Intuit Third-Quarter GAAP Operating Income Grows 13 Percent
Highlights:
Quarterly revenue grows 9 percent Non-GAAP operating income grows 15 percent GAAP EPS grows 11 percent, non-GAAP 21 percent
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- Intuit Inc. (Nasdaq:INTU) today announced third-quarter revenue of $1.434 billion, a 9 percent increase from the year-ago quarter. GAAP operating income of $764 million and GAAP diluted earnings per share of $1.47 were at the upper end of the guidance range.
"We just finished a strong tax season with double-digit customer growth. We grew our small business customer base and increased share in a challenging economic environment," said Brad Smith, Intuit's president and chief executive officer.
"Our continued focus on customers and providing products and services that help consumers and small business owners save and make money enables us to grow our top line. We expect to deliver a solid year with both revenue and operating income growth," Smith said.
Third-Quarter 2009 Financial Highlights
-- Revenue of $1.434 billion, up 9 percent from the year-ago quarter.
-- GAAP (Generally Accepted Accounting Principles) operating income from
continuing operations of $764 million, up 13 percent from the year-ago
quarter. GAAP diluted earnings per share of $1.47, compared to $1.33 in
the year-ago quarter, up 11 percent from the year-ago quarter.
-- Non-GAAP operating income of $837 million, up 15 percent from the
year-ago quarter. Non-GAAP diluted earnings per share of $1.68, compared
to $1.39 in the year-ago quarter, up 21 percent from the year-ago
quarter.
Third-Quarter 2009 Business Segment Results
-- Consumer Tax revenue was $777 million, up 18 percent from the year-ago
quarter.
-- QuickBooksrevenue was $149 million, down 8 percent from the year-ago
quarter.
-- Payroll and Payments revenue was $157 million, up 11 percent from the
year-ago quarter.
-- Accounting Professionalsrevenue was $179 million, up 4 percent from the
year-ago quarter.
-- Financial Institutionsrevenue was $78 million, up 3 percent from the
year-ago quarter.
-- Other Businessesrevenue was $94 million, down 9 percent from the
year-ago quarter.
Forward-looking Guidance
Intuit narrowed its guidance range for the full 2009 fiscal year, which ends July 31, and expects:
-- Revenue of $3.155 billion to $3.185 billion, or growth of 3 to 4
percent.
-- GAAP operating income of $672 to $692 million, or growth of 3 to 6
percent. This represents GAAP diluted earnings per share of $1.31 to
$1.35.
-- Non-GAAP operating income of $918 million to $938 million, or growth of
7 to 10 percent. This represents non-GAAP diluted earnings per share of
$1.78 to $1.82.
Intuit also updated its previous fiscal year revenue guidance for the Consumer Tax segment, which is now expected to grow 5 to 7 percent. All other segment revenue guidance remained unchanged.
Webcast and Conference Call Information
A live audio webcast of Intuit's third-quarter 2009 conference call is available at http://investors.intuit.com/events.cfm. The call begins today at 1:30 p.m. Pacific time. The replay of the audio webcast will remain on Intuit's Web site for one week after the conference call. Intuit has also posted this press release, including the attached tables and non-GAAP to GAAP reconciliations on its Web site and will post the conference call script shortly after the conference call concludes. These documents may be found at http://investors.intuit.com/results.cfm.
The conference call number is 866-238-1645 in the United States or 703-639-1163 from international locations. No reservation or access code is needed. A replay of the 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 1355112.
Intuit, the Intuit logo and QuickBooks, 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 which follow it. A copy of the press release issued by Intuit on May 20, 2009 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 Intuit's future expected financial results; its prospects for the business in fiscal 2009; 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: 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; if economic and market conditions in the U.S. and worldwide continue to decline, our customers may delay or reduce technology purchases which may harm our business, results of operations and financial condition; we may not be able to successfully introduce new products and services to meet our growth and profitability objectives, and current and future products and services may not adequately address customer needs and may not achieve broad market acceptance, which could harm our operating results and financial condition; any failure to maintain reliable and responsive service levels for our offerings could cause us to lose customers and negatively impact our revenues and profitability; any significant product quality problems or delays in our products 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; any failure to properly use and protect personal customer information could harm our revenue, earnings and reputation; our acquisition activities may be disruptive to Intuit and may not result in expected benefits; our use of significant amounts of debt to finance acquisitions or other activities could harm our financial condition and results of operations; 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; predicting tax-related revenues is challenging due to the heavy concentration of activity in a short time period; we have implemented, and are continuing to upgrade, new information systems and any problems with these new systems could interfere with our ability to deliver products and services and gather information to effectively manage our business; 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; and litigation involving intellectual property, antitrust, shareholder and other matters may increase our costs. More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2008 and in our other SEC filings. You can locate these reports through our website at http://www.intuit.com/about_intuit/investors. Forward-looking statements are based on information as of May 20, 2009, and we do not undertake any duty to update any forward-looking statement or other information in these remarks.
