.29

207.43

31.34

233.84

201.47

34.69

6,650

3,386

10,036

1,216

449

1,665
11,701

6,614

3,599

10,213

1,282

438

1,720

11,933

8,311

4,672

12,983

2,168

4,765

676

7,609

20,592

2,658

768

115

3,541

24,133

224.51

196.07

33.44

6,365

3,921

10,286

1,231

433

1,664

11,950

(1) An assisted tax return is defined as a current or prior year individual tax return that has been accepted and paid for by the client. Also included are business returns.
The count methodology has been adjusted in the current and prior year periods to exclude extensions and to recognize the corresponding individual tax returns
when filed. A DIY software return is defined as a return that has been electronically filed and accepted by the IRS. Also included are online returns paid and printed.
(2) In fiscal years 2017, 2016 and 2015, the end of the Canadian tax season was extended from April 30 into May. Tax returns prepared in Canada in fiscal years 2017,
2016 and 2015 includes approximately 59 thousand, 93 thousand and 131 thousand returns, respectively, in both company-owned and franchise offices which were
accepted by the client after April 30. The revenues related to these returns were recognized in fiscal years 2018, 2017 and 2016, respectively.

(3) Net average charge is calculated as total revenue divided by total returns. For DIY tax software, net average charge excludes Free File.
(4) Net average charge related to H&R Block Franchise Operations represents tax preparation fee revenues collected by H&R Block franchisees divided by returns filed

in franchise offices. H&R Block will recognize a portion of franchise revenues as franchise royalties based on 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. | 2017 Form 10-K

Consolidated – Financial Results
Year ended April 30,
Revenues:

U.S. assisted tax preparation fees
U.S. royalties
U.S. DIY tax preparation fees
International revenues
Revenues from Refund Transfers
Revenues from Emerald Card®
Revenues from Peace of Mind® Extended Service Plan
Interest and fee income on Emerald Advance
Other

Total revenues

Compensation and benefits:

Field wages
Other wages
Benefits and other compensation

Occupancy and equipment
Marketing and advertising
Depreciation and amortization
Bad debt
Supplies
Other

Total operating expenses

Other income (expense), net
Interest expense on borrowings
Pretax income
Income taxes
Net income from continuing operations
Net loss from discontinued operations
Net income

Basic earnings (loss) per share:

Continuing operations
Discontinued operations
Consolidated

Diluted earnings (loss) per share:

Continuing operations
Discontinued operations
Consolidated

EBITDA from continuing operations (1)
EBITDA from continuing operations - adjusted (1)

2017

2016

$ Change

% Change

(in 000s, except per share amounts)

1,902,212
250,270
219,123
210,320
148,212
95,221
92,820
57,022
61,114
3,036,314

702,518
181,735
163,368
1,047,621
415,002
261,281
182,168
52,776
33,847
327,635
2,320,330
6,254
(92,951)
629,287
208,370
420,917
(11,972)
408,945

1.97
(0.05)
1.92

1.96
(0.05)
1.91

904,406
904,922

1,890,175
249,433
234,341
213,400
162,560
92,608
86,830
57,268
51,538
3,038,153

724,019
166,445
183,512
1,073,976
405,493
297,762
173,598
75,395
36,340
342,397
2,404,961
5,249
(68,962)
569,479
185,926
383,553
(9,286)
374,267

1.54
(0.04)
1.50

1.53
(0.04)
1.49

812,218
838,654

12,037
837
(15,218)
(3,080)
(14,348)
2,613
5,990
(246)
9,576
(1,839)

(21,501)
15,290
(20,144)
(26,355)
9,509
(36,481)
8,570
(22,619)
(2,493)
(14,762)
(84,631)
1,005
(23,989)
59,808
22,444
37,364
(2,686)
34,678

0.43
(0.01)
0.42

92,188
66,268

0.6 %
0.3 %
(6.5)%
(1.4)%
(8.8)%
2.8 %
6.9 %
(0.4)%
18.6 %
(0.1)%

(3.0)%
9.2 %
(11.0)%
(2.5)%
2.3 %
(12.3)%
4.9 %
(30.0)%
(6.9)%
(4.3)%
(3.5)%
19.1 %
(34.8)%
10.5 %
12.1 %
9.7 %
(28.9)%
9.3 %

27.9 %
(25.0)%
28.0 %

28.1 %
(25.0)%
28.2 %

11.4 %
7.9 %

(1) See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP measures.

FISCAL 2017 COMPARED TO FISCAL 2016
Revenues decreased $1.8 million, or 0.1%, compared to the prior year.

U.S. assisted tax preparation fees increased $12.0 million, or 0.6%, primarily due to a more favorable net average
charge and mix, offset by a decline in tax returns prepared in company-owned offices. Although franchise returns
were down 5.6% primarily due to our acquisition of franchise businesses during the year, royalties related to our new
Refund Advance offering offset the lower volumes.

2017 Form 10-K | H&R Block, Inc.

U.S. DIY tax preparation fees declined $15.2 million, or 6.5%, due to our H&R Block More ZeroSM promotion, which
offered free online tax preparation for certain forms. This decrease was partially offset by a 3.5% increase in returns.

Fees earned on RTs decreased $14.3 million, or 8.8%, primarily due to lower attach rates due to our H&R Block

More ZeroSM and Free 1040EZ promotions and the offering of state RTs at no cost.

Revenue from POM increased $6.0 million, or 6.9%, primarily due to an increase in units sold in prior years and
favorable changes in the timing of forecasted claims. This revenue is initially deferred, and recognized over the term
of the service plan based on actual claims paid in relation to projected claims.

Other revenues increased $9.6 million, or 18.6%, primarily due to the fees earned on our TIS product, partially
offset by a decline in income on our mortgage loan portfolio and investments in available-for-sale (AFS) securities
recorded as other income in the current year rather than as revenue for a portion of the prior year. See Item 8, note
11 to the consolidated financial statements.

Total operating expenses decreased $84.6 million, or 3.5%, from the prior year. Total compensation and benefits
decreased $26.4 million primarily due to lower headcount in our field and corporate operations and lower commission-
based wages due to lower return volumes. These declines were partially offset by an increase in short-term incentive
compensation. Occupancy and equipment expenses increased $9.5 million, or 2.3%, primarily due to higher rental
rates on tax offices. Marketing and advertising expenses decreased $36.5 million, or 12.3%, primarily due to our prior
year sweepstakes campaign. Depreciation and amortization expense increased $8.6 million, or 4.9%, primarily due to
amortization resulting from acquisitions of franchisee and competitor businesses. Bad debt expense decreased $22.6
million, or 30.0%, primarily due to favorable collections on prior year EAs and RTs, and a reduction in overall bad debt
rate on current year balances.

Other expenses decreased $14.8 million, or 4.3%, primarily due to prior year costs associated with capital
transactions and the divestiture of HRB Bank and cost savings initiatives. These were partially offset by higher fees
paid to our bank partners in the current year for products and services they offer to our clients, including program
costs related to our RA offering introduced in the current year. The components of other expenses are as follows:

Year ended April 30,

Consulting and outsourced services
Bank partner fees
Client claims and refunds
Employee travel and related expenses
Credit card/bank charges
Insurance
Legal fees and settlements
Other

2017

2016

$ Change

% Change

104,995
47,479
42,618
38,719
28,658
13,320
12,589
39,257
327,635

140,052
16,980
39,782
46,665
28,618
12,167
18,707
39,426
342,397

(35,057)
30,499
2,836
(7,946)
40
1,153
(6,118)
(169)
(14,762)

(25.0)%
179.6 %
7.1 %
(17.0)%
0.1 %
9.5 %
(32.7)%
(0.4)%
(4.3)%

Interest expense increased $24.0 million, or 34.8%, due primarily to issuance of our Senior Notes during fiscal year

2016 in the aggregate principal amount of $1.0 billion.

Pretax income for fiscal year 2017 increased $59.8 million, or 10.5%, while our pretax margin increased to 20.7%
from 18.7% in fiscal year 2016. Net income from continuing operations increased $37.4 million, or 9.7%, over the prior
year. Diluted earnings per share from continuing operations increased 28.1% from the prior year to $1.96 due to a
14.6% decline in diluted weighted average shares outstanding and higher net income.

Losses of our discontinued mortgage operations resulted primarily from litigation expenses. See the discussion of
the risk of contingent losses related to our discontinued operations in Item 1A, "Risk Factors" and in Item 8, notes 13
and 14 to the consolidated financial statements.

H&R Block, Inc. | 2017 Form 10-K

Consolidated – Financial Results
Year ended April 30,
Revenues:

Total revenues

Compensation and benefits:

Field wages
Other wages
Benefits and other compensation

Occupancy and equipment
Marketing and advertising
Depreciation and amortization
Bad debt
Supplies
Other

Total operating expenses

Other income (expense), net
Interest expense on borrowings
Pretax income
Income taxes
Net income from continuing operations
Net loss from discontinued operations
Net income

Basic earnings (loss) per share:

Continuing operations
Discontinued operations
Consolidated

Diluted earnings (loss) per share:

Continuing operations
Discontinued operations
Consolidated

EBITDA from continuing operations (1)
EBITDA from continuing operations - adjusted (1)

2016

2015

$ Change

% Change

(in 000s, except per share amounts)

1,890,175
249,433
234,341
213,400
162,560
92,608
86,830
57,268
51,538
3,038,153

724,019
166,445
183,512
1,073,976
405,493
297,762
173,598
75,395
36,340
342,397
2,404,961
5,249
(68,962)
569,479
185,926
383,553
(9,286)
374,267

1.54
(0.04)
1.50

1.53
(0.04)
1.49

812,218
838,654

1,865,438
273,250
231,854
236,552
167,787
103,300
81,551
57,202
61,724
3,078,658

731,309
176,697
183,001
1,091,007
375,743
273,682
159,804
74,993
42,872
265,891
2,283,992
(6,615)
(45,246)
742,805
256,061
486,744
(13,081)
473,663

1.77
(0.05)
1.72

1.75
(0.04)
1.71

948,537
951,006

24,737
(23,817)
2,487
(23,152)
(5,227)
(10,692)
5,279
66
(10,186)
(40,505)

(7,290)
(10,252)
511
(17,031)
29,750
24,080
13,794
402
(6,532)
76,506
120,969
11,864
(23,716)
(173,326)
(70,135)
(103,191)
3,795
(99,396)

(0.23)
0.01
(0.22)

(0.22)
—
(0.22)

(136,319)
(112,352)

1.3 %
(8.7)%
1.1 %
(9.8)%
(3.1)%
(10.4)%
6.5 %
0.1 %
(16.5)%
(1.3)%

(1.0)%
(5.8)%
0.3 %
(1.6)%
7.9 %
8.8 %
8.6 %
0.5 %
(15.2)%
28.8 %
5.3 %
**
(52.4)%
(23.3)%
(27.4)%
(21.2)%
29.0 %
(21.0)%

(13.0)%
20.0 %
(12.8)%

(12.6)%
— %
(12.9)%

(14.4)%
(11.8)%

(1) See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP measures.

FISCAL 2016 COMPARED TO FISCAL 2015
Revenues decreased $40.5 million, or 1.3%, compared to fiscal year 2015.

U.S. assisted tax preparation fees increased $24.7 million, or 1.3%, while U.S. royalty revenues declined $23.8
million, or 8.7%. We acquired a number of franchisee businesses during the year, and declines in royalty revenues are
due primarily to the associated loss of royalties when those businesses are acquired, and to a lesser extent, a decline
in client volumes served by franchise offices. Return counts in our company-owned offices, excluding the impact of
returns prepared in those offices resulting from acquired franchisee businesses, declined 6.2% from fiscal year 2015.

2017 Form 10-K | H&R Block, Inc.

Tax preparation fees from our U.S. DIY business increased $2.5 million, or 1.1%, as improved monetization for new
and existing clients coupled with an increase in product attach rates were partially offset by a 2.6% decrease in returns.

International revenues decreased $23.2 million, or 9.8%. The decrease was driven by a $26.8 million decline
resulting from unfavorable changes in foreign currency exchange rates, partially offset by favorable volume and price
changes.

Fees earned on RTs decreased $5.2 million, or 3.1%, primarily due to lower assisted return volumes.

Revenues from H&R Block Emerald Prepaid MasterCard® transactions decreased $10.7 million, or 10.4%, primarily

due to our agreement with BofI and lower assisted return volumes.

Revenue from POM increased $5.3 million, or 6.5%, in fiscal year 2016 primarily due to a change in projected

claims.

Other revenues declined $10.2 million, or 16.5%, primarily due to the presentation of income from our mortgage
loan portfolio and investments in AFS securities as other income beginning in fiscal year 2016, rather than as revenue
in fiscal year 2015.

Total operating expenses increased $121.0 million, or 5.3%, from fiscal year 2015. Total compensation and benefits
decreased $17.0 million primarily due to a decline in short-term incentive compensation and the impact of changes
in foreign currency exchange rates. Occupancy and equipment expenses increased $29.8 million, or 7.9%, primarily
due to a 4.0% increase in company-owned offices resulting from acquisitions of franchisee and competitor businesses.
Marketing and advertising expenses increased $24.1 million due to planned increases in tax season spend, including
our sweepstakes campaign. Depreciation and amortization expense increased $13.8 million, or 8.6%, primarily due
to amortization resulting from acquisitions of franchisee and competitor businesses.

Other expenses increased $76.5 million, or 28.8%, primarily due to costs associated with capital transactions and
the divestiture of HRB Bank, and fees paid to BofI for products and services they offer to our clients. The components
of other expenses are as follows:

Year ended April 30,

Consulting and outsourced services
Bank partner fees
Client claims and refunds
Employee travel and related expenses
Credit card/bank charges
Insurance
Legal fees and settlements
Other

2016

2015

$ Change

% Change

140,052
16,980
39,782
46,665
28,618
12,167
18,707
39,426
342,397

113,616
—
28,337
44,660
23,668
11,330
7,185
37,095
265,891

26,436
16,980
11,445
2,005
4,950
837
11,522
2,331
76,506

23.3%
**
40.4%
4.5%
20.9%
7.4%
160.4%
6.3%
28.8%

Other income (expense) improved $11.9 million, primarily due to the inclusion of interest income on our mortgage
loan portfolio and AFS securities (reported as revenue in fiscal year 2015), as discussed above and in Item 8, note 11
to the consolidated financial statements. Interest expense increased $23.7 million, or 52.4%, due primarily to issuance
of our Senior Notes in September 2015 in the aggregate principal amount of $1.0 billion.

Pretax income for fiscal year 2016 decreased $173.3 million, or 23.3%, from the prior year. The pretax margin
decreased to 18.7% in fiscal year 2016 from 24.1% in fiscal year 2015. Net income from continuing operations declined
$103.2 million or 21.2% compared with the prior year. Diluted earnings per share from continuing operations decreased
12.6% from the prior year to $1.53 due to the decline in net income, partially offset by a 9.5% decline in weighted
average shares outstanding.

Pretax losses of our discontinued mortgage operations totaled $18.6 million, compared to $27.1 million in fiscal
year 2015, and resulted primarily from loss provisions related to SCC's estimated contingent losses for representation
and warranty claims of $4.0 million and $16.0 million for fiscal years 2016 and 2015, respectively.

H&R Block, Inc. | 2017 Form 10-K

CRITICAL ACCOUNTING ESTIMATES

We consider the estimates discussed below to be critical to understanding our financial statements, as they require
the use of significant judgment and estimation in order to measure, at a specific point in time, matters that are
inherently uncertain. Specific methods and assumptions for these critical accounting estimates are described in the
following paragraphs. We have reviewed and discussed each of these estimates with the Audit Committee of our
Board of Directors. For all of these estimates, we caution that future events rarely develop precisely as forecasted and
estimates routinely require adjustment and may require material adjustment.

See Item 8, note 1 to the consolidated financial statements, which discusses accounting policies and new or

proposed accounting standards that may affect our financial reporting in the future.

LITIGATION AND OTHER RELATED CONTINGENCIES –

Nature of Estimates Required. We accrue liabilities related to certain legal matters for which we believe it is probable
that a loss has been incurred and the amount of such loss can be reasonably estimated. Assessing the likely outcome
of pending or threatened litigation, indemnification and contribution claims, and other related loss contingencies,
including the amount of potential loss, if any, is highly subjective.

Assumptions and Approach Used. We are subject to pending or threatened litigation claims and claims for
indemnification and contribution, and other related loss contingencies, which are described in Item 8, note 13 to the
consolidated financial statements. It is our policy to routinely assess the likelihood of any adverse judgments or
outcomes related to legal matters, as well as ranges of probable losses. A determination of the amount of the liability
required to be accrued, if any, for these contingencies is made after analysis of each known issue and an analysis of
historical experience. In cases where we have concluded that a loss is only reasonably possible or remote, or is not
reasonably estimable, no liability is accrued.

Sensitivity of Estimate to Change. It is reasonably possible that future litigation and other related loss contingencies
may vary from the amounts accrued. Our aggregate range of reasonably possible losses includes (1) matters where a
liability has been accrued and there is a reasonably possible loss in excess of the amount accrued for that liability, and
(2) matters where a loss is believed to be reasonably possible, but a liability has not been accrued. This aggregate
range represents only those losses as to which we are currently able to estimate a reasonably possible loss or range
of loss. It does not represent our maximum loss exposure. As of April 30, 2017, we believe the aggregate range of
reasonably possible losses in excess of amounts accrued is not material.

However, our judgments on whether a loss is probable, reasonably possible, or remote, and our estimates of
probable loss amounts may differ from actual results due to difficulties in predicting the outcome of jury trials,
arbitration hearings, settlement discussions and related activity, predicting the outcome of class certification actions,
and numerous other uncertainties. Due to the number of claims which are periodically asserted against us, and the
magnitude of damages sought in those claims, actual losses in the future may significantly differ from our current
estimates.

INCOME TAXES – UNCERTAIN TAX POSITIONS –

Nature of Estimates Required. The income tax laws of jurisdictions in which we operate are complex and subject to
different interpretations by the taxpayer and applicable government taxing authorities. Income tax returns filed by
us are based on our interpretation of these rules. The amount of income taxes we pay is subject to ongoing audits by
federal, state and foreign tax authorities, which may result in proposed assessments, including interest or penalties.
We accrue a liability for unrecognized tax benefits arising from uncertain tax positions reflecting our judgment as to
the ultimate resolution of the applicable issues.

Assumptions and Approach Used. Differences between a tax position taken or expected to be taken in our tax
returns and the amount of benefit recorded in our financial statements result in unrecognized tax benefits.
Unrecognized tax benefits are recorded in the balance sheet as either a liability or reductions to recorded tax assets,
as applicable. Our uncertain tax positions arise from items such as apportionment of income for state purposes,
transfer pricing, and the deductibility of related party transactions. We evaluate each uncertain tax position based on
its technical merits. For each position, we consider all applicable information including relevant tax laws, the taxing
authorities potential position, our tax return position, and the possible settlement outcomes to determine the amount

2017 Form 10-K | H&R Block, Inc.

of liability to record. In making this determination, we assume the tax authority has all relevant information at its
disposal.

Sensitivity of Estimate to Change. Our assessment of the technical merits and measurement of tax benefits
associated with uncertain tax positions is subject to a high degree of judgment and estimation. Actual results may
differ from our current judgments due to a variety of factors, including changes in law, interpretations of law by taxing
authorities that differ from our assessments, changes in the jurisdictions in which we operate and results of routine
tax examinations. We believe we have adequately provided for any reasonably foreseeable outcome related to these
matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities
in the period the assessments are made or resolved, or when statutes of limitation on potential assessments expire.
As a result, our effective tax rate may fluctuate on a quarterly basis.

