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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 January 31, 2013
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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-10.04
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EX-10.05
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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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Six Months Ended
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||||||||||||
(In millions, except per share amounts)
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January 31,
2013 |
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January 31,
2012 |
|
January 31,
2013 |
|
January 31,
2012 |
||||||||
Net revenue:
|
|
|
|
|
|
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|
||||||||
Product
|
$
|
402
|
|
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$
|
419
|
|
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$
|
629
|
|
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$
|
641
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Service and other
|
566
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580
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986
|
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933
|
|
||||
Total net revenue
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968
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|
999
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1,615
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|
1,574
|
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||||
Costs and expenses:
|
|
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|
||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Cost of product revenue
|
40
|
|
|
52
|
|
|
72
|
|
|
84
|
|
||||
Cost of service and other revenue
|
162
|
|
|
150
|
|
|
307
|
|
|
282
|
|
||||
Amortization of acquired technology
|
6
|
|
|
3
|
|
|
11
|
|
|
6
|
|
||||
Selling and marketing
|
372
|
|
|
330
|
|
|
623
|
|
|
546
|
|
||||
Research and development
|
179
|
|
|
164
|
|
|
357
|
|
|
327
|
|
||||
General and administrative
|
109
|
|
|
95
|
|
|
207
|
|
|
187
|
|
||||
Amortization of other acquired intangible assets
|
7
|
|
|
10
|
|
|
14
|
|
|
31
|
|
||||
Total costs and expenses
|
875
|
|
|
804
|
|
|
1,591
|
|
|
1,463
|
|
||||
Operating income from continuing operations
|
93
|
|
|
195
|
|
|
24
|
|
|
111
|
|
||||
Interest expense
|
(7
|
)
|
|
(15
|
)
|
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(15
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)
|
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(30
|
)
|
||||
Interest and other income, net
|
1
|
|
|
3
|
|
|
3
|
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|
14
|
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||||
Income before income taxes
|
87
|
|
|
183
|
|
|
12
|
|
|
95
|
|
||||
Income tax provision (benefit)
|
16
|
|
|
62
|
|
|
(8
|
)
|
|
32
|
|
||||
Net income from continuing operations
|
71
|
|
|
121
|
|
|
20
|
|
|
63
|
|
||||
Net income (loss) from discontinued operations
|
—
|
|
|
(3
|
)
|
|
32
|
|
|
(9
|
)
|
||||
Net income
|
$
|
71
|
|
|
$
|
118
|
|
|
$
|
52
|
|
|
$
|
54
|
|
|
|
|
|
|
|
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||||||||
Basic net income per share from continuing operations
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$
|
0.24
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$
|
0.41
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$
|
0.07
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$
|
0.21
|
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Basic net income (loss) per share from discontinued operations
|
—
|
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|
(0.01
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)
|
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0.11
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(0.03
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)
|
||||
Basic net income per share
|
$
|
0.24
|
