Form: 8-K

Current report filing

August 2, 2013

Documents

Exhibit 99.02

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On August 1, 2013 Intuit Inc. ("Intuit" or the "Company") completed the sale of its Financial Services business to the private equity firm Thoma Bravo. The cash transaction is valued at approximately $1.025 billion. The following unaudited pro forma condensed consolidated balance sheet and statements of operations are derived from the historical consolidated financial statements of the Company. The pro forma condensed consolidated balance sheet of Intuit as of April 30, 2013 gives effect to the disposition as if it had occurred on that date. The pro forma condensed consolidated statements of operations of Intuit for the nine months ended April 30, 2013 and April 30, 2012 and the fiscal years ended July 31, 2012, 2011 and 2010 assume that the sale had been completed as of August 1, 2009. The unaudited pro forma condensed consolidated balance sheet and statements of operations should be read in conjunction with the notes thereto and the historical financial statements, including the notes thereto, of the Company included in its Annual Report on Form 10-K for the year ended July 31, 2012.

The preparation of the unaudited pro forma consolidated financial information is based on financial statements prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the use of estimates that affect the reported amounts of revenues and expenses. Actual results could differ from those estimates.

The unaudited pro forma consolidated financial information is provided for illustrative purposes only and does not purport to represent what the actual results of operations would have been had the transaction occurred on the respective dates assumed, nor is it necessarily indicative of the Company’s future operating results. However, the pro forma adjustments reflected in the accompanying unaudited pro forma consolidated financial information reflect estimates and assumptions that the Company’s management believes to be reasonable.




INTUIT INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
APRIL 30, 2013
(Unaudited)
 
 
 
 
Pro Forma Adjustments
 
 
(In millions)
Historical
 
IFS (1)
 
Other (2)
 
Pro Forma
ASSETS
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,412

 
$
—

 
$
1,025

 
$
2,437

Investments
583

 
—

 
—

 
583

Accounts receivable, net
312

 
(42
)
 
—

 
270

Deferred income taxes
136

 
—

 
—

 
136

Prepaid expenses and other current assets
73

 
(4
)
 
—

 
69

Current assets before funds held for customers
2,516

 
(46
)
 
1,025

 
3,495

Funds held for customers
184

 
—

 
—

 
184

Total current assets
2,700

 
(46
)
 
1,025

 
3,679

 
 
 
 
 
 
 
 
Long-term investments
88

 
—

 
—

 
88

Property and equipment, net
588

 
(28
)
 
—

 
560

Goodwill
2,159

 
(914
)
 
—

 
1,245

Acquired intangible assets, net
165

 
(5
)
 
—

 
160

Other assets
110

 
(8
)
 
—

 
102

Total assets
$
5,810

 
$
(1,001
)
 
$
1,025

 
$
5,834

 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
Accounts payable
$
231

 
$
(12
)
 
$
15

 
$
234

Accrued compensation and related liabilities
211

 
(16
)
 
—

 
195

Deferred revenue
423

 
(3
)
 
—

 
420

Income taxes payable
274

 
—

 
—

 
274

Other current liabilities
223

 
—

 
—

 
223

Current liabilities before customer fund deposits
1,362

 
(31
)
 
15

 
1,346

Customer fund deposits
184

 
—

 
—

 
184

Total current liabilities
1,546

 
(31
)
 
15

 
1,530

 
 
 
 
 
 
 
 
Long-term debt
499

 
—

 
—

 
499

Other long-term obligations
195

 
(9
)
 
—

 
186

Total liabilities
2,240

 
(40
)
 
15

 
2,215

 
 
 
 
 
 
 
 
Stockholders’ equity
3,570

 
(961
)
 
1,010

 
3,619

Total liabilities and stockholders’ equity
$
5,810

 
$
(1,001
)
 
$
1,025

 
$
5,834

See accompanying Notes.



