Raises QuickBooks Online Subscriber Growth Estimate; Reiterates
Fiscal Year ’15 Guidance

MOUNTAIN VIEW, Calif.–(BUSINESS WIRE)–
Intuit Inc. (Nasdaq: INTU)
announced financial results for the second quarter of fiscal 2015, which
ended Jan. 31.

“We delivered a strong quarter, exceeding our company financial targets
across the board,” said Brad Smith, Intuit’s president and chief
executive officer. “Our Small Business online ecosystem momentum
continues to build, with steady subscriber growth again this quarter. On
the heels of this performance, we’ve raised our QuickBooks Online
subscriber guidance for this fiscal year.

“Overall, early indicators and unit results show our tax strategy is on
track. While we faced some initial challenges as a result of a change to
our desktop product lineup, we took swift action in response to our
customers’ feedback. While doing so, we continue to take proactive
measures to navigate a heightened sense of concern about tax fraud in
the American tax system.

“Beyond these challenges, we are inspired by the opportunities in front
of us and we remain deeply committed to accelerating both customer and
revenue growth across the company,” said Smith.

Financial Highlights

Unless otherwise noted, all growth rates refer to the current period
versus the comparable prior-year period, and the business metrics and
associated growth rates refer to worldwide business metrics.

During the second quarter, Intuit:

  • Delivered total company revenue of 8 million, up 3 percent, driven
    by the ongoing acceleration to the cloud.
  • Added more than 100,000 QuickBooks Online subscribers versus the
    previous quarter, bringing total paying subscribers worldwide to
    841,000.
  • Increased total TurboTax units 11 percent through Feb. 14, versus the
    comparable prior-year period.
  • Completed two acquisitions, Acrede and ZeroPaper, to help fuel
    QuickBooks Online ecosystem international growth.
  • Launched QuickBooks Self-Employed, designed specifically for the
    rapidly expanding population of freelancers and independent
    contractors.

Business Segment Results

Small Business

  • Total Small Business segment revenue declined 1 percent for the second
    quarter, in line with expectations.
  • QuickBooks total paying customers grew 20 percent.
  • QuickBooks desktop ecosystem revenue declined 10 percent as the
    company continues to focus on online solutions.

Small Business Online Ecosystem

  • Small business online ecosystem revenue increased 26 percent, with
    customer acquisition continuing to drive growth.
  • Total QuickBooks Online subscribers grew 50 percent, up from 43
    percent growth in the previous quarter.

    • QuickBooks Online subscribers outside the U.S. were up more than
      170 percent, to 127,000, in line with last quarter’s rapid growth.
  • Online Payments charge volume grew 20 percent, driven by an increase
    in charge volume per customer.
  • Online Payroll customers grew 23 percent.
  • Demandforce customers grew 18 percent.

Consumer and Professional Tax

  • Within the consumer segment, Consumer Tax revenue grew 54 percent,
    benefitting from an earlier start to this year’s tax season compared
    with last year.
  • ProTax revenue declined 69 percent. As previously disclosed, the
    company expects that approximately 0 million in fiscal year 2015
    revenue will shift to 2016 due to changes in current desktop offerings
    that will affect the timing of revenue recognition.

Snapshot of Second-quarter Results

 
GAAP     Non-GAAP
    Q2     Q2         Q2     Q2    
      FY ’15     FY ’14     Change     FY ’15     FY ’14     Change
Revenue     8     2     3%     8     2     3%
Operating Income (Loss)     ()     ()     NM     ()         NM
EPS     ({$content}.23)     ({$content}.13)     NM     ({$content}.06)     {$content}.02     NM

Dollars are in millions, except earnings per share (EPS). See “About
Non-GAAP Financial Measures” below for more information regarding
financial measures not prepared in accordance with Generally Accepted
Accounting Principles (GAAP). Q2 FY15 results reflect the impact of
changes to future desktop software offerings; revenue for those
offerings is now recognized as services are delivered, rather than up
front.

