TurboTax Online, QuickBooks Online Report Strong Customer Growth;
Company Raises Revenue Guidance

MOUNTAIN VIEW, Calif.–(BUSINESS WIRE)–
Intuit Inc. (Nasdaq:INTU) announced
financial results for the third quarter of fiscal 2015 and raised
full-year revenue guidance. The company’s third quarter ended April 30.

“We delivered a strong quarter, exceeding our company financial revenue
target amidst another strong tax season and accelerating growth in our
small business online ecosystem,” said Brad Smith, Intuit’s president
and chief executive officer. “We achieved our goals in our tax business,
increasing growth in the do-it-yourself software category, acquiring and
retaining more customers and expanding our market share.

“Our small business online ecosystem continues to build momentum, with
QuickBooks Online subscriber growth accelerating for the eighth
consecutive quarter.

“With these strong results, we’ve increased our revenue outlook for the
full year. Our performance continues to inspire our entire organization
and sets us on a path to finish the year on a very strong note,” 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.

Intuit:

  • Reported third-quarter revenue of .2 billion, above the company’s
    previously set guidance.
  • Grew U.S. TurboTax Online units 13 percent in the tax season and total
    U.S. TurboTax units 9 percent, excluding Free File Alliance.
  • Grew total QuickBooks Online subscribers by 55 percent.
  • Added more than 120,000 QuickBooks Online subscribers in the third
    quarter, ending with 965,000 paying subscribers worldwide.
  • Increased revenue guidance for fiscal 2015.

Business Segment Results

Small Business

  • Total Small Business segment revenue declined 5 percent for the
    quarter, in line with expectations and reflecting the changes in
    desktop offerings that resulted in ratable revenue recognition.
  • QuickBooks total paying customers grew 20 percent.
  • Small business online ecosystem revenue increased 20 percent, with
    customer acquisition continuing to drive growth.
  • Total QuickBooks Online subscribers grew 55 percent, accelerating for
    the eighth consecutive quarter.

    • QuickBooks Online subscribers outside the U.S. increased
      approximately 140 percent, to just over 150,000.
    • Ended with 15,000 QuickBooks Self-Employed subscribers, up from
      5,000 last quarter.
  • Online Payments charge volume grew 19 percent, driven primarily by an
    increase in charge volume per customer.
  • Online Payroll customers grew 20 percent.

Consumer and Professional Tax

  • Consumer Tax revenue grew 4 percent in the third quarter and 9 percent
    year to date.
  • ProTax revenue declined 61 percent, in line with expectations. As
    previously disclosed, revenue will shift to fiscal 2016 due to changes
    in current desktop offerings that will affect the timing of revenue
    recognition.
  • The company raised full-year guidance for Consumer Tax revenue, and
    now expects growth of 9 percent for the fiscal year, above the
    previous guidance range of 5 to 7 percent.
  • Due to a bill payment strategy shift in the Consumer Ecosystem Group,
    the company recorded a 3 million goodwill impairment charge. This
    charge impacted third-quarter GAAP operating income by 3 million
    and GAAP earnings per share by {$content}.93.

Snapshot of Third-quarter Results

         
GAAP     Non-GAAP
    Q3     Q3         Q3     Q3    
      FY ’15     FY ’14     Change     FY ’15     FY ’14     Change
Revenue     ,194     ,388     (8%)     ,194     ,388     (8%)
Operating Income     6     ,494     (39%)     ,221     ,556     (22%)
EPS     .78     .39     (47%)     .85     .53     (19%)
 

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). Q3 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. Q3 FY15 GAAP results also include a 3 million impairment
charge for goodwill in the company’s Consumer Ecosystem Group.

Capital Allocation Summary

  • Ended the third quarter with approximately .1 billion in cash and
    investments.
  • Repurchased 8 million of shares of stock and received board
    approval for an additional billion in buyback authorization. The
    company now has .6 billion remaining on its authorization and
    intends to be in the market each quarter.
  • Received board approval for a {$content}.25 dividend per share for the fiscal
    fourth quarter, payable on July 20. This represents a 32 percent
    increase versus last year and reflects the company’s large and growing
    cash position, as well as more recurring and predictable revenue
    streams.