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|
$
|
0.40
|
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$
|
0.18
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$
|
0.18
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Shares used in basic per share calculations
|
296
|
|
|
297
|
|
|
296
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|
|
298
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||||
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||||||||
Diluted net income per share from continuing operations
|
$
|
0.23
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$
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0.40
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$
|
0.07
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$
|
0.21
|
|
Diluted net income (loss) per share from discontinued operations
|
—
|
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|
(0.01
|
)
|
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0.10
|
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|
(0.03
|
)
|
||||
Diluted net income per share
|
$
|
0.23
|
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|
$
|
0.39
|
|
|
$
|
0.17
|
|
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$
|
0.18
|
|
Shares used in diluted per share calculations
|
303
|
|
|
306
|
|
|
302
|
|
|
307
|
|
||||
|
|
|
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||||||||
Dividends declared per common share
|
$
|
0.17
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$
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0.15
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$
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0.34
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$
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0.30
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Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
January 31,
2013 |
|
January 31,
2012 |
|
January 31,
2013 |
|
January 31,
2012 |
||||||||
|
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||||||||
Net income
|
$
|
71
|
|
|
$
|
118
|
|
|
$
|
52
|
|
|
$
|
54
|
|
Other comprehensive income (loss), net of income taxes:
|
|
|
|
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|
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|
||||||||
Unrealized losses on available-for-sale debt securities
|
—
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—
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—
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(1
|
)
|
||||
Unrealized gains on available-for-sale equity securities
|
—
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—
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3
|
|
|
—
|
|
||||
Foreign currency translation gains (losses)
|
—
|
|
|
—
|
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|
1
|
|
|
(5
|
)
|
||||
Total other comprehensive income (loss), net
|
—
|
|
|
—
|
|
|
4
|
|
|
(6
|
)
|
||||
Comprehensive income
|
$
|
71
|
|
|
$
|
118
|
|
|
$
|
56
|
|
|
$
|
48
|
|
(In millions)
|
January 31,
2013 |
|
July 31,
2012 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
399
|
|
|
$
|
393
|
|
Investments
|
279
|
|
|
351
|
|
||
Accounts receivable, net
|
541
|
|
|
183
|
|
||
Income taxes receivable
|
157
|
|
|
53
|
|
||
Deferred income taxes
|
142
|
|
|
184
|
|
||
Prepaid expenses and other current assets
|
110
|
|
|
69
|
|
||
Current assets before funds held for customers
|
1,628
|
|
|
1,233
|
|
||
Funds held for customers
|
284
|
|
|
290
|
|
||
Total current assets
|
1,912
|
|
|
1,523
|
|
||
Long-term investments
|
88
|
|
|
75
|
|
||
Property and equipment, net
|
599
|
|
|
567
|
|
||
Goodwill
|
2,191
|
|
|
2,200
|
|
||
Acquired intangible assets, net
|
187
|
|
|
213
|
|
||
Other assets
|
112
|
|
|
106
|
|
||
Total assets
|
$
|
5,089
|
|
|
$
|
4,684
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
213
|
|
|
$
|
157
|
|
Accrued compensation and related liabilities
|
183
|
|
|
231
|
|
||
Deferred revenue
|
649
|
|
|
443
|
|
||
Other current liabilities
|
267
|
|
|
144
|
|
||
Current liabilities before customer fund deposits
|
1,312