Capital Allocation Summary

  • Ended the second quarter with approximately .4 billion in cash and
    investments.
  • In the second quarter, repurchased 5 million of shares; about .2
    billion remains on the current authorization.
  • Intuit’s board of directors approved a {$content}.25 dividend for the fiscal
    third quarter, payable on April 20. This represents a 32 percent
    increase versus last year and reflects a large and growing cash
    position, as well as more recurring and predictable revenue streams.

Forward-looking Guidance

Intuit provided guidance for the third and fourth quarters of fiscal
year 2015. The company reiterated financial guidance and raised
QuickBooks Online subscriber guidance for full fiscal 2015.

This guidance factors in the company’s strategic decision to deliver
ongoing services and releases for its future desktop offerings to
encourage migration to online solutions. As a result, revenue for future
desktop software licenses will be recognized as services are delivered,
rather than up front.

For the third quarter of fiscal 2015, Intuit expects:

  • Revenue of .075 billion to .150 billion.
  • GAAP operating income of .090 billion to .110 billion.
  • Non-GAAP operating income of .170 billion to .190 billion.
  • GAAP earnings per share of .50 to .55.
  • Non-GAAP earnings per share of .70 to .75.
  • QuickBooks Online subscribers of approximately 925,000.

For the fourth quarter of fiscal 2015, Intuit expects:

  • Revenue of 0 million to 5 million.
  • GAAP loss per share of {$content}.23 to {$content}.25.
  • Non-GAAP loss per share of {$content}.06 to {$content}.08.

For fiscal year 2015, Intuit expects:

  • Revenue of .275 billion to .375 billion, a decline of 3 to 5
    percent.
  • GAAP operating income of 0 million to 0 million.
  • Non-GAAP operating income of .110 billion to .140 billion.
  • GAAP diluted EPS of .70 to .75.
  • Non-GAAP diluted EPS of .45 to .50.
  • QuickBooks Online subscribers of 975,000 to 1 million.

Intuit will provide its second tax unit update in late April after the
tax season ends.

Conference Call and Replay Information

Intuit executives will discuss the financial results on a conference
call at 1:30 p.m. Pacific time on that day. To hear the call, dial
866-814-1913 in the United States or 703-639-1357 from international
locations. No reservation or access code is needed. The conference call
can also be heard live at http://investors.intuit.com/events/default.aspx.
Prepared remarks for the call will be available on Intuit’s Investor
Relations website after the call ends.

Replay Information

A replay of the conference call will be available for one week by
calling 888-266-2081, or 703-925-2533 from international locations. The
access code for this call is 1651570.

The audio webcast will remain available on Intuit’s website for one week
after the conference call.

About Intuit Inc.

Intuit Inc. creates business and
financial management solutions that simplify the business of life for
small businesses, consumers and accounting professionals.

Its flagship products and services include QuickBooks®,
Quicken®
and TurboTax®,
which make it easier to manage small businesses and payroll processing,
personal finance, and tax preparation and filing. Mint.com
provides a fresh, easy and intelligent way for people to manage their
money, while Demandforce®
offers marketing and communication tools for small businesses. ProSeries®
and Lacerte®
are Intuit’s leading tax preparation offerings for professional
accountants.

Founded in 1983, Intuit had revenue of .5 billion in its fiscal year
2014. The company has approximately 8,000 employees with major offices
in the United States, Canada, the United Kingdom, India and other
locations. More information can be found at www.intuit.com.

Intuit and the Intuit logo, among others, are registered trademarks
and/or registered service marks of Intuit Inc. in the United States and
other countries.

About Non-GAAP Financial Measures

This press release and the accompanying tables include non-GAAP
financial measures. For a description of these non-GAAP financial
measures, including the reasons management uses each measure, and
reconciliations of these non-GAAP financial measures to the most
directly comparable financial measures prepared in accordance with
Generally Accepted Accounting Principles, please see the section of the
accompanying tables titled “About Non-GAAP Financial Measures” as well
as the related Table B and Table E. A copy of the press release issued
by Intuit today can be found on the investor relations page of Intuit’s
Web site.

