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R
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended October 31, 2011
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o
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from ____________ to ____________ .
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Delaware
(State of incorporation)
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77-0034661
(IRS employer identification no.)
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2700 Coast Avenue, Mountain View, CA 94043
(Address of principal executive offices)
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(650) 944-6000
(Registrant’s telephone number, including area code)
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Large accelerated filer
R
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
Number
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EX-10.01
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EX-10.02
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EX-10.03
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EX-31.01
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EX-31.02
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EX-32.01
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EX-32.02
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EX-101.INS XBRL Instance Document
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EX-101.SCH XBRL Taxonomy Extension Schema
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EX-101.CAL XBRL Taxonomy Extension Calculation Linkbase
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EX-101.LAB XBRL Taxonomy Extension Label Linkbase
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EX-101.PRE XBRL Taxonomy Extension Presentation Linkbase
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EX-101.DEF XBRL Taxonomy Extension Definition Linkbase
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Three Months Ended
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||||||
(In millions, except per share amounts)
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October 31,
2011 |
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October 31,
2010 |
||||
Net revenue:
|
|
|
|
||||
Product
|
$
|
222
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|
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$
|
216
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|
Service and other
|
372
|
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316
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Total net revenue
|
594
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532
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Costs and expenses:
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||||
Cost of revenue:
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||||
Cost of product revenue
|
32
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32
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Cost of service and other revenue
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136
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123
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Amortization of acquired technology
|
4
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|
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4
|
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Selling and marketing
|
236
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|
|
220
|
|
||
Research and development
|
167
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|
|
156
|
|
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General and administrative
|
92
|
|
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90
|
|
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Amortization of other acquired intangible assets
|
21
|
|
|
11
|
|
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Total costs and expenses
|
688
|
|
|
636
|
|
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Operating loss
|
(94
|
)
|
|
(104
|
)
|
||
Interest expense
|
(15
|
)
|
|
(15
|
)
|
||
Interest and other income, net
|
11
|
|
|
8
|
|
||
Loss before income taxes
|
(98
|
)
|
|
(111
|
)
|
||
Income tax benefit
|
(34
|
)
|
|
(41
|
)
|
||
Net loss
|
$
|
(64
|
)
|
|
$
|
(70
|
)
|
|
|
|
|
||||
Basic net loss per share
|
$
|
(0.21
|
)
|
|
$
|
(0.22
|
)
|
Shares used in basic per share calculations
|
300
|
|
|
316
|
|
||
|
|
|
|
||||
Diluted net loss per share
|
$
|
(0.21
|
)
|
|
$
|
(0.22
|
)
|
Shares used in diluted per share calculations
|
300
|
|
|
316
|
|
||
|
|
|
|
||||
Dividends declared per common share
|
$
|
0.15
|
|
|
$
|
—
|
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(In millions)
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October 31,
2011 |
|
July 31,
2011 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
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|
||||
Cash and cash equivalents
|
$
|
333
|
|
|
$
|
722
|
|
Investments
|
718
|
|
|
699
|
|
||
Accounts receivable, net
|
166
|
|
|
171
|
|
||
Income taxes receivable
|
139
|
|
|
72
|
|
||
Deferred income taxes
|
110
|
|
|
94
|
|
||
Prepaid expenses and other current assets
|
93
|
|
|
82
|
|
||
Current assets before funds held for customers
|
1,559
|
|
|
1,840
|
|
||
Funds held for customers
|
321
|
|
|
414
|
|
||
Total current assets
|
1,880
|
|
|
2,254
|
|
||
Long-term investments
|
59
|
|
|
63
|
|
||
Property and equipment, net
|
560
|
|
|
561
|
|
||
Goodwill
|
1,886
|
|
|
1,886
|
|
||
Acquired intangible assets, net
|
151
|
|
|
180
|
|
||
Long-term deferred income taxes
|
41
|
|
|
55
|
|
||
Other assets
|
106
|
|
|
111
|
|
||
Total assets
|
$
|
4,683
|
|
|
$
|
5,110
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
500
|
|
|