As of April 30, 2017, we accrued liabilities for unrecognized tax benefits on uncertain tax positions of approximately
$150 million. Of the total gross unrecognized tax benefits as of April 30, 2017, approximately $118 million would
impact our effective tax rate if ultimately recognized.

NEW ACCOUNTING PRONOUNCEMENTS

See Item 8, note 1 to the consolidated financial statements for a discussion of recently issued accounting
pronouncements.

FINANCIAL CONDITION

These comments should be read in conjunction with the consolidated balance sheets and consolidated statements
of cash flows included in Item 8.

CAPITAL RESOURCES AND LIQUIDITY –

OVERVIEW – Our primary sources of capital and liquidity include cash from operations (including changes in working
capital), draws on our 2016 CLOC, and issuances of debt. We use our sources of liquidity primarily to fund working
capital, service and repay debt, pay dividends, repurchase shares of our common stock, and acquire businesses.

Our operations are highly seasonal and substantially all of our revenues and cash flow are generated during the
period from February through April. Therefore, we require the use of cash to fund losses and working capital needs
from May through January, and typically rely on available cash balances from the prior tax season and borrowings to
meet our off-season liquidity needs.

Given the likely availability of a number of liquidity options discussed herein, we believe that, in the absence of
any unexpected developments, our existing sources of capital as of April 30, 2017 are sufficient to meet our future
operating and financing needs.

DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS – The following table summarizes our statements
of cash flows for fiscal years 2017, 2016 and 2015. See Item 8 for the complete consolidated statements of cash flows
for these periods.

Year ended April 30,

Net cash provided by (used in):

Operating activities

Investing activities

Financing activities

Effects of exchange rate changes on cash

Net change in cash and cash equivalents

2017

2016

550,093

532,394

99,319

(530,424)

(4,458)

329,515

(1,961,729)

(10,569)

114,530

(1,110,389) $

(in 000s)

2015

626,608

(148,932)

(645,807)

(9,986)

(178,117)

Operating Activities. Cash provided by operating activities increased $17.7 million from fiscal year 2016. The
increase from the prior year was primarily due to higher net income and changes in tax balances, partially offset by
declines in payables balances.

H&R Block, Inc. | 2017 Form 10-K

Investing Activities. Cash provided by investing activities totaled $99.3 million compared to $329.5 million in the
prior year. This decrease is principally due to the sale of our AFS securities in the prior year, partially offset by the sale
of our portfolio of mortgage loans in the current year, a decrease of $34.0 million in payments for business acquisitions,
and a decrease of $10.7 million in capital expenditures.

Financing Activities. Cash used in financing activities decreased $1.4 billion. Changes in cash from financing
activities resulted primarily from lower share repurchase activity and prior year customer deposit activity, partially
offset by the issuance of debt in the prior year.

CASH REQUIREMENTS –

Dividends and Share Repurchase. Returning capital to shareholders in the form of dividends and the repurchase

of outstanding shares has historically been a significant component of our capital allocation plan.

We have consistently paid quarterly dividends. Dividends paid totaled $187.1 million, $201.7 million and $220.0
million in fiscal years 2017, 2016 and 2015, respectively. The decline from the prior years is due to lower outstanding
shares as a result of share repurchase activity. Although we have historically paid dividends and plan to continue to
do so, there can be no assurances that circumstances will not change in the future that could affect our ability or
decisions to pay dividends.

In September 2015, we announced that our Board of Directors approved a $3.5 billion share repurchase program,
effective through June 2019. As a part of the repurchase program, in the current year, we purchased $317.0 million
of our common stock at an average price of $22.61 per share. See Item 8, note 8 to the consolidated financial statements
for additional information. Although we may continue to repurchase shares, there is no assurance that we will purchase
up to the full Board authorization.

Capital Investment. Our business is not capital intensive. Capital expenditures totaled $89.3 million and $99.9
million in fiscal years 2017 and 2016, respectively. Our capital expenditures relate primarily to recurring improvements
to retail offices, as well as investments in computers, software and related assets. In addition, we expended net cash
totaling $54.8 million and $88.8 million in fiscal years 2017 and 2016, respectively, in connection with acquired
businesses. We routinely acquire competitor tax businesses and franchisees, and recurring capital allocated to
acquisitions consists primarily of this activity.

FINANCING RESOURCES – Our 2016 CLOC has capacity up to $2.0 billion, and is scheduled to expire in September
2021. Proceeds under the 2016 CLOC may be used for working capital needs or for other general corporate purposes.
We were in compliance with our 2016 CLOC covenants as of April 30, 2017. As of April 30, 2017, amounts available
to borrow under the 2016 CLOC were limited by the debt-to-EBITDA covenant to approximately $1.6 billion, however,
our cash needs at April 30 generally do not require us to borrow on our CLOC at that time. We had no balance
outstanding under the 2016 CLOC as of April 30, 2017. See Item 8, note 6 to the consolidated financial statements for
discussion of the Senior Notes and our 2016 CLOC.

The following table provides ratings for debt issued by Block Financial as of April 30, 2017 and 2016:

As of

April 30, 2017

April 30, 2016

Short-term

Long-term

Outlook

Short-term

Long-term

Outlook

Moody's
S&P (1)
(1) Outlook of Stable effective June 14, 2017.

P-3

A-2

Baa3

BBB

Stable

Negative

P-3

A-2

Baa3

BBB

Stable

CASH AND OTHER ASSETS – As of April 30, 2017, we held cash and cash equivalents of $1.0 billion, including $63.4

million held by our foreign subsidiaries.

In December 2016 we sold our portfolio of mortgage loans and real estate owned. Cash proceeds received

approximated carrying value.

Foreign Operations. Seasonal borrowing needs of our Canadian operations are typically funded by our U.S.
operations. To mitigate foreign currency risk, we sometimes enter into foreign exchange forward contracts. There was
one forward contract outstanding as of April 30, 2017, which had a book value of $0.5 million.

2017 Form 10-K | H&R Block, Inc.

While our Canadian operations made a one-time distribution of previously taxed income to their U.S. parent in
fiscal year 2017, we do not currently intend to repatriate any additional non-borrowed funds held by our foreign
subsidiaries.

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in
a decrease of $4.5 million during fiscal year 2017 compared to decreases of $10.6 million and $10.0 million in fiscal
years 2016 and 2015, respectively. This change resulted primarily from a decline in Canadian exchange rates.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – A summary of our borrowings and known
or estimated contractual obligations as of April 30, 2017, and the timing and effect that such commitments are expected
to have on our liquidity and capital requirements in future periods is as follows:

Long-term debt (including interest)

Contingent acquisition payments

Capital lease obligations

Operating leases

Guaranty on Refund Advance loans

Total contractual cash obligations

(in 000s)

Total

Less Than
1 Year

1 - 3 Years

4 - 5 Years

After 5 Years

$ 1,914,574

72,688

145,375

755,156

941,355

10,428

6,610

707,828

720

7,104

981

249,813

720

3,324

2,100

—

2,299

329,515

101,286

—

1,230

27,214

—

$ 2,640,160

331,306

480,314

858,741

969,799

The table above does not reflect unrecognized tax benefits of approximately $150 million due to the high degree

of uncertainty regarding the future cash flows associated with these amounts.

In connection with our agreement with BofI, we are required to purchase a 90% participation interest, at par, in

all EAs originated by our lending partner.

See discussion of contractual obligations and commitments in Item 8, within the notes to the consolidated financial

statements.

REGULATORY ENVIRONMENT – The federal government, various state, local, provincial and foreign governments,
and some self-regulatory organizations have enacted statutes and ordinances, or adopted rules and regulations,
regulating aspects of our business. These aspects include, but are not limited to, commercial income tax return
preparers, income tax courses, the electronic filing of income tax returns, the offering of RTs, privacy, consumer
protection, franchising, sales methods and banking. We determine the applicability of such statutes, ordinances, rules
and regulations (collectively, Laws) and work to comply with those Laws that are applicable to us or our services or
products.

On October 5, 2016, the CFPB released its Final Rules regulating prepaid products. The Final Rules are scheduled
to take effect on April 1, 2018, with certain provisions phased in over time following that date. Once effective, the
Final Rules will apply to the H&R Block Emerald Prepaid MasterCard®, but we do not believe they will apply to EAs or
RAs due to their nature as non-covered separate credit products. The Final Rules, among other things: (i) establish
required consumer disclosures to be made prior to acquiring a prepaid account in most situations; (ii) require periodic
statements or online access to specified account information; and (iii) require online posting of the Cardholder
Agreement and submission of new and revised Cardholder Agreements to the CFPB.

We are continuing to assess the impact of these changes on the H&R Block Emerald Prepaid MasterCard® and our

consolidated financial statements.

From time to time in the ordinary course of business, we receive inquiries from governmental and self-regulatory
agencies regarding the applicability of Laws to our services and products. In response to past inquiries, we have
demonstrated that we comply with such Laws, convinced the authorities that such Laws were not applicable or that
compliance already exists, or modified our activities in the applicable jurisdiction to avoid the application of all or
certain parts of such Laws. We believe the past resolution of such inquiries and our ongoing compliance with Laws
has not had a material effect on our consolidated financial statements. We cannot predict what effect future Laws,
changes in interpretations of existing Laws or the results of future regulatory inquiries with respect to the applicability

H&R Block, Inc. | 2017 Form 10-K

of Laws may have on our consolidated financial position, results of operations and cash flows. See additional discussion
of legal matters in Item 8, note 13 to the consolidated financial statements.

Tax Reform. As a multinational corporation, we are subject to taxes in both U.S. and non-U.S. jurisdictions. Due to
economic and political factors, tax laws, regulations and rates of the jurisdictions in which we operate are subject to
significant change. The federal government has indicated its desire to pursue comprehensive tax reform and is currently
proposing a variety of changes. Additionally, various foreign countries are evaluating their tax systems. Many changes
have been proposed.

Among the U.S. tax reform proposals are a reduction in corporate income tax rate, a border adjustment tax,
elimination of many currently available deductions and changes to how foreign earnings are taxed. Any of these
proposals, among others, could significantly impact the amount of tax due in the U.S. We cannot predict whether, or
in what form, changes in tax laws will be made. If comprehensive tax reform occurs, we would benefit from a significant
reduction in U.S. tax rates, however without understanding the full context of tax reform, it is difficult to estimate or
provide guidance on the overall impact of potential U.S. tax reform on our organization.

NON-GAAP FINANCIAL INFORMATION

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 earnings before interest, taxes,
depreciation and amortization (EBITDA) from continuing operations and adjusted EBITDA and EBITDA margin from
continuing operations, adjusted pretax and net income of continuing operations, and adjusted diluted earnings per
share from continuing operations. Adjusted EBITDA and EBITDA margin 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.

2017 Form 10-K | H&R Block, Inc.

The following is a reconciliation of EBITDA from continuing operations to net income:

Year ended April 30,

Net income - as reported

Discontinued operations, net

Net income from continuing operations - as reported

Add back:

Income taxes of continuing operations

Interest expense of continuing operations

Depreciation and amortization of continuing operations

2017

2016

408,945

374,267

11,972

420,917

208,370

92,951

182,168

483,489

9,286

383,553

185,926

69,141

173,598

428,665

EBITDA from continuing operations

904,406

812,218

(in 000s)

2015

473,663

13,081

486,744

256,061

45,928

159,804

461,793

948,537

H&R Block, Inc. | 2017 Form 10-K

The following is a reconciliation of our results from continuing operations to our adjusted results from continuing

operations, which are non-GAAP financial measures:

Year ended April 30,

From continuing operations

Adjustments (pretax):

Loss contingencies - litigation
Tax effect of adjustments (1)

As adjusted - from continuing operations

From continuing operations

Impact of adjustments

Adjusted

Year ended April 30,

From continuing operations

Adjustments (pretax):

Loss contingencies - litigation

Severance

Costs related to HRB Bank and recapitalization transactions

Losses (gains) on AFS securities

Gain on sales of tax offices/businesses
Tax effect of adjustments (1)

From continuing operations

Impact of adjustments

Adjusted

Year ended April 30,

From continuing operations

Adjustments (pretax):

Loss contingencies - litigation

Severance

Costs related to HRB Bank transaction

Losses (gains) on AFS securities

Gain on sales of tax offices/businesses
Tax effect of adjustments (1)

Pretax Income

(in 000s, except per share amounts)

2017
Net Income

EBITDA

629,287

420,917

904,406

516

—

516

(186)

330

516

—

516

629,803

421,247

904,922

Diluted EPS

EBITDA Margin (2)

1.96

—

1.96

2016

29.8%

—%

29.8%

Pretax Income

Net Income

EBITDA

569,479

383,553

812,218

Diluted EPS

EBITDA Margin (2)

1.53

0.06

1.59

2015

26.7%

0.9%

27.6%

Pretax Income

Net Income

EBITDA

742,805

486,744

948,537

1,978

12,001

20,722

(8,138)

(127)

—

26,436

1,978

12,001

20,722

(8,138)

(127)

(10,176)

16,260

(3,936)

6,699

238

124

(656)

—

2,469

(3,936)

6,699

238

124

(656)

(963)

1,506

1,978

12,001

20,722

(8,138)

(127)

—

26,436

838,654

(3,936)

6,699

238

124

(656)

—

2,469

951,006

As adjusted - from continuing operations

595,915

399,813

As adjusted - from continuing operations

745,274

488,250

From continuing operations

Impact of adjustments

Adjusted

Diluted EPS

EBITDA Margin (2)

1.75

—

1.75

30.8%

0.1%

30.9%

1 Tax effect of adjustments is computed as the pretax effect of the adjustments multiplied by our effective tax rate before discrete items.
2 EBITDA margin from continuing operations is computed as EBITDA from continuing operations divided by revenues from continuing operations.

2017 Form 10-K | H&R Block, Inc.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

GENERAL – We have a formal investment policy that strives to minimize the market risk exposure of our cash
equivalents, which are primarily affected by credit quality and movements in interest rates. The guidelines in our
investment policy focus on managing liquidity and preserving principal and earnings.

Our cash equivalents are primarily held for liquidity purposes and are comprised of high quality, short-term
investments, including money market funds. Because our cash and cash equivalents have a short maturity, our
portfolio's market value is relatively insensitive to interest rate changes.

As our CLOC borrowings are generally seasonal, interest rate risk typically increases through our third fiscal quarter
and declines to zero by fiscal year-end. While the market value of our CLOC borrowings is relatively insensitive to
interest rate changes, interest expense on CLOC borrowings will increase and decrease with changes in the underlying
short-term interest rates. We had no balance outstanding under the 2016 CLOC as of April 30, 2017.

Our long-term debt as of April 30, 2017, consists primarily of fixed-rate Senior Notes; therefore, a change in interest
rates would have no impact on consolidated pretax earnings until these notes mature or are refinanced. The fixed-
rate interest payable on our Senior Notes is subject to adjustment based upon our credit ratings. See Item 8, note 6
to the consolidated financial statements.

FOREIGN EXCHANGE RATE RISK

Our operations in international markets are exposed to movements in currency exchange rates. The currencies
primarily involved are the Canadian dollar and the Australian dollar. We translate revenues and expenses related to
these operations at the average of exchange rates in effect during the period. Assets and liabilities of foreign subsidiaries
are translated into U.S. dollars at exchange rates prevailing at the end of the year. Translation adjustments are recorded
as a separate component of other comprehensive income in stockholders' equity. Translation of financial results into
U.S. dollars does not presently materially affect, and has not historically materially affected, our consolidated financial
results, although such changes do affect the year-to-year comparability of the operating results in U.S. dollars of our
international businesses. The impact of changes in foreign exchange rates during the period on our international cash
balances resulted in a decrease of $4.5 million during fiscal year 2017 compared to a decrease of $10.6 million and
$10.0 million in fiscal years 2016 and 2015, respectively. This change resulted primarily from a decline in Canadian
exchange rates. We estimate a 10% change in foreign exchange rates by itself would impact consolidated pretax income
in fiscal years 2017 and 2016 by $2.2 million and $2.5 million, respectively, and cash balances as of April 30, 2017 and
2016 by $3.6 million and $8.9 million, respectively.

We generally use foreign exchange forward contracts to mitigate foreign currency exchange rate risk for seasonal
loans we advance to our Canadian operations. At April 30, 2017 we had one forward contract outstanding with a fair
value of $0.5 million, compared with none in the prior year.

H&R Block, Inc. | 2017 Form 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

DISCUSSION OF FINANCIAL RESPONSIBILITY

H&R Block's management is responsible for the integrity and objectivity of the information contained in this document.
Management is responsible for the consistency of reporting this information and for ensuring that accounting principles
generally accepted in the U.S. are properly applied. In discharging this responsibility, management maintains an
extensive program of internal audits and requires members of management to certify financial information within
their scope of management. Our system of internal control over financial reporting also includes formal policies and
procedures, including a Code of Business Ethics and Conduct that reinforces our commitment to ethical business
conduct and is designed to encourage our employees and directors to act with high standards of integrity in all that
they do.

The Audit Committee of the Board of Directors, composed solely of independent outside directors, meets
periodically with management, the independent auditor and the Vice President, Audit Services (our chief internal
auditor) to review matters relating to our financial statements, internal audit activities, internal accounting controls
and non-audit services provided by the independent auditors. The independent auditor and the Vice President, Audit
Services have full access to the Audit Committee and meet with the committee, both with and without management
present, to discuss the scope and results of their audits, including internal controls and financial matters.

Deloitte & Touche LLP audited our consolidated financial statements for fiscal years 2017, 2016 and 2015. The
audits were conducted in accordance with the standards of the Public Company Accounting Oversight Board (United
States).

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as
such term is defined in Exchange Act Rules 12a-15(f). Under the supervision and with the participation of management,
including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of
our internal control over financial reporting based on the criteria established in "Internal Control - Integrated
Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), using the
2013 framework, as of April 30, 2017.

Based on our assessment, management concluded that as of April 30, 2017, the Company's internal control over
financial reporting was effective based on the criteria set forth by COSO, using the 2013 framework. The Company's
external auditor, Deloitte & Touche LLP, an independent registered public accounting firm, has issued an audit report
on the effectiveness of the Company's internal control over financial reporting.

/s/ William C. Cobb
William C. Cobb
President and Chief Executive Officer

/s/ Tony G. Bowen
Tony G. Bowen
Chief Financial Officer

2017 Form 10-K | H&R Block, Inc.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
H&R Block, Inc.
Kansas City, Missouri

We have audited the accompanying consolidated balance sheets of H&R Block, Inc. and subsidiaries (the "Company")
as of April 30, 2017 and 2016, and the related consolidated statements of income and comprehensive income,
stockholders' equity, and cash flows for each of the three years in the period ended April 30, 2017. Our audits also
included the financial statement schedule listed in the Index at Item 15. These financial statements and financial
statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion
on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position
of H&R Block, Inc. and subsidiaries as of April 30, 2017 and 2016, and the results of their operations and their cash
flows for each of the three years in the period ended April 30, 2017, in conformity with accounting principles generally
accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the Company's internal control over financial reporting as of April 30, 2017, based on the criteria established
in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission and our report dated June 16, 2017 expressed an unqualified opinion on the Company's internal
control over financial reporting.