|
|
|
975
|
|
||
Customer fund deposits
|
284
|
|
|
290
|
|
||
Total current liabilities
|
1,596
|
|
|
1,265
|
|
||
Long-term debt
|
499
|
|
|
499
|
|
||
Other long-term obligations
|
202
|
|
|
176
|
|
||
Total liabilities
|
2,297
|
|
|
1,940
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
||
Common stock and additional paid-in capital
|
3,186
|
|
|
3,018
|
|
||
Treasury stock, at cost
|
(4,986
|
)
|
|
(4,911
|
)
|
||
Accumulated other comprehensive income
|
29
|
|
|
25
|
|
||
Retained earnings
|
4,563
|
|
|
4,612
|
|
||
Total stockholders’ equity
|
2,792
|
|
|
2,744
|
|
||
Total liabilities and stockholders’ equity
|
$
|
5,089
|
|
|
$
|
4,684
|
|
(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, 2012
|
295,289
|
|
|
$
|
3,018
|
|
|
$
|
(4,911
|
)
|
|
$
|
25
|
|
|
$
|
4,612
|
|
|
$
|
2,744
|
|
Components of comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
52
|
|
|||||
Other comprehensive income, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
56
|
|
||||||||||
Issuance of treasury stock under employee stock plans
|
4,814
|
|
|
16
|
|
|
125
|
|
|
—
|
|
|
—
|
|
|
141
|
|
|||||
Tax benefit from share-based compensation plans
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|||||
Stock repurchases under stock repurchase programs
|
(3,361
|
)
|
|
—
|
|
|
(200
|
)
|
|
—
|
|
|
—
|
|
|
(200
|
)
|
|||||
Cash dividends declared ($0.34 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
|
(101
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
|||||
Balance at January 31, 2013
|
296,742
|
|
|
$
|
3,186
|
|
|
$
|
(4,986
|
)
|
|
$
|
29
|
|
|
$
|
4,563
|
|
|
$
|
2,792
|
|
(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 income:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
54
|
|
|||||
Other comprehensive loss, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
48
|
|
||||||||||
Issuance of treasury stock under employee stock plans
|
5,590
|
|
|
(39
|
)
|
|
150
|
|
|
—
|
|
|
(5
|
)
|
|
106
|
|
|||||
Tax benefit from share-based compensation plans
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|||||
Stock repurchases under stock repurchase programs
|
(11,411
|
)
|
|
—
|
|
|
(586
|
)
|
|
—
|
|
|
—
|
|
|
(586
|
)
|
|||||
Cash dividends declared ($0.30 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(89
|
)
|
|
(89
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|||||
Balance at January 31, 2012
|
294,776
|
|
|
$
|
2,975
|
|
|
$
|
(4,752
|
)
|
|
$
|
9
|
|
|
$
|
3,991
|
|
|
$
|
2,223
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
January 31,
2013 |
|
January 31,
2012 |
|
January 31,
2013 |
|
January 31,
2012 |
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
71
|
|
|
$
|
118
|
|
|
$
|
52
|
|
|
$
|
54
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
42
|
|
|
44
|
|
|
82
|
|
|
88
|
|
||||
Amortization of acquired intangible assets
|
16
|
|
|
17
|
|
|
30
|
|
|
45
|
|
||||
Share-based compensation expense
|
47
|
|
|
43
|
|
|
96
|
|
|
83
|
|
||||
Pre-tax gain on sale of discontinued operations
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
||||
Deferred income taxes
|
(5
|
)
|
|
(12
|
)
|
|
48
|
|
|
(17
|
)
|
||||
Tax benefit from share-based compensation plans
|
12
|
|
|
15
|
|
|
56
|
|
|
45
|
|
||||
Excess tax benefit from share-based compensation plans
|
(12
|
)
|
|
(14
|
)
|
|
(56
|
)
|
|
(43
|
)
|
||||
Other
|
5
|
|
|
8
|
|
|
9
|
|
|
2
|
|
||||
Total adjustments
|
105
|
|
|
101
|
|
|
212
|
|
|
203
|
|
||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
(357
|
)
|
|
(426
|
)
|
|
(358
|
)
|
|
(421
|
)
|
||||
Prepaid expenses, income taxes receivable and other assets
|
(17
|
)
|
|
60
|
|
|
(145
|
)
|
|
(18
|
)
|
||||
Accounts payable
|
46
|
|
|
45
|
|
|
58
|
|
|
84
|
|
||||
Accrued compensation and related liabilities
|
48
|
|
|
27
|
|
|
(48
|
)
|
|
(47
|
)
|
||||
Deferred revenue
|
233
|
|
|
207
|
|
|
217
|
|
|
182
|
|
||||
Income taxes payable
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Other liabilities
|
126
|
|
|
128
|
|
|
122
|
|
|
112
|
|
||||
Total changes in operating assets and liabilities
|
80
|
|
|
41
|
|
|
(153
|
)
|
|
(107
|
)