Cautions About Forward-looking Statements

This press release contains forward-looking statements, including
forecasts of expected growth and future financial results of Intuit and
its reporting segments; Intuit’s prospects for the business in fiscal
2015 and beyond; expectations regarding growth opportunities from
connected services; expectations regarding Intuit’s growth outside the
US; expectations regarding timing and growth of revenue for each of
Intuit’s reporting segments and from current or future products and
services; expectations regarding customer growth; expectations regarding
changes to our products and their impact on Intuit’s business;
expectations regarding the amount and timing of any future dividends or
share repurchases; expectations regarding acquisitions and divestitures
and their impact on Intuit’s business; expectations regarding
availability of our offerings; all of the statements under the heading
“Forward-looking Guidance”; expectations regarding our ability to detect
and prevent fraudulent activities that impact our offerings;
expectations regarding the impact of such fraudulent activities on
customer confidence and our results for the tax season; and expectations
regarding the impact of our strategic decisions on Intuit’s business.
Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause our actual
results to differ materially from the expectations expressed in the
forward-looking statements. More details about the risks that may impact
our business are included in our Form 10-K for fiscal 2014 and in our
other SEC filings. You can locate these reports through our website at http://investors.intuit.com.
Forward-looking statements are based on information as of Feb.19, 2015
and we do not undertake any duty to update any forward-looking statement
or other information in these materials.

       
TABLE A

INTUIT INC.

GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)

 
 
Three Months Ended Six Months Ended

January 31,

   

January 31,

January 31,

   

January 31,

2015 2014 2015 2014
Net revenue:
Product $ 198 $ 287 $ 431 $ 516
Service and other 610   495   1,049   888  
Total net revenue 808   782   1,480   1,404  
Costs and expenses:
Cost of revenue:
Cost of product revenue 44 45 78 74
Cost of service and other revenue 153 125 284 233
Amortization of acquired technology 9 6 19 12
Selling and marketing 376 352 657 610
Research and development 200 186 400 362
General and administrative 118 109 242 227
Amortization of other acquired intangible assets 6   5   12   9  
Total costs and expenses [A] 906   828   1,692   1,527  
Operating loss from continuing operations (98 ) (46 ) (212 ) (123 )
Interest expense (7 ) (8 ) (14 ) (16 )
Interest and other income, net 2     2   5  
Loss before income taxes (103 ) (54 ) (224 ) (134 )
Income tax benefit [B] (37 ) (17 ) (74 ) (40 )
Net loss from continuing operations (66 ) (37 ) (150 ) (94 )
Net income from discontinued operations [C]       46  
Net loss $ (66 ) $ (37 ) $ (150 ) $ (48 )
 
Basic net loss per share from continuing operations $ (0.23 ) $ (0.13 ) $ (0.53 ) $ (0.33 )
Basic net income per share from discontinued operations       0.16  
Basic net loss per share $ (0.23 ) $ (0.13 ) $ (0.53 ) $ (0.17 )
Shares used in basic per share calculations 285   284   285   286  
 
Diluted net loss per share from continuing operations $ (0.23 ) $ (0.13 ) $ (0.53 ) $ (0.33 )
Diluted net income per share from discontinued operations       0.16  
Diluted net loss per share $ (0.23 ) $ (0.13 ) $ (0.53 ) $ (0.17 )
Shares used in diluted per share calculations 285   284   285   286  
 
Cash dividends declared per common share $ 0.25   $ 0.19   $ 0.50   $ 0.38  
 

See accompanying Notes.

 

INTUIT INC.