$
|
500
|
|
Accounts payable
|
168
|
|
|
129
|
|
||
Accrued compensation and related liabilities
|
140
|
|
|
215
|
|
||
Deferred revenue
|
379
|
|
|
406
|
|
||
Other current liabilities
|
128
|
|
|
141
|
|
||
Current liabilities before customer fund deposits
|
1,315
|
|
|
1,391
|
|
||
Customer fund deposits
|
321
|
|
|
414
|
|
||
Total current liabilities
|
1,636
|
|
|
1,805
|
|
||
Long-term debt
|
499
|
|
|
499
|
|
||
Other long-term obligations
|
187
|
|
|
190
|
|
||
Total liabilities
|
2,322
|
|
|
2,494
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
||
Common stock and additional paid-in capital
|
2,919
|
|
|
2,886
|
|
||
Treasury stock, at cost
|
(4,484
|
)
|
|
(4,316
|
)
|
||
Accumulated other comprehensive income
|
9
|
|
|
15
|
|
||
Retained earnings
|
3,917
|
|
|
4,031
|
|
||
Total stockholders’ equity
|
2,361
|
|
|
2,616
|
|
||
Total liabilities and stockholders’ equity
|
$
|
4,683
|
|
|
$
|
5,110
|
|
(In millions, except shares in thousands)
|
Shares of
Common
Stock
|
|
Common
Stock and
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
|
|
Total
Stockholders'
Equity
|
|||||||||||
Balance at July 31, 2011
|
300,597
|
|
|
$
|
2,886
|
|
|
$
|
(4,316
|
)
|
|
$
|
15
|
|
|
$
|
4,031
|
|
|
$
|
2,616
|
|
Components of comprehensive net loss:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(64
|
)
|
|
(64
|
)
|
|||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Comprehensive net loss
|
|
|
|
|
|
|
|
|
|
|
(70
|
)
|
||||||||||
Issuance of treasury stock under employee stock plans
|
3,219
|
|
|
(37
|
)
|
|
87
|
|
|
—
|
|
|
(5
|
)
|
|
45
|
|
|||||
Stock repurchases under stock repurchase programs
|
(5,211
|
)
|
|
—
|
|
|
(255
|
)
|
|
—
|
|
|
—
|
|
|
(255
|
)
|
|||||
Cash dividends declared ($0.15 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
(45
|
)
|
|||||
Tax benefit from share-based compensation plans
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|||||
Share-based compensation expense
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|||||
Balance at October 31, 2011
|
298,605
|
|
|
$
|
2,919
|
|
|
$
|
(4,484
|
)
|
|
$
|
9
|
|
|
$
|
3,917
|
|
|
$
|
2,361
|
|
(In millions, except shares in thousands)
|
Shares of
Common
Stock
|
|
Common
Stock and
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
|
|
Total
Stockholders'
Equity
|
|||||||||||
Balance at July 31, 2010
|
313,861
|
|
|
$
|
2,728
|
|
|
$
|
(3,315
|
)
|
|
$
|
11
|
|
|
$
|
3,397
|
|
|
$
|
2,821
|
|
Components of comprehensive net loss:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
(70
|
)
|
|||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Comprehensive net loss
|
|
|
|
|
|
|
|
|
|
|
(69
|
)
|
||||||||||
Issuance of treasury stock under employee stock plans
|
7,049
|
|
|
(33
|
)
|
|
159
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|||||
Stock repurchases under stock repurchase programs
|
(7,308
|
)
|
|
—
|
|
|
(330
|
)
|
|
—
|
|
|
—
|
|
|
(330
|
)
|
|||||
Tax benefit from share-based compensation plans
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|||||
Share-based compensation expense
|
—
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|||||
Balance at October 31, 2010
|
313,602
|
|
|
$
|
2,762
|
|
|
$
|
(3,486
|
)
|
|
$
|
12
|
|
|
$
|
3,327
|
|
|
$
|
2,615
|
|
|
Three Months Ended
|
||||||
(In millions)
|
October 31,
2011 |
|
October 31,
2010 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(64
|
)
|
|
$
|
(70
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation
|
44
|
|
|
37
|
|
||
Amortization of acquired intangible assets
|
28
|
|
|
19
|
|
||
Share-based compensation expense
|
40
|
|
|
35
|
|
||
Deferred income taxes
|
(5
|
)
|
|
25
|
|
||
Tax benefit from share-based compensation plans
|
30
|
|
|
32
|
|
||
Excess tax benefit from share-based compensation plans
|
(29
|
)
|
|
(27
|
)
|
||
Other
|
(6
|
)
|
|
5
|
|
||
Total adjustments
|
102
|
|
|
126
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
5
|
|
|
(12
|
)
|
||
Prepaid expenses, income taxes receivable and other assets
|
(78
|
)
|
|
(134
|
)
|
||
Accounts payable
|
39
|
|
|
5
|
|
||
Accrued compensation and related liabilities
|
(74
|
)
|
|
(82
|
)
|
||
Deferred revenue
|
(25
|
)
|
|
(29
|
)
|
||
Income taxes payable
|
1
|
|
|
(13
|
)
|
||
Other liabilities
|
(16
|
)
|
|
(2
|
)
|
||
Total changes in operating assets and liabilities
|
(148
|
)
|
|
(267
|
)
|
||
Net cash used in operating activities
|
(110
|
)
|
|
(211
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of available-for-sale debt securities
|
(197
|
)
|
|
(428
|
)
|
||
Sales of available-for-sale debt securities
|
136
|
|
|
638
|
|
||
Maturities of available-for-sale debt securities
|
41
|
|
|
134
|
|
||
Net change in money market funds and other cash equivalents held
to satisfy customer fund obligations
|
93
|
|
|
(26
|
)
|
||
Net change in customer fund deposits
|
(93
|
)
|
|
26
|
|
||
Purchases of property and equipment
|
(44
|
)
|
|
(51
|
)
|
||
Acquisitions of intangible assets
|
—
|
|
|
(3
|
)
|
||
Other
|
14
|
|
|
(5
|
)
|
||
Net cash (used in) provided by investing activities
|
(50
|
)
|
|
285
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net proceeds from issuance of treasury stock under
employee stock plans
|
45
|
|
|
126
|
|
||
Purchases of treasury stock
|
(255
|
)
|
|
(330
|
)
|
||
Cash dividends paid to stockholders
|
(45
|
)
|
|
—
|
|
||
Excess tax benefit from share-based compensation plans
|
29
|
|
|
27
|
|
||
Net cash used in financing activities
|
(226
|
)
|
|
(177
|
)
|
||
Effect of exchange rates on cash and cash equivalents
|
(3
|
)
|
|
1
|
|
||
Net decrease in cash and cash equivalents
|
(389
|
)
|
|
(102
|
)
|
||
Cash and cash equivalents at beginning of period
|
722
|
|
|
214
|
|
||
Cash and cash equivalents at end of period
|
$
|
333
|
|
|
$
|
112
|
|
1.
