From the Desk of Irwin Michael – September 4, 2015 “An Unexpected Positive Surprise” About four months ago we purchased the common shares of Kansas City, Missouri-based H+R Block (HRB), a financial company primarily known for its tax preparation services. Despite the fact that H+R Block’s revenue and earnings are very seasonal, we believed that HRB, the world’s largest consumer tax services provider, offered good fundamental value as a 1.75% dividend paying, free cash flowing, sum of the parts opportunity. Subsequently H+R Block sold and successfully divested its H+R Block Bank and in the process will focus on its core tax preparation activities. More importantly, HRB will no longer be regulated as a savings and loan (S+L) holding company. Concurrently, with this divestiture, HRB will be launching a “modified Dutch auction” this month to purchase up to $1.5 billion of its common stock or 16% of the company’s present market capitalization. We believe the bank sale and share repurchase are attractive for a number of reasons including: Refocuses HRB’s activities to consumer tax services and will transition the company such that it will be easier to analyze and follow. The sale of the non-core bank asset frees up HRB from saving and loan regulations. The “modified Dutch auction” share repurchase will significantly shrink the number of HRB shares outstanding and will offer a huge liquidity event for existing shareholders. With an intention to establish a new capital structure, we expect HRB will initiate further shareholder and corporate value creation activities to reposition the company for further growth opportunities. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.