NOTES TO TABLE A

 
 
[A] The following table summarizes the total share-based compensation
expense that we recorded in operating loss from continuing
operations for the periods shown.
            Three Months Ended     Six Months Ended
(in millions)

January 31,
2015

   

January 31,
2014

January 31,
2015

   

January 31,
2014

Cost of revenue $ 2 $ 2 $ 4 $ 4
Selling and marketing 18 16 36 31
Research and development 20 16 40 30
General and administrative 21   18   42   34
Total share-based compensation expense $ 61   $ 52   $ 122   $ 99
[B]   We compute our provision for or benefit from income taxes by
applying the estimated annual effective tax rate to income or loss
from recurring operations and adding the effects of any discrete
income tax items specific to the period.
 
In December 2014 the Tax Increase Prevention Act of 2014 was signed
into law. The Act includes a reinstatement of the federal research
and experimentation credit through December 31, 2014 that was
retroactive to January 1, 2014. We recorded a discrete tax benefit
of approximately million for the retroactive effect during the
three and six months ended January 31, 2015.
 
Our effective tax rates for the three and six months ended January
31, 2015 were approximately 36% and 33%. Excluding discrete tax
items primarily related to the reinstatement of the federal research
and experimentation credit, as well as including the effects of
losses in certain jurisdictions where we do not recognize a tax
benefit, our effective tax rate for those periods was approximately
36% and did not differ significantly from the federal statutory rate
of 35%.
 
Our effective tax rates for the three and six months ended January
31, 2014 were approximately 31% and 30%. Excluding the impact of
discrete tax items primarily related to share-based compensation,
our effective tax rate for those periods was approximately 34% and
did not differ significantly from the federal statutory rate of 35%.
 
[C] On August 1, 2013 we completed the sale of our Intuit Financial
Services (IFS) business for approximately .025 billion in cash. We
recorded a gain on the disposal of IFS of approximately million,
net of income taxes, in the first quarter of fiscal 2014.
 
On August 19, 2013 we completed the sale of our Intuit Health
business for cash consideration that was not significant and
recorded a loss on disposal that was offset by a related income tax
benefit of approximately million, resulting in a net gain on
disposal of approximately million in the first quarter of fiscal
2014.
 
We have reclassified our statements of operations for all periods
presented to reflect these two businesses as discontinued
operations. Because the cash flows of our IFS and Intuit Health
discontinued operations were not material for any period presented,
we have not segregated the cash flows of those businesses from
continuing operations on our statements of cash flows.
 
TABLE B

INTUIT INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES

(In millions, except per share amounts)

(Unaudited)

       
 
Three Months Ended Six Months Ended

January 31,

   

January 31,

January 31,

   

January 31,

2015

2014

2015

2014

GAAP operating loss from continuing operations $ (98 ) $ (46 ) $ (212 ) $ (123 )
Amortization of acquired technology 9 6 19 12
Amortization of other acquired intangible assets 6 5 12 9
Professional fees for business combinations 2 3
Share-based compensation expense 61   52   122   99  
Non-GAAP operating income (loss) from continuing operations $ (20 ) $ 17   $ (56 ) $ (3 )
 
GAAP net loss $ (66 ) $ (37 ) $ (150 ) $ (48 )
Amortization of acquired technology 9 6 19 12
Amortization of other acquired intangible assets 6 5 12 9
Professional fees for business combinations 2 3
Share-based compensation expense 61 52 122 99
Net gains on debt securities and other investments 1 1 (1 )
Income tax effects and adjustments (28 ) (20 ) (51 ) (34 )
Net income from discontinued operations       (46 )
Non-GAAP net income (loss) $ (16 ) $ 7   $ (44 ) $ (9 )
 
GAAP diluted net loss per share $ (0.23 ) $ (0.13 ) $ (0.53 ) $ (0.17 )
Amortization of acquired technology 0.03 0.02 0.07 0.04
Amortization of other acquired intangible assets 0.02 0.02 0.04 0.03
Professional fees for business combinations 0.01 0.01
Share-based compensation expense 0.21 0.18 0.43 0.35
Net gains on debt securities and other investments
Income tax effects and adjustments (0.10 ) (0.07 ) (0.17 ) (0.12 )
Net income from discontinued operations       (0.16 )
Non-GAAP diluted net income (loss) per share $ (0.06 ) $ 0.02   $ (0.15 ) $ (0.03 )
 
Shares used in diluted per share calculation 285   284   285   286  

See “About Non-GAAP Financial Measures” immediately following Table E
for information on these measures, the items excluded from the most
directly comparable GAAP measures in arriving at non-GAAP financial
measures, and the reasons management uses each measure and excludes the
specified amounts in arriving at each non-GAAP financial measure.

