DFAN14A: Definitive additional proxy soliciting materials filed by non-management including Rule 14(a)(12) material
Published on November 30, 2006
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Soliciting Material Pursuant to §240.14a-12 |
Digital Insight Corporation
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Filed by Intuit Inc.
Pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Digital Insight Corporation
Commission File No.: 000-27459
Pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Digital Insight Corporation
Commission File No.: 000-27459
The following is a transcript of the question and answer portion of a conference call with analysts
and others held on November 30, 2006 announcing Intuit Inc.s definitive agreement to acquire
Digital Insight Corporation. A recording of this conference call is archived and available on Intuits website at www.intuit.com.
QUESTION AND ANSWER
Operator
(OPERATOR INSTRUCTIONS) Bryan Keane of Prudential.
Good morning. Just thinking about Digital Insight and their many distribution agreements with
FiServe, CheckFree, Metavante and others, do you think their any of those relationships change
going forward and have you talked to some of those distribution vendors?
This is Jeff Stiefler. We have two kinds of agreements with third parties. One set is
distribution agreements with primarily core processors and the second are a set of product
partnerships where we act as resellers for a variety of other financial technologies. The core
processors, the FiServes, Fidelitys, Metavantes of the world we have very effective long-standing
relationships with. We see those players as benefiting from this transaction as we bring new
functionality, new capabilities to them and to their clients. We have talked with most of the major
players about a project that were working on jointly which they are very excited about. We
obviously did not talk with them directly about this transaction but my belief is that they will
view this as a net positive.
As it relates to CheckFree, we are a partner with them in selling their bill pay services. We are
very large and important partner to them as they are to us. Again, we believe that this will be
anywhere from neutral to positive for them.
Okay. When you think about this killer app you guys are building, I guess how would you charge
for that and what is the revenue opportunity for that?
We are still working out specifically what the revenue model looks like. It is premature to
talk about how we would price it or the size of the opportunity. We are starting from the ground up
as we always do with understanding what customers need and how we can serve those needs. We are
very comfortable that we have between us the set of capabilities to serve needs of this 22 million
size segment of small businesses in a way that nobody else can today. And as we get further down
the road well figure out how were going to price it and market it.
Its safe to say I think, Jeff, that Bryan, that we will have some kind of rev share agreement
between us, the financial institutions and the core processors as we go forward. But we will work
through all those details and our focus is building as Jeff said, the killer app. The better the
app is the more small businesses will want to use it because of the integration with online banking
and well figure out the economic part. Were quite excited about the opportunity.
Okay, and just last question. Steve, Intuit typically owns the customer relationship. Is this
kind of a different angle where you will share it or probably the bank I assume will want to own
the relationships so you guys will almost be a reseller?
I wouldnt term it as a reseller. But I think you are right, this is a change. I think the
logic here is very similar to the relationship we just announced with Google a few months ago with
the concept being by integrating what we do and what a partner does into the workflow to make it
easier for the end user will create real value for the end user. And I think the logic here is the
same. By partnering with online banking, with financial institutions we will create solutions that
are better for the small business or consumers and will create value for them which will help us
accelerate revenue growth.
So Id argue this is a new phase in our journey as opposed to selling TurboTax or QuickBooks
directly but I think it actually has more leverage because we are combining the strengths of online
banking with the strengths of Intuit. So we are quite excited about the prospects that this
provides to create real value for financial institutions and for small businesses and consumers.
Okay, great. Thanks for the color and congratulations on the deal.
Thank you.
Adam Holt of JPMorgan.
Good morning and congratulations on the transaction.
Thanks, Adam.
My first question is for Jeff I guess. If you look at the way that your model has evolved over
the last couple of years, bill pay has become a more important percentage of your revenue. I was
wondering if you could first of all talk about bill pay as a percentage of your aggregate mix and
how
important you think that is to this deal going forward? And secondly, can you update us on where
you are in terms of small business customers? The last number I saw was a little over 100,000.
Sure. As it relates to bill pay, it is a significant source of revenue and growth for the
company. We see that continuing. As I mentioned in my remarks and certainly have talked with the
guys who have followed DI, the number one growth opportunity we have is to increase adoption of
bill pay usage within our already installed base. That opportunity hasnt changed at all. But I
think has been enhanced by this transaction in a couple of important ways.