/s/ Deloitte & Touche LLP

Kansas City, Missouri
June 16, 2017

H&R Block, Inc. | 2017 Form 10-K

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
H&R Block, Inc.
Kansas City, Missouri

We have audited the internal control over financial reporting of H&R Block, Inc. and subsidiaries (the "Company") as
of April 30, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for
maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial
Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based
on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the
company's principal executive and principal financial officers, or persons performing similar functions, and effected
by the company's board of directors, management, and other personnel to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could
have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion
or improper management override of controls, material misstatements due to error or fraud may not be prevented
or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over
financial reporting to future periods are subject to the risk that the controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting
as of April 30, 2017, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated financial statements and financial statement schedule as of and for the year ended April 30,
2017 of the Company and our report dated June 16, 2017 expressed an unqualified opinion on those financial
statements and financial statement schedule.

/s/ Deloitte & Touche LLP

Kansas City, Missouri
June 16, 2017

2017 Form 10-K | H&R Block, Inc.

CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
Year ended April 30,

(in 000s, except per share amounts)

2017

2016

2015

REVENUES:

Service revenues

Royalty, product and other revenues

OPERATING EXPENSES:

Cost of revenues:

Compensation and benefits

Occupancy and equipment

Provision for bad debt

Depreciation and amortization

Other

Selling, general and administrative:

Marketing and advertising

Compensation and benefits

Depreciation and amortization

Other selling, general and administrative

Total operating expenses

Other income (expense), net

Interest expense on borrowings

Income from continuing operations before income taxes

Income taxes

Net income from continuing operations

Net loss from discontinued operations, net of tax benefits of

$6,986, $5,414 and $8,125

NET INCOME

BASIC EARNINGS (LOSS) PER SHARE:

Continuing operations

Discontinued operations

Consolidated

DILUTED EARNINGS (LOSS) PER SHARE:

Continuing operations

Discontinued operations

Consolidated

COMPREHENSIVE INCOME:

Net income

Unrealized gains (losses) on securities, net of taxes:

Unrealized holding gains (losses) arising during the year, net

of taxes of ($9), ($2,270) and $4,301

Reclassification adjustment for losses (gains) included in

income, net of taxes of $ - , ($3,214) and $27

Change in foreign currency translation adjustments

Other comprehensive loss

Comprehensive income

2,648,349

2,653,936

387,965

3,036,314

384,217

3,038,153

808,240

415,058

52,776

119,789

248,514

845,197

405,123

75,395

115,907

243,930

2,651,057

427,601

3,078,658

852,480

378,624

74,993

111,861

212,532

1,644,377

1,685,552

1,630,490

261,281
239,381

62,379

112,912

675,953

297,762

228,778

57,691

135,178

719,409

2,320,330

2,404,961

6,254

(92,951)

629,287

208,370

420,917

5,249

(68,962)

569,479

185,926

383,553

(11,972)

408,945

(9,286)

374,267

1.97

(0.05)

1.92

1.96

(0.05)
1.91

1.54

(0.04)

1.50

1.53

(0.04)

1.49

273,682

238,527

47,943

93,350

653,502

2,283,992

(6,615)

(45,246)

742,805

256,061

486,744

(13,081)

473,663

1.77

(0.05)

1.72

1.75

(0.04)

1.71

408,945

374,267

473,663

(16)

—

(4,050)

(4,066)

(3,530)

(4,982)

(4,461)

(12,973)

404,879

361,294

6,645

(10,123)

(3,437)

470,226

See accompanying notes to consolidated financial statements.

H&R Block, Inc. | 2017 Form 10-K

CONSOLIDATED BALANCE SHEETS
As of April 30,

ASSETS

Cash and cash equivalents

Cash and cash equivalents - restricted

Receivables, less allowance for doubtful accounts of $55,296 and $57,011

Prepaid expenses and other current assets

Total current assets

Mortgage loans held for investment, less allowance for loan losses of $5,518

Property and equipment, at cost, less accumulated depreciation and

amortization of $678,161 and $601,120

Intangible assets, net

Goodwill

Deferred tax assets and income taxes receivable

Other noncurrent assets

Total assets

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:

Accounts payable and accrued expenses

Accrued salaries, wages and payroll taxes

Accrued income taxes and reserves for uncertain tax positions

Current portion of long-term debt

Deferred revenue and other current liabilities

Total current liabilities

Long-term debt

Reserves for uncertain tax positions

Deferred revenue and other noncurrent liabilities

Total liabilities

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Common stock, no par, stated value $.01 per share, 800,000,000 shares

authorized, shares issued of 246,198,878 and 260,218,666

Additional paid-in capital

Accumulated other comprehensive loss

Retained earnings (deficit)

Less treasury shares, at cost, of 39,027,573 and 39,701,409

Total stockholders' equity (deficiency)

Total liabilities and stockholders' equity

(in 000s, except share and
per share amounts)

2017

2016

1,011,331

106,208

162,775

65,725

1,346,039

—

263,827

409,364

491,207

83,728

99,943

896,801

104,110

153,116

66,574

1,220,601

202,385

293,565

433,885

470,757

120,123

105,909

2,694,108

2,847,225

217,028

183,856

348,199

981

189,216

939,280

1,493,017

159,085

163,609

2,754,991

2,462

754,912

(15,299)

(48,206)

(754,752)

(60,883)

259,586

161,786

373,754

826

243,653

1,039,605

1,491,375

132,960

160,182

2,824,122

2,602

758,230

(11,233)

40,347

(766,843)

23,103

2,694,108

2,847,225

See accompanying notes to consolidated financial statements.

2017 Form 10-K | H&R Block, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended April 30,
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income
Adjustments to reconcile net income to net cash provided by operating activities:

2017

2016

(in 000s)

2015

408,945

374,267

473,663

Depreciation and amortization
Provision for bad debt
Deferred taxes
Stock-based compensation
Changes in assets and liabilities, net of acquisitions:

Cash and cash equivalents - restricted
Receivables
Prepaid expenses and other current assets
Other noncurrent assets
Accounts payable and accrued expenses
Accrued salaries, wages and payroll taxes
Deferred revenue and other current liabilities
Deferred revenue and other noncurrent liabilities
Income tax receivables, accrued income taxes and income tax reserves
Other, net

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale securities
Sales, maturities and payments received on available-for-sale securities
Principal payments and sales of mortgage loans and real estate owned, net
Capital expenditures
Payments made for business acquisitions, net of cash acquired
Franchise loans funded
Payments received on franchise loans
Other, net

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayments of commercial paper and line of credit borrowings
Proceeds from issuance of commercial paper and line of credit borrowings
Repayments of long-term debt
Proceeds from issuance of long-term debt
Transfer of HRB Bank deposits
Customer banking deposits, net
Dividends paid
Repurchase of common stock, including shares surrendered
Proceeds from exercise of stock options
Other, net

Net cash used in financing activities

Effects of exchange rate changes on cash

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year

SUPPLEMENTARY CASH FLOW DATA:

Income taxes paid, net of refunds received
Interest paid on borrowings
Accrued additions to property and equipment
Conversion of investment in preferred stock to available-for-sale common stock

182,168
52,776
46,455
19,285

(2,104)
(77,873)
(4,542)
(6,364)
(30,472)
22,789
(59,998)
4,314
129
(5,415)
550,093

—
1,144
207,174
(89,255)
(54,816)
(34,473)
61,437
8,108
99,319

173,598
75,395
36,276
23,540

(12,159)
(70,721)
4,321
4,197
16,723
17,388
(77,510)
3,055
(12,499)
(23,477)
532,394

—
436,471
38,481
(99,923)
(88,776)
(22,820)
55,007
11,075
329,515

(1,700,000)
1,700,000
—
—
—
—
(187,115)
(322,850)
2,371
(22,830)
(530,424)

(1,465,000)
1,465,000
—
996,831
(419,028)
(326,705)
(201,688)
(2,018,338)
25,775
(18,576)
(1,961,729)

159,804
74,993
(15,502)
26,068

23,252
(68,109)
(8,542)
2,260
681
(21,132)
(34,491)
3,289
33,410
(23,036)
626,608

(90,581)
91,878
32,090
(123,158)
(113,252)
(49,695)
90,636
13,150
(148,932)

(1,049,136)
1,049,136
(400,000)
—
—
(28,544)
(219,960)
(10,449)
16,522
(3,376)
(645,807)

(4,458)

(10,569)

(9,986)

114,530
896,801
1,011,331

163,539
87,185
2,433
—

(1,110,389)
2,007,190
896,801

165,154
59,058
2,822
—

(178,117)
2,185,307
2,007,190

236,624
44,847
14,282
5,000

See accompanying notes to consolidated financial statements.

H&R Block, Inc. | 2017 Form 10-K

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS – Our operating subsidiaries provide assisted and do-it-yourself (DIY) tax return preparation
solutions through multiple channels (including in-person, online and mobile applications, and desktop software) and
distribute H&R Block-branded financial products and services, including those of our financial partners, to the general
public primarily in the United States (U.S.), Canada, Australia, and their respective territories.

PRINCIPLES OF CONSOLIDATION – The consolidated financial statements include the accounts of the Company

and our 100% owned subsidiaries. Intercompany transactions and balances have been eliminated.

DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon
Corporation, previously known as Option One Mortgage Corporation (including its subsidiaries, collectively, SCC),
which exited its mortgage business in fiscal year 2008. See notes 13 and 14 for additional information on litigation,
claims, and other loss contingencies related to our discontinued operations.

MANAGEMENT ESTIMATES – The preparation of financial statements in conformity with accounting principles
generally accepted in the U. S. (GAAP) requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates,
assumptions and judgments are applied in the evaluation of contingent losses arising from our discontinued mortgage
business, contingent losses associated with pending claims and litigation, reserves for uncertain tax positions and
related matters. Estimates have been prepared based on the best information available as of each balance sheet date.
As such, actual results could differ materially from those estimates.

CASH AND CASH EQUIVALENTS – All non-restricted highly liquid instruments purchased with an original maturity

of three months or less are considered to be cash equivalents.

Outstanding checks in excess of funds on deposit (book overdrafts) included in accounts payable totaled $29.6

million and $43.1 million as of April 30, 2017 and 2016, respectively.

CASH AND CASH EQUIVALENTS – RESTRICTED – Cash and cash equivalents – restricted consists primarily of cash

held by our captive insurance subsidiary.

RECEIVABLES AND RELATED ALLOWANCES – Our trade receivables consist primarily of accounts receivable from
tax clients for tax return preparation. The allowance for doubtful accounts for these receivables requires management's
judgment regarding collectibility and current economic conditions to establish an amount considered by management
to be adequate to cover estimated losses as of the balance sheet date. Credit losses from tax clients for tax return
preparation are not specifically identified and charged off; instead they are evaluated on a pooled basis. At the end
of each tax season the outstanding balances on these receivables are evaluated based on collections received and
expected collections over subsequent tax seasons.

Our financing receivables consist primarily of participations in H&R Block Emerald Advance® lines of Credit (EAs),

loans made to franchisees, and amounts due under our Instant Cash Back® program in Canada.

H&R Block Emerald Advance® lines of credit. EAs are typically offered to clients in our offices from late November
through December, currently in an amount not to exceed $1,000. If the borrower meets certain criteria as agreed in
the loan terms, the line of credit can be utilized year-round. EA balances require an annual paydown on February 15th,
and any amounts unpaid are placed on non-accrual status as of March 1st. Payments on past due amounts are applied
to principal. Beginning in fiscal year 2016, we no longer originate EAs. These lines of credit are offered by BofI Federal
Bank, a federal savings bank (BofI). We purchase participation interests in their loans, as discussed further in note 12.

Credit losses from EAs are not specifically identified and charged off; instead we review the credit quality of these
receivables on a pooled basis, segregated by the year of origination. Credit losses are based on an analysis of collections
received and expected collections over subsequent tax seasons. We charge-off receivables to an amount we believe
represents the net realizable value.

Loans made to franchisees. The credit quality of these receivables is assessed at origination at an individual
franchisee level. Payment history is monitored on a regular basis. Based upon our internal analysis and underwriting

H&R Block, Inc. | 2017 Form 10-K

activities, we believe all loans to franchisees are of similar credit quality. Loans are evaluated for collectibility when
they become delinquent. Amounts deemed to be uncollectible are written off to bad debt expense and bad debt
related to these loans has typically been immaterial. Additionally, the franchise territory serves as additional protection
in the event a franchisee defaults on the loan, as we may revoke franchise rights, write off the remaining balance of
the loan and refranchise the territory or begin operating it as company-owned.

Instant Cash Back® receivables. Our Canadian operations advance refunds due to certain clients from the Canada
Revenue Agency (CRA), in exchange for a fee. The total fee we charge for this service is mandated by legislation which
is administered by the CRA. Interest is not charged on these balances, in accordance with CRA regulations. The client
assigns to us the full amount of the tax refund to be issued by the CRA and the refund is then sent by the CRA directly
to us. The amount we advance to clients under this program is the amount of their estimated refund, less our fees,
any amounts expected to be withheld by the CRA for amounts the client may owe to government authorities and any
amounts owed to us from prior years. The CRA's system for tracking amounts due to various government agencies
also indicates if the client has already filed a return, does not exist in the CRA's records, or is bankrupt. This serves to
greatly reduce the amounts of uncollectible receivables and the risk of fraudulent returns.

We do not specifically identify credit losses for these receivables; instead we determine our allowance for these
receivables based on a review of receipts taking into consideration historical experience. In September of each fiscal
year, any balances remaining from the previous tax season are charged-off against the related allowance.

PROPERTY AND EQUIPMENT – Buildings and equipment are initially recorded at cost and are depreciated over the
estimated useful life of the assets using the straight-line method. Leasehold improvements are initially recorded at
cost and are amortized over the lesser of the remaining term of the respective lease or the estimated useful life, using
the straight-line method. Estimated useful lives are 15 to 40 years for buildings, three to five years for computers and
other equipment, three years for purchased software and up to eight years for leasehold improvements.

Substantially all of the operations of our subsidiaries are conducted in leased premises. For all lease agreements,

including those with escalating rent payments or rent holidays, we recognize rent expense on a straight-line basis.

GOODWILL AND INTANGIBLE ASSETS – Goodwill represents costs in excess of fair values assigned to the underlying
net assets of acquired businesses. Goodwill is not amortized, but rather is tested for impairment annually, or more
frequently if indications of potential impairment exist.

Intangible assets with finite lives are amortized over their estimated useful lives and are reviewed for impairment
whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. The
weighted-average life of intangible assets with finite lives is 18 years. Intangible assets are typically amortized over
the estimated useful life of the assets using the straight-line method.

We capitalize certain allowable costs associated with software developed for internal use. These costs are typically

amortized over three to five years using the straight-line method.

TREASURY SHARES – We record shares of common stock repurchased by us as treasury shares, at cost, resulting
in a reduction of stockholders' equity. Periodically, we may retire shares held in treasury as determined by our Board
of Directors. We typically reissue treasury shares as part of our stock-based compensation programs. When shares
are reissued, we determine the cost using the average cost method.

REVENUE RECOGNITION – We recognize revenue for our services when each of the following four criteria is met:
persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the selling price
is fixed or determinable; and collectibility is reasonably assured.

Service revenues consist primarily of fees for preparation and filing of tax returns, both in offices and through our
online programs, fees earned on refund transfers (RTs), interchange income associated with our H&R Block Emerald
Prepaid MasterCard® program and fees associated with our Peace of Mind® Extended Service Plan (POM). Service
revenues are recognized in the period in which the service is performed as follows:

Assisted and online tax preparation revenues are recorded when a completed return is electronically filed or
accepted by the customer.

Fees related to RTs are recognized when Internal Revenue Service (IRS) acknowledgment is received and the bank
account is established at BofI.

2017 Form 10-K | H&R Block, Inc.

Revenues associated with our H&R Block Emerald Prepaid MasterCard® program consist of interchange income
from the use of debit cards and fees from the use of ATM networks, net of volume-based amounts retained by
BofI in connection with our agreement. Interchange income is a fee paid by a merchant bank to BofI through the
interchange network. Net revenue associated with our H&R Block Prepaid Mastercard® is recognized based on
cardholder transactions.

POM revenues are deferred and recognized over the term of the plan, based on actual claims paid in relation to
projected claims.

Royalty, product and other revenues include royalties from franchisees and sales of desktop software products,

and are recognized as follows:

Franchise royalties, which are based on contractual percentages of franchise revenues, are recorded in the period
in which the services are provided to the customer.

Revenue from the sale of desktop software is recognized when the product is sold to the end user. Rebates,
slotting fees and other incentives paid in connection with these sales are recorded as a reduction of revenue.

Participation revenue on EAs is recorded over the life of the underlying loan.

Interest on loans to franchisees is calculated using the average daily balance method and is recognized based on
the principal amount outstanding until the outstanding balance is paid or becomes delinquent.

Sales tax we collect and remit to taxing authorities is recorded net in the consolidated statements of income.

ADVERTISING EXPENSE – Advertising costs for radio and television ads are expensed over the course of the tax

season, with print and mailing advertising expensed as incurred.

EMPLOYEE BENEFIT PLANS – We have a 401(k) defined contribution plan covering eligible full-time and seasonal
employees following the completion of an eligibility period. Contributions to this plan are discretionary and totaled
$13.8 million, $14.3 million and $14.8 million for continuing operations in fiscal years 2017, 2016 and 2015, respectively.

We have severance plans covering executives and eligible regular full-time or part-time active employees of a
participating employer who incur a qualifying termination. Expenses related to severance benefits of continuing
operations totaled $5.6 million, $12.0 million and $6.7 million in fiscal years 2017, 2016 and 2015, respectively.

NEW ACCOUNTING PRONOUNCEMENTS –

Interest. On May 1, 2016 we adopted Accounting Standards Update No. 2015-3, "Interest - Imputation of
Interest," (ASU 2015-3) which requires that debt issuance costs related to a recognized debt liability be presented in
the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.
This guidance must be applied retrospectively to all periods presented. Prior periods have been retrospectively
adjusted to conform to the current period presentation. Debt issuance costs related to our Senior Notes previously
reported as other current assets and other noncurrent assets have been reclassified to long-term debt. This guidance
did not have a material effect on our consolidated financial statements.

Stock-based compensation. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Update No. 2016-9, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-
Based Payment Accounting" (ASU 2016-9), to reduce complexity in accounting standards involving several aspects of
the accounting for employee share-based payment transactions, including the income tax consequences, classification
of awards as either equity or liabilities, and classification on the statement of cash flows. We will adopt this guidance
as of May 1, 2017 and do not believe it will have a material impact on our consolidated financial statements.

Leases. In February 2016, the FASB issued Accounting Standards Update No. 2016-2, "Leases" (ASU 2016-2), which
will require the recognition of lease assets and lease liabilities by lessees for leases previously classified as operating
leases. ASU 2016-2 also requires additional qualitative and quantitative disclosures related to the nature, timing and
uncertainty of cash flows arising from leases. This guidance will be effective for us on May 1, 2019, with early adoption
permitted, and requires the use of a modified retrospective approach for leases that exist or are entered into after
the beginning of the earliest comparative period in the financial statements. We are currently evaluating the impact
of ASU 2016-2 on our consolidated financial statements, however we expect the impact of this guidance on our
consolidated financial statements could be significant.