INTUIT INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED APRIL 30, 2013
(Unaudited)
 
 (In millions, except per share amounts)
Historical
 
Adjustments (3)
 
Pro Forma
Net revenue:
 
 
 
 
 
Product
$
1,267

 
$
—

 
$
1,267

Service and other
2,526

 
(243
)
 
2,283

Total net revenue
3,793

 
(243
)
 
3,550

Costs and expenses:
 
 
 
 
 
Cost of revenue:
 
 
 
 
 
Cost of product revenue
102

 
—

 
102

Cost of service and other revenue
459

 
(121
)
 
338

Amortization of acquired technology
16

 
(1
)
 
15

Selling and marketing
1,029

 
(51
)
 
978

Research and development
534

 
(21
)
 
513

General and administrative
315

 
(6
)
 
309

Amortization of other acquired intangible assets
21

 
—

 
21

Goodwill and intangible asset impairment charge
46

 
—

 
46

Total costs and expenses
2,522

 
(200
)
 
2,322

Operating income from continuing operations
1,271

 
(43
)
 
1,228

Interest expense
(23
)
 
—

 
(23
)
Interest and other income, net
6

 
1

 
7

Income from continuing operations before income taxes
1,254

 
(42
)
 
1,212

Income tax provision
412

 
(14
)
 
398

Net income from continuing operations
$
842

 
$
(28
)
 
$
814

 
 
 
 
 
 
Basic net income per share from continuing operations
$
2.84

 
 
 
$
2.75

Shares used in basic per share calculations
296

 
 
 
296

 
 
 
 
 
 
Diluted net income per share from continuing operations
$
2.78

 
 
 
$
2.69

Shares used in diluted per share calculations
303

 
 
 
303

See accompanying Notes.



INTUIT INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED APRIL 30, 2012
(Unaudited)
 
  (In millions, except per share amounts)
Historical
 
Adjustments (3)
 
Pro Forma
Net revenue:
 
 
 
 
 
Product
$
1,239

 
$
—

 
$
1,239

Service and other
2,261

 
(246
)
 
2,015

Total net revenue
3,500

 
(246
)
 
3,254

Costs and expenses:
 
 
 
 
 
Cost of revenue:
 
 
 
 
 
Cost of product revenue
116

 
—

 
116

Cost of service and other revenue
444

 
(124
)
 
320

Amortization of acquired technology
9

 
(1
)
 
8

Selling and marketing
898

 
(48
)
 
850

Research and development
490

 
(27
)
 
463

General and administrative
288

 
(4
)
 
284

Amortization of other acquired intangible assets
33

 
(15
)
 
18

Total costs and expenses
2,278

 
(219
)
 
2,059

Operating income from continuing operations
1,222

 
(27
)
 
1,195

Interest expense
(42
)
 
—

 
(42
)
Interest and other income, net
23

 
—

 
23

Income from continuing operations before income taxes
1,203

 
(27
)
 
1,176

Income tax provision
404

 
(9
)
 
395

Net income from continuing operations
$
799

 
$
(18
)
 
$
781

 
 
 
 
 
 
Basic net income per share from continuing operations
$
2.69

 
 
 
$
2.63

Shares used in basic per share calculations
297

 
 
 
297

 
 
 
 
 
 
Diluted net income per share from continuing operations
$
2.61

 
 
 
$
2.55

Shares used in diluted per share calculations
306

 
 
 
306

See accompanying Notes.




INTUIT INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED JULY 31, 2012
(Unaudited)
 
 (In millions, except per share amounts)
Historical
 
Adjustments (3)
 
Pro Forma
Net revenue:
 
 
 
 
 
Product
$
1,479

 
$
—

 
$
1,479

Service and other
2,672

 
(326
)
 
2,346

Total net revenue
4,151

 
(326
)
 
3,825

Costs and expenses:
 
 
 
 
 
Cost of revenue:
 
 
 
 
 
Cost of product revenue
145

 
—

 
145

Cost of service and other revenue
601

 
(166
)
 
435

Amortization of acquired technology
14

 
(1
)
 
13

Selling and marketing
1,118

 
(65
)
 
1,053

Research and development
669

 
(36
)
 
633

General and administrative
388

 
(6
)
 
382

Amortization of other acquired intangible assets
39

 
(15
)
 
24

Total costs and expenses
2,974

 
(289
)
 
2,685

Operating income from continuing operations
1,177

 
(37
)
 
1,140

Interest expense
(50
)
 
—

 
(50
)
Interest and other income, net
24

 
—

 
24

Income from continuing operations before income taxes
1,151

 
(37
)
 
1,114

Income tax provision
384

 
(12
)
 
372

Net income from continuing operations
$
767

 
$
(25
)
 
$
742

 
 
 
 
 
 
Basic net income per share from continuing operations
$
2.59

 
 
 
$
2.51

Shares used in basic per share calculations
296

 
 
 
296

 
 
 
 
 
 
Diluted net income per share from continuing operations
$
2.52

 
 
 
$
2.43

Shares used in diluted per share calculations
305

 
 
 
305

See accompanying Notes.