|
||||
Net cash provided by operating activities
|
256
|
|
|
260
|
|
|
111
|
|
|
150
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Purchases of available-for-sale debt securities
|
(123
|
)
|
|
(146
|
)
|
|
(210
|
)
|
|
(343
|
)
|
||||
Sales of available-for-sale debt securities
|
109
|
|
|
130
|
|
|
190
|
|
|
266
|
|
||||
Maturities of available-for-sale debt securities
|
74
|
|
|
48
|
|
|
95
|
|
|
89
|
|
||||
Net change in money market funds and other cash equivalents held
to satisfy customer fund obligations
|
(75
|
)
|
|
(9
|
)
|
|
6
|
|
|
84
|
|
||||
Net change in customer fund deposits
|
75
|
|
|
9
|
|
|
(6
|
)
|
|
(84
|
)
|
||||
Purchases of property and equipment
|
(45
|
)
|
|
(48
|
)
|
|
(115
|
)
|
|
(92
|
)
|
||||
Proceeds from divestiture of businesses
|
—
|
|
|
—
|
|
|
60
|
|
|
—
|
|
||||
Other
|
(17
|
)
|
|
1
|
|
|
(22
|
)
|
|
15
|
|
||||
Net cash used in investing activities
|
(2
|
)
|
|
(15
|
)
|
|
(2
|
)
|
|
(65
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Net proceeds from issuance of treasury stock under
employee stock plans
|
68
|
|
|
61
|
|
|
141
|
|
|
106
|
|
||||
Purchases of treasury stock
|
(100
|
)
|
|
(331
|
)
|
|
(200
|
)
|
|
(586
|
)
|
||||
Cash dividends paid to stockholders
|
(51
|
)
|
|
(44
|
)
|
|
(101
|
)
|
|
(89
|
)
|
||||
Excess tax benefit from share-based compensation plans
|
12
|
|
|
14
|
|
|
56
|
|
|
43
|
|
||||
Net cash used in financing activities
|
(71
|
)
|
|
(300
|
)
|
|
(104
|
)
|
|
(526
|
)
|
||||
Effect of exchange rates on cash and cash equivalents
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
(4
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
183
|
|
|
(56
|
)
|
|
6
|
|
|
(445
|
)
|
||||
Cash and cash equivalents at beginning of period
|
216
|
|
|
333
|
|
|
393
|
|
|
722
|
|
||||
Cash and cash equivalents at end of period
|
$
|
399
|
|
|
$
|
277
|
|
|
$
|
399
|
|
|
$
|
277
|
|
1.
|
Description of Business and Summary of Significant Accounting Policies
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions, except per share amounts)
|
January 31,
2013 |
|
January 31,
2012 |
|
January 31,
2013 |
|
January 31,
2012 |
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income from continuing operations
|
$
|
71
|
|
|
$
|
121
|
|
|
$
|
20
|
|
|
$
|
63
|
|
Net income (loss) from discontinued operations
|
—
|
|
|
(3
|
)
|
|
32
|
|
|
(9
|
)
|
||||
Net income
|
$
|
71
|
|
|
$
|
118
|
|
|
$
|
52
|
|
|
$
|
54
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Shares used in basic per share amounts:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
296
|
|
|
297
|
|
|
296
|
|
|
298
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Shares used in diluted per share amounts:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
296
|
|
|
297
|
|
|
296
|
|
|
298
|
|
||||
Dilutive common equivalent shares from stock options
|
|
|
|
|
|
|
|
||||||||
and restricted stock awards
|
7
|
|
|
9
|
|
|
6
|
|
|
9
|
|
||||
Dilutive weighted average common shares outstanding
|
303
|
|
|
306
|
|
|
302
|
|
|
307
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic net income per share from continuing operations
|
$
|
0.24
|
|
|
$
|
0.41
|
|
|
$
|
0.07
|
|
|
$
|
0.21
|
|
Basic net income (loss) per share from discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
0.11
|
|
|
(0.03
|
)
|
||||
Basic net income per share
|
$
|
0.24
|
|
|
$
|
0.40
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income per share from continuing operations
|
$
|
0.23
|
|
|
$
|
0.40
|
|
|
$
|
0.07
|
|
|
$
|
0.21
|
|
Diluted net income (loss) per share from discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
0.10
|
|
|
(0.03
|
)
|
||||
Diluted net income per share
|
$
|
0.23
|
|
|
$
|
0.39
|
|
|
$
|
0.17
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
||||||||
Shares excluded from computation of diluted net income
per share:
|
|
|
|
|
|
|
|
||||||||
Weighted average stock options and restricted stock units excluded from computation due to anti-dilutive effect
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
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.