|
Description of Business and Summary of Significant Accounting Policies
|
|
Three Months Ended
|
||||||
(In millions, except per share amounts)
|
October 31,
2011 |
|
October 31,
2010 |
||||
Numerator:
|
|
|
|
||||
Net loss
|
$
|
(64
|
)
|
|
$
|
(70
|
)
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Shares used in basic and diluted per share amounts:
|
|
|
|
||||
Weighted average common shares outstanding
|
300
|
|
|
316
|
|
||
|
|
|
|
||||
Basic and diluted net loss per share:
|
|
|
|
||||
Basic net loss per share
|
$
|
(0.21
|
)
|
|
$
|
(0.22
|
)
|
Diluted net loss per share
|
$
|
(0.21
|
)
|
|
$
|
(0.22
|
)
|
|
|
|
|
||||
Shares excluded from computation of diluted net loss per share:
|
|
|
|
||||
Weighted average stock options and restricted stock units that would have been included in the computation of dilutive common equivalent shares outstanding if net income had been reported in the period
|
28
|
|
|
33
|
|
||
Weighted average stock options and restricted stock units excluded from calculation due to anti-dilutive effect
|
3
|
|
|
5
|
|
2.
|
Fair Value Measurements
|
•
|
Level 1
uses unadjusted quoted prices that are available in active markets for identical assets or liabilities.
|
•
|
Level 2
uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data for substantially the full term of the assets or liabilities.
|
•
|
Level 3
uses one or more significant inputs that are supported by little or no market activity and that are significant to the determination of fair value. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation.
|
|
October 31, 2011
|
|
July 31, 2011
|
||||||||||||||||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Fair Value
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents, primarily money market funds
|
$
|
333
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
333
|
|
|
$
|
854
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
854
|
|
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Municipal bonds
|
—
|
|
|
397
|
|
|
—
|
|
|
397
|
|
|
—
|
|
|
434
|
|
|
—
|
|
|
434
|
|
||||||||
Municipal auction rate securities
|
—
|
|
|
—
|
|
|
54
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|
59
|
|
||||||||
Corporate notes
|
—
|
|
|
333
|
|
|
—
|
|
|
333
|
|
|
—
|
|
|
288
|
|
|
—
|
|
|
288
|
|
||||||||
U.S. agency securities
|
—
|
|
|
163
|
|
|
—
|
|
|
163
|
|
|
—
|
|
|
152
|
|
|
—
|
|
|
152
|
|
||||||||
Total available-for-sale debt securities
|
—
|
|
|
893
|
|
|
54
|
|
|
947
|
|
|
—
|
|
|
874
|
|
|
59
|
|
|
933
|
|
||||||||
Total assets measured at fair value on a recurring basis
|
$
|
333
|
|
|
$
|
893
|
|
|
$
|
54
|
|
|
$
|
1,280
|
|
|
$
|
854
|
|
|
$
|
874
|
|
|
$
|
59
|
|
|
$
|
1,787
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Senior notes (1)
|
$
|
—
|
|
|
$
|
1,077
|
|
|
$
|
—
|
|
|
$
|
1,077
|
|
|
$
|
—
|
|
|
$
|
1,084
|
|
|
$
|
—
|
|
|
$
|
1,084
|
|
(1)
|
Carrying value on our balance sheets at
October 31, 2011
and
July 31, 2011
was
$999
million. See Note 5.
|
|
October 31, 2011
|
|
July 31, 2011
|
||||||||||||||||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Fair Value
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
In cash and cash equivalents
|
$
|
187
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
187
|
|
|
$
|
615
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
615
|
|
In funds held for customers
|
146
|
|
|
—
|
|
|
—
|
|
|
146
|
|
|
239
|
|
|
—
|
|
|
—
|
|
|
239
|
|
||||||||
Total cash equivalents
|
$
|
333
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
333
|
|
|
$
|
854
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
854
|
|
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
In investments
|
$
|
—
|
|
|
$
|
718
|
|
|
$
|
—
|
|
|
$
|
718
|
|
|
$
|
—
|
|
|
$
|
699
|
|
|
$
|
—
|
|
|
$
|
699
|
|
In funds held for customers
|
—
|
|
|
175
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|
175
|
|
||||||||
In long-term investments
|
—
|
|
|
—
|
|
|
54
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|
59
|
|
||||||||
Total available-for-sale debt securities
|
$
|
—
|
|
|
$
|
893
|
|
|
$
|
54
|
|
|
$
|
947
|
|
|
$
|
—
|
|
|
$
|
874
|
|
|
$
|
59
|
|
|
$
|
933
|
|
|
Three Months Ended
|
||
(In millions)
|
October 31,
2011 |
||
Beginning balance
|
$
|
59
|
|
Settlements at par
|
(5
|
)
|
|
Ending balance
|
$
|
54
|
|
3.
|
Cash and Cash Equivalents, Investments and Funds Held for Customers
|
|
October 31, 2011
|
|
July 31, 2011
|
||||||||||||
(In millions)
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
Classification on balance sheets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
333
|
|
|
$
|
333
|
|
|
$
|
722
|
|
|
$
|
722
|
|
Investments
|
718
|
|
|
718
|
|
|
698
|
|
|
699
|
|
||||
Funds held for customers
|
321
|
|
|
321
|
|
|
413
|
|
|
414
|
|
||||
Long-term investments
|
59
|
|
|
59
|
|
|
63
|
|
|
63
|
|
||||
Total cash and cash equivalents, investments and funds held for customers
|
$
|
1,431
|
|
|
$
|
1,431
|
|
|
$
|
1,896
|
|
|
$
|
1,898
|
|
|
October 31, 2011
|
|
July 31, 2011
|
||||||||||||
(In millions)
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
Type of issue:
|
|
|
|
|
|
|
|
||||||||
Total cash and cash equivalents
|
$
|
479
|
|
|
$
|
479
|
|
|
$
|
961
|
|
|
$
|
961
|
|
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
||||||||
Municipal bonds
|
397
|
|
|
397
|
|
|
434
|
|
|
434
|
|
||||
Municipal auction rate securities
|
54
|
|
|
54
|
|
|
59
|
|
|
59
|
|
||||
Corporate notes
|
333
|
|
|
333
|
|
|
287
|
|
|
288
|
|
||||
U.S. agency securities
|
163
|
|
|
163
|
|
|
151
|
|
|
152
|
|
||||
Total available-for-sale debt securities
|
947
|
|
|
947
|
|
|
931
|
|
|
933
|
|
||||
Other long-term investments
|
5
|
|
|
5
|
|
|
4
|
|
|
4
|
|
||||
Total cash and cash equivalents, investments and funds held for customers
|
$
|
1,431
|
|
|
$
|
1,431
|
|
|
$
|
1,896
|
|
|
$
|
1,898
|
|
|
October 31, 2011
|
|
July 31, 2011
|
||||||||||||
(In millions)
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
Due within one year
|
$
|
252
|
|
|
$
|
252
|
|
|
$
|
267
|
|
|
$
|
267
|
|
Due within two years
|
388
|
|
|
388
|
|
|
323
|
|
|
324
|
|
||||
Due within three years
|
182
|
|
|
182
|
|
|
190
|
|
|
191
|
|
||||
Due after three years
|
125
|
|
|
125
|
|
|
151
|
|
|
151
|
|
||||
Total available-for-sale debt securities
|
$
|
947
|
|
|
$
|
947
|
|
|
$
|
931
|
|
|
$
|
933
|
|
4.