H&R Block, Inc. | 2017 Form 10-K

Revenue recognition. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, "Revenue from
Contracts with Customers," (ASU 2014-09) which is a comprehensive new revenue recognition model that requires
an entity to recognize the amount of revenue which reflects the consideration it expects to receive in exchange for
the transfer of the promised goods or services to customers. This ASU also requires additional disclosure about the
nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant
judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract, and
clarifies guidance for multiple-element arrangements. This guidance will replace most existing revenue recognition
guidance in U.S. GAAP when it becomes effective. The new standard is effective for us on May 1, 2018. The standard
permits the use of either the retrospective or cumulative effect transition method.

We have substantially completed our evaluation of the impact of ASU 2014-09 on our U.S. assisted tax preparation
fees and revenues from POM, and based on the preliminary results of our evaluation, we do not expect the application
of this guidance to have a material impact on the recognition of revenue related to these services. Changes to our
client agreements or service design before adoption of the new standard could change our preliminary conclusions.
We are still evaluating the impact of this guidance as it relates to other revenue streams, as well as certain associated
expenses. Depending on the results of our review, there could be changes to the classification and timing of recognition
of revenues and expenses related to other revenue streams. We are continuing our assessment, including evaluating
the standard's impact on our internal controls and selecting a transition method for adoption.

NOTE 2: EARNINGS PER SHARE

Basic and diluted earnings per share is computed using the two-class method. The two-class method is an earnings
allocation formula that determines net income per share for each class of common stock and participating security
according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed
by dividing net income from continuing operations attributable to common shareholders by the weighted average
shares outstanding during each period.

The computations of basic and diluted earnings per share from continuing operations are as follows:

Year ended April 30,

Net income from continuing operations attributable to shareholders

Amounts allocated to participating securities

Net income from continuing operations attributable to common shareholders

Basic weighted average common shares

Potential dilutive shares

Dilutive weighted average common shares

Earnings per share from continuing operations attributable to common

shareholders:

Basic

Diluted

(in 000s, except per share amounts)

2017

420,917

(1,005)

419,912

212,809

1,286

214,095

2016

383,553

(718)

382,835

249,009

1,809

250,818

2015

486,744

(774)

485,970

275,033

2,103

277,136

1.97

1.96

1.54

1.53

1.77

1.75

Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain
restrictions or the exercise of options to purchase 0.3 million, 0.1 million and 0.1 million shares of stock for fiscal years
2017, 2016 and 2015, respectively, as the effect would be antidilutive.

2017 Form 10-K | H&R Block, Inc.

NOTE 3: RECEIVABLES

Receivables consist of the following:

As of April 30,

2017

2016

Short-term

Long-term

Short-term

Long-term

(in 000s)

Loans to franchisees

39,911

36,614

50,000

Receivables for tax preparation and related fees

Instant Cash Back® receivables

H&R Block Emerald Advance® lines of credit

Software receivables from retailers

Royalties and other receivables from franchisees

Other

Allowance for doubtful accounts

54,506

37,150

26,325

16,715

13,275

30,189

218,071

(55,296)

6,316

—

5,069

—

1,585

3,314

52,898

—

52,327

37,663

25,092

8,940

9,997

26,108

210,127

(57,011)

162,775

52,898

153,116

46,284

5,528

—

869

—

7,726

60,407

—

60,407

Balances presented above as short-term are included in receivables, while the long-term portions are included in

other noncurrent assets in the consolidated balance sheets.

Loans to Franchisees. Franchisee loan balances as of April 30, 2017 consisted of $49.5 million in term loans made
primarily to finance the purchase of franchises and $27.0 million in revolving lines of credit primarily for the purpose
of funding off-season working capital needs. Loans made to franchisees as of April 30, 2016 consisted of $61.2 million
in term loans and $35.1 million in revolving lines of credit.

As of April 30, 2017 , we had $0.1 million of loans more than 90 days past due, while we had no such loans, as of

April 30, 2016. We had no loans to franchisees on non-accrual status as of April 30, 2017 or 2016.

Canadian Instant Cash Back® Program. Refunds advanced under the Instant Cash Back program are not subject to
credit approval, therefore the primary indicator of credit quality is the age of the receivable amount. Instant Cash
Back amounts are generally received within 60 days of filing the client's return. As of April 30, 2017 and 2016, we had
$1.5 million of Instant Cash Back balances were more than 60 days old.

H&R Block Emerald Advance® lines of credit. Beginning in fiscal year 2016, we no longer originate EAs. These lines

of credit are originated by BofI, and we purchase a participation interest in them.

We review the credit quality of our EA receivables based on pools, which are segregated by the year of origination,
with older years being deemed more unlikely to be repaid. These amounts as of April 30, 2017, by year of origination,
are as follows:

Credit Quality Indicator – Year of origination:

2017

2016

2015 and prior

Revolving loans

(in 000s)

10,160

4,527

2,709

13,998

31,394

As of April 30, 2017 and 2016, $28.0 million and $21.1 million of EAs were on non-accrual status and classified as

impaired, or more than 60 days past due, respectively.

H&R Block, Inc. | 2017 Form 10-K

Allowance for Doubtful Accounts. Activity in the allowance for doubtful accounts for our receivables is as follows:

Balances as of May 1, 2014

Provision

Charge-offs, net of recoveries

Balances as of April 30, 2015

Provision

Charge-offs, net of recoveries

Balances as of April 30, 2016

Provision

Charge-offs, net of recoveries

Balances as of April 30, 2017

EAs

7,530

All Other

45,048

27,065

(27,242)

7,353

24,939

(23,285)

9,007

12,713

(11,597)

44,002

(41,876)

47,174

48,743

(47,913)

48,004

40,063

(42,894)

10,123

45,173

(in 000s)

Total

52,578

71,067

(69,118)

54,527

73,682

(71,198)

57,011

52,776

(54,491)

55,296

In fiscal year 2017, we recorded recoveries of $6.8 million on EAs against our allowance, compared to none in fiscal

years 2016 and 2015.

NOTE 4: PROPERTY AND EQUIPMENT

The components of property and equipment, net of accumulated depreciation and amortization, are as follows:

As of April 30,

Buildings

Computers and other equipment

Leasehold improvements

Purchased software

Land and other non-depreciable assets

2017

69,904

111,618

74,112

6,570

1,623

(in 000s)

2016

76,289

128,815

77,712

9,126

1,623

263,827

293,565

Depreciation and amortization expense of property and equipment for continuing operations for fiscal years 2017,

2016 and 2015 was $103.2 million, $100.8 million and $101.3 million, respectively.

NOTE 5: GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the years ended April 30, 2017 and 2016 are as follows:

Balances as of May 1, 2015

Acquisitions

Disposals and foreign currency changes, net

Impairments

Balances as of April 30, 2016

Acquisitions

Disposals and foreign currency changes, net

Impairments

Balances as of April 30, 2017

Goodwill

Accumulated
Impairment Losses

474,128

(32,297) $

27,765

1,161

—

503,054

19,261

1,189

—

(32,297)

—

523,504

(32,297) $

(in 000s)

Net

441,831

27,765

1,161

—

470,757

19,261

1,189

—

491,207

We tested goodwill for impairment in the fourth quarter of fiscal year 2017, and did not identify any impairment.

2017 Form 10-K | H&R Block, Inc.

(in 000s)

Net

251,070

102,535

35,393

5,927

9,707

28,791

Components of intangible assets are as follows:

As of April 30,

2017

Gross
Carrying
Amount

Accumulated
Amortization

2016

Gross
Carrying
Amount

Accumulated
Amortization

Net

Reacquired franchise rights

331,150

(90,877) $

240,273

319,354

(68,284) $

Customer relationships

Internally-developed software

Noncompete agreements

Franchise agreements

Purchased technology

Acquired assets pending final

allocation (1)

234,603

139,709

32,408

19,201

54,700

(133,207)

(108,379)

(27,559)

(10,774)

(31,973)

101,396

31,330

4,849

8,427

22,727

206,607

131,161

31,499

19,201

54,700

(104,072)

(95,768)

(25,572)

(9,494)

(25,909)

362

—

362

462

—

462

812,133

(402,769) $

409,364

762,984

(329,099) $

433,885

(1) Represents recent business acquisitions for which final purchase price allocations have not yet been determined.

The increase in the gross carrying amount of intangible assets resulted primarily from the acquisition of
approximately 230 offices to our company-owned network. The amounts and weighted-average lives of assets acquired
or added during fiscal year 2017 are as follows:

Reacquired franchise rights

Customer relationships

Internally-developed software

Noncompete agreements

Total

Amount

Weighted-Average Life (in years)

(dollars in 000s)

12,681

29,470

9,661

1,065

52,877

Amortization of intangible assets of continuing operations for the years ended April 30, 2017, 2016 and 2015 was
$78.9 million, $72.8 million and $58.5 million, respectively. Estimated amortization of intangible assets for fiscal years
2018, 2019, 2020, 2021 and 2022 is $74.8 million, $60.0 million, $43.7 million, $30.3 million and $20.1 million,
respectively.

NOTE 6: LONG-TERM DEBT

The components of long-term debt are as follows:

As of April 30,

Senior Notes, 4.125%, due October 2020

Senior Notes, 5.500%, due November 2022

Senior Notes, 5.250%, due October 2025

Capital lease obligation, due over the next 6 years

Debt issuance costs and discounts

Less: Current portion

2017

650,000

500,000

350,000

6,610

(12,612)

1,493,998

(981)

(in 000s)

2016

650,000

500,000

350,000

7,435

(15,234)

1,492,201

(826)

1,493,017

1,491,375

Effective May 1, 2016, we adopted the provisions of 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.

H&R Block, Inc. | 2017 Form 10-K

UNSECURED COMMITTED LINE OF CREDIT – On September 22, 2016, we entered into a First Amended and Restated
Credit and Guarantee Agreement (2016 CLOC), which amended our Credit and Guarantee Agreement (2015 CLOC),
extending the scheduled maturity date from September 21, 2020 to September 22, 2021 and decreasing the sublimit
for standby letters of credit. Other material terms remain unchanged from our 2015 CLOC. The 2016 CLOC provides
for an unsecured senior revolving credit facility in the aggregate principal amount of $2.0 billion, which includes a
$200.0 million sublimit for swingline loans and a $50.0 million sublimit for standby letters of credit. Proceeds under
the 2016 CLOC may be used for working capital needs or for other general corporate purposes. We may request
increases in the aggregate principal amount of the revolving credit facility of up to $500.0 million, subject to obtaining
commitments from lenders and meeting certain other conditions. The 2016 CLOC will mature on September 22, 2021,
unless extended pursuant to the terms of the 2016 CLOC, at which time all outstanding amounts thereunder will be
due and payable. The 2016 CLOC includes an annual facility fee, which will vary depending on our then current credit
ratings.

The 2016 CLOC is subject to various conditions, triggers, events or occurrences that could result in earlier
termination and contains customary representations, warranties, covenants and events of default, including, without
limitation: (1) a covenant requiring the Company to maintain a debt-to-EBITDA ratio calculated on a consolidated basis
of no greater than (a) 3.50 to 1.00 as of the last day of each fiscal quarter ending on April 30, July 31, and October 31
of each year and (b) 4.50 to 1.00 as of the last day of each fiscal quarter ending on January 31 of each year; (2) a
covenant requiring us to maintain an interest coverage (EBITDA-to-interest expense) ratio calculated on a consolidated
basis of not less than 2.50 to 1.00 as of the last date of any fiscal quarter; and (3) covenants restricting our ability to
incur certain additional debt, incur liens, merge or consolidate with other companies, sell or dispose of assets (including
equity interests), liquidate or dissolve, engage in certain transactions with affiliates or enter into certain restrictive
agreements. The 2016 CLOC includes provisions for an equity cure which could potentially allow us to independently
cure certain defaults. We were in compliance with these requirements as of April 30, 2017. As of April 30, 2017,
amounts available to borrow under the 2016 CLOC were limited by the debt-to-EBITDA covenant to approximately
$1.6 billion, however, our cash needs at April 30 generally do not require us to borrow on our CLOC at that time. We
had no balance outstanding under the 2016 CLOC as of April 30, 2017.

SENIOR NOTES – On September 25, 2015, we issued $650.0 million of 4.125% Senior Notes due October 1, 2020,
and $350.0 million of 5.250% Senior Notes due October 1, 2025. The Senior Notes are not redeemable by the
bondholders prior to maturity, although we have the right to redeem some or all of these notes at any time, at specified
redemption prices. Proceeds of the Senior Notes issued in September 2015, along with cash on hand, were used to
repurchase shares, as discussed in note 8.

On October 25, 2012, we issued $500.0 million of 5.50% Senior Notes due November 1, 2022. The Senior Notes

are not redeemable by the bondholders prior to maturity.

The interest rates on our Senior Notes are subject to adjustment based upon our credit ratings.

OTHER INFORMATION – The aggregate payments required to retire long-term debt are $1.0 million, $1.0 million,
$1.1 million, $651.1 million, $1.2 million and $851.2 million in fiscal years 2018, 2019, 2020, 2021, 2022 and beyond,
respectively.

NOTE 7: FAIR VALUE

FAIR VALUE MEASUREMENT – We use the following classification of financial instruments pursuant to the fair value
hierarchy methodologies for assets measured at fair value:

Level 1 – inputs to the valuation are quoted prices in an active market for identical assets.

Level 2 – inputs to the valuation include quoted prices for similar assets in active markets utilizing a third-party
pricing service to determine fair value.

Level 3 – valuation is based on significant inputs that are unobservable in the market and our own estimates
of assumptions that we believe market participants would use in pricing the asset.

Assets measured on a recurring basis are initially measured at fair value and are required to be remeasured at fair
value in the financial statements at each reporting date. There were no transfers between hierarchy levels during the
fiscal years ended April 30, 2017 and 2016.

2017 Form 10-K | H&R Block, Inc.

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS – The carrying amounts and estimated fair values of our

financial instruments are as follows:

As of April 30,

Assets:

2017

2016

Carrying
Amount

Estimated
Fair Value

Carrying
Amount

Estimated
Fair Value

(in 000s)

Fair Value
Hierarchy

Cash and cash equivalents

1,011,331

896,801

Cash and cash equivalents - restricted

Receivables, net - short-term

Receivables, net - long-term

Liabilities:

106,208

162,775

52,898

106,208

162,775

52,898

104,110

153,116

60,407

896,801

104,110

153,116

Level 1

60,407

Level 1 and 3

Long-term debt (excluding debt issuance costs)

1,502,735

1,569,033

1,502,751

1,566,098

Contingent consideration

10,428

8,657

Level 2

Level 3

Fair value estimates, methods and assumptions are set forth below. The fair value was not estimated for assets

and liabilities that are not considered financial instruments.

Cash and cash equivalents, including restricted - Fair value approximates the carrying amount.
Receivables, net - short-term - For short-term balances the carrying values reported in the balance sheet
approximate fair market value due to the relative short-term nature of the respective instruments.
Receivables, net - long-term - The carrying values for the long-term portion of loans to franchisees
approximate fair market value due to variable interest rates, low historical delinquency rates and franchise
territories serving as collateral (Level 1). Long-term EA receivables are carried at net realizable value which
approximates fair value (Level 3). Net realizable value is determined based on historical collection rates.
Long-term debt - The fair value of our Senior Notes is based on quotes from multiple banks.
Contingent consideration - Fair value approximates the carrying amount.

NOTE 8: STOCKHOLDERS' EQUITY
During fiscal year 2017, we repurchased and immediately retired 14.0 million shares of stock at an aggregate cost of
$317.0 million, or an average price of $22.61 per share. During fiscal year 2016, we repurchased and immediately
retired 56.4 million shares of stock at an aggregate cost of $2.0 billion, or an average price of $35.46 per share. We
had no similar repurchases or retirements of common stock in fiscal year 2015.

As of April 30, 2017 and 2016, substantially all of the balance of our accumulated comprehensive loss consisted
of foreign currency translation adjustments.

NOTE 9: STOCK-BASED COMPENSATION

We have a stock-based Long Term Incentive Plan (Plan), under which we can grant stock options, restricted shares,
performance-based share units, restricted share units, deferred stock units and other forms of equity to employees,
non-employee directors and consultants. Stock-based compensation expense of our continuing operations totaled
$19.3 million, $23.5 million and $26.1 million in fiscal years 2017, 2016 and 2015, respectively, net of related tax
benefits of $6.0 million, $9.5 million and $9.9 million, respectively. We realized tax benefits of $5.9 million, $20.9
million and $12.5 million in fiscal years 2017, 2016 and 2015, respectively.

As of April 30, 2017, we had 8.2 million shares reserved for future awards under our Plan. We issue shares from
our treasury stock to satisfy the exercise or vesting of stock-based awards and believe we have adequate treasury
stock balances available for future issuances.

We measure the fair value of options on the grant date or modification date using the Black-Scholes-Merton (Black-
Scholes) option valuation model based upon the expected term of the options. We measure the fair value of nonvested
shares and share units based on the closing price of our common stock on the grant date. We measure the fair value
of performance-based share units based on the Monte Carlo valuation model, taking into account as necessary those
provisions of the performance-based nonvested share units that are characterized as market conditions. We generally
expense the grant-date fair value, net of estimated forfeitures, over the vesting period on a straight-line basis.

H&R Block, Inc. | 2017 Form 10-K

Options, nonvested shares and nonvested share units (other than performance-based nonvested share units)
granted to employees typically vest pro-rata based upon service over a three-year period with a portion vesting each
year. Performance-based nonvested share units granted to employees typically cliff vest at the end of a three-year
period based upon satisfaction of both service-based and performance-based requirements. The number of
performance-based share units that ultimately vest can range from zero up to 250 percent of the number granted,
based on the form of the award, which can vary by year of grant. The performance metrics for these awards typically
consist of earnings before interest, taxes, depreciation and amortization (EBITDA), EBITDA growth, return on equity,
return on invested capital, total shareholder return or our stock price. Deferred stock units granted to non-employee
directors vest when they are granted and are settled six months after the director separates from service as a director
of the Company, except in the case of death.

All share units granted to employees and non-employee directors receive cumulative dividend equivalents to the
extent of the units ultimately vesting at the time of distribution. Options granted under our Plan have a maximum
contractual term of ten years.

STOCK OPTIONS – A summary of options for the fiscal year ended April 30, 2017, is as follows:

Outstanding, beginning of the year

Granted

Exercised

Forfeited or expired

Outstanding, end of the year

Exercisable, end of the year

Exercisable and expected to vest

(in 000s, except per share amounts)

Weighted-
Average
Exercise Price

Weighted-
Average
Remaining
Contractual Term

Aggregate
Intrinsic Value

18.76

20.29

16.03

31.98

17.99

17.93

17.99

4 years

11,651

11,549

11,640

1,976

(162)

(135)

1,702

1,675

1,699

The total intrinsic value of options exercised during fiscal years 2017, 2016 and 2015 was $1.0 million, $11.7 million
and $8.4 million, respectively. As of April 30, 2017, we had $0.1 million of total unrecognized compensation cost
related to outstanding options. The cost is expected to be recognized over a weighted-average period of two years.

When valuing our options on the grant date, we typically estimate the expected volatility using our historical stock
price data. We also use historical exercise and forfeiture behaviors to estimate the options expected term and our
forfeiture rate. The dividend yield is calculated based on the current dividend and the market price of our common
stock on the grant date. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve in effect on
the grant date. Both expected volatility and the risk-free interest rate are based on a period that approximates the
expected term.