Forward-looking Guidance

The company reiterated revenue guidance for the fourth quarter and
raised revenue guidance for fiscal 2015.

For the fourth quarter of fiscal 2015, Intuit expects:

  • Revenue of 0 million to 5 million.
  • GAAP operating loss of 0 million to 0 million.
  • Non-GAAP operating loss of million to million.
  • GAAP loss per share of {$content}.34 to {$content}.36.
  • Non-GAAP loss per share of {$content}.10 to {$content}.12.

For fiscal year 2015, Intuit expects:

  • Revenue of .395 billion to .420 billion, versus previous guidance
    of .275 billion to .375 billion.
  • GAAP operating income of 5 million to 5 million, versus previous
    guidance of 0 million to 0 million.
  • Non-GAAP operating income of .120 billion to .140 billion, versus
    previous guidance of .110 billion to .140 billion.
  • GAAP diluted EPS of {$content}.88 to {$content}.90, versus previous guidance of .70
    to .75.
  • Non-GAAP diluted EPS of .50 to .52, versus previous guidance of
    .45 to .50.
  • QuickBooks Online subscribers of 1 million to 1.025 million, versus
    previous guidance of 975,000 to 1 million.

Conference Call and Replay Information

Intuit executives will discuss the financial results on a conference
call today at 1:30 p.m. Pacific time. To hear the call, dial
866-348-8108 in the United States or 908-982-4619 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 1656287.

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 B1, Table B2, 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 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 availability of our offerings;
expectations regarding the impact of our strategic decisions on Intuit’s
business; and all of the statements under the heading “Forward-looking
Guidance”.

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. These factors include, without limitation,
the following: inherent difficulty in predicting consumer behavior;
difficulties in receiving, processing, or filing customer tax
submissions; consumers may not respond as we expected to our advertising
and promotional activities; product introductions and price competition
from our competitors can have unpredictable negative effects on our
revenue, profitability and market position; governmental encroachment in
our tax businesses or other governmental activities or public policy
affecting the preparation and filing of tax returns could negatively
affect our operating results and market position; we may not be able to
successfully innovate and introduce new offerings and business models to
meet our growth and profitability objectives, and current and future
offerings may not adequately address customer needs and may not achieve
broad market acceptance, which could harm our operating results and
financial condition; business interruption or failure of our information
technology and communication systems may impair the availability of our
products and services, which may damage our reputation and harm our
future financial results; as we upgrade and consolidate our customer
facing applications and supporting information technology
infrastructure, any problems with these implementations could interfere
with our ability to deliver our offerings; any failure to properly use
and protect personal customer information and data could harm our
revenue, earnings and reputation; if we are unable to develop, manage
and maintain critical third party business relationships, our business
may be adversely affected; increased government regulation of our
businesses may harm our operating results; if we fail to process
transactions effectively or fail to adequately protect against potential
fraudulent activities, our revenue and earnings may be harmed; related
publicity regarding such fraudulent activity could cause customers to
lose confidence in using our software and adversely impact our results;
any significant offering quality problems or delays in our offerings
could harm our revenue, earnings and reputation; our participation in
the Free File Alliance may result in lost revenue opportunities and
cannibalization of our traditional paid franchise; the continuing global
economic downturn may continue to impact consumer and small business
spending, financial institutions and tax filings, which could negatively
affect our revenue and profitability; year-over-year changes in the
total number of tax filings that are submitted to government agencies
due to economic conditions or otherwise may result in lost revenue
opportunities; our revenue and earnings are highly seasonal and the
timing of our revenue between quarters is difficult to predict, which
may cause significant quarterly fluctuations in our financial results;
our financial position may not make repurchasing shares advisable or we
may issue additional shares in an acquisition causing our number of
outstanding shares to grow; our inability to adequately protect our
intellectual property rights may weaken our competitive position and
reduce our revenue and earnings; our acquisition and divestiture
activities may disrupt our ongoing business, may involve increased
expenses and may present risks not contemplated at the time of the
transactions; our use of significant amounts of debt to finance
acquisitions or other activities could harm our financial condition and
results of operation; and litigation involving intellectual property,
antitrust, shareholder and other matters may increase our costs. 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 May 21, 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   Nine Months Ended
April 30,
2015
  April 30,
2014
April 30,
2015
  April 30,
2014
Net revenue:
Product $ 447 $ 735 $ 878 $ 1,251
Service and other 1,747   1,653   2,796   2,541  
Total net revenue 2,194   2,388   3,674   3,792  
Costs and expenses:
Cost of revenue:

Cost of product revenue

35 34 113 108
Cost of service and other revenue 173 130 457 363
Amortization of acquired technology 11 6 30 18
Selling and marketing 448 412 1,105 1,022
Research and development 217 186 617 548
General and administrative 135 121 377 348
Amortization of other acquired intangible assets 6 5 18 14
Goodwill impairment charge 263     263    
Total costs and expenses [A] 1,288   894   2,980   2,421  
Operating income from continuing operations 906 1,494 694 1,371
Interest expense (7 ) (8 ) (21 ) (24 )
Interest and other income, net 1   3   3   8  
Income before income taxes 900 1,489 676 1,355
Income tax provision [B] 399   505   325   465  
Net income from continuing operations 501 984 351 890
Net income from discontinued operations [C]       46  
Net income $ 501   $ 984   $ 351   $ 936  
 
Basic net income per share from continuing operations $ 1.81 $ 3.47 $ 1.24 $ 3.12
Basic net income per share from discontinued operations       0.16  
Basic net income per share $ 1.81   $ 3.47   $ 1.24   $ 3.28  
Shares used in basic per share calculations 277   284   282   285  
 
Diluted net income per share from continuing operations $ 1.78 $ 3.39 $ 1.22 $ 3.06
Diluted net income per share from discontinued operations       0.16  
Diluted net income per share $ 1.78   $ 3.39   $ 1.22   $ 3.22  
Shares used in diluted per share calculations 282   290   288   291  
 
Cash dividends declared per common share $ 0.25   $ 0.19   $ 0.75   $ 0.57  
 

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   Nine Months Ended
(in millions)

April 30,
2015

 

April 30,
2014

April 30,
2015

 

April 30,
2014

Cost of revenue $ 2 $ 2 $ 6 $ 6
Selling and marketing 19 13 55 44
Research and development 20 16 60 46
General and administrative 21   18   63   52
Total share-based compensation expense $ 62   $ 49   $ 184   $ 148

[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
second quarter of fiscal 2015.
 
Our effective tax rates for the three and nine months ended April
30, 2015 were approximately 44% and 48%. Excluding discrete tax
items primarily related to the goodwill impairment charge, our
effective tax rate for the three months ended April 30, 2015 was
approximately 36% and did not differ significantly from the federal
statutory rate of 35%. Excluding discrete tax items primarily
related to the goodwill impairment charge and the reinstatement of
the federal research and experimentation credit, our effective tax
rate for the nine months ended April 30, 2015 was approximately 36%
and did not differ significantly from the federal statutory rate of
35%.
 
Our effective tax rate for the three and nine months ended April 30,
2014 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 B1

INTUIT INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES

(In millions, except per share amounts)

(Unaudited)

 
Fiscal 2015
       

Nine Months
Ended

Q1 Q2 Q3 Q4 April 30, 2015
GAAP operating income (loss) from continuing operations $ (114 ) $ (98 ) $ 906 $ 694
Amortization of acquired technology 10 9 11 30
Amortization of other acquired intangible assets 6 6 6 18
Professional fees for business combinations 1 2 3 6
Goodwill impairment charge 263 263
Gain on sale of long-lived assets (30 ) (30 )
Share-based compensation expense 61   61   62     184  
Non-GAAP operating income (loss) from continuing operations $ (36 ) $ (20 ) $ 1,221   $   $

1,165

 
 
GAAP net income (loss) $ (84 ) $ (66 ) $ 501 $ 351
Amortization of acquired technology 10 9 11 30
Amortization of other acquired intangible assets 6 6 6 18
Professional fees for business combinations 1 2 3 6
Goodwill impairment charge 263 263
Gain on sale of long-lived assets (30 ) (30 )
Share-based compensation expense 61 61 62 184
Net (gain) loss on debt securities and other investments 1 3 4
Income tax effects and adjustments (23 ) (28 ) (15 )   (66 )
Non-GAAP net income (loss) $ (28 ) $ (16 ) $ 804   $  