We are at DI extremely good at some things and less good at others. One of the things we are less
good at is marketing to end users. One of the things that Intuit is very good at is marketing to
end users. I believe Intuit is better than we are today at building and delivering really simple
easy to use segment specific solutions which are all things that can help us further drive
penetration. But as we shared with investors before, the opportunity to drive higher adoption is
extraordinary at our base.
We generate about four times the revenue from a bill pay customer that we generate from an Internet
backing banking only customer. We have 1.7 million of them today out of 38 million potential end
users which is good what if we did nothing other than drive that 1.7 million or the average
penetration rate up to the level of our current best penetrated clients, we would take our revenue
which this year will be $245-odd million and drive revenue north of $600 million just simply from
driving higher bill pay adoption in our installed base.
So it is a tremendous opportunity for us. We see this as enhancing our ability to achieve that
goal.
You know, Adam, let me just build with that statistic around what Jeff just said. DIs current
penetration of their customer base on bill pay is 5%; the industry average is 15%; and leading
banks, those on the leading edge of online bill pay are at 30%. So theres a huge opportunity for
growth right within through adoption rates within the existing 1760 financial institutions.
We think the real synergy though is in addition to that these new killer apps for small business
which are generally dramatically underserved by todays online banking solutions that are either
built for consumers or enterprise customers. There really are not great online banking solutions
targeted for small business. So we think that is the killer app that has a real opportunity to
increase value for financial institutions and small businesses.
If I could, I just had two follow-ups. The first is, you mentioned in your prepared comments
that you all have been working together on solutions for the better part of a year. I was wondering
if maybe you could walk us through what the catalyst was to move from a partnership to obviously a
more formal agreement?
And then secondly, as you think about accretion targets for fiscal 08, is that predicated on an
acceleration in Digital Insights current revenue run rate and growth rates?
Lets take the second one first. Look the thought here is this is all about growth. And that
is why the synergies are a little bit longer in the future. In the short term there is actually
some short-term negatives because there is not a lot of redundancy and theres not a lot of cost
opportunities. This is buying another growth engine for Intuit. And so the faster we grow revenue,
the more the synergies will show up.
So I think it makes sense to be prudent in our guidance in the future in terms of how fast those
synergies are going to come in. What we are saying is $0.02 to $0.03 negative in fiscal year 07,
and slightly accretive in 08 and nicely accretive starting in 09 and 10. And so the answer is
yes to your question. But we havent baked a lot of synergy revenue growth into the short term even
in 08.
With respect to why did we get together. We have, if you remember at investor day, Brad Smiths
presentation about small business and small and simple and all the spreads you worked that we have
done in the last year on this really underserved segment, it became increasingly apparent to Intuit
that to win in the small and simple market of 22 million people we had to find a way to partner
with online banking. Online banking is the along with Quicken in QuickBooks is the predominant
financial management solution for many of these 22 million that we had and in many cases because
it was simple and widely accessible.
So it wasnt us or them. It was how do we figure out how to work together and so to really
penetrate this market plus the working relationship and the reaction we were getting from financial
institutions from this killer app, we decided that this was a long-term very important strategic
opportunity for us to continue our small-business leadership position. And so I think the strategic
opportunity for us plus the cultural things that Jeff talked about and the way the teams work
together led us to the path that it made sense to combine the companies.
Great, thank you.
Greg Smith of Merrill Lynch.
Good morning. For Steve first, what was more attractive about Digital Insight from a product
versus distribution channel perspective?
I think the whole company is. I think the leadership team, their relationships with financial
institutions, their relationships with core processors, the market they are in. Its a clear
leadership in the outsourced opportunity. I think it is a premier company. We like to think of
Intuit as a premier company, and Digital Insight is clearly a premier company. And I think it is
the strength and online banking and the platform software as a service platform in a growth market
that we felt by combining the strengths of our applications and their operating system and
relationships and distribution that we could supercharge online banking and change the game.
We have a lot of execution work to make that happen but we know the market opportunity is there.
The better we execute the faster we will supercharge the opportunity and change the game.