The following assumptions were used to value options during the periods:

2016

2015

2017

29.43%

4 years

3.94%

1.18%

22.95%-24.87%

4 years

2.26%-2.69%

1.29%-1.43%

26.25%

4 years

2.62%

1.43%

5.18

3.31

5.28

Year ended April 30,

Options - management and director:

Expected volatility

Expected term

Dividend yield

Risk-free interest rate

Weighted-average fair value

2017 Form 10-K | H&R Block, Inc.

OTHER AWARDS – A summary of nonvested shares, nonvested share units and deferred stock units, including those

that are performance-based, for the year ended April 30, 2017, is as follows:

Outstanding, beginning of the year

Granted

Released

Forfeited

Outstanding, end of the year

(shares in 000s)

Nonvested Shares and
Nonvested Share Units

Performance-Based
Nonvested Share Units

Weighted-
Average
Grant Date
Fair Value

26.21

23.61

30.65

29.80

23.50

1,513

716

(411)

(202)

1,616

Weighted-
Average
Grant Date
Fair Value

31.86

25.38

28.55

30.12

30.22

1,099

462

(270)

(192)

1,099

The total fair value of shares and units vesting during fiscal years 2017, 2016 and 2015 was $20.3 million, $28.8
million and $14.3 million, respectively. As of April 30, 2017, we had $25.0 million of total unrecognized compensation
cost related to these shares. This cost is expected to be recognized over a weighted-average period of two years.

When valuing our performance-based nonvested share units on the grant date, we typically estimate the expected
volatility using historical volatility for H&R Block, Inc. and selected comparable companies. The dividend yield is
calculated based on the current dividend and the market price of our common stock on the grant date. The risk-free
interest rate is based on the U.S. Treasury zero-coupon yield curve in effect on the grant date. Both expected volatility
and the risk-free interest rate are based on a period that approximates the expected term. The following assumptions
were used to value performance-based nonvested share units using the Monte Carlo valuation model during the
periods:

Year ended April 30,

Expected volatility

Expected term
Dividend yield (1)

Risk-free interest rate

Weighted-average fair value

2017

2016

2015

13.92% - 74.53%

12.85% - 55.27%

12.28% - 78.42%

3 years

0% - 3.68%

3 years

0% - 2.70%

0.84%

25.38

0.95%

30.00

3 years

0% - 2.39%

0.81%

37.17

(1)

The valuation model assumes that dividends are reinvested by the Company on a continuous basis.

NOTE 10: INCOME TAXES

The components of income from continuing operations upon which domestic and foreign income taxes have been
provided are as follows:

Year ended April 30,

Domestic

Foreign

2017

535,378

93,909

629,287

2016

513,746

55,733

569,479

(in 000s)

2015

682,744

60,061

742,805

Foreign income consists principally of intercompany transactions and our tax operations in Canada and Australia.

H&R Block, Inc. | 2017 Form 10-K

The components of income tax expense (benefit) for continuing operations are as follows:

Year ended April 30,

2017

2016

Current:

Federal

State

Foreign

Deferred:

Federal

State

Foreign

147,961

167,233

15,118

10,678

173,757

39,299

(5,064)

378

34,613

(26,980)

8,735

148,988

19,937

13,801

3,200

36,938

Total income taxes for continuing operations

208,370

185,926

(in 000s)

2015

245,473

31,501

9,788

286,762

(30,181)

(4,040)

3,520

(30,701)

256,061

The reconciliation between the income tax provision and the amount computed by applying the statutory federal

tax rate of 35% to income taxes of continuing operations is as follows:

Year ended April 30,

U.S. statutory tax rate

Change in tax rate resulting from:

State income taxes, net of federal income tax benefit

Earnings taxed in foreign jurisdictions

Permanent differences

Uncertain tax positions

Change in valuation allowance

Currency loss on previously taxed income

Significant state apportionment changes

Other

Effective tax rate

2017

35.0 %

1.6 %

(4.6)%

(0.4)%

4.3 %

0.2 %

(1.6)%

— %

(1.4)%

33.1 %

2016

35.0 %

2.2 %

(2.0)%

(0.2)%

2.8 %

(0.5)%

— %

(4.3)%

(0.3)%

32.7 %

2015

35.0 %

3.5 %

(1.8)%

(0.3)%

(1.0)%

0.2 %

— %

(1.1)%

34.5 %

The effective tax rate for fiscal year 2017 increased 0.4% compared to the prior year. This increase was primarily
caused by two items. The tax rate increased 4.3% due to a one-time material state apportionment benefit in the prior
year that was not present in the current year. The tax rate increased another 1.5% due to increased income tax reserves
related to state apportionment and transfer pricing of intercompany transactions. These items were largely offset by
a tax benefit from a foreign currency loss on a distribution of previously taxed income and a moderate shift of our
income mix generated in lower tax jurisdictions.

The net loss from discontinued operations for fiscal years 2017, 2016 and 2015 totaled $12.0 million, $9.3 million
and $13.1 million, respectively, and was net of tax benefits of $7.0 million, $5.4 million and $8.1 million, respectively.

2017 Form 10-K | H&R Block, Inc.

The significant components of deferred tax assets and liabilities are reflected in the following table:

As of April 30,

Deferred tax assets:

Accrued expenses

Deferred revenue

Allowance for credit losses and related reserves

Internally-developed software

Deferred and stock-based compensation

Net operating loss carry-forward

Federal tax benefits related to state unrecognized tax benefits

Other

Valuation allowance

Total deferred tax assets

Deferred tax liabilities:

Prepaid expenses and other

Property and equipment

Intangibles

Total deferred tax liabilities

Net deferred tax assets

2017

4,491

36,305

39,243

55,253

17,919

28,049

36,265

—

(22,844)

194,681

(12,104)

(10,024)

(95,385)

(117,513)

(in 000s)

2016

7,919

35,066

69,347

51,998

19,075

26,992

31,123

10,187

(21,515)

230,192

(3,225)

(19,913)

(93,406)

(116,544)

77,168

113,648

Our valuation allowance on deferred tax assets increased $1.3 million during the current period. The increase in

valuation allowance primarily related to foreign net operating losses generated in the current fiscal year.

Certain of our subsidiaries file stand-alone returns in various states and foreign jurisdictions, and others join in
filing consolidated or combined returns in such jurisdictions. As of April 30, 2017, we had net operating losses (NOLs)
in various states and foreign jurisdictions. The amount of state NOLs vary by taxing jurisdiction. We maintain a valuation
allowance of $22.7 million for the portion of such losses that, more likely than not, will not be realized. If not used,
the NOLs will expire in varying amounts during fiscal years 2018 through 2034.

We intend to indefinitely reinvest the earnings of our foreign subsidiaries; therefore, no provision has been made
for income taxes that might be payable upon remittance of such earnings. The amount of unrecognized tax liability
on these foreign earnings, net of expected foreign tax credits, is approximately $10 million as of April 30, 2017.

Changes in unrecognized tax benefits for fiscal years 2017, 2016 and 2015 are as follows:

Year ended April 30,

Balance, beginning of the year

Additions based on tax positions related to prior years

Reductions based on tax positions related to prior years

Additions based on tax positions related to the current year

Reductions related to settlements with tax authorities

Expiration of statute of limitations

Other

Balance, end of the year

2017

2016

111,514

86,268

14,743

(8,469)

33,264

(293)

(989)

173

29,294

(25,413)

27,220

(450)

(8,922)

3,517

149,943

111,514

(in 000s)

2015

111,491

15,510

(38,783)

22,319

(10,450)

(11,423)

(2,396)

86,268

The total gross unrecognized tax benefit ending balance as of April 30, 2017, 2016 and 2015, includes $118.2 million,
$82.3 million and $55.3 million, respectively, which if recognized, would impact our effective tax rate. The difference
results from adjusting the gross balances for such items as federal, state and foreign deferred items, interest and
deductible taxes. We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease

H&R Block, Inc. | 2017 Form 10-K

by approximately $14 million within the next twelve months due to settlements of audit issues and expiration of
statutes of limitations.

Interest and penalties, if any, accrued on the unrecognized tax benefits are reflected in income tax expense. The
total gross interest and penalties accrued as of April 30, 2017, 2016 and 2015 totaled $21.0 million, $22.3 million and
$24.7 million, respectively.

We file a consolidated federal income tax return in the United States with the IRS and file tax returns in various
state and foreign jurisdictions. Tax returns are typically examined and either settled upon completion of the
examination or through the appeals process. As of April 30, 2017, the Company did not have a U.S. federal income
tax return under examination. Our U.S. federal returns for 2012 and all prior periods have been audited by the IRS
and are closed. Our U.S. federal returns for 2013 and after have not been audited and remain open to examination.
In May of 2017, we received notice from the IRS of their intent to audit our 2014 federal income tax return. With
respect to state and local jurisdictions and countries outside of the United States, we are typically subject to
examination for three to six years after the income tax returns have been filed. Although the outcome of tax audits
is always uncertain, we believe that adequate amounts of tax, interest and penalties have been provided for in the
accompanying consolidated financial statements for any adjustments that might be incurred due to federal, state,
local or foreign audits.

NOTE 11: OTHER INCOME AND OTHER EXPENSES

The following table shows the components of other income (expense), net:

Year ended April 30,

Mortgage loans and real estate owned, net

Interest income

Interest and gains on available-for-sale securities

Foreign currency losses

Impairment of investments

Other, net

2017

2,644

2016

4,914

3,642

188

(1)

—

(219)

3,962

8,548

(7,807)

(2,500)

(1,868)

6,254

5,249

(in 000s)

2015

—

272

—

(5,878)

(1,368)

359

(6,615)

In connection with our deregistration as a savings and loan holding company in fiscal year 2016, we no longer
present interest income on mortgage loans and various other investments as revenues. Effective September 1, 2015,
these amounts are prospectively reported in other income on the consolidated statements of operations and
comprehensive loss. Additionally, in December 2016 we sold our portfolio of mortgage loans and related real estate
owned. Cash proceeds received approximated carrying value.

NOTE 12: COMMITMENTS AND CONTINGENCIES

We offer POM to tax clients whereby we (1) represent our clients if they are audited by the IRS, and (2) assume the
cost, up to a cumulative per client limit of $6,000, of additional taxes owed by a client resulting from errors attributable
to H&R Block. We defer all revenues and direct costs associated with these service plans, recognizing these amounts
over the term of the service plan based on actual claims paid in relation to projected claims. The related short-term
asset is included in prepaid expenses and other current assets. The related liability is included in deferred revenue
and other current liabilities in the consolidated balance sheets. The related long-term asset and liability are included
in other noncurrent assets and deferred revenue and other noncurrent liabilities, respectively, in the consolidated
balance sheets. A loss on POM would be recognized if the sum of expected costs for services exceeded unearned
revenue. Changes in the related balance of deferred revenue for both company-owned and franchise POM are as
follows:

2017 Form 10-K | H&R Block, Inc.

Year ended April 30,

Balance, beginning of the year

Amounts deferred for new extended service plans issued

Revenue recognized on previous deferrals

Balance, end of the year

2017

204,342

120,691

(113,810)

211,223

(in 000s)

2016

189,779

119,915

(105,352)

204,342

We accrued $6.8 million and $7.0 million as of April 30, 2017 and 2016, respectively, related to estimated losses
under our standard guarantee, which is included with our standard in-office tax preparation services. The short-term
and long-term portions of this liability are included in deferred revenue and other liabilities in the consolidated balance
sheets.

We have accrued estimated contingent consideration totaling $10.4 million and $8.7 million as of April 30, 2017
and 2016, respectively, related to acquisitions, with amounts recorded in deferred revenue and other liabilities.
Estimates of contingent payments are typically based on expected financial performance of the acquired business
and economic conditions at the time of acquisition. Should actual results differ from our assumptions, future payments
made will differ from the above estimate and any differences will be recorded in results from continuing operations.

We have contractual commitments to fund certain franchises with approved revolving lines of credit. Our total
obligation under these lines of credit was $53.0 million as of April 30, 2017, and net of amounts drawn and outstanding,
our remaining commitment to fund totaled $26.0 million.

We are self-insured for certain risks, including, employer provided medical benefits, workers' compensation,
property and casualty, professional liability and claims related to POM. These programs maintain various self-insured
retentions. In all but POM in company-owned offices, commercial insurance is purchased in excess of the self-insured
retentions. We accrue estimated losses for self-insured retentions using actuarial models and assumptions based on
historical loss experience.

We have a deferred compensation plan that permits certain employees to defer portions of their compensation
and accrue income on the deferred amounts. Included in deferred revenue and other liabilities is $25.2 million and
$29.0 million as of April 30, 2017 and 2016, respectively, reflecting our obligation under these plans.

On October 25, 2016, we entered into a Refund Advance Program Agreement and certain ancillary agreements
with certain third parties, pursuant to which they originated and funded Refund Advance loans, and provided
technology, software, and underwriting support services related to such loans during the 2017 tax season. The Refund
Advance loans were offered to eligible assisted U.S. tax preparation clients, based on client eligibility as determined
by the loan originator. We paid loan origination fees based on volume and customer type. The loan origination fees
were intended to cover expected loan losses and payments to capital providers, among other items. In addition, we
provided limited guaranties up to $73 million in the aggregate, subject to specified thresholds, which would cover
certain incremental loan losses. We expect that only an immaterial amount of the guaranties will be called upon under
anticipated loss scenarios. At April 30, 2017 we had accrued an estimated liability of $0.7 million related to the RA
program.

In connection with our agreement with BofI, we are required to purchase a 90% participation interest, at par, in

all EAs originated by our lending partner.

H&R Block, Inc. | 2017 Form 10-K

Substantially all of the operations of our subsidiaries are conducted in leased premises. Most of the operating
leases are for periods ranging from three years to five years, with renewal options, and provide for fixed monthly
rentals. Future minimum operating lease commitments as of April 30, 2017, are as follows:

2018

2019

2020

2021

2022

2023 and beyond

(in 000s)

249,813

192,260

137,255

71,665

29,621

27,214

707,828

Rent expense of continuing operations for fiscal years 2017, 2016 and 2015 totaled $236.2 million, $228.5 million

and $213.1 million, respectively.

See note 13 to the consolidated financial statements for additional discussion regarding guarantees and

indemnifications.

NOTE 13: LITIGATION AND OTHER RELATED CONTINGENCIES

We are a defendant in numerous litigation matters, arising both in the ordinary course of business and otherwise,
including as described below. The matters described below are not all of the lawsuits to which we are subject. In some
of the matters, very large or indeterminate amounts, including punitive damages, are sought. U.S. jurisdictions permit
considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not
to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient
to invoke the jurisdiction of the court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in
amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. We believe that the
monetary relief which may be specified in a lawsuit or a claim bears little relevance to its merits or disposition value
due to this variability in pleadings and our experience in litigating or resolving through settlement of numerous claims
over an extended period of time.

The outcome of a litigation matter and the amount or range of potential loss at particular points in time may be
difficult to ascertain. Among other things, uncertainties can include how fact finders will evaluate documentary
evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the
law. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves
view the relevant evidence and applicable law.

In addition to litigation matters, we are also subject to claims and other loss contingencies arising out of our business

activities, including as described below.

We accrue liabilities for litigation, claims, including indemnification and contribution claims, and other related loss
contingencies and any related settlements (each referred to, individually, as a "matter" and, collectively, as "matters")
when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities
have been accrued for certain of the matters noted below. If a range of loss is estimated, and some amount within
that range appears to be a better estimate than any other amount within that range, then that amount is accrued. If
no amount within the range can be identified as a better estimate than any other amount, we accrue the minimum
amount in the range.

For such matters where a loss is believed to be reasonably possible, but not probable, or the loss cannot be
reasonably estimated, no accrual has been made. It is possible that such matters could require us to pay damages or
make other expenditures or accrue liabilities in amounts that could not be reasonably estimated as of April 30, 2017.
While the potential future liabilities could be material in the particular quarterly or annual periods in which they are
recorded, based on information currently known, we do not believe any such liabilities are likely to have a material
adverse effect on our business and our consolidated financial position, results of operations and cash flows. As of
April 30, 2017 and 2016, our total accrued liabilities were $2.3 million for matters addressed in this note.

2017 Form 10-K | H&R Block, Inc.

Our aggregate range of reasonably possible losses includes (1) matters where a liability has been accrued and there
is a reasonably possible loss in excess of the amount accrued for that liability, and (2) matters where a loss is believed
to be reasonably possible, but a liability has not been accrued. This aggregate range only represents those losses as
to which we are currently able to estimate a reasonably possible loss or range of loss. It does not represent our
maximum loss exposure. The estimated range of reasonably possible loss is based upon currently available information
and is subject to significant judgment and a variety of assumptions, as well as known and unknown uncertainties. The
matters underlying the estimated range will change from time to time, and actual results may vary significantly from
the current estimate. As of April 30, 2017, we believe the aggregate range of reasonably possible losses in excess of
amounts accrued is not material.

For other matters, we are not currently able to estimate the reasonably possible loss or range of loss. We are often
unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient
information to support an assessment of the reasonably possible loss or range of loss, such as precise information
about the amount of damages or other remedies being asserted, the defenses to the claims being asserted, discovery
from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts,
or the status or terms of any settlement negotiations.

On a quarterly and annual basis, we review relevant information with respect to litigation and other loss
contingencies and update our accruals, disclosures and estimates of reasonably possible loss or range of loss based
on such reviews. Costs incurred with defending matters are expensed as incurred. Any receivable for insurance
recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable
and reasonably estimable.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and
we intend to defend them vigorously, but there can be no assurances as to their outcomes. In the event of unfavorable
outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid
to discharge or settle the matters could be substantial and could have a material adverse impact on our business and
our consolidated financial position, results of operations, and cash flows.

INCLUDING

LITIGATION, CLAIMS,

INDEMNIFICATION AND CONTRIBUTION CLAIMS, OR OTHER LOSS
CONTINGENCIES PERTAINING TO DISCONTINUED MORTGAGE OPERATIONS – Although SCC ceased its mortgage loan
origination activities in December 2007 and sold its loan servicing business in April 2008, SCC or the Company has
been, remains, and may in the future be, subject to litigation, claims, including indemnification and contribution
claims, and other loss contingencies pertaining to SCC's mortgage business activities that occurred prior to such
termination and sale. These contingencies, claims, and lawsuits include actions by regulators, third parties seeking
indemnification or contribution, including depositors, underwriters, and securitization trustees, individual plaintiffs,
and cases in which plaintiffs seek to represent a class of others alleged to be similarly situated. Among other things,
these contingencies, claims, and lawsuits allege or may allege discriminatory or unfair and deceptive loan origination
and servicing (including debt collection, foreclosure, and eviction) practices, other common law torts, rights to
indemnification or contribution, breach of contract, violations of securities laws, and a variety of federal statutes,
including the Truth in Lending Act (TILA), Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement
Procedures Act (RESPA), Home Ownership & Equity Protection Act (HOEPA), as well as similar state statutes. Given
the impact of the financial crisis on the non-prime mortgage environment, the aggregate volume of these matters is
substantial although it is difficult to predict either the likelihood of new matters being initiated or the outcome of
existing matters. In many of these matters, including certain of the lawsuits and claims described below, it is not
possible to estimate a reasonably possible loss or range of loss due to, among other things, the inherent uncertainties
involved in these matters, some of which are beyond the Company's control, and the indeterminate damages sought
in some of these matters.