$

760

 
 
GAAP diluted net income (loss) per share $ (0.29 ) $ (0.23 ) $ 1.78 $ 1.22
Amortization of acquired technology 0.04 0.03 0.04 0.11
Amortization of other acquired intangible assets 0.02 0.02 0.02 0.06
Professional fees for business combinations 0.01 0.01 0.02
Goodwill impairment charge 0.93 0.91
Gain on sale of long-lived assets (0.11 ) (0.10 )
Share-based compensation expense 0.21 0.21 0.22 0.64
Net (gain) loss on debt securities and other investments 0.01 0.01
Income tax effects and adjustments (0.08 ) (0.10 ) (0.05 )   (0.23 )
Non-GAAP diluted net income (loss) per share $ (0.10 ) $ (0.06 ) $ 2.85   $   $ 2.64  
 
Shares used in diluted per share calculation 286   285   282     288  
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 B2

INTUIT INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES

(In millions, except per share amounts)

(Unaudited)

 
Fiscal 2014
Q1   Q2   Q3   Q4   Full Year
GAAP operating income (loss) from continuing operations $ (77 ) $ (46 ) $ 1,494 $ (57 ) $ 1,314
Amortization of acquired technology 6 6 6 8 26
Amortization of other acquired intangible assets 4 5 5 6 20
Professional fees for business combinations 2 5 7
Share-based compensation expense 47   52   49   56   204  
Non-GAAP operating income (loss) from continuing operations $ (20 ) $ 17   $ 1,556   $ 18   $ 1,571  
 
GAAP net income (loss) $ (11 ) $ (37 ) $ 984 $ (29 ) $ 907
Amortization of acquired technology 6 6 6 8 26
Amortization of other acquired intangible assets 4 5 5 6 20
Professional fees for business combinations 2 5 7
Share-based compensation expense 47 52 49 56 204
Net (gain) loss on debt securities and other investments (2 ) 1 1 (21 ) (21 )
Income tax effects and adjustments (14 ) (20 ) (23 ) (16 ) (73 )
Net income from discontinued operations (46 )       (46 )
Non-GAAP net income (loss) $ (16 ) $ 7   $ 1,024   $ 9   $ 1,024  
 
GAAP diluted net income (loss) per share $ (0.04 ) $ (0.13 ) $ 3.39 $ (0.10 ) $ 3.12
Amortization of acquired technology 0.02 0.02 0.02 0.03 0.09
Amortization of other acquired intangible assets 0.01 0.02 0.02 0.02 0.07
Professional fees for business combinations 0.01 0.02 0.02
Share-based compensation expense 0.16 0.18 0.17 0.19 0.70
Net (gain) loss on debt securities and other investments (0.07 ) (0.07 )
Income tax effects and adjustments (0.05 ) (0.07 ) (0.08 ) (0.06 ) (0.25 )
Net income from discontinued operations (0.16 )       (0.16 )
Non-GAAP diluted net income (loss) per share $ (0.06 ) $ 0.02   $ 3.53   $ 0.03   $ 3.52  
 
Shares used in diluted per share calculation 288   284   290   290   291  
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.
 

When reported on August 21, 2014, fourth quarter results included
an accrual for a loss contingency that was resolved before we
filed our fiscal 2014 Form 10-K. We have adjusted our fiscal
fourth quarter and full-year 2014 operating income and earnings
per share accordingly, resulting in a GAAP and non-GAAP operating
income increase of approximately million, and a GAAP and
non-GAAP earnings per share increase of approximately {$content}.03.