|
Current Liabilities
|
(In millions)
|
October 31,
2011 |
|
July 31,
2011 |
||||
Reserve for product returns
|
$
|
20
|
|
|
$
|
20
|
|
Reserve for rebates
|
12
|
|
|
11
|
|
||
Current portion of license fee payable
|
10
|
|
|
10
|
|
||
Current portion of deferred rent
|
6
|
|
|
7
|
|
||
Interest payable
|
7
|
|
|
21
|
|
||
Executive deferred compensation plan liabilities
|
54
|
|
|
50
|
|
||
Other
|
19
|
|
|
22
|
|
||
Total other current liabilities
|
$
|
128
|
|
|
$
|
141
|
|
5.
|
Long-Term Obligations
|
(In millions)
|
October 31,
2011 |
|
July 31,
2011 |
||||
Total license fee payable
|
$
|
61
|
|
|
$
|
60
|
|
Total deferred rent
|
52
|
|
|
52
|
|
||
Long-term deferred revenue
|
40
|
|
|
40
|
|
||
Long-term income tax liabilities
|
40
|
|
|
42
|
|
||
Long-term payables
|
10
|
|
|
12
|
|
||
Other
|
1
|
|
|
1
|
|
||
Total long-term obligations
|
204
|
|
|
207
|
|
||
Less current portion (included in other current liabilities)
|
(17
|
)
|
|
(17
|
)
|
||
Long-term obligations due after one year
|
$
|
187
|
|
|
$
|
190
|
|
6.
|
Income Taxes
|
7.
|
Stockholders’ Equity
|
|
Three Months Ended
|
||||||
(In millions, except per share amounts)
|
October 31,
2011 |
|
October 31,
2010 |
||||
Cost of revenue
|
$
|
1
|
|
|
$
|
1
|
|
Selling and marketing
|
14
|
|
|
9
|
|
||
Research and development
|
12
|
|
|
13
|
|
||
General and administrative
|
13
|
|
|
12
|
|
||
Total share-based compensation expense
|
40
|
|
|
35
|
|
||
Income tax benefit
|
(13
|
)
|
|
(12
|
)
|
||
Increase in net loss
|
$
|
27
|
|
|
$
|
23
|
|
Increase in net loss per share:
|
|
|
|
||||
Basic
|
$
|
0.09
|
|
|
$
|
0.07
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
0.07
|
|
|
|
|
Options Outstanding
|
||||||
(Shares in thousands)
|
Shares
Available
for Grant
|
|
Number
of Shares
|
|
Weighted
Average
Exercise
Price
Per Share
|
||||
Balance at July 31, 2011
|
30,716
|
|
|
22,679
|
|
|
$
|
32.38
|
|
Options granted
|
(157
|
)
|
|
157
|
|
|
45.32
|
|
|
Restricted stock units granted (2)
|
(648
|
)
|
|
—
|
|
|
—
|
|
|
Options exercised
|
—
|
|
|
(1,882
|
)
|
|
27.49
|
|
|
Options canceled or expired (1)
|
197
|
|
|
(199
|
)
|
|
35.98
|
|
|
Restricted stock units forfeited (1)(2)
|
590
|
|
|
—
|
|
|
—
|
|
|
Balance at October 31, 2011
|
30,698
|
|
|
20,755
|
|
|
$
|
32.89
|
|
Exercisable at October 31, 2011
|
|
|
13,190
|
|
|
$
|
29.17
|
|
(1)
|
Stock options and restricted stock units canceled, expired or forfeited under our 2005 Equity Incentive Plan are returned to the pool of shares available for grant. Stock options and restricted stock units canceled, expired or forfeited under older expired plans are not returned to the pool of shares available for grant.
|
(2)
|
Under the terms of our 2005 Equity Incentive Plan as amended on January 19, 2011, RSUs granted from the pool of shares available for grant on or after November 1, 2010 reduce the pool by
2.3
shares for each share granted. RSUs forfeited and returned to the pool of shares available for grant increase the pool by
2.3
shares for each share forfeited.
|
|
Restricted Stock Units
|
|||||
(Shares in thousands)
|
Number
of Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Nonvested at July 31, 2011
|
11,055
|
|
|
$
|
37.92
|
|
Granted
|
220
|
|
|
43.34
|
|
|
Vested
|
(1,415
|
)
|
|
32.77
|
|
|
Forfeited
|
(241
|
)
|
|
36.35
|
|
|
Nonvested at October 31, 2011
|
9,619
|
|
|
$
|
38.84
|
|
8.