TABLE C

INTUIT INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

       
 
January 31, 2015 July 31, 2014
ASSETS
Current assets:
Cash and cash equivalents $ 482 $ 849
Investments 885 1,065
Accounts receivable, net 459 134
Income taxes receivable 146 35
Deferred income taxes 149 133
Prepaid expenses and other current assets 103   116
Current assets before funds held for customers 2,224 2,332
Funds held for customers 354   289
Total current assets 2,578 2,621
 
Long-term investments 35 31
Property and equipment, net 643 606
Goodwill 1,688 1,635
Acquired intangible assets, net 187 199
Other assets 114   109
Total assets $ 5,245   $ 5,201
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 273 $ 161
Accrued compensation and related liabilities 199 278
Deferred revenue 888 526
Other current liabilities 395   167
Current liabilities before customer fund deposits 1,755 1,132
Customer fund deposits 354   289

Total current liabilities

2,109 1,421
 
Long-term debt 499 499
Long-term deferred revenue 83 10
Other long-term obligations 200   193
Total liabilities 2,891   2,123
 
Stockholders’ equity 2,354   3,078
Total liabilities and stockholders’ equity $ 5,245   $ 5,201
 
TABLE D

INTUIT INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

   
 
Six Months Ended
January 31,     January 31,
2015 2014
Cash flows from operating activities:
Net loss $ (150 ) $ (48 )
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation 75 75
Amortization of acquired intangible assets 36 25
Share-based compensation expense 122 99
Pre-tax gain on sale of discontinued operations (40 )
Deferred income taxes (16 ) 66
Tax benefit from share-based compensation plans 38 43
Excess tax benefit from share-based compensation plans (38 ) (43 )
Other 19   11  
Total adjustments 236   236  
Changes in operating assets and liabilities:
Accounts receivable (327 ) (308 )
Income taxes receivable (110 ) (161 )
Prepaid expenses and other assets 12 (29 )
Accounts payable 116 88
Accrued compensation and related liabilities (79 ) (49 )
Deferred revenue 439 326
Other liabilities 110   87  
Total changes in operating assets and liabilities 161   (46 )
Net cash provided by operating activities 247   142  
Cash flows from investing activities:
Purchases of available-for-sale debt securities (619 ) (320 )
Sales of available-for-sale debt securities 458 145
Maturities of available-for-sale debt securities 328 147

Net change in money market funds and other cash equivalents held
to satisfy customer fund obligations

(65 ) (55 )
Net change in customer fund deposits 65 55
Purchases of property and equipment (116 ) (93 )
Acquisitions of businesses, net of cash acquired (76 ) (66 )
Proceeds from divestiture of businesses 1,025
Other (10 ) (10 )
Net cash provided by (used in) investing activities (35 ) 828  
Cash flows from financing activities:
Net proceeds from issuance of stock under employee stock plans 101 125
Cash paid for purchases of treasury stock (554 ) (1,402 )
Dividends and dividend rights paid (143 ) (111 )
Excess tax benefit from share-based compensation plans 38   43  
Net cash used in financing activities (558 ) (1,345 )
Effect of exchange rates on cash and cash equivalents (21 ) (9 )
Net decrease in cash and cash equivalents (367 ) (384 )
Cash and cash equivalents at beginning of period 849   1,009  
Cash and cash equivalents at end of period $ 482   $ 625  
 

TABLE E

INTUIT INC.

RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL
MEASURES

TO PROJECTED GAAP REVENUE, OPERATING INCOME, AND EPS

(In millions, except per share amounts)

(Unaudited)

   
 
Forward-Looking Guidance
GAAP             Non-GAAP
Range of Estimate Range of Estimate
From     To Adjmts From     To

Three Months Ending April 30, 2015

Revenue $ 2,075 $ 2,150 $ $ 2,075 $ 2,150
Operating income $ 1,090 $ 1,110 $ 80 [a] $ 1,170 $ 1,190
Diluted earnings per share $ 2.50 $ 2.55 $ 0.20 [b] $ 2.70 $ 2.75
 
Three Months Ending July 31, 2015
Revenue $ 720 $ 745 $ $ 720 $ 745
Diluted loss per share $ (0.25 ) $ (0.23 ) $ 0.17 [c] $ (0.08 ) $ (0.06 )
 
Twelve Months Ending July 31, 2015
Revenue $ 4,275 $ 4,375 $ $ 4,275 $ 4,375
Operating income $ 800 $ 830 $ 310 [d] $ 1,110 $ 1,140
Diluted earnings per share $ 1.70 $ 1.75 $ 0.75 [e] $ 2.45 $ 2.50

See “About Non-GAAP Financial Measures” immediately following this
Table E for information on these measures, the items excluded from
the most directly comparable GAAP measures in arriving at non-GAAP
financial measures, and the reasons management uses each measure
and excludes the specified amounts in arriving at each non-GAAP
financial measure.

 
[a] Reflects estimated adjustments for share-based compensation expense
of approximately million, amortization of acquired technology of
approximately million, and amortization of other acquired
intangible assets of approximately million.
 
[b] Reflects the estimated adjustments in item [a], income taxes related
to these adjustments, and other income tax effects related to the
use of the long-term non-GAAP tax rate.
 
[c] Reflects estimated adjustments for share-based compensation expense
of approximately million, amortization of acquired technology of
approximately million, and amortization of other acquired
intangible assets of approximately million. Also reflects income
taxes related to these adjustments and other income tax effects
related to the use of the long-term non-GAAP tax rate.
 
[d] Reflects estimated adjustments for share-based compensation expense
of approximately 1 million; amortization of acquired technology
of approximately million; and amortization of other acquired
intangible assets of approximately million.
 
[e] Reflects the estimated adjustments in item [d], income taxes related
to these adjustments, and other income tax effects related to the
use of the long-term non-GAAP tax rate.
 

INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES

The accompanying press release dated February 19, 2015 contains non-GAAP
financial measures. Table B and Table E reconcile the non-GAAP financial
measures in that press release to the most directly comparable financial
measures prepared in accordance with Generally Accepted Accounting
Principles (GAAP). These non-GAAP financial measures include non-GAAP
operating income (loss), non-GAAP net income (loss) and non-GAAP net
income (loss) per share.

Non-GAAP financial measures should not be considered as a substitute
for, or superior to, measures of financial performance prepared in
accordance with GAAP. These non-GAAP financial measures do not reflect a
comprehensive system of accounting, differ from GAAP measures with the
same names and may differ from non-GAAP financial measures with the same
or similar names that are used by other companies.

We compute non-GAAP financial measures using the same consistent method
from quarter to quarter and year to year. We may consider whether other
significant items that arise in the future should be excluded from our
non-GAAP financial measures.

We exclude the following items from all of our non-GAAP financial
measures:

  • Share-based compensation expense
  • Amortization of acquired technology
  • Amortization of other acquired intangible assets
  • Goodwill and intangible asset impairment charges
  • Professional fees for business combinations

We also exclude the following items from non-GAAP net income (loss) and
diluted net income (loss) per share:

  • Gains and losses on debt and equity securities and other investments
  • Income tax effects and adjustments
  • Discontinued operations

We believe that these non-GAAP financial measures provide meaningful
supplemental information regarding Intuit’s operating results primarily
because they exclude amounts that we do not consider part of ongoing
operating results when planning and forecasting and when assessing the
performance of the organization, our individual operating segments or
our senior management. Segment managers are not held accountable for
share-based compensation expense, amortization, or the other excluded
items and, accordingly, we exclude these amounts from our measures of
segment performance. We believe that our non-GAAP financial measures
also facilitate the comparison by management and investors of results
for current periods and guidance for future periods with results for
past periods.