|
|
January 31, 2013
|
|
July 31, 2012
|
||||||||||||||||||||||||||||
(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
|
$
|
325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
325
|
|
|
$
|
333
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
333
|
|
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Municipal bonds
|
—
|
|
|
206
|
|
|
—
|
|
|
206
|
|
|
—
|
|
|
260
|
|
|
—
|
|
|
260
|
|
||||||||
Municipal auction rate securities
|
—
|
|
|
—
|
|
|
33
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
41
|
|
||||||||
Corporate notes
|
—
|
|
|
143
|
|
|
—
|
|
|
143
|
|
|
—
|
|
|
142
|
|
|
—
|
|
|
142
|
|
||||||||
U.S. agency securities
|
—
|
|
|
105
|
|
|
—
|
|
|
105
|
|
|
—
|
|
|
124
|
|
|
—
|
|
|
124
|
|
||||||||
Available-for-sale corporate equity securities
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||||||
Total available-for-sale securities
|
37
|
|
|
454
|
|
|
33
|
|
|
524
|
|
|
33
|
|
|
526
|
|
|
41
|
|
|
600
|
|
||||||||
Total assets measured at fair value on a recurring basis
|
$
|
362
|
|
|
$
|
454
|
|
|
$
|
33
|
|
|
$
|
849
|
|
|
$
|
366
|
|
|
$
|
526
|
|
|
$
|
41
|
|
|
$
|
933
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Senior notes (1)
|
$
|
—
|
|
|
$
|
621
|
|
|
$
|
—
|
|
|
$
|
621
|
|
|
$
|
—
|
|
|
$
|
582
|
|
|
$
|
—
|
|
|
$
|
582
|
|
(1)
|
Carrying value on our balance sheet at
January 31, 2013
was
$499
million and at
July 31, 2012
was
$499
million. See Note 6.
|
|
January 31, 2013
|
|
July 31, 2012
|
||||||||||||||||||||||||||||
(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
|
$
|
216
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
216
|
|
|
$
|
219
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
219
|
|
In funds held for customers
|
109
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|
114
|
|
|
—
|
|
|
—
|
|
|
114
|
|
||||||||
Total cash equivalents
|
$
|
325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
325
|
|
|
$
|
333
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
333
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
In investments
|
$
|
—
|
|
|
$
|
279
|
|
|
$
|
—
|
|
|
$
|
279
|
|
|
$
|
—
|
|
|
$
|
351
|
|
|
$
|
—
|
|
|
$
|
351
|
|
In funds held for customers
|
—
|
|
|
175
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|
175
|
|
||||||||
In long-term investments
|
37
|
|
|
—
|
|
|
33
|
|
|
70
|
|
|
33
|
|
|
—
|
|
|
41
|
|
|
74
|
|
||||||||
Total available-for-sale securities
|
$
|
37
|
|
|
$
|
454
|
|
|
$
|
33
|
|
|
$
|
524
|
|
|
$
|
33
|
|
|
$
|
526
|
|
|
$
|
41
|
|
|
$
|
600
|
|
|
Six Months
|
||
|
Ended
|
||
(In millions)
|
January 31,
2013 |
||
Beginning balance
|
$
|
41
|
|
Settlements at par
|
(8
|
)
|
|
Ending balance
|
$
|
33
|
|
3.