Table A
INTUIT INC.
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
April 30, April 30, April 30, April 30,
2009 2008 2009 2008
Net revenue:
Product $ 535,732 $ 517,670 $ 1,191,214 $ 1,277,080
Service and other 898,676 795,338 1,515,549 1,315,740
Total net revenue 1,434,408 1,313,008 2,706,763 2,592,820
Costs and expenses:
Cost of revenue:
Cost of product 33,850 34,637 122,895 125,264
revenue
Cost of service and 123,842 105,311 343,042 305,603
other revenue
Amortization of
purchased intangible 15,380 14,075 45,616 40,188
assets
Selling and 278,609 246,095 741,169 679,459
marketing
Research and 132,866 149,985 412,332 449,088
development
General and 75,335 79,150 211,520 222,937
administrative
Acquisition-related 10,464 9,254 32,600 25,349
charges
Total costs and 670,346 638,507 1,909,174 1,847,888
expenses [A]
Operating income
from continuing 764,062 674,501 797,589 744,932
operations
Interest expense (12,642 ) (12,830 ) (36,059 ) (40,389 )
Interest and other 5,977 10,361 10,299 32,477
income
Gains on marketable
equity securities 507 477 1,084 1,190
and other
investments, net
Gain on sale of
outsourced payroll - 13,616 - 51,571
assets [B]
Income from
continuing 757,904 686,125 772,913 789,781
operations before
income taxes
Income tax provision 272,868 241,612 254,401 275,839
[C]
Minority interest 216 334 796 1,332
expense, net of tax
Net income from
continuing 484,820 444,179 517,716 512,610
operations
Net income from
discontinued - - - 26,012
operations [D]
Net income $ 484,820 $ 444,179 $ 517,716 $ 538,622
Basic net income per
share from $ 1.51 $ 1.37 $ 1.61 $ 1.55
continuing
operations
Basic net income per
share from - - - 0.08
discontinued
operations
Basic net income per $ 1.51 $ 1.37 $ 1.61 $ 1.63
share
Shares used in basic
per share 321,890 323,408 321,897 330,862
calculations
Diluted net income
per share from $ 1.47 $ 1.33 $ 1.57 $ 1.50
continuing
operations
Diluted net income
per share from - - - 0.08
discontinued
operations
Diluted net income $ 1.47 $ 1.33 $ 1.57 $ 1.58
per share
Shares used in
diluted per share 329,104 333,436 329,412 341,869
calculations
See accompanying Notes.
INTUIT INC.
NOTES TO TABLE A
[A] The following table summarizes the total share-based compensation expense
that we recorded for the periods shown.
Three Months Ended Nine Months Ended
April 30, April 30, April 30, April 30,
2009 2008 2009 2008
Cost of product revenue $ 388 $ 288 $ 995 $ 847
Cost of service and other 1,976 1,483 4,991 4,894
revenue
Selling and marketing 12,984 10,684 33,890 28,110
Research and development 10,855 8,378 27,445 24,377
General and administrative 10,747 9,260 26,280 28,054
Total share-based compensation $ 36,950 $ 30,093 $ 93,601 $ 86,282
In March 2007 we sold certain assets related to our Complete Payroll and
Premier Payroll Service businesses to Automatic Data Processing, Inc.
(ADP) for a price of up to approximately $135 million in cash. The final
purchase price was contingent upon the number of customers that
transitioned to ADP pursuant to the purchase agreement over a period of
[B] approximately one year from the date of sale. In the three and nine months
ended April 30, 2008 we recorded pre-tax gains of $13.6 million and $51.6
million on our statement of operations for customers who transitioned to
ADP during those periods. We received a total price of $93.6 million and
recorded a total pre-tax gain of $83.2 million from the inception of this
transaction through its completion in the third quarter of fiscal 2008.
Our effective tax rates for the three months ended April 30, 2009 and 2008
were approximately 36% and 35% and did not differ significantly from the
federal statutory rate of 35%.