On May 31, 2012, a lawsuit was filed by Homeward Residential, Inc. (Homeward) in the Supreme Court of the State
of New York, County of New York, against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Index
No. 651885/2012). SCC removed the case to the United States District Court for the Southern District of New York on
June 28, 2012 (Case No. 12-cv-5067). The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan
Trust 2006-2 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of
contract, anticipatory breach, indemnity, and declaratory judgment in connection with alleged losses incurred as a
result of the breach of representations and warranties relating to SCC and to loans sold to the trust. The plaintiff seeks

H&R Block, Inc. | 2017 Form 10-K

specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders
for alleged actual and anticipated losses, as well as a repurchase of all loans due to alleged misrepresentations by SCC
as to itself and as to the loans' compliance with its underwriting standards and the value of underlying real estate. In
response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase,
anticipatory breach, indemnity, and declaratory judgment. The case is proceeding on the remaining claims.
Representatives of a holder of certificates in the trust filed a motion to intervene to add H&R Block, Inc. to the lawsuit
and assert claims against H&R Block, Inc. based on alter ego, corporate veil-piercing, and agency law. SCC is opposing
the motion to intervene, which remains pending. We believe H&R Block, Inc. has meritorious defenses to the extent
the court allows any such claims to be asserted. We have not concluded that a loss related to this matter is probable,
nor have we accrued a liability related to this matter.

On September 28, 2012, a second lawsuit was filed by Homeward in the United States District Court for the Southern
District of New York against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Case No. 12-cv-7319).
The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2006-3 and for the benefit of
the trustee and the certificate holders of such trust, asserts claims for breach of contract and indemnity in connection
with losses allegedly incurred as a result of the breach of representations and warranties relating to 96 loans sold to
the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the
trust and its certificate holders for alleged actual and anticipated losses. In response to a motion filed by SCC, the
court dismissed the plaintiff's claims for breach of the duty to cure or repurchase and for indemnification of its costs
associated with the litigation. On September 30, 2016, the court granted a motion allowing plaintiff to file a second
amended complaint to include breach of contract claims with respect to 649 additional loans in the trust and to allow
such claims with respect to other loans in the trust proven to be in material breach of SCC’s representations and
warranties. SCC filed a motion for reconsideration and a motion for leave to appeal the ruling, both of which remain
pending. On October 6, 2016, plaintiff filed its second amended complaint. SCC filed a motion to dismiss, which also
remains pending. Representatives of a holder of certificates in the trust filed a motion to intervene to add H&R Block,
Inc. to the lawsuit and assert claims against H&R Block, Inc. based on alter ego, corporate veil-piercing, and agency
law. SCC is opposing the motion to intervene, which remains pending. We believe H&R Block, Inc. has meritorious
defenses to the extent the court allows any such claims to be asserted. A portion of the accrual for representation
and warranty claims, as discussed in note 14, is related to loans in this case. We have not concluded that a loss related
to this lawsuit is probable, nor have we accrued a liability related to this lawsuit.

Underwriters and depositors are, or have been, involved in multiple lawsuits related to securitization transactions
in which SCC participated. These lawsuits allege or alleged a variety of claims, including violations of federal and state
securities laws and common law fraud, based on alleged materially inaccurate or misleading disclosures. SCC has
received notices of claims for indemnification relating to lawsuits to which underwriters or depositors are party. Based
on information currently available to SCC, it believes that the 21 lawsuits in which notice of a claim has been made
involve 39 securitization transactions with original investments of approximately $14 billion (of which the outstanding
principal amount is approximately $4 billion). Additional lawsuits against the underwriters or depositors may be filed
in the future, and SCC may receive additional notices of claims for indemnification or contribution from underwriters
or depositors with respect to existing or new lawsuits or settlements of such lawsuits. Certain of the notices received
included, and future notices may include, a reservation of rights to assert claims for contribution, which are referred
to herein as " contribution claims." Contribution claims may become operative if indemnification is unavailable or
insufficient to cover all of the losses and expenses involved. We have not concluded that a loss related to any of these
indemnification or contribution claims is probable, nor have we accrued a liability related to any of these claims.

Securitization trustees also are, or have been, involved in lawsuits related to securitization transactions in which
SCC participated. Plaintiffs in these lawsuits allege, among other things, that originators, depositors, servicers, or other
parties breached their representations and warranties or otherwise failed to fulfill their obligations, including that
securitization trustees breached their contractual obligations, breached their fiduciary duties, or violated statutory
requirements by failing to properly protect the certificate holders’ interests. SCC has received notices from
securitization trustees of potential indemnification obligations, and may receive additional notices with respect to
existing or new lawsuits or settlements of such lawsuits, in its capacity as originator, depositor, or servicer. We have
not concluded that a loss related to any of these indemnification claims is probable, nor have we accrued a liability
related to any of these claims.

2017 Form 10-K | H&R Block, Inc.

If the amount that SCC is ultimately required to pay with respect to claims and litigation related to its past sales
and securitizations of mortgage loans, together with payment of SCC's related administration and legal expense,
exceeds SCC's net assets, the creditors of SCC, other potential claimants, or a bankruptcy trustee if SCC were to file
or be forced into bankruptcy, may attempt to assert claims against us for payment of SCC's obligations. Claimants may
also attempt to assert claims against or seek payment directly from the Company even if SCC's assets exceed its
liabilities. SCC's principal assets, as of April 30, 2017, total approximately $318 million and consist primarily of an
intercompany note receivable. We believe our legal position is strong on any potential corporate veil-piercing
arguments; however, if this position is challenged and not upheld, it could have a material adverse effect on our
business and our consolidated financial position, results of operations and cash flows.

LITIGATION, CLAIMS OR OTHER LOSS CONTINGENCIES PERTAINING TO CONTINUING OPERATIONS –

Compliance Fee Litigation. On April 16, 2012, a putative class action lawsuit was filed against us in the Circuit Court
of Jackson County, Missouri styled Manuel H. Lopez III v. H&R Block, Inc., et al. (Case # 1216CV12290) concerning a
compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff seeks to represent all
Missouri citizens who were charged the compliance fee, and asserts claims of violation of the Missouri Merchandising
Practices Act, money had and received, and unjust enrichment. We filed a motion to compel arbitration of the 2011
claims. The court denied the motion. We filed an appeal. On May 6, 2014, the Missouri Court of Appeals, Western
District, reversed the ruling of the trial court and remanded the case for further consideration of the motion. On March
12, 2015, the trial court denied the motion on remand. We filed an additional appeal, which was denied. The parties
subsequently reached an agreement to resolve the plaintiff’s claims in the case. A portion of our loss contingency
accrual is related to this matter.

On April 19, 2012, a putative class action lawsuit was filed against us in the United States District Court for the
Western District of Missouri styled Ronald Perras v. H&R Block, Inc., et al. (Case No. 4:12-cv-00450-DGK) concerning
a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff originally sought to
represent all persons nationwide (excluding citizens of Missouri) who were charged the compliance fee, and asserted
claims of violation of various state consumer laws, money had and received, and unjust enrichment. In November
2013, the court compelled arbitration of the 2011 claims and stayed all proceedings with respect to those claims. In
June 2014, the court denied class certification of the remaining 2012 claims. The plaintiff filed an appeal with the
Eighth Circuit Court of Appeals, which was denied on June 18, 2015. In January 2016, the plaintiff filed an amended
complaint asserting claims of violation of Missouri and California state consumer laws, money had and received, and
unjust enrichment, along with a motion to certify a class of all persons (excluding citizens of Missouri) who were
charged the compliance fee in the state of California. We subsequently filed a motion for summary judgment on all
claims. On April 29, 2016, the court granted our motion for summary judgment on all claims and denied the plaintiff's
motion for class certification as moot. The plaintiff filed an appeal with the Eighth Circuit Court of Appeals. The parties
subsequently reached an agreement to resolve the plaintiff’s claims in the case. A portion of our loss contingency
accrual is related to this matter.

LITIGATION, CLAIMS AND OTHER LOSS CONTINGENCIES PERTAINING TO OTHER DISCONTINUED OPERATIONS –

Express IRA Litigation. On January 2, 2008, the Mississippi Attorney General in the Chancery Court of Hinds County,
Mississippi First Judicial District (Case No. G 2008 6 S 2) filed a lawsuit regarding our former Express IRA product that
is styled Jim Hood, Attorney for the State of Mississippi v. H&R Block, Inc., H&R Block Financial Advisors, Inc., et al. The
complaint alleges fraudulent business practices, deceptive acts and practices, common law fraud and breach of
fiduciary duty with respect to the sale of the product in Mississippi and seeks equitable relief, disgorgement of profits,
damages and restitution, civil penalties and punitive damages. We have not concluded that a loss related to this matter
is probable, nor have we accrued a loss contingency related to this matter.

Although we sold H&R Block Financial Advisors, Inc. (HRBFA) effective November 1, 2008, we remain responsible

for any liabilities relating to the Express IRA litigation through an indemnification agreement.

OTHER – We are from time to time a party to litigation, claims and other loss contingencies not discussed herein
arising out of our business operations. These matters may include actions by state attorneys general, other state
regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others
similarly situated.

H&R Block, Inc. | 2017 Form 10-K

While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any,
we are required to pay to discharge or settle these other matters will not have a material adverse impact on our
business and our consolidated financial position, results of operations and cash flows.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and
we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there can be
no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our
operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be
substantial and could have a material adverse impact on our business and our consolidated financial position, results
of operations and cash flows.

NOTE 14: LOSS CONTINGENCIES ARISING FROM REPRESENTATIONS AND WARRANTIES OF OUR DISCONTINUED

MORTGAGE OPERATIONS

SCC ceased originating mortgage loans in December 2007 and, in April 2008, sold its servicing assets and discontinued
its remaining operations.

Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers, who generally
securitized such loans, or in the form of RMBSs. In connection with the sale of loans and/or RMBSs, SCC made certain
representations and warranties. Claims under these representations and warranties together with any settlement
arrangements related to these losses are collectively referred to as "representation and warranty claims." These
representations and warranties varied based on the nature of the transaction and the buyer's or insurer's requirements,
but generally pertained to the ownership of the loan, the validity of the lien securing the loan, borrower fraud, the
loan's compliance with the criteria for inclusion in the transaction, including compliance with SCC's underwriting
standards or loan criteria established by the buyer, ability to deliver required documentation, and compliance with
applicable laws. Representations and warranties related to borrower fraud in whole loan sale transactions to
institutional investors, which were generally securitized by such investors and represented approximately 68% of the
disposal of loans originated in calendar years 2005, 2006 and 2007, included a "knowledge qualifier" limiting SCC's
liability to those instances where SCC had knowledge of the fraud at the time the loans were sold. Representations
and warranties made in other sale transactions effectively did not include a knowledge qualifier as to borrower fraud.
To the extent that any remaining repurchase obligations exist, SCC believes it would have an obligation to repurchase
a loan only if it breached a representation and warranty and such breach materially and adversely affects the value
of the mortgage loan or certificate holder's interest in the mortgage loan.

Representation and warranty claims received by SCC have primarily related to alleged breaches of representations
and warranties related to a loan's compliance with the underwriting standards established by SCC at origination and
borrower fraud for loans originated in calendar years 2006 and 2007. SCC has received claims representing an original
principal amount of $2.6 billion since May 1, 2008, of which $1.9 billion were received prior to fiscal year 2013.

SETTLEMENT ACTIONS – SCC has entered into bulk settlements of previously denied and potential future
representation and warranty and other claims against SCC. Settlement payments were made during fiscal year 2017
in the amount of $61.0 million pursuant to settlement agreements entered into in fiscal years 2016 and 2017. The
amounts paid under these settlement agreements were fully covered by prior accruals.

LIABILITY FOR ESTIMATED CONTINGENT LOSSES – SCC accrues a liability for losses related to representation and
warranty claims when those losses are believed to be both probable and reasonably estimable. SCC's loss estimate
as of April 30, 2017 is based on the best information currently available, management judgment, developments in
relevant case law and the terms of bulk settlements.

2017 Form 10-K | H&R Block, Inc.

The liability is included in deferred revenue and other current liabilities on the consolidated balance sheets. A

rollforward of SCC's accrued liability for these loss contingencies is as follows:

Year ended April 30,

Balance, beginning of the year

Loss provisions

Payments

Balance, end of the year

2017

2016

65,265

149,765

235

(61,000)

4,000

(88,500)

4,500

65,265

(in 000s)

2015

183,765

16,000

(50,000)

149,765

The statute of limitations for a contractual claim to enforce a representation and warranty obligation is generally
six years or such shorter limitations period that may apply under the law of a state where the economic injury occurred.
On June 11, 2015, the New York Court of Appeals, New York's highest court, held in ACE Securities Corp. v. DB Structured
Products, Inc., that the six-year statute of limitations under New York law starts to run at the time the representations
and warranties are made, not the date when the repurchase demand was denied. This decision applies to claims and
lawsuits brought against SCC where New York law governs. New York law governs many, though not all, of the RMBS
transactions into which SCC entered. However this decision would not affect representation and warranty claims and
lawsuits SCC has received or may receive, for example, where the statute of limitations has been tolled by agreement
or a suit was timely filed.

In response to the statute of limitations rulings in the ACE case and similar rulings in other state and federal courts,
parties seeking to pursue representation and warranty claims or lawsuits have sought, and may in the future seek, to
distinguish certain aspects of the ACE decision, pursue alternate legal theories of recovery, or assert claims against
other contractual parties such as securitization trustees. For example, a 2016 ruling by a New York intermediate
appellate court allowed a counterparty to pursue litigation on additional loans in the same trust even though only
some of the loans complied with the condition precedent of timely pre-suit notice and opportunity to cure or
repurchase. Additionally, plaintiffs in litigation to which SCC is not party have alleged breaches of an independent
contractual duty to provide notice of material breaches of representations and warranties, and pursued separate
claims to which, they argue, the statute of limitations ruling in the ACE case does not apply. The impact on SCC from
alternative legal theories seeking to avoid or distinguish the ACE decision, or judicial limitations on the ACE decision,
is unclear. SCC has not accrued liabilities for claims not subject to a tolling arrangement or not relating back to timely
filed litigation.

See note 13, which addresses contingent losses that may be incurred with respect to various indemnification or
contribution claims by underwriters, depositors, and securitization trustees in securitization transactions in which SCC
participated.

NOTE 15: SEGMENT INFORMATION

Our subsidiaries provide assisted and DIY tax return preparation solutions through multiple channels (including in-
person, online and mobile applications, and desktop software) and distribute the H&R Block-branded financial
products and services, including those of our financial partners. Tax returns are either prepared by H&R Block tax
professionals (in company-owned or franchise offices or virtually via the internet) or prepared and filed by our clients
through our DIY tax solutions.

We operate as a single segment that includes all of our continuing operations, which are designed to enable clients
to obtain tax preparation services seamlessly.

H&R Block, Inc. | 2017 Form 10-K

Revenues of our continuing operations are as follows:

Year ended April 30,

REVENUES :

U.S. assisted tax preparation fees

U.S. royalties

U.S. DIY tax preparation fees

International revenues

Revenues from Refund Transfers

Revenues from Emerald Card®

Revenues from Peace of Mind® Extended Service Plan

Interest and fee income on Emerald Advance

Other

2017

2016

(in 000s)

2015

1,902,212

1,890,175

1,865,438

250,270

219,123

210,320

148,212

95,221

92,820

57,022

61,114

249,433

234,341

213,400

162,560

92,608

86,830

57,268

51,538

273,250

231,854

236,552

167,787

103,300

81,551

57,202

61,724

3,036,314

3,038,153

3,078,658

The carrying value of long-lived assets held outside the U.S. totaled $21.0 million, $17.5 million and $16.7 million

as of April 30, 2017, 2016 and 2015, respectively.

NOTE 16: QUARTERLY FINANCIAL DATA (UNAUDITED)

Fiscal Year 2017

Apr 30, 2017

Jan 31, 2017

Oct 31, 2016

Jul 31, 2016

3,036,314

2,327,915

451,882

131,332

125,185

(in 000s, except per share amounts)

629,287

1,211,903

(150,598) $

(228,469) $

425,333

(49,386)

(85,054)

(203,549)

(82,523)

208,370

420,917

(11,972)

408,945

1.97

(0.05)

1.92

1.96

(0.05)

1.91

786,570

(101,212)

(143,415)

(121,026)

(3,218)

783,352

3.79

(0.02)

3.77

3.76

(0.01)

3.75

(3,302)

(2,805)

(2,647)

(104,514) $

(146,220) $

(123,673)

(0.49) $

(0.01)

(0.50) $

(0.49) $

(0.01)

(0.50) $

(0.67) $

(0.01)

(0.68) $

(0.67) $

(0.01)

(0.68) $

(0.55)

(0.01)

(0.56)

(0.55)

(0.01)

(0.56)

Revenues

Income (loss) from continuing
operations before taxes
(benefit)

Income taxes (benefit)

Net income (loss) from continuing

operations

Net loss from discontinued

operations

Net income (loss)

Basic earnings (loss) per share:

Continuing operations

Discontinued operations

Consolidated

Diluted earnings (loss) per share:

Continuing operations

Discontinued operations

Consolidated

2017 Form 10-K | H&R Block, Inc.

Revenues

Income (loss) from continuing
operations before taxes
(benefit)

Income taxes (benefit)

Net income (loss) from continuing

operations

Net loss from discontinued

operations

Net income (loss)

Basic earnings (loss) per share:

Continuing operations

Discontinued operations

Consolidated

Diluted earnings (loss) per share:

Continuing operations

Discontinued operations

Consolidated

Fiscal Year 2016

Apr 30, 2016

Jan 31, 2016

Oct 31, 2015

Jul 31, 2015

3,038,153

2,297,477

474,543

128,415

137,718

(in 000s, except per share amounts)

569,479

1,140,807

(146,500) $

(237,719) $

(67,851)

(95,201)

(187,109)

(90,604)

185,926

383,553

(9,286)

374,267

1.54

(0.04)

1.50

1.53

(0.04)

1.49

439,582

701,225

(563)

700,662

3.15

—

3.15

3.13

—

3.13

(78,649)

(142,518)

(96,505)

(3,080)

(2,489)

(81,729) $

(145,007) $

(3,154)

(99,659)

(0.34) $

(0.01)

(0.35) $

(0.34) $

(0.01)

(0.35) $

(0.54) $

(0.01)

(0.55) $

(0.54) $

(0.01)

(0.55) $

(0.35)

(0.01)

(0.36)

(0.35)

(0.01)

(0.36)

Because most of our clients file their tax returns during the period from January through April of each year,
substantially all of our revenues from income tax return preparation and related services and products are earned
during this period. As a result, we generally operate at a loss through a majority of the fiscal year.

The accumulation of four quarters in fiscal years 2017 and 2016 for earnings per share may not equal the related
per share amounts for the years ended April 30, 2017 and 2016 due to the timing of the exercise of stock options and
lapse of certain restrictions on nonvested shares and share units and deferred stock units and the antidilutive effect
of stock options and nonvested shares and share units in the first three quarters for those years.