Okay. And then is there any concern here the fact that Digital Insight primarily targets
smaller banks and credit unions? Is there anything missing here as far as marketing into the very
large financial institutions?
We think that Jeff and I have spent a bunch of time talking about this. I think in the
future you have the 7 big large banks that are generally buyers and builders or assemblers. Then
youve got people that outsource. I think the more compelling our offering is I think the more
likelihood people will outsource this to us as opposed to license it from somebody else or build it
themselves. And I think you will see us with modular offerings that might plug into larger
financial institutions longer term.
So I think we are after all financial institutions which well sell different value propositions
based on their strategies for serving small businesses and consumers. I dont know, Jeff, if you
would add any thoughts to that?
Yes, I would add just a couple. One is that as you know, Greg, weve been migrating upstream
for years very successfully and what were finding in the market is that increasingly large sized
financial institutions are talking to us about outsourcing some or all of their online banking
applications. And that threshold level has been climbing every year for a variety of exogenous
reasons. So we see that happening.
Secondly, we have successfully now served a number of very large banks on the business banking side
through capabilities we acquired with the Magnet acquisition. That business has now settled down
and is operating quite well and so we have relationships with a number of the top 20 financial
institutions in the country today. So we think weve got a base of understanding of that market and
we think that market is coming toward us and not away from us.
Okay. And how long I guess, Jeff for you, how long do you think it will take until you can
really take what Intuit brings to the table and actually accelerate growth? Is this two years away?
Something you can do in a matter of months? What do you really think there?
As Steve said, we are taking I think a prudent approach to predicting when well start to see
the fruits of that effort. We are saying we dont see significant incremental ramp until fiscal
year 09. We will certainly work as actively as we can to beat that targets. But I think within
certainly the next couple of years we will have created the kind of cross pollination between the
two organizations that are really that is really necessary to optimize the common benefits.
Personally I hope we get there faster. But I think from an expectation building point of view, that
is probably about the right timeframe.
Okay and then just two quick financial questions, Kiran, for you. The non-GAAP I assume you
are excluding stock comp, amortization? Are you also including any integration charges as well in
there?
That is correct. At this stage we dont have any of those integration charges identified. So
this is just excluding the FAS 123 costs and the ...
Yes but we dont I think its safe to say we dont expect any restructuring charges as the
result of this transaction. So I think we will use the same definition of non-GAAP that weve used
for the last 10 plus years and with absolutely no change to that.
Okay, perfect. Is it possible to quantify the direct expense synergies? I mean clearly there
is going to be some S&A duplication that can be lopped off. Any way to quantify that today?
I think its a rounding error. I think you should investors should not view that this is a
big cost take out. Im not sure there will be any cost. In the short term I think there will be any
cost increase because of this acquisition. This is all about revenue growth, accelerating revenue
growth. Thats where the value is going to be created here.
Okay, very clear. Thank you.
John Kraft of D.A. Davidson.
Good morning and congratulations, Jeff. I guess congratulations to both of you guys.
Thank you, John.
Jeff, specifically as far as a bit of a background, did you approach Intuit? And will you have
an opportunity to go shop around for a higher bid at some point?
The processes that led to us getting together has been evolving for a long time. I can assure
you that it was a very comprehensive and thorough process and that we believe this is the best
possible outcome for both companies. We will share details of that process with you when the proxy
statement gets filed. But we are very comfortable that this transaction represents great value for
not only both companies but the shareholders of both companies.
And, Steve, given that you have some significant market share in certain of your products, do
you anticipate any regulatory issues to closure?
No, absolutely not.
Okay. And just lastly for both I guess. Youre talking about a killer app for the business
clients. And, Jeff, given the legacy Magnet solution that you have, that is a pretty robust
product. Can you give us an example of some features that you think these businesses are lacking?
Well, it is more a matter of the interplay between features and markets that the impact of
this new set of capabilities lies, I believe. Intuit has done as it typically does a remarkable job
crawling into the heads of a segment of small businesses that it describes as small and simple. I
think of a sole proprietor that manages both personal and business affairs online. The marriage of
our capability to deliver information and transaction driven and recordkeeping capabilities to that
sole proprietor with Intuits brilliance at creating solutions to make that individual better able
to manage his or her financial life and to wrap it in a front-end delivery envelope that makes it
extremely easy and simple to use is where the magic is. And it is that combination of attributes
that neither of us has on our own but collectively we have together that we believe will create the
breakthrough.