Our effective tax rate for the nine months ended April 30, 2009 was
approximately 33%. Excluding discrete tax benefits primarily related to a
[C] favorable agreement we entered into with a tax authority and the
retroactive reinstatement of the federal research and experimentation
credit, our effective tax rate for that period was approximately 36% and
did not differ significantly from the federal statutory rate of 35%. Our
effective tax rate for the nine months ended April 30, 2008 was
approximately 35% and did not differ significantly from the federal
statutory rate of 35%.
In August 2007 we sold our Intuit Distribution Management Solutions (IDMS)
business for approximately $100 million in cash and recorded a net gain on
disposal of $27.5 million. IDMS was part of our Other Businesses segment.
In accordance with the provisions of SFAS 144,"Accounting for the
Impairment or Disposal of Long-lived Assets," we determined that IDMS
became a discontinued operation in the fourth quarter of fiscal 2007. We
have therefore segregated the net assets and operating results of IDMS
[D] from continuing operations on our balance sheets and in our statements of
operations for all periods prior to the sale. Revenue and net loss from
IDMS discontinued operations for the nine months ended April 30, 2008 were
not significant. Because IDMS operating cash flows were not material for
any period presented, we have not segregated them from continuing
operations on our statements of cash flows. We have segregated the cash
impact of the gain on disposal of IDMS on our statement of cash flows for
the nine months ended April 30, 2008.
INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated May 20, 2009 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 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 assessing the performance of the organization, our operating segments or our senior management. Segment managers are not held accountable for share-based compensation expenses, acquisition-related costs, or the other excluded items that may impact their business units' operating income (loss) and, accordingly, we exclude these amounts from our measures of segment performance. We also exclude these amounts from our budget and planning process. We believe that our non-GAAP financial measures also facilitate the comparison of results for current periods and guidance for future periods with results for past periods. We exclude the following items from our non-GAAP financial measures:
-- Share-based compensation expenses. Our non-GAAP financial measures
exclude share-based compensation expenses, which consist of expenses for
stock options, restricted stock, restricted stock units and purchases of
common stock under our Employee Stock Purchase Plan. Segment managers
are not held accountable for share-based compensation expenses impacting
their business units' operating income (loss) and, accordingly, we
exclude share-based compensation expenses from our measures of segment
performance. While share-based compensation is a significant expense
affecting our results of operations, management excludes share-based
compensation from our budget and planning process. We exclude
share-based compensation expenses from our non-GAAP financial measures
for these reasons and the other reasons stated above. We compute
weighted average dilutive shares using the method required by SFAS 123
(R) for both GAAP and non-GAAP diluted net income per share.
-- Amortization of purchased intangible assets and acquisition-related
charges. In accordance with GAAP, amortization of purchased intangible
assets in cost of revenue includes amortization of software and other
technology assets related to acquisitions. Acquisition-related charges
in operating expenses include amortization of other purchased intangible
assets such as customer lists, covenants not to compete and trade names.
Acquisition activities are managed on a corporate-wide basis and segment
managers are not held accountable for the acquisition-related costs
impacting their business units' operating income (loss). We exclude
these amounts from our measures of segment performance and from our
budget and planning process. We exclude these items from our non-GAAP
financial measures for these reasons, the other reasons stated above and
because we believe that excluding these items facilitates comparisons to
the results of other companies in our industry, which have their own
unique acquisition histories.
-- Charge for historical use of technology licensing rights. We exclude
from our non-GAAP financial measures the portion of technology licensing
fees that relates to historical use of that technology. We exclude this
portion for the reasons stated above and because it is unrelated to our
ongoing business operating results.
-- Gains and losses on disposals of businesses and assets. We exclude these
amounts from our non-GAAP financial measures for the reasons stated
above and because they are unrelated to our ongoing business operating
results.
-- Gains and losses on marketable equity securities and other investments.
We exclude these amounts from our non-GAAP financial measures for the
reasons stated above and because they are unrelated to our ongoing
business operating results.
-- Income tax effects of excluded items. Our non-GAAP financial measures
exclude the income tax effects of the adjustments described above that
relate to the current period as well as adjustments for similar items
that relate to prior periods. We exclude the impact of these tax items
for the reasons stated above and because management believes that they
are not indicative of our ongoing business operations.
-- 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 for the reasons stated
above and because they are unrelated to our ongoing business operations.