|
Litigation
|
9.
|
Segment Information
|
|
Three Months Ended
|
||||||
(In millions)
|
October 31,
2011 |
|
October 31,
2010 |
||||
Net revenue:
|
|
|
|
||||
Financial Management Solutions
|
$
|
168
|
|
|
$
|
154
|
|
Employee Management Solutions
|
121
|
|
|
107
|
|
||
Payment Solutions
|
94
|
|
|
80
|
|
||
Consumer Tax
|
41
|
|
|
29
|
|
||
Accounting Professionals
|
27
|
|
|
25
|
|
||
Financial Services
|
89
|
|
|
81
|
|
||
Other Businesses
|
54
|
|
|
56
|
|
||
Total net revenue
|
$
|
594
|
|
|
$
|
532
|
|
|
|
|
|
||||
Operating income (loss):
|
|
|
|
||||
Financial Management Solutions
|
$
|
42
|
|
|
$
|
33
|
|
Employee Management Solutions
|
75
|
|
|
64
|
|
||
Payment Solutions
|
24
|
|
|
12
|
|
||
Consumer Tax
|
(28
|
)
|
|
(29
|
)
|
||
Accounting Professionals
|
(14
|
)
|
|
(16
|
)
|
||
Financial Services
|
18
|
|
|
15
|
|
||
Other Businesses
|
(3
|
)
|
|
1
|
|
||
Total segment operating income
|
114
|
|
|
80
|
|
||
Unallocated corporate items:
|
|
|
|
||||
Share-based compensation expense
|
(40
|
)
|
|
(35
|
)
|
||
Other common expenses
|
(143
|
)
|
|
(134
|
)
|
||
Amortization of acquired technology
|
(4
|
)
|
|
(4
|
)
|
||
Amortization of other acquired intangible assets
|
(21
|
)
|
|
(11
|
)
|
||
Total unallocated corporate items
|
(208
|
)
|
|
(184
|
)
|
||
Total operating loss
|
$
|
(94
|
)
|
|
$
|
(104
|
)
|
•
|
Executive Overview that discusses at a high level our operating results and some of the trends that affect our business.
|
•
|
Significant changes since our most recent Annual Report on Form 10-K in the Critical Accounting Policies and Estimates that we believe are important to understanding the assumptions and judgments underlying our financial statements.
|
•
|
Results of Operations that includes a more detailed discussion of our revenue and expenses.
|
•
|
Liquidity and Capital Resources which discusses key aspects of our statements of cash flows, changes in our balance sheets, and our financial commitments.
|
•
|
Our Financial Management Solutions segment includes QuickBooks financial and business management software and services; technical support; financial supplies; and Intuit Websites, which provides website design and hosting services for small and medium-sized businesses.
|
•
|
Our Employee Management Solutions segment provides payroll products and services for small businesses.
|
•
|
Our Payment Solutions segment provides merchant services for small businesses, including credit and debit card processing, electronic check conversion and automated clearing house services.
|
•
|
Our Consumer Tax segment includes TurboTax income tax preparation products and services for consumers and small businesses.
|
•
|
Our Accounting Professionals segment includes Lacerte, ProSeries and ProLine Tax Online professional tax products and services. This segment also includes QuickBooks Premier Accountant Edition and the QuickBooks ProAdvisor Program for accounting professionals.
|
(Dollars in millions, except per share amounts)
|
Q1
FY12
|
|
Q1
FY11
|
|
$
Change
|
|
%
Change
|
|||||||
Total net revenue
|
$
|
594
|
|
|
$
|
532
|
|
|
$
|
62
|
|
|
12
|
%
|
Operating loss
|
(94
|
)
|
|
(104
|
)
|
|
10
|
|
|
(10
|
)%
|
|||
Net loss
|
(64
|
)
|
|
(70
|
)
|
|
6
|
|
|
(9
|
)%
|
|||
Basic and diluted net loss
per share
|
$
|
(0.21
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
0.01
|
|
|
(5
|
)%
|
(Dollars in millions)
|
Q1
FY12
|
|
Q1
FY11
|
|
%
Change
|
|||||
Product revenue
|
$
|
89
|
|
|
$
|
84
|
|
|
|
|
Service and other revenue
|
79
|
|
|
70
|
|
|
|
|||
Total segment revenue
|
$
|
168
|
|
|
$
|
154
|
|
|
9
|
%
|
% of total revenue
|
28
|
%
|
|
29
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Segment operating income
|
$
|
42
|
|
|
$
|
33
|
|
|
28
|
%
|
% of related revenue
|
25
|
%
|
|
21
|
%
|
|
|
(Dollars in millions)
|
Q1
FY12
|
|
Q1
FY11
|
|
%
Change
|
|||||
Product revenue
|
$
|
68
|
|
|
$
|
63
|
|
|
|
|
Service and other revenue
|
53
|
|
|
44
|
|
|
|
|||
Total segment revenue
|
$
|
121
|
|
|
$
|
107
|
|
|
13
|
%
|
% of total revenue
|
20
|
%
|
|
20
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Segment operating income
|
$
|
75
|
|
|
$
|
64
|
|
|
17
|
%
|
% of related revenue
|
62
|
%
|
|
59
|
%
|
|
|
(Dollars in millions)
|
Q1
FY12
|
|
Q1
FY11
|
|
%
Change
|
|||||
Product revenue
|
$
|
6
|
|
|
$
|
8
|
|
|
|
|
Service and other revenue
|
88
|
|
|
72
|
|
|
|
|||
Total segment revenue
|
$
|
94
|
|
|
$
|
80
|
|
|
19
|
%
|
% of total revenue
|
16
|
%
|
|
15
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Segment operating income
|
$
|
24
|
|
|
$
|
12
|
|
|
91
|
%
|
% of related revenue
|
25
|
%
|
|
16
|
%
|
|
|
(Dollars in millions)
|
Q1
FY12
|
|
Q1
FY11
|
|
%
Change
|
|||||
Product revenue
|
$
|
11
|
|
|
$
|
9
|
|
|
|
|
Service and other revenue
|
30
|
|
|
20
|
|
|
|
|||
Total segment revenue
|
$
|
41
|
|
|
$
|
29
|
|
|
39
|
%
|
% of total revenue
|
7
|
%
|
|
6
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Segment operating loss
|
$
|
(28
|
)
|
|
$
|
(29
|
)
|
|
(4
|
)%
|
% of related revenue
|
n/a
|
|
|
n/a
|
|
|
|
(Dollars in millions)