John, let me build on Jeffs thought and give you a couple of examples as we think about it.
If you look at the way small businesses talk about things is money in and money out. Money in is
things like estimating, invoicing, receiving payments, how much available to spend; money out is
paying bills and suppliers, managing payroll and tracking expenses. If you went out and looked at
the online banking functionality for a typical bank you would see that they have big gaps in some
of these areas like estimating, invoicing, payroll, tracking expenses.
And so now online banking does do how much available to spend and some do receiving payments. So
the combination of thinking end to end about all of the tasks that the small and simple businesses
do and offering them an integrated solution where all of the workflows allow data to flow
seamlessly between applications the same way that were doing it with QuickBooks customers is
going to create real, real opportunities.
Remember these 15 million use pencil and paper, manual, high error rate and so there is a big
opportunity here to give them a better solution by integrating online banking with the kind of
great applications that we have. And hopefully that give you a little bit of the context about the
tasks they do and the things that we can do conceptually that make up this killer app that Jeff is
talking about.
Sure, and I appreciate that and I guess look forward to seeing what you guys can build out.
Thanks. Stay tuned.
Glenn Greene of ThinkEquity Partners.
Thank you. First of all congratulations everyone.
Thanks Glenn.
Thanks Glenn.
First question for Steve. I guess sort of a big picture, strategy picture for Intuit if you
just sort of go back five, six years, you ran online insurance and online mortgage, you even had
your own bill pay engine and you kind of exited those businesses. Kind of with this acquisition you
are clearly going back in that direction. Was this a function of Digital Insight being a unique
asset? You like the recurring revenue and the On-Demand model? Or is there sort of more to come
here? What is kind of the big picture thinking with terms of this acquisition?
Yes, actually I see this not as a moving back to where we were at all, Glenn. I see this as
building a financial institutions business of which Intuits old businesses, direct to consumers
content directly to consumers. I see this as building a financial institution business to help them
solve better solve the needs of their customers which happened to be consumers and small businesses
by combining what we do with what they do. I see it completely different. The end market happens to
have some overlap but the strategy is dramatically different. This is all about a financial
institutions business for Intuit not a online banking or online mortgage business.
Okay. And then if I heard right it sounded like you were contemplating packaging Quicken with
the Internet banking product. Did I hear that right? And if that is the case can you charge more
for Digital Insights Internet banking service?
I think there is a couple thoughts on this. One is Quicken has a lot of great functionality.
Let me just give you an example. Most online banking sites that Ive visited can tell you how much
what checks have cleared but they dont tell you what bills are coming due, or they cant help
you look forward into managing your cash flow. And do I have the money available to pay the bills?
Now that is something that Quicken has tools and wizards to do and have been very successful for
the 15 million customers.
What if we unbundled Quicken, made it more modular and provided some of that functionality as a web
service to be integrated with Digital Insights online banking capability for consumers? And then
the question is, do you charge for it or do you drive more rapid adoption because the solution is
better. I think those are the kind of things that we will test and figure out what works best. I
think that is why Im so excited. I think we can supercharge online banking growth with consumers
by taking some of the applications that we have and marrying them in an integrated fashion with the
Digital Insight online consumer online banking platform.
Same kind of concept with small business where we believe we can add payroll and payments and
things like that, create more value for customers that we will then share with financial
institutions and core processors. Its all going to come down to can we build these killer apps
that really extend the functionality and make it easier and better value for consumers? And we are
quite optimistic that we are going to be able to do that. And that has really been our history and
track record. This is just another game to apply the same thing and build a big financial
institutions business.
Glenn, what I might add is if you think about the first wave of online banking, it was all
about just creating basic functionality for consumers and small businesses so that they could use a
new channel to make their financial lives a bit easier. The industry has grown up around that
fundamental premise and it has served everybody quite well.