The following describes each non-GAAP financial measure, the items excluded from the most directly comparable GAAP measure in arriving at each non-GAAP financial measure, and the reasons management uses each measure and excludes the specified amounts in arriving at each non-GAAP financial measure.
(A) Operating income (loss). We exclude share-based compensation expenses, amortization of purchased intangible assets, acquisition-related charges, and charges for historical use of technology licensing rights from our GAAP operating income (loss) from continuing operations in arriving at our non-GAAP operating income (loss) primarily because we do not consider them part of ongoing operating results when assessing the performance of the organization, our operating segments and senior management or when undertaking our budget and planning process. We believe that the exclusion of these expenses from our non-GAAP financial measures also facilitates the comparison of results for current periods and guidance for future periods with results for prior periods. In addition, we exclude amortization of purchased intangible assets and acquisition-related charges from non-GAAP operating income (loss) because we believe that excluding these items facilitates comparisons to the results of other companies in our industry, which have their own unique acquisition histories.
(B) Net income (loss) and net income (loss) per share (or earnings per share). We exclude share-based compensation expenses, amortization of purchased intangible assets, acquisition-related charges, charges for historical use of technology licensing rights, net gains on marketable equity securities and other investments, gains and losses on disposals of businesses and assets, certain tax items as described above, and amounts related to discontinued operations from our GAAP net income (loss) and net income (loss) per share in arriving at our non-GAAP net income (loss) and net income (loss) per share. We exclude all of these items from our non-GAAP net income (loss) and net income (loss) per share primarily because we do not consider them part of ongoing operating results when assessing the performance of the organization, our operating segments and senior management or when undertaking our budget and planning process. We believe that the exclusion of these items from our non-GAAP financial measures also facilitates the comparison of results for current periods and guidance for future periods with results for prior periods.
In addition, we exclude amortization of purchased intangible assets and acquisition-related charges from our non-GAAP net income (loss) and net income (loss) per share because we believe that excluding these items facilitates comparisons to the results of other companies in our industry, which have their own unique acquisition histories. We exclude charges for historical use of technology licensing rights and net gains on marketable equity securities and other investments from our non-GAAP net income (loss) and net income (loss) per share because they are unrelated to our ongoing business operating results. Our non-GAAP financial measures exclude the income tax effects of the adjustments described above that relate to the current period as well as adjustments for similar items that relate to prior periods. We exclude the impact of these tax items because management believes that they are not indicative of our ongoing business operations. The effective tax rates used to calculate non-GAAP net income (loss) and net income (loss) per share were as follows: 36% for the first, second and third quarters of fiscal 2008; 36% for the first quarter of fiscal 2009; 34% for the second and third quarters of fiscal 2009; and 34% for fourth quarter and full year fiscal 2009 guidance. Finally, we exclude amounts related to discontinued operations from our non-GAAP net income (loss) and net income (loss) per share because they are unrelated to our ongoing business operations.
We refer to these non-GAAP financial measures in assessing the performance of Intuit's ongoing operations and for planning and forecasting in future periods. These non-GAAP financial measures also facilitate our internal comparisons to Intuit's historical operating results. We have historically reported similar non-GAAP financial measures and believe that the inclusion of comparative numbers provides consistency in our financial reporting. We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year.
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 marketable equity securities and other investments.