|
Cash and Cash Equivalents, Investments and Funds Held for Customers
|
|
January 31, 2013
|
|
July 31, 2012
|
||||||||||||
(In millions)
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
Classification on balance sheets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
399
|
|
|
$
|
399
|
|
|
$
|
393
|
|
|
$
|
393
|
|
Investments
|
279
|
|
|
279
|
|
|
350
|
|
|
351
|
|
||||
Funds held for customers
|
284
|
|
|
284
|
|
|
289
|
|
|
290
|
|
||||
Long-term investments
|
55
|
|
|
88
|
|
|
47
|
|
|
75
|
|
||||
Total cash and cash equivalents, investments, and funds
held for customers
|
$
|
1,017
|
|
|
$
|
1,050
|
|
|
$
|
1,079
|
|
|
$
|
1,109
|
|
|
January 31, 2013
|
|
July 31, 2012
|
||||||||||||
(In millions)
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
Type of issue:
|
|
|
|
|
|
|
|
||||||||
Total cash and cash equivalents
|
$
|
509
|
|
|
$
|
509
|
|
|
$
|
508
|
|
|
$
|
508
|
|
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
||||||||
Municipal bonds
|
206
|
|
|
206
|
|
|
259
|
|
|
260
|
|
||||
Municipal auction rate securities
|
33
|
|
|
33
|
|
|
41
|
|
|
41
|
|
||||
Corporate notes
|
142
|
|
|
143
|
|
|
141
|
|
|
142
|
|
||||
U.S. agency securities
|
105
|
|
|
105
|
|
|
124
|
|
|
124
|
|
||||
Total available-for-sale debt securities
|
486
|
|
|
487
|
|
|
565
|
|
|
567
|
|
||||
Available-for-sale corporate equity securities
|
5
|
|
|
37
|
|
|
5
|
|
|
33
|
|
||||
Other long-term investments
|
17
|
|
|
17
|
|
|
1
|
|
|
1
|
|
||||
Total cash and cash equivalents, investments, and funds
held for customers
|
$
|
1,017
|
|
|
$
|
1,050
|
|
|
$
|
1,079
|
|
|
$
|
1,109
|
|
|
January 31, 2013
|
|
July 31, 2012
|
||||||||||||
(In millions)
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
Due within one year
|
$
|
191
|
|
|
$
|
191
|
|
|
$
|
218
|
|
|
$
|
218
|
|
Due within two years
|
132
|
|
|
133
|
|
|
134
|
|
|
135
|
|
||||
Due within three years
|
92
|
|
|
92
|
|
|
131
|
|
|
132
|
|
||||
Due after three years
|
71
|
|
|
71
|
|
|
82
|
|
|
82
|
|
||||
Total available-for-sale debt securities
|
$
|
486
|
|
|
$
|
487
|
|
|
$
|
565
|
|
|
$
|
567
|
|
4.
|
Discontinued Operations
|
5.
|
Current Liabilities
|
(In millions)
|
January 31,
2013 |
|
July 31,
2012 |
||||
Reserve for product returns
|
$
|
85
|
|
|
$
|
19
|
|
Reserve for rebates
|
58
|
|
|
17
|
|
||
Current portion of license fee payable
|
10
|
|
|
10
|
|
||
Current portion of deferred rent
|
8
|
|
|
8
|
|
||
Interest payable
|
10
|
|
|
10
|
|
||
Executive deferred compensation plan liabilities
|
60
|
|
|
56
|
|
||
Other
|
36
|
|
|
24
|
|
||
Total other current liabilities
|
$
|
267
|
|
|
$
|
144
|
|
6.
|
Long-Term Obligations
|
(In millions)
|
January 31,
2013 |
|
July 31,
2012 |
||||
Total license fee payable
|
$
|
56
|
|
|
$
|
54
|
|
Total deferred rent
|
55
|
|
|
53
|
|
||
Long-term deferred revenue
|
45
|
|
|
42
|
|
||
Long-term income tax liabilities
|
43
|
|
|
41
|
|
||
Long-term deferred income tax liabilities
|
15
|
|
|
—
|
|
||
Other
|
7
|
|
|
5
|
|
||
Total long-term obligations
|
221
|
|
|
195
|
|
||
Less current portion (included in other current liabilities)
|
(19
|
)
|
|
(19
|
)
|
||
Long-term obligations due after one year
|
$
|
202
|
|
|
$
|
176
|
|
7.
|
Income Taxes
|
8.