 
 
TABLE C

INTUIT INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

   

April 30,
2015

July 31,
2014

ASSETS
Current assets:
Cash and cash equivalents $ 1,193 $ 849
Investments 891 1,065
Accounts receivable, net 210 134
Income taxes receivable 8 35
Deferred income taxes 135 133
Prepaid expenses and other current assets 100   116
Current assets before funds held for customers 2,537 2,332
Funds held for customers 330   289
Total current assets 2,867 2,621
 
Long-term investments 32 31
Property and equipment, net 671 606
Goodwill 1,432 1,635
Acquired intangible assets, net 183 199
Other assets 110   109
Total assets $ 5,295   $ 5,201
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 286 $ 161
Accrued compensation and related liabilities 249 278
Deferred revenue 796 526
Income taxes payable 230 6
Other current liabilities 235   161
Current liabilities before customer fund deposits 1,796 1,132
Customer fund deposits 330   289
Total current liabilities 2,126 1,421
 
Long-term debt 499 499
Long-term deferred revenue 145 10
Other long-term obligations 204   193
Total liabilities 2,974   2,123
 
Stockholders’ equity 2,321   3,078
Total liabilities and stockholders’ equity $ 5,295   $ 5,201
 
 
TABLE D

INTUIT INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 
Nine Months Ended

April 30,
2015

 

April 30,
2014

Cash flows from operating activities:
Net income $ 351 $ 936
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 115 110
Amortization of acquired intangible assets 55 37
Goodwill impairment charge 263
Share-based compensation expense 184 148
Pre-tax gain on sale of discontinued operations (40 )
Deferred income taxes (3 ) 62
Tax benefit from share-based compensation plans 51 52
Excess tax benefit from share-based compensation plans (51 ) (52 )
Other (3 ) 16  
Total adjustments 611   333  
Changes in operating assets and liabilities:
Accounts receivable (76 ) (148 )
Income taxes receivable 27 60
Prepaid expenses and other assets 18 (18 )
Accounts payable 125 56
Accrued compensation and related liabilities (29 ) (18 )
Deferred revenue 407 (9 )
Income taxes payable 224 275
Other liabilities 64   63  
Total changes in operating assets and liabilities 760   261  
Net cash provided by operating activities 1,722   1,530  
Cash flows from investing activities:
Purchases of available-for-sale debt securities (785 ) (917 )
Sales of available-for-sale debt securities 534 218
Maturities of available-for-sale debt securities 406 318
Net change in money market funds and other cash equivalents

held to satisfy customer fund obligations

(41 ) (38 )
Net change in customer fund deposits 41 38
Purchases of property and equipment (183 ) (121 )
Acquisitions of businesses, net of cash acquired (95 ) (90 )
Proceeds from divestiture of businesses 1,025
Other 28   (14 )
Net cash provided by (used in) investing activities (95 ) 419  
Cash flows from financing activities:
Net proceeds from issuance of stock under employee stock plans 129 161
Cash paid for purchases of treasury stock (1,234 ) (1,425 )
Dividends and dividend rights paid (212 ) (165 )
Excess tax benefit from share-based compensation plans 51   52  
Net cash used in financing activities (1,266 ) (1,377 )
Effect of exchange rates on cash and cash equivalents (17 ) (7 )
Net increase in cash and cash equivalents 344 565
Cash and cash equivalents at beginning of period 849   1,009  
Cash and cash equivalents at end of period $ 1,193   $ 1,574  
 
 
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

Range of Estimate

      Non-GAAP

Range of Estimate

From   To Adjmts From   To
Three Months Ending July 31, 2015
Revenue $ 720 $ 745 $ $ 720 $ 745
Operating loss $ (140 ) $ (120 ) $ 95 [a] $ (45 ) $ (25 )
Diluted loss per share $ (0.36 ) $ (0.34 ) $ 0.24 [b] $ (0.12 ) $ (0.10 )
 
Twelve Months Ending July 31, 2015
Revenue $ 4,395 $ 4,420 $ $ 4,395 $ 4,420
Operating income $ 555 $ 575 $ 565 [c] $ 1,120 $ 1,140
Diluted earnings per share $ 0.88 $ 0.90 $ 1.62 [d] $ 2.50 $ 2.52
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 2 million; amortization of acquired technology
of approximately million; amortization of other acquired
intangible assets of approximately million; a goodwill
impairment charge of approximately 3 million; a gain on sale of
long-lived assets of approximately million; and professional
fees for business combinations of approximately million.
 
[d] Reflects the estimated adjustments in item [c], 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 May 21, 2015 contains non-GAAP
financial measures. Table B1, Table B2 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 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 impairment charges. We exclude from our non-GAAP
financial measures non-cash charges to adjust the carrying value of
goodwill to its estimated fair value.

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