Table B
INTUIT INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
April 30, April 30, April 30, April 30,
2009 2008 2009 2008
GAAP operating income from $ 764,062 $ 674,501 $ 797,589 $ 744,932
continuing operations
Amortization of purchased 15,380 14,075 45,616 40,188
intangible assets
Acquisition-related charges 10,464 9,254 32,600 25,349
Charge for historical use of 10,600 - 10,600 -
technology licensing rights
Share-based compensation 36,950 30,093 93,601 86,282
expense
Non-GAAP operating income $ 837,456 $ 727,923 $ 980,006 $ 896,751
GAAP net income $ 484,820 $ 444,179 $ 517,716 $ 538,622
Amortization of purchased 15,380 14,075 45,616 40,188
intangible assets
Acquisition-related charges 10,464 9,254 32,600 25,349
Charge for historical use of 10,600 - 10,600 -
technology licensing rights
Share-based compensation 36,950 30,093 93,601 86,282
expense
Net gains on marketable
equity securities and other (507 ) (477 ) (1,084 ) (1,190 )
investments
Pre-tax gain on sale of - (13,616 ) - (51,571 )
outsourced payroll assets
Income tax effect of (25,676 ) (18,143 ) (63,793 ) (39,563 )
non-GAAP adjustments
Exclusion of discrete tax 20,229 (1,408 ) (1,478 ) (4,580 )
items
Discontinued operations - - - (26,012 )
Non-GAAP net income $ 552,260 $ 463,957 $ 633,778 $ 567,525
GAAP diluted net income per $ 1.47 $ 1.33 $ 1.57 $ 1.58
share
Amortization of purchased 0.05 0.04 0.14 0.12
intangible assets
Acquisition-related charges 0.03 0.03 0.09 0.07
Charge for historical use of 0.03 - 0.03 -
technology licensing rights
Share-based compensation 0.11 0.09 0.28 0.25
expense
Net gains on marketable
equity securities and other - - - -
investments
Pre-tax gain on sale of - (0.04 ) - (0.15 )
outsourced payroll assets
Income tax effect of (0.08 ) (0.06 ) (0.19 ) (0.12 )
non-GAAP adjustments
Exclusion of discrete tax 0.07 - - (0.01 )
items
Discontinued operations - - - (0.08 )
Non-GAAP diluted net income $ 1.68 $ 1.39 $ 1.92 $ 1.66
per share
Shares used in diluted per 329,104 333,436 329,412 341,869
share calculations
See "About Non-GAAP Financial Measures" immediately preceding this Table B 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 thousands)
(Unaudited)
April 30, July 31,
2009 2008
ASSETS
Current assets:
Cash and cash equivalents $ 1,222,028 $ 413,340
Investments 250,072 414,493
Accounts receivable, net 272,676 127,230
Income taxes receivable 1,793 60,564
Deferred income taxes 75,607 101,730
Prepaid expenses and other current assets 53,368 45,457
Current assets before funds held for customers 1,875,544 1,162,814
Funds held for customers 343,589 610,748
Total current assets 2,219,133 1,773,562
Long-term investments 268,395 288,310
Property and equipment, net 535,603 507,499
Goodwill 1,694,307 1,698,087
Purchased intangible assets, net 202,016 273,087
Long-term deferred income taxes 36,573 52,491
Other assets 76,948 73,548
Total assets $ 5,032,975 $ 4,666,584
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 147,662 $ 115,198
Accrued compensation and related liabilities 153,284 229,819
Deferred revenue 298,939 359,936
Income taxes payable 149,355 16,211
Other current liabilities 216,309 135,326
Current liabilities before customer fund deposits 965,549 856,490
Customer fund deposits 343,589 610,748
Total current liabilities 1,309,138 1,467,238
Long-term debt 998,136 997,996
Other long-term obligations 125,814 121,489
Total liabilities 2,433,088 2,586,723
Minority interest 1,368 6,907
Stockholders' equity 2,598,519 2,072,954
Total liabilities and stockholders' equity $ 5,032,975 $ 4,666,584
Table D
INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
April 30, April 30, April 30, April 30,
2009 2008 2009 2008
Cash flows from
operating activities:
Net income (1) $ 484,820 $ 444,179 $ 517,716 $ 538,622
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation 36,130 31,420 105,289 85,542
Amortization of 26,889 25,518 83,833 71,626
intangible assets
Share-based 36,950 30,093 93,601 86,328
compensation
Pre-tax gain on sale
of outsourced payroll - (13,616 ) - (51,571 )
assets
Pre-tax gain on sale - - - (45,667 )
of IDMS (1)
Deferred income taxes 727 4,582 44,944 19,142
Tax benefit from
share-based 1,641 3,059 8,612 28,091
compensation plans
Excess tax benefit
from share-based (865 ) (2,024 ) (7,362 ) (17,785 )
compensation plans
Other 3,419 5,428 10,075 8,364
Subtotal 589,711 528,639 856,708 722,692
Changes in operating
assets and
liabilities:
Accounts receivable 170,042 150,540 (146,475 ) (86,398 )
Prepaid expenses, 154,111 19,470 40,222 40,563
taxes and other assets
Accounts payable 24,996 333 39,899 10,708
Accrued compensation
and related 21,509 28,231 (75,501 ) (21,574 )
liabilities
Deferred revenue (173,752 ) (56,746 ) (51,744 ) (32,946 )
Income taxes payable 150,010 196,883 137,332 182,545
Other liabilities (1,598 ) (35,401 ) 77,450 53,903
Total changes in
operating assets and 345,318 303,310 21,183 146,801
liabilities
Net cash provided by
operating activities 935,029 831,949 877,891 869,493
(1)
Cash flows from
investing activities:
Purchases of
available-for-sale (71,207 ) (290,300 ) (138,163 ) (738,991 )
debt securities
Sales of
available-for-sale 27,738 151,142 292,133 868,759
debt securities
Maturities of
available-for-sale 3,265 26,760 27,120 201,095
debt securities
Net change in funds
held for customers' (49,906 ) 181,124 267,159 (37,715 )
money market funds and
other cash equivalents
Purchases of property (31,487 ) (95,335 ) (148,371 ) (217,254 )
and equipment
Net change in customer 49,906 (181,124 ) (267,159 ) 37,715
fund deposits
Acquisitions of
businesses and (9,490 ) (128,768 ) (12,831 ) (262,839 )
intangible assets, net
of cash acquired
Cash received from
acquirer of outsourced - 7,576 - 34,879
payroll assets
Proceeds from
divestiture of - - - 97,147
businesses
Other (1,088 ) 4,384 5,477 (2,086 )
Net cash provided by
(used in) investing (82,269 ) (324,541 ) 25,365 (19,290 )
activities
Cash flows from
financing activities:
Net proceeds from
issuance of common 30,743 32,113 125,812 153,790
stock under employee
stock plans
Tax payments related
to restricted stock (463 ) (511 ) (14,742 ) (4,560 )
issuance
Purchase of treasury - (300,000 ) (200,251 ) (799,998 )
stock
Excess tax benefit
from share-based 865 2,024 7,362 17,785
compensation plans
Other (785 ) 523 (2,535 ) (3,072 )
Net cash provided by
(used in) financing 30,360 (265,851 ) (84,354 ) (636,055 )
activities
Effect of exchange
rates on cash and cash 200 (201 ) (10,214 ) 2,155
equivalents
Net increase in cash 883,320 241,356 808,688 216,303
and cash equivalents
Cash and cash
equivalents at 338,708 230,148 413,340 255,201
beginning of period
Cash and cash
equivalents at end of $ 1,222,028 $ 471,504 $ 1,222,028 $ 471,504
period
(1) Because the operating cash flows of our Intuit Distribution Management
Solutions (IDMS) discontinued operations were not material for any period
presented, we have not segregated them from continuing operations on these
statements of cash flows. We have presented the effect of the gain on disposal
of IDMS on the statement of cash flows for the nine months ended April 30, 2008.
Table E
INTUIT INC.
RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL MEASURES
TO PROJECTED GAAP REVENUE, OPERATING INCOME (LOSS), AND EPS
(In thousands, except per share amounts)
(Unaudited)
Forward-Looking Guidance
GAAP Non-GAAP
Range of Estimate Range of Estimate
From To Adjustments From To
Three
Months
Ending
July 31,
2009
Revenue $ 454,000 $ 484,000 $ - $ 454,000 $ 484,000
Operating $ (126,000 ) $ (106,000 ) $ 64,000 [a] $ (62,000 ) $ (42,000 )
loss
Diluted
loss per $ (0.26 ) $ (0.22 ) $ 0.12 [b] $ (0.14 ) $ (0.10 )
share
Shares 322,000 325,000 - 322,000 325,000
Twelve
Months
Ending
July 31,
2009
Revenue $ 3,155,000 $ 3,185,000 $ - $ 3,155,000 $ 3,185,000
Operating $ 672,000 $ 692,000 $ 246,000 [c] $ 918,000 $ 938,000
income
Diluted
earnings $ 1.31 $ 1.35 $ 0.47 [d] $ 1.78 $ 1.82
per share
Shares 328,000 331,000 - 328,000 331,000
See "About Non-GAAP Financial Measures" immediately preceding Table B 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
$40 million; amortization of purchased intangible assets of approximately $15 million;
and acquisition-related charges of approximately $9 million.
[b] Reflects the estimated adjustments in item [a], income taxes related to these
adjustments, and adjustments for certain discrete GAAP tax items.
[c] Reflects estimated adjustments for share-based compensation expense of approximately
$134 million; amortization of purchased intangible assets of approximately $60 million;
acquisition-related charges of approximately $41 million; and a charge for historical
use of technology licensing rights of approximately $11 million.
[d] Reflects the estimated adjustments in item [c], income taxes related to these
adjustments, and adjustments for certain discrete GAAP tax items.
Source: Intuit Inc.
Released May 20, 2009