Information regarding H&R Block's common stock prices and dividends for fiscal years 2017 and 2016 is as follows:

Fiscal Year 2017:

Dividends paid per share

Stock price range:

High

Low

Fiscal Year 2016:

Dividends paid per share

Stock price range:

High

Low

Fiscal Year

Fourth Quarter

Third Quarter

Second Quarter

First Quarter

0.88

24.95

19.18

0.80

37.53

19.75

0.22

24.82

19.85

0.20

35.14

19.75

0.22

24.06

20.91

0.20

37.53

31.00

0.22

24.95

20.58

0.20

37.50

31.03

0.22

24.53

19.18

0.20

34.62

29.15

NOTE 17: CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Block Financial is a 100% owned subsidiary of the Company. Block Financial is the Issuer and the Company is the full
and unconditional Guarantor of the Senior Notes, our 2016 CLOC and other indebtedness issued from time to time.
These condensed consolidating financial statements have been prepared using the equity method of accounting.
Earnings of subsidiaries are, therefore, reflected in the Company's investment in subsidiaries account. The elimination
entries eliminate investments in subsidiaries, related stockholders' equity and other intercompany balances and
transactions.

H&R Block, Inc. | 2017 Form 10-K

CONDENSED CONSOLIDATING INCOME STATEMENTS

Year ended April 30, 2017

Total revenues

Cost of revenues

Selling, general and administrative

Total operating expenses

Other income (expense), net

Interest expense on external

borrowings

Income from continuing operations

before taxes

Income tax (benefit)

Net income from continuing

operations

Net income (loss) from

discontinued operations

Net income

Other comprehensive loss

Comprehensive income

Year ended April 30, 2016

Total revenues

Cost of revenues

Selling, general and administrative

Total operating expenses

Other income (expense), net

Interest expense on external

borrowings

Income from continuing operations

before taxes

Income taxes (benefit)

Net income from continuing

operations

Net loss from discontinued

operations

Net income

Other comprehensive loss

H&R Block, Inc.
(Guarantor)

Block Financial
(Issuer)

Other
Subsidiaries

Eliminations

— $

186,659

2,877,265

(27,610) $

—

399,996

71,661

24,201

95,862

25,361

1,580,425

671,653

2,252,078

9,330

(7,709)

(19,901)

(27,610)

(428,433)

(in 000s)

Consolidated
H&R Block

3,036,314

1,644,377

675,953

2,320,330

6,254

—

(92,263)

(688)

—

(92,951)

399,996

(8,949)

408,945

—

408,945

(4,066)

23,895

6,472

17,423

(12,705)

4,718

—

633,829

210,847

(428,433)

—

629,287

208,370

422,982

(428,433)

420,917

733

423,715

(4,066)

—

(428,433)

4,066

404,879

4,718

419,649

(424,367) $

H&R Block, Inc.
(Guarantor)

Block Financial
(Issuer)

Other
Subsidiaries

Eliminations

Consolidated
H&R Block

— $

192,698

2,868,343

(22,888) $

—

2,537

375,136

102,707

30,780

133,487

21,473

—

(68,531)

372,599

(1,668)

374,267

—

374,267

(12,973)

12,153

1,411

10,742

(9,286)

1,456

(8,444)

1,588,450

703,375

2,291,825

(9,965)

(431)

566,122

186,183

(5,605)

(17,283)

(22,888)

(381,395)

—

(68,962)

(381,395)

—

569,479

185,926

379,939

(381,395)

383,553

—

379,939

(12,973)

—

(381,395)

21,417

(9,286)

374,267

(12,973)

361,294

(11,972)

408,945

(4,066)

404,879

3,038,153

1,685,552

719,409

2,404,961

5,249

Comprehensive income (loss)

361,294

(6,988) $

366,966

(359,978) $

2017 Form 10-K | H&R Block, Inc.

Year ended April 30, 2015

Total revenues

Cost of revenues

Selling, general and administrative

Total operating expenses

Other income (expense), net

Interest expense on external

borrowings

Income from continuing operations

before taxes

Income taxes

Net income from continuing

operations

Net income (loss) from

discontinued operations

Net income

Other comprehensive income (loss)

H&R Block, Inc.
(Guarantor)

Block Financial
(Issuer)

Other
Subsidiaries

Eliminations

Consolidated
H&R Block

— $

226,285

2,858,474

(6,101) $

—

475,336

96,493

19,053

115,546

1,773

1,540,091

634,456

2,174,547

35,458

(6,094)

(7)

(6,101)

(519,182)

3,078,658

1,630,490

653,502

2,283,992

(6,615)

—

(44,884)

(362)

—

(45,246)

475,336

1,673

473,663

—

473,663

(3,437)

67,628

2,602

65,026

(16,725)

48,301

6,738

719,023

251,786

(519,182)

—

742,805

256,061

467,237

(519,182)

486,744

3,644

470,881

(3,437)

—

(519,182)

(3,301)

(13,081)

473,663

(3,437)

470,226

Comprehensive income

470,226

55,039

467,444

(522,483) $

H&R Block, Inc. | 2017 Form 10-K

CONDENSED CONSOLIDATING BALANCE SHEETS

H&R Block, Inc.
(Guarantor)

Block Financial
(Issuer)

Other
Subsidiaries

Eliminations

— $

4,486

1,006,845

— $

1,011,331

(in 000s)

Consolidated
H&R Block

As of April 30, 2017

Cash & cash equivalents

Cash & cash equivalents - restricted

Receivables, net

Prepaid expenses and other current assets

Total current assets

Property and equipment, net

Intangible assets, net

Goodwill

Deferred tax assets and income taxes

receivable

Investments in subsidiaries

Amounts due from affiliates

Other noncurrent assets

Total assets

Accounts payable and accrued expenses

Accrued salaries, wages and payroll taxes

Accrued income taxes and reserves for

uncertain tax positions

Current portion of long-term debt

Deferred revenue and other current

liabilities

Total current liabilities

Long-term debt

Deferred tax liabilities and reserves for

uncertain tax positions

Deferred revenue and other noncurrent

liabilities

Amounts due to affiliates

Total liabilities

Stockholders' equity (deficiency)

—

5,587

2,158,234

—

2,163,821

2,086

—

2,086

—

28,324

—

2,194,294

2,224,704

(60,883)

8,060

61,250

2,280

76,076

—

30,743

—

1,493,195

51,829

1,651,921

14,218

851

—

26,759

41,828

1,487,389

953

—

1,538,207

113,714

183,005

348,199

981

162,457

895,366

5,628

162,656

8,037

122,724

98,148

101,525

63,445

1,269,963

263,749

409,364

491,207

47,398

—

113,714

(2,271,948)

2,194,294

(3,687,489)

106,208

162,775

65,725

1,346,039

263,827

409,364

491,207

83,728

—

48,114

—

99,943

4,837,803

$ (5,959,437) $

2,694,108

200,724

— $

—

217,028

183,856

348,199

981

189,216

939,280

1,493,017

159,085

163,609

—

1,493,195

(3,687,489)

2,679,569

(3,687,489)

2,754,991

2,158,234

(2,271,948)

(60,883)

Total liabilities and stockholders' equity

2,163,821

1,651,921

4,837,803

$ (5,959,437) $

2,694,108

2017 Form 10-K | H&R Block, Inc.

H&R Block, Inc.
(Guarantor)

Block Financial
(Issuer)

Other
Subsidiaries

Eliminations

Consolidated
H&R Block

— $

9,025

887,776

— $

As of April 30, 2016

Cash & cash equivalents

Cash & cash equivalents - restricted

Receivables, net

Prepaid expenses and other current assets

Total current assets

Mortgage loans held for investment, net

Property and equipment, net

Intangible assets, net

Goodwill

Deferred tax assets and income taxes

receivable

Investments in subsidiaries

Amounts due from affiliates

Other noncurrent assets

Total assets

Accounts payable and accrued expenses

Accrued salaries, wages and payroll taxes

Accrued income taxes and reserves for

uncertain tax positions

Current portion of long-term debt

Deferred revenue and other current

liabilities

Total current liabilities

Long-term debt

Deferred tax liabilities and reserves for

uncertain tax positions

Deferred revenue and other noncurrent

liabilities

Amounts due to affiliates

Total liabilities

Stockholders' equity

—

5,917

1,738,643

—

1,744,560

1,531

—

1,531

—

5,917

—

1,714,009

1,721,457

23,103

29,004

71,882

6,925

116,836

202,385

136

—

77,270

—

1,307,612

62,806

1,767,045

18,596

1,766

52,976

—

87,982

161,320

1,484,766

1,178

—

1,658,050

108,995

75,106

81,234

59,649

1,103,765

—

293,429

433,885

470,757

36,936

—

108,995

(1,847,638)

1,714,009

(3,021,621)

160,020

320,778

826

155,671

876,754

6,609

159,004

—

896,801

104,110

153,116

66,574

1,220,601

202,385

293,565

433,885

470,757

120,123

—

259,586

161,786

373,754

826

243,653

1,039,605

1,491,375

132,960

160,182

—

43,103

—

105,909

4,204,879

$ (4,869,259) $

2,847,225

239,459

— $

10,786

116,257

1,307,612

(3,021,621)

2,466,236

(3,021,621)

2,824,122

1,738,643

(1,847,638)

23,103

Total liabilities and stockholders' equity

1,744,560

1,767,045

4,204,879

$ (4,869,259) $

2,847,225

H&R Block, Inc. | 2017 Form 10-K

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

H&R Block, Inc.
(Guarantor)

Block Financial
(Issuer)

Other
Subsidiaries

Eliminations

(in 000s)

Consolidated
H&R Block

— $

(45,555) $

595,648

— $

550,093

—

(187,115)

(322,850)

2,371

507,594

—

144

1,000

207,174

(32)

—

(34,136)

61,102

—

(89,223)

(54,816)

(337)

335

—

(194,782)

(507,594)

702,376

1,546

6,562

—

1,144

207,174

(89,255)

(54,816)

(34,473)

61,437

—

8,108

41,016

(644,073)

702,376

99,319

(1,700,000)

1,700,000

—

(4,539)

9,025

—

194,782

(22,830)

—

(702,376)

(1,700,000)

1,700,000

(187,115)

(322,850)

2,371

—

(22,830)

171,952

(702,376)

(530,424)

(4,458)

119,069

887,776

—

(4,458)

114,530

896,801

— $

4,486

1,006,845

— $

1,011,331

Year ended April 30, 2017

Net cash provided by (used in) operating

activities:

Cash flows from investing:

Sales, maturities and payments received on

AFS securities

Principal payments and sales of mortgage

loans and real estate owned, net

Capital expenditures

Payments for business acquisitions, net of

cash acquired

Franchise loans funded

Payments received on franchise loans

Intercompany borrowings (payments)

Other, net

Net cash provided by (used in) investing

activities

Cash flows from financing:

Repayments of line of credit borrowings

Proceeds from line of credit borrowings

Dividends paid

Repurchase of common stock, including

shares surrendered

Proceeds from exercise of stock options

Intercompany borrowings (payments)

Other, net

Net cash provided by (used in) financing

activities

Effects of exchange rate changes on cash

Net increase (decrease) in cash

Cash - beginning of the year

Cash - end of the year

2017 Form 10-K | H&R Block, Inc.

Year ended April 30, 2016

Net cash provided by (used in) operating

activities:

Cash flows from investing:

Sales, maturities and payments received on

AFS securities

Principal payments and sales of mortgage

loans and real estate owned, net

Capital expenditures

Payments for business acquisitions, net of

cash acquired

Franchise loans funded

Payments received on franchise loans

Intercompany borrowings (payments)

Other, net

Net cash provided by (used in) investing

activities

Cash flows from financing:

Repayments of line of credit borrowings

Proceeds from line of credit borrowings

Proceeds from long-term debt

Transfer of HRB Bank deposits

Customer banking deposits, net

Dividends paid

Repurchase of common stock, including

shares surrendered

Proceeds from exercise of stock options

Intercompany borrowings (payments)

H&R Block, Inc.
(Guarantor)

Block Financial
(Issuer)

Other
Subsidiaries

Eliminations

Consolidated
H&R Block

— $

(55,689) $

588,083

— $

532,394

—

(201,688)

(2,018,338)

25,775

2,197,954

430,460

6,011

38,481

(21)

—

(22,479)

54,613

—

(99,902)

(88,776)

(341)

394

—

(1,147,985)

(2,197,954)

3,345,939

2,192

8,883

—

436,471

38,481

(99,923)

(88,776)

(22,820)

55,007

—

11,075

(644,739)

(2,371,685)

3,345,939

329,515

(1,465,000)

1,465,000

996,831

(419,028)

(327,145)

—

440

—

1,147,985

(3,345,939)

(1,465,000)

1,465,000

996,831

(419,028)

(326,705)

(201,688)

(2,018,338)

25,775

—

(18,576)

Other, net

(3,703)

(19,282)

4,409

—

Net cash provided by (used in) financing

activities

Effects of exchange rate changes on cash

Net decrease in cash

Cash - beginning of the year

Cash - end of the year

—

231,376

1,152,394

(3,345,499)

(1,961,729)

—

(469,052)

478,077

(10,569)

(641,777)

1,529,553

—

440

(440)

(10,569)

(1,110,389)

2,007,190

— $

9,025

887,776

— $

896,801

H&R Block, Inc. | 2017 Form 10-K

Year ended April 30, 2015

H&R Block, Inc.
(Guarantor)

Block Financial
(Issuer)

Other
Subsidiaries

Eliminations

Consolidated
H&R Block

Net cash provided by operating activities:

— $

15,456

611,152

— $

626,608

Cash flows from investing:

Purchases of AFS securities

Sales, maturities and payments received on

AFS securities

Principal payments and sales of mortgage

loans and real estate owned, net

Capital expenditures

Payments for business acquisitions, net of

cash acquired

Franchise loans funded

Payments received on franchise loans

Intercompany borrowings (payments)

Other, net

Net cash provided by (used in) investing

activities

Cash flows from financing:

Repayments of short-term borrowings

Proceeds from short-term borrowings

Repayments of long-term debt

Customer banking deposits, net

Dividends paid

Repurchase of common stock, including

shares surrendered

Proceeds from exercise of stock options

Intercompany borrowings (payments)

Other, net

Net cash used in financing activities

Effects of exchange rate changes on cash

Net decrease in cash

Cash - beginning of the year

Cash - end of the year

—

(219,960)

(10,449)

16,522

213,887

—

(90,381)

(200)

87,922

3,956

32,090

—

(224)

(122,934)

—

(113,252)

(475)

437

(49,220)

90,199

134,094

3,807

(285,049)

150,955

9,343

—

(90,581)

91,878

32,090

(123,158)

(113,252)

(49,695)

90,636

—

13,150

208,287

(508,174)

150,955

(148,932)

(1,049,136)

1,049,136

(400,000)

(29,204)

—

660

—

71,162

(134,094)

(150,955)

—

(3,376)

—

(358,042)

(137,470)

(150,295)

—

(134,299)

(9,986)

(44,478)

—

660

(1,049,136)

1,049,136

(400,000)

(28,544)

(219,960)

(10,449)

16,522

—

(3,376)

(645,807)

(9,986)

(178,117)

612,376

1,574,031

(1,100)

2,185,307

— $

478,077

$ 1,529,553

(440) $

2,007,190

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There were no disagreements or reportable events requiring disclosure pursuant to Item 304(b) of Regulation S-K.

ITEM 9A. CONTROLS AND PROCEDURES

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES – We have established disclosure controls and
procedures (Disclosure Controls) to ensure that information required to be disclosed in the Company's reports filed
under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the
time periods specified in the U.S. Securities and Exchange Commission's rules and forms. Disclosure Controls are also
designed to ensure that such information is accumulated and communicated to management, including the Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Our Disclosure Controls were designed to provide reasonable assurance that the controls and procedures would meet
their objectives. Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect
that our Disclosure Controls will prevent all error and all fraud. A control system, no matter how well designed and
operated, can provide only reasonable assurance of achieving the designed control objectives and management is
required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because
of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple

2017 Form 10-K | H&R Block, Inc.

error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusions of
two or more people or by management override of the control. Because of the inherent limitations in a cost-effective,
maturing control system, misstatements due to error or fraud may occur and not be detected.

As of the end of the period covered by this Form 10-K, we evaluated the effectiveness of the design and operations
of our Disclosure Controls. The controls evaluation was done under the supervision and with the participation of
management, including our Chief Executive Officer and Chief Financial Officer. Based on this evaluation, our Chief
Executive Officer and Chief Financial Officer have concluded our Disclosure Controls were effective as of the end of
the period covered by this Annual Report on Form 10-K.

(b) MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING – Management is responsible
for establishing and maintaining adequate internal control over financial reporting for the Company, as such term is
defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of management, including
our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal
control over financial reporting as of April 30, 2017 based on the criteria established in "Internal Control – Integrated
Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), using the
2013 framework.

Based on our assessment, management concluded that, as of April 30, 2017, the Company's internal control over

financial reporting was effective based on the criteria set forth by COSO.

The Company's external auditors that audited the consolidated financial statements included in Item 8, Deloitte &
Touche LLP, an independent registered public accounting firm, have issued an audit report on the effectiveness of the
Company's internal control over financial reporting. This report appears near the beginning of Item 8.

(c) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING – During the quarter ended April 30, 2017,
there were no changes that materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information about our executive officers is included under the caption "Employees and Executive Officers" in Item 1
of this report on Form 10-K.

The following information appearing in our definitive proxy statement, to be filed no later than 120 days after

April 30, 2017, is incorporated herein by reference:

Information appearing under the heading "Proposal 1 – Election of Directors";

Information appearing under the heading "Section 16(a) Beneficial Ownership Reporting Compliance"; and

Information appearing under the heading "Board of Directors' Meetings and Committees" regarding
identification of the Audit Committee and Audit Committee financial experts.

We have adopted a Code of Business Ethics and Conduct that applies to our directors, officers and employees,
including our Chief Executive Officer, Chief Financial Officer, principal accounting officer and persons performing similar
functions. A copy of the Code of Business Ethics and Conduct is available on our website at www.hrblock.com. We
intend to provide information on our website regarding amendments to, or waivers under, the Code of Business Ethics
and Conduct.

ITEM 11. EXECUTIVE COMPENSATION

The information called for by this item is contained in our definitive proxy statement filed pursuant to Regulation 14A
not later than 120 days after April 30, 2017, in the sections entitled "Director Compensation," "Director Compensation
Table," "Compensation Discussion and Analysis," "Compensation Committee Report," "Compensation Committee

H&R Block, Inc. | 2017 Form 10-K

Interlocks and Insider Participation," "Risk Assessment in Compensation Programs," and "Executive Compensation,"
and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

STOCKHOLDER MATTERS

The information called for by this item is contained in our definitive proxy statement filed pursuant to Regulation 14A
not later than 120 days after April 30, 2017, in the sections entitled "Equity Compensation Plans" and "Information
Regarding Security Holders," and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information called for by this item is contained in our definitive proxy statement filed pursuant to Regulation 14A
not later than 120 days after April 30, 2017, in the sections entitled "Employment Agreements, Change in Control and
Other Arrangements," "Review of Related Person Transactions," and "Corporate Governance," and is incorporated
herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Documents filed as part of this report:

1. The following financial statements appearing in Item 8: "Consolidated Statements of Income and
Comprehensive Income," "Consolidated Balance Sheets," "Consolidated Statements of Cash Flows" and
"Consolidated Statements of Stockholders' Equity."

2. Financial Statement Schedule II - Valuation and Qualifying Accounts. All other schedules have been omitted
because they were not applicable or because the required information has been included in the financial
statements or notes thereto.

3. Exhibits – The list of exhibits in the Exhibit Index to this report is incorporated herein by reference.

2017 Form 10-K | H&R Block, Inc.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

H&R BLOCK, INC.