|
Q1
FY12
|
|
Q1
FY11
|
|
%
Change
|
|||||
Product revenue
|
$
|
23
|
|
|
$
|
20
|
|
|
|
|
Service and other revenue
|
4
|
|
|
5
|
|
|
|
|||
Total segment revenue
|
$
|
27
|
|
|
$
|
25
|
|
|
6
|
%
|
% of total revenue
|
5
|
%
|
|
5
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Segment operating loss
|
$
|
(14
|
)
|
|
$
|
(16
|
)
|
|
(13
|
)%
|
% of related revenue
|
n/a
|
|
|
n/a
|
|
|
|
(Dollars in millions)
|
Q1
FY12
|
|
Q1
FY11
|
|
%
Change
|
|||||
Product revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
Service and other revenue
|
89
|
|
|
81
|
|
|
|
|||
Total segment revenue
|
$
|
89
|
|
|
$
|
81
|
|
|
9
|
%
|
% of total revenue
|
15
|
%
|
|
15
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Segment operating income
|
$
|
18
|
|
|
$
|
15
|
|
|
20
|
%
|
% of related revenue
|
21
|
%
|
|
19
|
%
|
|
|
(Dollars in millions)
|
Q1
FY12
|
|
Q1
FY11
|
|
%
Change
|
|||||
Product revenue
|
$
|
25
|
|
|
$
|
32
|
|
|
|
|
Service and other revenue
|
29
|
|
|
24
|
|
|
|
|||
Total segment revenue
|
$
|
54
|
|
|
$
|
56
|
|
|
(3
|
)%
|
% of total revenue
|
9
|
%
|
|
10
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Segment operating income
|
$
|
(3
|
)
|
|
$
|
1
|
|
|
n/a
|
|
% of related revenue
|
n/a
|
|
|
2
|
%
|
|
|
(Dollars in millions)
|
Q1
FY12
|
|
% of
Related
Revenue
|
|
Q1
FY11
|
|
% of
Related
Revenue
|
||||||
Cost of product revenue
|
$
|
32
|
|
|
14
|
%
|
|
$
|
32
|
|
|
15
|
%
|
Cost of service and other revenue
|
136
|
|
|
37
|
%
|
|
123
|
|
|
39
|
%
|
||
Amortization of acquired technology
|
4
|
|
|
n/a
|
|
|
4
|
|
|
n/a
|
|
||
Total cost of revenue
|
$
|
172
|
|
|
29
|
%
|
|
$
|
159
|
|
|
30
|
%
|
(Dollars in millions)
|
Q1
FY12
|
|
% of
Total
Net
Revenue
|
|
Q1
FY11
|
|
% of
Total
Net
Revenue
|
||||||
Selling and marketing
|
$
|
236
|
|
|
40
|
%
|
|
$
|
220
|
|
|
42
|
%
|
Research and development
|
167
|
|
|
28
|
%
|
|
156
|
|
|
29
|
%
|
||
General and administrative
|
92
|
|
|
15
|
%
|
|
90
|
|
|
17
|
%
|
||
Amortization of other acquired intangible assets
|
21
|
|
|
4
|
%
|
|
11
|
|
|
2
|
%
|
||
Total operating expenses
|
$
|
516
|
|
|
87
|
%
|
|
$
|
477
|
|
|
90
|
%
|
|
Three Months Ended
|
||||||
(In millions)
|
October 31,
2011 |
|
October 31,
2010 |
||||
Interest income
|
$
|
2
|
|
|
$
|
3
|
|
Net (losses) gains on executive deferred compensation plan assets
|
(2
|
)
|
|
3
|
|
||
Gain on disposition of stock warrants
|
10
|
|
|
—
|
|
||
Other
|
1
|
|
|
2
|
|
||
Total interest and other income, net
|
$
|
11
|
|
|
$
|
8
|
|
(Dollars in millions)
|
October 31,
2011 |
|
July 31,
2011 |
|
$
Change
|
|
%
Change
|
|||||||
Cash, cash equivalents and investments
|
$
|
1,051
|
|
|
$
|
1,421
|
|
|
$
|
(370
|
)
|
|
(26
|
)%
|
Long-term investments
|
59
|
|
|
63
|
|
|
(4
|
)
|
|
(6
|
)%
|
|||
Current portion of long-term debt
|
500
|
|
|
500
|
|
|
—
|
|
|
—
|
%
|
|||
Long-term debt
|
499
|
|
|
499
|
|
|
—
|
|
|
—
|
%
|
|||
Working capital
|
244
|
|
|
449
|
|
|
(205
|
)
|
|
(46
|
)%
|
|||
Ratio of current assets to current liabilities
|
1.1 : 1
|
|
|
1.2 : 1
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
(Dollars in millions)
|
October 31,
2011 |
|
October 31,
2010 |
|
$
Change
|
|
%
Change
|
|||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|||||||
Operating activities
|
$
|
(110
|
)
|
|
$
|
(211
|
)
|
|
$
|
101
|
|
|
(48
|
)%
|
Investing activities
|
(50
|
)
|
|
285
|
|
|
(335
|
)
|
|
N/A
|
|
|||
Financing activities
|
(226
|
)
|
|
(177
|
)
|
|
(49
|
)
|
|
28
|
%
|
|||
Effect of exchange rate changes on cash
|
(3
|
)
|
|
1
|
|
|
(4
|
)
|
|
N/A
|
|
|||
Increase (decrease) in cash and cash equivalents
|
$
|
(389
|
)
|
|
$
|
(102
|
)
|
|
|
|
|
•
|
our expectations and beliefs regarding future conduct and growth of the business;
|
•
|
the assumptions underlying our Critical Accounting Policies and Estimates, including our estimates regarding product rebate and return reserves; the collectability of accounts receivable; stock volatility and other assumptions used to estimate the fair value of share-based compensation; the fair value of goodwill; and expected future amortization of acquired intangible assets;
|
•
|
our belief that the investments we hold are not other-than-temporarily impaired;
|
•
|
our belief that the reduction in liquidity of the municipal auction rate securities we hold will not have a material impact on our overall ability to meet our liquidity needs;
|
•
|
our expectation that we will continue to pay a comparable cash dividend on a quarterly basis;
|
•
|
our belief that our exposure to currency exchange fluctuation risk will not be significant in the future;
|
•
|
our expectations regarding future payment or refinancing of the 2012 Notes;
|
•
|
our assessments and estimates that determine our effective tax rate;
|
•
|
our belief that we will not need funds generated from foreign operations to fund our domestic operations;
|
•
|
our belief that our cash and cash equivalents, investments and cash generated from operations will be sufficient to meet our seasonal working capital needs, capital expenditure requirements, contractual obligations, commitments, debt service requirements and other liquidity requirements associated with our operations for at least the next 12 months;