The next wave I believe will be all about a combination of functionality, usability, segmentation,
personalization and the competition will be in part the financial institutions with each other but
it will be in part the experience that end users have with other nonfinancial institution delivery
of online services so that the consumer is increasingly beginning to compare the user experience
they have with Amazon to the user experience they
have with their local bank or credit union. And the organization that breaks that barrier I think
is going to be the leader in the next generation. And that is what we hope this combination will
allow us to do.
Okay. And then one final question. Steve, if you could just talk about what you have sort of
done to make sure that the Digital Insight management team stays on board?
I think this is a big part, Glenn, of the discussions with Jeff and team. And we would not
have made the acquisition if we didnt feel comfortable that the management team was coming along
to help us achieve this dream that we share together.
I mean, are there lock up agreements?
Weve got employment agreements for the key people at Digital Insight as part of the
transaction.
Glenn, every one of our management team members and myself will come with this transaction
because we want to be part of it. And we all have employment agreements.
Okay, great. Thanks, Jeff.
But it will be 100%.
Okay.
Nik Fisken of Stephens Incorporated.
Good morning everybody. Congrats to the especially to the Digital Insight team. As you guys
look at the market to the end users to drive bill pay adoption, in what scenario would you guys
want to own your own bill pay product?
This is Jeff. Just answering from my perspective, I dont think we need to own our own bill
pay product just as I didnt think we needed to own it when I was just thinking about Digital
Insight. We have great relationships with both Metavante and CheckFree. My guess is if we wanted to
have a great relationship with other providers we could do that as well. I think there are lots of
advantages for us to have that freedom of choice. Its not intuitively obvious to me that the
economics of owning that capability would be better. And I think the risks would be substantially
higher.
So Im not Steve and I talked about it and I guess concluded that were going to continue to go
down the path weve been going down at Digital Insight, which is be a user and not an owner.
Yes, Nik, what I would say is that to second Jeffs thoughts here, I think we at Intuit feel
that it makes a lot of sense in some situations to be Switzerland, to be neutral. And I think this
is one where we go into it with a mindset of being Switzerland is a much better way to approach the
market and form strong partnerships as Jeff has today with the various bill pay companies.
And as we launch the new product, are we going to be a user and not a owner of all the bill
pay parts of a transaction? Are you going to start to bring some things in-house like if you could
look at the CSP portion of it?
I think we will have to see how it evolves over time. Where it makes sense to be an owner, we
will be an honor. Where it makes sense to partner, well partner. I think the history of DI is that
we we know how to do that and have done that well. This just gives us a bigger playing field on
which to do it.
Thanks so much.
Heather Bellini of UBS.
Thanks Steve. I was just wondering I had a couple of questions. Is there a sense you can
give us on the timing of when the killer app you are talking about the more of the maybe
integration with QuickBooks and Quicken when that would be out?
And then I had a question on the financing of the deal, I guess for Kiran. You said its a combo of
cash and debt. Can you give us an idea of the mix and what is going to be the gating factors on how
you balance that?
So the first thing, Heather, that target would be sometime next summer is roughly the time
about the same time (multiple speakers).
Summer 07?
Summer 07, roughly. About the same time that well have our healthcare offering, our new
healthcare offering in the market.
And would that be an embedded so would this be embedded within existing QuickBooks and
Quicken so it would potentially drive a bigger upgrade?
No, it would not be like Google in the fact that it is embedded at this stage. The new app is
a web service. Its on the Digital Insight platform so it will be bringing our content into the
Digital Insight software as a service platform.
And eventually though, could we see it built in?
Yes. I think the answer to that is yes, speculating and I think that is part of the
opportunities weve got to sort through in terms of what is the best way to deliver real value to
customers. But I think the answer is yes if that creates value for both consumers and for small
businesses. On the financing side, Kiran.
I think, Heather, what is important today is to note that there are no financing contingencies
for this transaction. With over $1 billion of cash on our balance sheet, and ability to borrow
money we are very comfortable that this is not a gating factor at all. As we get closer to the
closing date we will lay out more of the details and the exact mix of cash and debt.
Right. But what understand that obviously financing isnt an issue. But what are your
thoughts behind how you would balance it? What are the considerations for how you would balance the
mix of cash and debt?