|
Stockholders’ Equity
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions, except per share amounts)
|
January 31,
2013 |
|
January 31,
2012 |
|
January 31,
2013 |
|
January 31,
2012 |
||||||||
Cost of revenue
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
3
|
|
Selling and marketing
|
17
|
|
|
15
|
|
|
35
|
|
|
29
|
|
||||
Research and development
|
14
|
|
|
14
|
|
|
28
|
|
|
26
|
|
||||
General and administrative
|
14
|
|
|
12
|
|
|
29
|
|
|
25
|
|
||||
Total share-based compensation expense
|
47
|
|
|
43
|
|
|
96
|
|
|
83
|
|
||||
Income tax benefit
|
(16
|
)
|
|
(14
|
)
|
|
(32
|
)
|
|
(27
|
)
|
||||
Decrease in net income
|
$
|
31
|
|
|
$
|
29
|
|
|
$
|
64
|
|
|
$
|
56
|
|
Decrease in net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.22
|
|
|
$
|
0.19
|
|
Diluted
|
$
|
0.10
|
|
|
$
|
0.09
|
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
(Shares in thousands)
|
Shares
Available
for Grant
|
|
Balance at July 31, 2012
|
21,760
|
|
Options granted
|
(106
|
)
|
Restricted stock units granted (1)
|
(901
|
)
|
Share-based awards canceled/forfeited/expired (1)(2)
|
1,399
|
|
Balance at January 31, 2013
|
22,152
|
|
(1)
|
Under the terms of our Amended and Restated 2005 Equity Incentive Plan, as amended through July 24, 2012 (2005 Equity Incentive Plan), 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.
|
(2)
|
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.
|
|
Options Outstanding
|
|||||
(Shares in thousands)
|
Number
of Shares
|
|
Weighted
Average
Exercise
Price
Per Share
|
|||
Balance at July 31, 2012
|
18,061
|
|
|
$
|
37.49
|
|
Options granted
|
106
|
|
|
60.30
|
|
|
Options exercised
|
(3,880
|
)
|
|
32.37
|
|
|
Options canceled or expired
|
(336
|
)
|
|
40.67
|
|
|
Balance at January 31, 2013
|
13,951
|
|
|
$
|
39.02
|
|
|
|
|
|
|||
Exercisable at January 31, 2013
|
8,620
|
|
|
$
|
32.68
|
|
|
Restricted Stock Units
|
|||||
(Shares in thousands)
|
Number
of Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Nonvested at July 31, 2012
|
9,607
|
|
|
$
|
46.79
|
|
Granted
|
392
|
|
|
60.30
|
|
|
Vested
|
(875
|
)
|
|
34.80
|
|
|
Forfeited
|
(511
|
)
|
|
47.08
|
|
|
Nonvested at January 31, 2013
|
8,613
|
|
|
$
|
48.61
|
|
9.
|
Litigation
|
10.
|
Segment Information
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
January 31,
2013 |
|
January 31,
2012 |
|
January 31,
2013 |
|
January 31,
2012 |
||||||||
Net revenue:
|
|
|
|
|
|
|
|
||||||||
Financial Management Solutions
|
$
|
208
|
|
|
$
|
179
|
|
|
$
|
388
|
|
|
$
|
328
|
|
Employee Management Solutions
|
144
|
|
|
128
|
|
|
279
|
|
|
249
|
|
||||
Payment Solutions
|
117
|
|
|
99
|
|
|
231
|
|
|
193
|
|
||||
Consumer Tax
|
216
|
|
|
295
|
|
|
252
|
|
|
336
|
|
||||
Accounting Professionals
|
123
|
|
|
131
|
|
|
155
|
|
|
158
|
|
||||
Financial Services
|
93
|
|
|
92
|
|
|
186
|
|
|
181
|
|
||||
Other Businesses
|
67
|
|
|
75
|
|
|
124
|
|
|
129
|
|
||||
Total net revenue
|
$
|
968
|
|
|
$
|
999
|
|
|
$
|
1,615
|
|
|
$
|
1,574
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Financial Management Solutions
|
$
|
75
|
|
|
$
|
69
|
|
|
$
|
133
|
|
|
$
|
120
|
|
Employee Management Solutions
|
85
|
|
|
72
|
|
|
170
|
|
|
147
|
|
||||
Payment Solutions
|
24
|
|
|
23
|
|
|
46
|
|
|
47
|
|
||||
Consumer Tax
|
24
|
|
|
114
|
|
|
(3
|
)
|
|
86
|
|
||||
Accounting Professionals
|
72
|
|
|
81
|
|
|
62
|
|
|
67
|
|
||||
Financial Services
|
20
|
|
|
25
|
|
|
35
|
|