|
•
|
our expectation that we will return excess cash generated by operations to our stockholders through repurchases of our common stock and payment of cash dividends;
|
•
|
our beliefs regarding seasonality and other trends for our businesses; and
|
•
|
our assessments and beliefs regarding the future outcome of pending legal proceedings and the liability, if any, that Intuit may incur as a result of those proceedings.
|
•
|
trade barriers and changes in trade regulations;
|
•
|
difficulties in developing, staffing, and simultaneously managing a large number of varying foreign operations as a result of distance, language, and cultural differences;
|
•
|
stringent local labor laws and regulations;
|
•
|
profit repatriation restrictions, and foreign currency exchange restrictions;
|
•
|
political or social unrest, economic instability, repression, or human rights issues;
|
•
|
geopolitical events, including acts of war and terrorism;
|
•
|
import or export regulations;
|
•
|
compliance with U.S. laws such as the Foreign Corrupt Practices Act, and local laws prohibiting corrupt payments to government officials;
|
•
|
different and more stringent user protection, data protection, privacy and other laws; and
|
•
|
risks related to other government regulation or required compliance with local laws.
|
•
|
inability to successfully integrate the acquired technology and operations into our business and maintain uniform standards, controls, policies, and procedures;
|
•
|
inability to realize synergies expected to result from an acquisition;
|
•
|
challenges retaining the key employees, customers, resellers and other business partners of the acquired operation;
|
•
|
the internal control environment of an acquired entity may not be consistent with our standards and may require significant time and resources to improve;
|
•
|
unidentified issues not discovered in our due diligence process, including product or service quality issues, intellectual property issues and legal contingencies.
|
•
|
increasing our vulnerability to downturns in our business, to competitive pressures and to adverse economic and industry conditions;
|
•
|
requiring the dedication of a portion of our expected cash from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures and acquisitions; and
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our businesses and our industries.
|
Period
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number
of Shares Purchased as Part of Publicly Announced
Plans
|
|
Approximate
Dollar Value of Shares That May Yet Be Purchased Under
the Plans
|
||||||
August 1, 2011 through August 31, 2011
|
|
1,150,000
|
|
|
$
|
46.01
|
|
|
1,150,000
|
|
|
$
|
2,587,145,826
|
|
September 1, 2011 through September 30, 2011
|
|
2,360,900
|
|
|
$
|
47.62
|
|
|
2,360,900
|
|
|
$
|
2,474,712,640
|
|
October 1, 2011 through October 31, 2011
|
|
1,700,000
|
|
|
$
|
52.50
|
|
|
1,700,000
|
|
|
$
|
2,385,466,360
|
|
Total
|
|
5,210,900
|
|
|
$
|
48.86
|
|
|
5,210,900
|
|
|
|
1.
|
All shares purchased as part of publicly announced plans during the three months ended
October 31, 2011
were purchased under a plan we announced on August 19, 2010 under which we are authorized to repurchase up to $2 billion of our common stock from time to time over a three-year period ending on August 16, 2013. At October 31, 2011, authorization from our Board of Directors to expend up to
$385
million remained available under that plan. On
August 18, 2011
we announced a new stock repurchase program under which we are authorized to repurchase up to an additional
$2
billion of our common stock from time to time over a three-year period ending on
August 15, 2014
.
|
Exhibit
Number
|
|
Exhibit Description
|
|
Filed
Herewith
|
|
Incorporated by
Reference
|
|
|
|
|
|
|
|
10.01+
|
|
Employment offer letter between Intuit Inc. and Laura A. Fennell, dated March 31, 2004
|
|
X
|
|
|
|
|
|
|
|
|
|
10.02+
|
|
Summary of Director Compensation Program
|
|
X
|
|
|
|
|
|
|
|
|
|
10.03+
|
|
Form of Director Restricted Stock Unit Agreement
|
|
X
|
|
|
|
|
|
|
|
|
|
31.01
|
|
Certification of Chief Executive Officer
|
|
X
|
|
|
|
|
|
|
|
|
|
31.02
|
|
Certification of Chief Financial Officer
|
|
X
|
|
|
|
|
|
|
|
|
|
32.01*
|
|
Section 1350 Certification (Chief Executive Officer)
|
|
X
|
|
|
|
|
|
|
|
|
|
32.02*
|
|
Section 1350 Certification (Chief Financial Officer)
|
|
X
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
X
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
X
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
X
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
X
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
X
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
X
|
|
|
|
|
+
|
Indicates a management contract or compensatory plan or arrangement.
|
*
|
This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended.
|
|
|
INTUIT INC.