I think the thing I would say is that look weve got a high-quality problem is we generate so
much cash every year and weve been returning it to shareholders since May of 2001. I think this is
a great way for us to put some debt on the balance sheet at a reasonable cost and get some leverage
on our balance sheet to put cash to work to provide higher returns for shareholders.
So I think the details will all be based on what is the cost and but I think it is safe to say
we are going to be somewhat aggressive in leveraging the balance sheet but not at any since this is
new for us, were still very interested in our credit rating. So that we will have we want to
have a strong credit rating. So I think it is credit rating versus debt on the balance sheet and we
will find a sweet spot of that. Would you add thought to that in the next 60 days?
No, that is right.
That sounds great. I just wanted to make sure then this wouldnt change the aggressiveness
that youve been showing on buybacks would it?
I think we still plan to do buybacks. Look, were going into our busy season and well expect
to generate 700, $800 million of cash in the next two quarters and we already have over $1 billion.
And were talking about taking on in the neighborhood of $1 billion of debt. So when you just do
that math it adds up to what $2.8 $2.7 billion in cash; this is a $1.3 billion transaction. So
we will still have plenty of cash. And as weve been doing for the last six years we will return
excess cash to shareholders to create real value.
Great. Just wanted to make sure. Thank you.
Wayne Johnson of Raymond James.
Good morning. Could you remind us what Intuit is using for electronic bill presentment and
payment processing capability prior to this announcement?
For our Quicken business?
Yes, for any of your services?
Yes, I think we are using one of the third-party providers that Jeff talked about earlier. I
believe our relationship was with Metavante.
Okay. And does Intuit have any credit card processing capability?
No, we outsource that to we have private label credit card arrangements for both Quicken
and QuickBooks.
Okay, great. Congratulations on the announcement. Thank you very much.
Thanks Wayne.
Ladies and gentlemen, Im not showing any further questions. Would you like to proceed with
any further remarks?
Well, we are glad we got this done before the market opens on the East Coast, 6:25 on the West
Coast. Just wanted to thank everybody for joining us. Thanks for the good questions. Were excited
about this opportunity and we look forward to talking more about it as we move toward close which
we would expect to happen in the next 60 to 90 days. So stay tuned for the next chapter and thanks
for joining us today.
Thank you. Ladies and gentlemen, thank you for participating in todays conference call. This
concludes the call. You may all disconnect.
Cautions About Forward-Looking Statements
This presentation includes forward-looking statements which are subject to safe harbors created under the U.S. federal securities laws. All statements included in this presentation that address activities, events or developments that Intuit and Digital Insight expect, believe or anticipate will or may occur in the future are forward looking statements, including: statements about the potential benefits of the proposed transaction to Intuit, including the ability to address new markets, offer new solutions, and increase revenue growth rates; the potential benefits of the proposed acquisition to financial institutions and their customers and to small businesses; the expected opportunities and results of the business in the future; the expected closing of the proposed transaction; the expected financial impact of the transaction on Intuit; and Intuits plans for financing the transaction. All forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking
This presentation includes forward-looking statements which are subject to safe harbors created under the U.S. federal securities laws. All statements included in this presentation that address activities, events or developments that Intuit and Digital Insight expect, believe or anticipate will or may occur in the future are forward looking statements, including: statements about the potential benefits of the proposed transaction to Intuit, including the ability to address new markets, offer new solutions, and increase revenue growth rates; the potential benefits of the proposed acquisition to financial institutions and their customers and to small businesses; the expected opportunities and results of the business in the future; the expected closing of the proposed transaction; the expected financial impact of the transaction on Intuit; and Intuits plans for financing the transaction. All forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking
statements. These risks and uncertainties include: the risk that the transaction is not consummated
or is not consummated within the expected timeframe; the risk that the expected benefits of the
proposed acquisition are not realized; the risk that disruption from the transaction may make it
more difficult to maintain relationships with customers, employees, partners or suppliers; the risk
that future products and services may not be successful or achieve broad market acceptance; and the
risk that Intuit will not be able to successfully integrate Digital Insights market opportunities,
technology, personnel and operations and achieve planned synergies. For information regarding other
related risks, see discussion of risks and other factors in documents filed by Intuit and Digital
Insight with the Securities and Exchange Commission (SEC) from time to time, including Digital
Insights Annual Report on Form 10-K for the year ended December 31, 2005 and report on Form 10-Q
for the quarter ended September 30, 2006 as well as Intuits Form 10-K for the year ended July 31,
2006. Forward-looking statements represent the judgment of the management of Intuit and Digital
Insight as of the date of this release, and Intuit and Digital Insight disclaim any intent or
obligation to update any forward-looking statements.