The following are descriptions of the items we exclude from our non-GAAP
financial measures.

Share-based compensation expenses. These consist of non-cash
expenses for stock options, restricted stock units and our Employee
Stock Purchase Plan. When considering the impact of equity awards, we
place greater emphasis on overall shareholder dilution rather than the
accounting charges associated with those awards.

Amortization of acquired technology and amortization of other
acquired intangible assets
. When we acquire an entity, we are
required by GAAP to record the fair values of the intangible assets of
the entity and amortize them over their useful lives. Amortization of
acquired technology in cost of revenue includes amortization of software
and other technology assets of acquired entities. Amortization of other
acquired intangible assets in operating expenses includes amortization
of assets such as customer lists, covenants not to compete and trade
names.

Goodwill and intangible asset impairment charges. We exclude from
our non-GAAP financial measures non-cash charges to adjust the carrying
values of goodwill and other acquired intangible assets to their
estimated fair values.

Professional fees for business combinations. We exclude from our
non-GAAP financial measures the professional fees we incur to complete
business combinations. These include investment banking, legal and
accounting fees.

Gains and losses on debt and equity securities and other investments.
We exclude from our non-GAAP financial measures gains and losses that we
record when we sell or impair available-for-sale debt and equity
securities and other investments.

Income tax effects and adjustments. During fiscal 2014, we
excluded from our non-GAAP financial measures the income tax effects of
the non-GAAP pre-tax adjustments described above, as well as income tax
effects related to business combinations. In addition, the effects of
one-time income tax adjustments recorded in a specific quarter for GAAP
purposes were reflected on a forecasted basis in our non-GAAP financial
measures. This was consistent with how we were evaluating our operating
results and planning, forecasting, and evaluating future periods during
that fiscal year.

During fiscal 2015, we began using a long-term non-GAAP tax rate for
evaluating operating results and for planning, forecasting, and
analyzing future periods. This long-term non-GAAP tax rate excludes the
income tax effects of the non-GAAP pre-tax adjustments described above,
assumes the federal research and experimentation credit is continuously
in effect, and eliminates the effects of non-recurring and period
specific items which can vary in size and frequency. Based on our
current long-term projections, we are using a long-term non-GAAP tax
rate of 34% which is consistent with the average of our normalized
fiscal year tax rate over a four year period that includes the past
three fiscal years plus the current fiscal year forecast. We will
evaluate this long-term non-GAAP tax rate on an annual basis and
whenever any significant events occur which may materially affect this
long-term rate. This long-term non-GAAP tax rate could be subject to
change for various reasons including significant changes in our
geographic earnings mix or fundamental tax law changes in major
jurisdictions in which we operate.

Operating results and gains and losses on the sale of discontinued
operations
. From time to time, we sell or otherwise dispose of
selected operations as we adjust our portfolio of businesses to meet our
strategic goals. In accordance with GAAP, we segregate the operating
results of discontinued operations as well as gains and losses on the
sale of these discontinued operations from continuing operations on our
GAAP statements of operations but continue to include them in GAAP net
income or loss and net income or loss per share. We exclude these
amounts from our non-GAAP financial measures.

The reconciliations of the forward-looking non-GAAP financial measures
to the most directly comparable GAAP financial measures in Table E
include all information reasonably available to Intuit at the date of
this press release. These tables include adjustments that we can
reasonably predict. Events that could cause the reconciliation to change
include acquisitions and divestitures of businesses, goodwill and other
asset impairments, and sales of available-for-sale debt securities and
other investments.

Source: Intuit Inc.

Investors
Intuit Inc.
Matt Rhodes, 650-944-2536
matthew_rhodes@intuit.com
or
Media
Intuit
Inc.
Diane Carlini, 650-944-6251
diane_carlini@intuit.com