(Registrant)
|
|
||
Date:
|
December 1, 2011
|
By:
|
/s/ R. NEIL WILLIAMS
|
|
|
|
|
|
R. Neil Williams
|
|
|
|
|
|
Senior Vice President and Chief Financial Officer (Authorized Officer and Principal Financial Officer)
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Filed
Herewith
|
|
Incorporated by
Reference
|
|
|
|
|
|
|
|
10.01+
|
|
Employment offer letter between Intuit Inc. and Laura A. Fennell, dated March 31, 2004
|
|
X
|
|
|
|
|
|
|
|
|
|
10.02+
|
|
Summary of Director Compensation Program
|
|
X
|
|
|
|
|
|
|
|
|
|
10.03+
|
|
Form of Director Restricted Stock Unit Agreement
|
|
X
|
|
|
|
|
|
|
|
|
|
31.01
|
|
Certification of Chief Executive Officer
|
|
X
|
|
|
|
|
|
|
|
|
|
31.02
|
|
Certification of Chief Financial Officer
|
|
X
|
|
|
|
|
|
|
|
|
|
32.01*
|
|
Section 1350 Certification (Chief Executive Officer)
|
|
X
|
|
|
|
|
|
|
|
|
|
32.02*
|
|
Section 1350 Certification (Chief Financial Officer)
|
|
X
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
X
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
X
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
X
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
X
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
X
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
X
|
|
|
|
|
+
|
Indicates a management contract or compensatory plan or arrangement.
|
*
|
This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended.
|
•
|
Each newly appointed or elected non-employee director will receive an initial restricted stock unit grant (an "Initial Grant") equal in number to $75,000 divided by the closing stock price on the date of grant. The grant date for these awards shall be the first business day following the date of the director's election or appointment. Each Initial Grant will generally vest 50% on the one-year anniversary of the grant date and 50% on the two-year anniversary of the grant date. All of a director's Initial Grant will become fully vested in the event of death or disability of the director or upon a “Corporate Transaction” (as defined in the applicable award agreement, which requires a transaction that results in a change in control of the ownership of Intuit). Payment of the Initial Grants shall be automatically deferred until the earliest of: (a) five years from the grant date; (b) termination (for any reason); or (c) a Corporate Transaction. Additional voluntary deferrals may also be permitted.
|
•
|
Each year, following the annual meeting of Intuit's stockholders, each appointed or elected non-employee director and the Chairman of the Board shall automatically receive a grant (a "Succeeding Grant") of restricted stock units equal in number to $260,000 divided by the closing stock price on the grant date. The grant date for these awards shall be the first business day following the annual meeting of the Company's stockholders. If a director joins the board mid-year, the director will receive a pro-rated Succeeding Grant. Each Succeeding Grant will generally vest in full on the first day of the 12
th
month following the grant date. All of a director's Succeeding grant will become fully vested in the event of death or disability of the director or upon a Corporate Transaction. Payment of the Succeeding Grants shall be automatically deferred until the earliest of: (a) five years from the grant date; (b) termination (for any reason); or (c) a Corporate Transaction. Additional voluntary deferrals will also be permitted.
|
•
|
Within the later of five years after the director joins the Board or July 2016, each director is required to hold shares of Intuit common stock with an aggregate value of five times the amount of the annual Board member cash retainer. Owned shares, outstanding restricted stock units, and any deferred cash retainers ultimately paid as restricted stock units (see below) count towards the ownership requirement.
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Non-employee directors in good standing are paid their annual cash retainers in four equal installments.
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Non-employee directors serving on Committees (as chair or member) are paid annual retainers in addition to the annual cash compensation for service as a member of the Board, as set forth below.
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Non-employee directors may elect to defer cash retainers and instead receive restricted stock units. Such election must be made prior to the start of the calendar year, and is irrevocable once made. Payment of any cash fees converted into restricted stock units shall be automatically deferred until the earliest of: (a) five years from the grant date; (b) termination (for any reason); or (c) a Corporate Transaction. Additional voluntary deferrals may also be permitted.
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•
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Annual cash compensation for service as a non-employee director of the Board: $60,000.
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Annual cash compensation for non-employee director committee service:
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•
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The Company will also pay the Chairman of the Board an annual cash stipend of $240,000 in lieu of participation in the non-employee director cash compensation program described above.
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1.
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Non-employee members of the Company may be permitted to elect to convert their cash fees into restricted stock units. The related grant of restricted stock units is referred to as a “Conversion Grant.”
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2.
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In the case of a Conversion Grant, in the event the participant experiences a Termination for any reason prior to a Vesting Date, the Award will cease to vest and the participant will have no right or claim to the unvested portion of the Award, which shall terminate immediately following the participant's Termination under Section 1.
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3.
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In the case of a Conversion Grant, in the event of a Corporate Transaction, the Award will cease to vest and the participant will have no right or claim to the unvested portion of the Award, which shall terminate immediately following the Corporate Transaction.
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1.
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I have reviewed this quarterly report on Form 10-Q of Intuit Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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1.
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I have reviewed this quarterly report on Form 10-Q of Intuit Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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