INTUIT INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED JULY 31, 2011
(Unaudited)
 
 (In millions, except per share amounts)
Historical
 
Adjustments (3)
 
Pro Forma
Net revenue:
 
 
 
 
 
Product
$
1,480

 
$
—

 
$
1,480

Service and other
2,292

 
(311
)
 
1,981

Total net revenue
3,772

 
(311
)
 
3,461

Costs and expenses:
 
 
 
 
 
Cost of revenue:
 
 
 
 
 
Cost of product revenue
143

 
—

 
143

Cost of service and other revenue
495

 
(154
)
 
341

Amortization of acquired technology
12

 
—

 
12

Selling and marketing
1,040

 
(61
)
 
979

Research and development
620

 
(36
)
 
584

General and administrative
352

 
(9
)
 
343

Amortization of other acquired intangible assets
43

 
(30
)
 
13

Goodwill and intangible asset impairment charge
30

 
—

 
30

Total costs and expenses
2,735

 
(290
)
 
2,445

Operating income from continuing operations
1,037

 
(21
)
 
1,016

Interest expense
(60
)
 
—

 
(60
)
Interest and other income, net
19

 
1

 
20

Income from continuing operations before income taxes
996

 
(20
)
 
976

Income tax provision
344

 
(6
)
 
338

Net income from continuing operations
$
652

 
$
(14
)
 
$
638

 
 
 
 
 
 
Basic net income per share from continuing operations
$
2.12

 
 
 
$
2.08

Shares used in basic per share calculations
307

 
 
 
307

 
 
 
 
 
 
Diluted net income per share from continuing operations
$
2.06

 
 
 
$
2.01

Shares used in diluted per share calculations
317

 
 
 
317

See accompanying Notes.



INTUIT INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED JULY 31, 2010
(Unaudited)
 
 (In millions, except per share amounts)
Historical
 
Adjustments (3)
 
Pro Forma
Net revenue:
 
 
 
 
 
Product
$
1,412

 
$
—

 
$
1,412

Service and other
1,991

 
(310
)
 
1,681

Total net revenue
3,403

 
(310
)
 
3,093

Costs and expenses:
 
 
 
 
 
Cost of revenue:
 
 
 
 
 
Cost of product revenue
144

 
—

 
144

Cost of service and other revenue
447

 
(153
)
 
294

Amortization of acquired technology
43

 
(22
)
 
21

Selling and marketing
913

 
(62
)
 
851

Research and development
564

 
(29
)
 
535

General and administrative
346

 
(10
)
 
336

Amortization of other acquired intangible assets
42

 
(31
)
 
11

Total costs and expenses
2,499

 
(307
)
 
2,192

Operating income from continuing operations
904

 
(3
)
 
901

Interest expense
(61
)
 
—

 
(61
)
Interest and other income, net
13

 
1

 
14

Income from continuing operations before income taxes
856

 
(2
)
 
854

Income tax provision
292

 
—

 
292

Net income from continuing operations
$
564

 
$
(2
)
 
$
562

 
 
 
 
 
 
Basic net income per share from continuing operations
$
1.79

 
 
 
$
1.78

Shares used in basic per share calculations
316

 
 
 
316

 
 
 
 
 
 
Diluted net income per share from continuing operations
$
1.74

 
 
 
$
1.73

Shares used in diluted per share calculations
325

 
 
 
325

See accompanying Notes.





INTUIT INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


(1) Adjustments to eliminate the Financial Services business assets and liabilities from Intuit's historical net assets as a result of the disposition of that business. Intercompany balances are excluded.

(2) Adjustments to reflect the other effects of the disposition, including: (i) the cash proceeds of $1.025 billion received at closing, (ii) estimated transaction costs, and (iii) estimated tax adjustments related to the disposition. The estimated after-tax gain on the sale of the Financial Services business assuming the disposition had closed on April 30, 2013 is approximately $49 million and is included on the stockholders’ equity line of the pro forma condensed consolidated balance sheet. The actual gain will be determined as of August 1, 2013, the closing date, and could be materially different from this estimate.

(3) Adjustments to eliminate the Financial Services business revenues and direct expenses from Intuit's historical financial results as a result of the disposition.