/s/ William C. Cobb

William C. Cobb
President and Chief Executive Officer
June 16, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the

following persons on behalf of the registrant and in the capacities and on the date indicated on June 16, 2017.

/s/ William C. Cobb

/s/ Tony G. Bowen

/s/ Kellie J. Logerwell

William C. Cobb
President, Chief Executive Officer
and Director
(principal executive officer)

Tony G. Bowen
Chief Financial Officer
(principal financial officer)

Kellie J. Logerwell
Chief Accounting Officer
(principal accounting officer)

/s/ Robert A. Gerard

Robert A. Gerard

/s/ Angela N. Archon

Angela N. Archon

Director, Chairman of the Board

Director

/s/ Paul J. Brown

Paul J. Brown

Director

/s/ Richard A. Johnson

Richard A. Johnson

Director

/s/ David B. Lewis

David B. Lewis

Director

/s/ Tom D. Seip

Tom D. Seip

Director

/s/ Bruce C. Rohde

Bruce C. Rohde

Director

/s/ James F. Wright

James F. Wright

Director

/s/ Victoria J. Reich

Victoria J. Reich

Director

/s/ Christianna Wood

Christianna Wood

Director

H&R Block, Inc. | 2017 Form 10-K

EXHIBIT INDEX
The following exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K:

3.1

3.2

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

10.1

10.2

10.3

10.4

Amended and Restated Articles of Incorporation of H&R Block, Inc., as amended through September 12, 2013, filed
as Exhibit 3.1 to the Company's current report on Form 8-K filed September 16, 2013, file number 1-06089, is
incorporated herein by reference.
Amended and Restated Bylaws of H&R Block, Inc., as amended through July 14, 2015, filed as Exhibit 3.1 to the
Company's current report on Form 8-K filed July 16, 2015, file number 1-06089, is incorporated herein by reference.
Indenture dated as of October 20, 1997, among H&R Block, Inc., Block Financial Corporation and Bankers Trust Company,
as Trustee, filed as Exhibit 4(a) to the Company's quarterly report on Form 10-Q for the quarter ended October 31,
1997, file number 1-06089, is incorporated herein by reference.
First Supplemental Indenture, dated as of April 18, 2000, among H&R Block, Inc., Block Financial Corporation, Bankers
Trust Company and the Bank of New York, filed as Exhibit 4(a) to the Company's current report on Form 8-K filed April
17, 2000, file number 1-06089, is incorporated herein by reference.
Second Supplemental Indenture, dated September 30, 2015, among H&R Block, Inc., Block Financial LLC (formerly
known as Block Financial Corporation), Deutsche Bank Trust Company Americas (formerly known as Bankers Trust
Company) and U.S. Bank National Association, as separate trustee, filed as Exhibit 4.1 to the Company's current report
on Form 8-K filed September 30, 2015, file number 1-06089, is incorporated herein by reference.
Officer's Certificate, dated October 25, 2012, in respect of 5.50% Notes due 2022 of Block Financial LLC, filed as Exhibit
4.1 to the Company's current report on Form 8-K filed October 25, 2012, file number 1-06089, is incorporated herein
by reference.
Officers’ Certificate, dated September 30, 2015, of Block Financial LLC (including the Form of the 4.125% Note due
2020 and the Form of the 5.250% Note due 2025), filed as Exhibit 4.2 to the Company's current report on Form 8-K
filed September 30, 2015, file number 1-06089, is incorporated herein by reference.
Form of 5.50% Note due 2022 of Block Financial LLC, filed as Exhibit 4.2 to the Company's current report on Form 8-
K filed October 25, 2012, file number 1-06089, is incorporated herein by reference.
Form of Certificate of Designation, Preferences and Rights of Participating Preferred Stock of H&R Block, Inc., filed as
Exhibit 4(e) to the Company's annual report on Form 10-K for the fiscal year ended April 30, 1995, file number 1-06089,
is incorporated herein by reference.
Form of Certificate of Amendment of Certificate of Designation, Preferences and Rights of Participating Preferred Stock
of H&R Block, Inc., filed as Exhibit 4(j) to the Company's annual report on Form 10-K for the fiscal year ended April 30,
1998, file number 1-06089, is incorporated herein by reference.
Form of Certificate of Designation, Preferences and Rights of Delayed Convertible Preferred Stock of H&R Block, Inc.,
filed as Exhibit 4(f) to the Company's annual report on Form 10-K for the fiscal year ended April 30, 1995, file number
1-06089, is incorporated herein by reference.

* 2013 Long-Term Incentive Plan, as amended and restated on March 6, 2013, filed as Exhibit 10.1 to the Company's
quarterly report on Form 10-Q for the quarter ended January 31, 2013, file number 1-06089, is incorporated herein
by reference.

* Form of 2013 Long Term Incentive Plan Award Agreement for Restricted Share Units, as approved on June 19, 2013,
filed as Exhibit 10.3 to the Company's current report on Form 8-K filed June 21, 2013, file number 1-06089, is
incorporated herein by reference.

* Form of 2013 Long Term Incentive Plan Award Agreement for Non-Qualified Stock Options, as approved on June 19,
2013, filed as Exhibit 10.4 to the Company's current report on Form 8-K filed June 21, 2013, file number 1-06089, is
incorporated herein by reference.

* Form of 2013 Long Term Incentive Plan Award Agreement for Deferred Stock Units, as approved on September 12,
2013, filed as Exhibit 10.1 to the Company's quarterly report on Form 10-Q for the quarter ended October 31, 2013,
file number 1-06089, is incorporated herein by reference.

10.5

* Alternate Form of Restricted Share Units Award Agreement, filed as Exhibit 10.3 to the Company's current report on

Form 8-K filed July 1, 2014, file number 1-06089, is incorporated herein by reference.

10.6

* Form of 2013 Long Term Incentive Plan Award Agreement for Market Stock Units, filed as Exhibit 10.2 to the Company's

10.7

10.8

current report on Form 8-K filed June 19, 2015, file number 1-06089, is incorporated herein by reference.

* Form of 2013 Long Term Incentive Plan Award Agreement for Performance Share Units, filed as Exhibit 10.3 to the
Company's current report on Form 8-K filed June 19, 2015, file number 1-06089, is incorporated herein by reference.
* Alternate Form of 2013 Long Term Incentive Plan Award Agreement for Market Stock Units, filed as Exhibit 10.4 to
the Company's current report on Form 8-K filed June 19, 2015, file number 1-06089, is incorporated herein by
reference.

2017 Form 10-K | H&R Block, Inc.

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

10.19

10.20

10.21

10.22

10.23

10.24

10.25

10.26

10.27

* Alternate Form of 2013 Long Term Incentive Plan Award Agreement for Performance Share Units, filed as Exhibit 10.5
to the Company's current report on Form 8-K filed June 19, 2015, file number 1-06089, is incorporated herein by
reference.

* Form of 2013 Long Term Incentive Plan Award Agreement for Restricted Share Units, as approved on July 18, 2016,
filed as Exhibit 10.1 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is
incorporated herein by reference.

* Form of 2013 Long Term Incentive Plan Award Agreement for Market Stock Units, as approved on July 18, 2016, filed
as Exhibit 10.2 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is incorporated
herein by reference.

* Form of 2013 Long Term Incentive Plan Award Agreement for Performance Share Units, as approved on July 18, 2016,
filed as Exhibit 10.3 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is
incorporated herein by reference.

* Form of 2013 Long Term Incentive Plan Award Agreement for Non-Qualified Stock Options, as approved on July 18,
2016, filed as Exhibit 10.4 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is
incorporated herein by reference.

* Alternate Form of 2013 Long Term Incentive Plan Award Agreement for Restricted Share Units, as approved on July
18, 2016, filed as Exhibit 10.5 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089,
is incorporated herein by reference.

* Alternate Form of 2013 Long Term Incentive Plan Award Agreement for Market Stock Units, as approved on July 18,
2016, filed as Exhibit 10.6 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is
incorporated herein by reference.

* Alternate Form of 2013 Long Term Incentive Plan Award Agreement for Performance Share Units, as approved on
July 18, 2016, filed as Exhibit 10.7 to the Company’s current report on Form 8-K filed July 22, 2016, file number
1-06089, is incorporated herein by reference.

* Form of 2013 Long Term Incentive Plan Award Agreement for Restricted Share Units - Annual Vesting, as approved
on July 18, 2016, filed as Exhibit 10.8 to the Company’s current report on Form 8-K filed July 22, 2016, file number
1-06089, is incorporated herein by reference.

* The Company's 2003 Long-Term Executive Compensation Plan, as amended September 30, 2010, filed as Exhibit 10.2
to the Company's quarterly report on Form 10-Q for the quarter ended October 31, 2010, file number 1-06089, is
incorporated herein by reference.

* First Amendment to the Company's 2003 Long-Term Executive Compensation Plan, effective May 10, 2012, filed as
Exhibit 10.1 to the Company's current report on Form 8-K filed May 11, 2012, file number 1-06089, is incorporated
herein by reference.

* Form of 2003 Long-Term Executive Compensation Plan Grant Agreement for Stock Options, filed as Exhibit 10.2 to
the Company's quarterly report on Form 10-Q for the quarter ended July 31, 2011, file number 1-06089, is incorporated
herein by reference.

* Form of 2003 Long-Term Executive Compensation Plan Grant Agreement for Stock Options as approved on June 20,
2012, filed as Exhibit 10.3 to the Company's current report on Form 8-K filed June 26, 2012, file number 1-06089, is
incorporated herein by reference.

* Employment Agreement dated April 27, 2011, between H&R Block Management, LLC and William C. Cobb, filed as
Exhibit 10.2 to the Company's current report on Form 8-K filed April 29, 2011, file number 1-06089, is incorporated
herein by reference.

* Letter Agreement between the Company, H&R Block Management, LLC and William C. Cobb, effective January 3,
2013, filed as Exhibit 10.5 to the Company's quarterly report on Form 10-Q for the quarter ended January 31, 2013,
file number 1-06089, is incorporated herein by reference.

* Letter Agreement, dated as of July 15, 2014, by and among the Company, H&R Block Management, LLC, and William
C. Cobb, filed as Exhibit 10.1 to the Company's current report on Form 8-K filed July 17, 2014, file number 1-06089,
is incorporated herein by reference.

* Letter Agreement, dated as of June 18, 2015, by and among the Company, H&R Block Management, LLC, and William
C. Cobb, filed as Exhibit 10.1 to the Company's current report on Form 8-K filed June 19, 2015, file number 1-06089,
is incorporated herein by reference.

* Agreement between H&R Block Management, LLC, H&R Block, Inc. and William C. Cobb as of January 3, 2013 in
connection with certain corrective actions relating to the June 30, 2011 Option Award, filed as Exhibit 10.1 to the
Company's current report on Form 8-K filed January 4, 2013, file number 1-06089, is incorporated herein by reference.
* H&R Block, Inc. 2013 Long Term Incentive Plan Non-Qualified Stock Option Award Agreement between H&R Block,
Inc. and William C. Cobb dated January 4, 2013, filed as Exhibit 10.2 to the Company's current report on Form 8-K
filed January 4, 2013, file number 1-06089, is incorporated herein by reference.

H&R Block, Inc. | 2017 Form 10-K

10.28

10.29

10.30

10.31

* H&R Block, Inc. 2013 Long Term Incentive Plan Restricted Share Units Award Agreement between H&R Block, Inc.
and William C. Cobb dated January 4, 2013, filed as Exhibit 10.3 to the Company's current report on Form 8-K filed
January 4, 2013, file number 1-06089, is incorporated herein by reference.

* Grant Agreement between H&R Block, Inc. and William C. Cobb in connection with award of Restricted Shares as of
May 2, 2011, filed as Exhibit 10.4 to the Company's quarterly report on Form 10-Q for the quarter ended July 31,
2011, file number 1-06089, is incorporated herein by reference.

* Grant Agreement between H&R Block, Inc. and William C. Cobb in connection with award of Stock Options as of May
2, 2011, filed as Exhibit 10.5 to the Company's quarterly report on Form 10-Q for the quarter ended July 31, 2011,
file number 1-06089, is incorporated herein by reference.

* H&R Block Deferred Compensation Plan for Executives, as amended and restated on November 9, 2012, filed as
Exhibit 10.4 to the Company's quarterly report on Form 10-Q for the quarter ended October 31, 2012, file number
1-06089, is incorporated herein by reference.

10.32

* The Amended and Restated H&R Block Executive Performance Plan, filed as Exhibit 10.1 to the Company's current

10.33

10.34

10.35

10.36

10.37

10.38

10.39

10.40

report on Form 8-K, filed September 12, 2014, file number 1-06089, is incorporated herein by reference.

* The H&R Block, Inc. 2000 Employee Stock Purchase Plan, as amended and restated effective November 7, 2013, filed
as Exhibit 10.2 to the Company's quarterly report on Form 10-Q for the quarter ended October 31, 2013, file number
1-06089, is incorporated herein by reference.

* The H&R Block, Inc. Executive Survivor Plan (as Amended and Restated January 1, 2001) filed as Exhibit 10.4 to the
Company's quarterly report on Form 10-Q for the quarter ended October 31, 2000, file number 1-06089, is
incorporated herein by reference.

* First Amendment to the H&R Block, Inc. Executive Survivor Plan (as Amended and Restated) effective as of July 1,
2002, filed as Exhibit 10.9 to the Company's annual report on Form 10-K for the fiscal year ended April 30, 2002, file
number 1-06089, is incorporated herein by reference.

* Second Amendment to the H&R Block, Inc. Executive Survivor Plan (as Amended and Restated), effective as of March
12, 2003, filed as Exhibit 10.12 to the Company's annual report on Form 10-K for the fiscal year ended April 30, 2003,
file number 1-06089, is incorporated herein by reference.

* H&R Block Severance Plan, as amended and restated on March 29, 2013, filed as Exhibit 10.29 to the Company's
annual report on Form 10-K for the fiscal year ended April 30, 2013, file number 1-06089, is incorporated herein by
reference.

* H&R Block Inc. Executive Severance Plan, as amended and restated effective November 8, 2013, filed as Exhibit 10.1
to the Company's current report on Form 8-K filed November 8, 2013, file number 1-06089, is incorporated herein
by reference.

* Form of Indemnification Agreement with Directors and Officers, filed as Exhibit 10.2 to the Company's quarterly
report on Form 10-Q for the quarter ended January 31, 2012, file number 1-06089, is incorporated herein by reference.
* 2008 Deferred Stock Unit Plan for Outside Directors, as amended on September 14, 2011, filed as Exhibit 10.27 to
the Company's annual report on Form 10-K for the year ended April 30, 2012, file number 1-06089, is incorporated
herein by reference.

10.41

* Letter Agreement Regarding Retirement and Transition, dated May 15, 2017, by and among the Company, H&R Block

10.42
10.43

10.44

10.45

10.46

10.47

12.1
12.2
21

Management, LLC, and William C. Cobb.

* Letter to Thomas A. Gerke, dated May 15, 2017.

First Amended and Restated Credit and Guarantee Agreement dated September 22, 2016, by and among Block Financial
LLC, H&R Block, Inc., the lenders party thereto from time to time, and JPMorgan Chase Bank, N.A., as administrative
agent, filed as Exhibit 10.1 to the Company's current report on Form 8-K filed September 26, 2016, file number 1-06089,
is incorporated herein by reference.
Amended and Restated Purchase and Assumption Agreement, dated August 5, 2015, by and among H&R Block Bank,
Block Financial LLC, and BofI Federal Bank, filed as Exhibit 10.1 to the Company's current report on Form 8-K filed
August 5, 2015, file number 1-06089, is incorporated herein by reference.
Program Management Agreement, dated August 31, 2015, by and between Emerald Financial Services, LLC and BofI
Federal Bank, filed as Exhibit 10.1 to the Company's current report on Form 8-K filed September 1, 2015, file number
1-06089, is incorporated herein by reference.
Emerald Advance Receivables Participation Agreement, dated as of August 31, 2015, by and among Emerald Financial
Services, LLC, BofI Federal Bank, HRB Participant I, LLC and H&R Block, Inc., filed as Exhibit 10.2 to the Company's
current report on Form 8-K filed September 1, 2015, file number 1-06089, is incorporated herein by reference.
Guaranty Agreement, dated as of August 31, 2015, by and between H&R Block, Inc. and BofI Federal Bank, filed as
Exhibit 10.2 to the Company's current report on Form 8-K filed September 1, 2015, file number 1-06089, is incorporated
herein by reference.
Computation of Ratio of Earnings to Fixed Charges for H&R Block, Inc. for the five years ended April 30, 2017.
Computation of Ratio of Earnings to Fixed Charges for Block Financial LLC for the five years ended April 30, 2017.
Subsidiaries of the Company.

2017 Form 10-K | H&R Block, Inc.

23
31.1
31.2
32.1

32.2

101.INS
101.SCH
101.CAL
101.LAB
101.PRE
101.DEF

Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification by Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley
Act of 2002.
Certification by Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley
Act of 2002.
XBRL Instance Document
XBRL Taxonomy Extension Schema
XBRL Extension Calculation Linkbase
XBRL Taxonomy Extension Label Linkbase
XBRL Taxonomy Extension Presentation Linkbase
XBRL Taxonomy Extension Definition Linkbase

Indicates management contracts, compensatory plans or arrangements.

H&R Block, Inc. | 2017 Form 10-K

Corporate Information

Headquarters
H&R Block Center

One H&R Block Way

Form 10-K Requests
Upon request, we will furnish, without

charge, to our shareowners a copy of our

Kansas City, Missouri 64105

2017 Form 10-K as filed with the Securities

816.854.3000

Transfer Agent & Registrar
Wells Fargo Shareowner Services

P.O. Box 64874

St. Paul, Minnesota 55164-0874

1110 Centre Pointe Curve, Suite 101
Mendota Heights, Minnesota 55120-4100

1.888.213.0968

wellsfargo.com/shareownerservices

Wells Fargo Shareowner Services

maintains the records for registered

and Exchange Commission. Requests

should be directed by telephone to

Investor Rela tions, 1.800.869.9220, option

6, or by e-mail to investorrelations@

hrblock.com.

For more information about H&R Block,

visit our website at www.hrblock.com.

Certifications Filed with
the Securities and Exchange
Commission Pursuant to the
Sarbanes-Oxley Act of 2002
The certifications of the Chief Executive

shareowners and provides a variety

Officer and Chief Financial Officer of the

of shareowner-related services at no

company required by Section 302 of the

charge, including change of name or

Sarbanes-Oxley Act of 2002 have been

address, consolidation of accounts,

filed as exhibits 31.1 and 31.2, respectively,

duplicate mailings, dividend reinvestment

in the company’s Form 10-K for the fiscal

enrollment and transfer of stock to

year ended April 30, 2017.

another person.

Independent Auditors
Deloitte & Touche LLP

Certification Submitted to the
New York Stock Exchange
The certification of the Chief Executive

1100 Walnut Street, Suite 3300

Officer required by the New York Stock

Kansas City, Missouri 64106-2129

Exchange Listing Standards, Section

Common Stock
Traded on the New York Stock Exchange

Ticker symbol: HRB

303A.12(a), relating to the company’s
compliance with the New York Stock

Exchange Corporate Governance Listing

Standards, was submitted to the New York
Stock Exchange on October 6, 2016.

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H&R BLOCK, INC.
One H&R Block Way
Kansas City, MO 64105

816.854.3000