Accretion and dilution calculated on non GAAP basis
In estimating future accretion and dilution on a non GAAP basis, Intuit excludes share-based compensation expenses, amortization of purchased intangible assets, acquisition-related charges, net gains on marketable equity securities and other investments, gains and losses on disposals of businesses, certain discrete tax items and amounts related to discontinued operations from its GAAP earnings per share.
In estimating future accretion and dilution on a non GAAP basis, Intuit excludes share-based compensation expenses, amortization of purchased intangible assets, acquisition-related charges, net gains on marketable equity securities and other investments, gains and losses on disposals of businesses, certain discrete tax items and amounts related to discontinued operations from its GAAP earnings per share.
Additional Information About the Proposed Transaction and Where You Can Find It
In connection with the proposed transaction, Digital Insight intends to file a proxy statement and other relevant materials with the Securities and Exchange Commission (SEC). BEFORE MAKING ANY VOTING DECISION WITH RESPECT TO THE PROPOSED TRANSACTION, STOCKHOLDERS OF DIGITAL INSIGHT ARE URGED TO READ THE PROXY STATEMENT, WHEN IT BECOMES AVAILABLE, AND THE OTHER RELEVANT MATERIALS FILED BY DIGITAL INSIGHT WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement and other relevant materials, when available, and any other documents filed by Digital Insight with the SEC, may be obtained free of charge at the SECs website at www.sec.gov. In addition, stockholders of Digital Insight may obtain free copies of the documents filed with the SEC by contacting Digital Insights Investor Relations at 26025 Mureau Road, Calabasas, California 91302, Telephone: (818) 878-6615. You may also read and copy any reports, statements and other information filed by Digital Insight with the SEC at the SEC public reference room at 100 F Street, N.E. Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SECs website for further information on its public reference room.
In connection with the proposed transaction, Digital Insight intends to file a proxy statement and other relevant materials with the Securities and Exchange Commission (SEC). BEFORE MAKING ANY VOTING DECISION WITH RESPECT TO THE PROPOSED TRANSACTION, STOCKHOLDERS OF DIGITAL INSIGHT ARE URGED TO READ THE PROXY STATEMENT, WHEN IT BECOMES AVAILABLE, AND THE OTHER RELEVANT MATERIALS FILED BY DIGITAL INSIGHT WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement and other relevant materials, when available, and any other documents filed by Digital Insight with the SEC, may be obtained free of charge at the SECs website at www.sec.gov. In addition, stockholders of Digital Insight may obtain free copies of the documents filed with the SEC by contacting Digital Insights Investor Relations at 26025 Mureau Road, Calabasas, California 91302, Telephone: (818) 878-6615. You may also read and copy any reports, statements and other information filed by Digital Insight with the SEC at the SEC public reference room at 100 F Street, N.E. Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SECs website for further information on its public reference room.
Digital Insight and its executive officers and directors may be deemed to be participants in the
solicitation of proxies from Digital Insight stockholders in favor of the proposed transaction.
Certain executive officers and directors of Digital Insight have interests in the transaction that
may differ from the interests of stockholders generally, including without limitation acceleration
of vesting of stock options, benefits conferred under retention, severance and change in control
arrangements, and continuation of director and officer insurance and indemnification. These
interests will be described in the proxy statement when it becomes available.
In addition, Intuit and its executive officers and directors may be deemed to be participants in
the solicitation of proxies from Digital Insights stockholders in favor of the approval of the
proposed transaction. Information concerning Intuits directors and executive officers is set forth
in Intuits proxy statement for its 2006 annual meeting of stockholders, which was filed with the
SEC on November 3, 2006, and annual report on Form 10-K filed with the SEC on September 15, 2006.
These documents are available free of charge at the SECs web site at www.sec.gov or by going to
Intuits Investor Relations Website at http://www.intuit.com/about_intuit/investors.