|
43
|
|
||||
Other Businesses
|
10
|
|
|
12
|
|
|
16
|
|
|
9
|
|
||||
Total segment operating income
|
310
|
|
|
396
|
|
|
459
|
|
|
519
|
|
||||
Unallocated corporate items:
|
|
|
|
|
|
|
|
||||||||
Share-based compensation expense
|
(47
|
)
|
|
(43
|
)
|
|
(96
|
)
|
|
(83
|
)
|
||||
Other common expenses
|
(157
|
)
|
|
(145
|
)
|
|
(314
|
)
|
|
(288
|
)
|
||||
Amortization of acquired technology
|
(6
|
)
|
|
(3
|
)
|
|
(11
|
)
|
|
(6
|
)
|
||||
Amortization of other acquired intangible assets
|
(7
|
)
|
|
(10
|
)
|
|
(14
|
)
|
|
(31
|
)
|
||||
Total unallocated corporate items
|
(217
|
)
|
|
(201
|
)
|
|
(435
|
)
|
|
(408
|
)
|
||||
Total operating income from continuing operations
|
$
|
93
|
|
|
$
|
195
|
|
|
$
|
24
|
|
|
$
|
111
|
|
•
|
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; QuickBooks technical support; financial supplies; and Demandforce, which provides online marketing and customer communication solutions.
|
•
|
Our Employee Management Solutions segment provides payroll products and services.
|
•
|
Our Payment Solutions segment provides merchant services, including credit and debit card processing, electronic check conversion and automated clearing house services; Web-based transaction processing services for online merchants; and GoPayment mobile payment processing 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 Intuit Tax Online professional tax products and services. This segment also includes QuickBooks Premier Accountant Edition and the QuickBooks ProAdvisor Program for accounting professionals.
|
•
|
Focus on the product – we call it “Delivering awesome product experiences.”
Customers increasingly demand anytime, anywhere, any device access to their information. Therefore, we are increasingly focused on reimagining our products with a mobile-first, and in some cases mobile-only, design. Our TurboTax solutions, for example, let customers prepare and file their entire tax returns online, via tablet, mobile phone or the desktop. In addition, we believe that a key factor in growing our customer base is to deliver an amazing first-use experience, so our customers can get the value they expect as easily and quickly as possible.
|
•
|
Creating network effect platforms – we call it “Enabling the contributions of others.”
We expect to solve problems faster and more efficiently for our growing base of customers by moving to more open platforms with application programming interfaces that enable the contributions of end users and third-party developers. One example of this is QuickBooks Online, which now allows small business customers all over the world to contribute to localizing the product.
|
•
|
Leveraging our data for our customers' benefit – we call it “Enabling data to create delight.”
Our 60 million customers are generating valuable data that we seek to appropriately use to deliver better products and breakthrough benefits by eliminating the need to enter data, helping them make better decisions and improving transactions and interactions.
|
(Dollars in millions, except per share amounts)
|
Q2
FY13 |
|
Q2
FY12 |
|
$
Change
|
|
%
Change
|
|
YTD
Q2 FY13 |
|
YTD
Q2 FY12 |
|
$
Change
|
|
%
Change
|
||||||||||||||
Total net revenue
|
$
|
968
|
|
|
$
|
999
|
|
|
$
|
(31
|
)
|
|
(3
|
)%
|
|
$
|
1,615
|
|
|
$
|
1,574
|
|
|
$
|
41
|
|
|
3
|
%
|
Operating income from continuing operations
|
93
|
|
|
195
|
|
|
(102
|
)
|
|
(52
|
)%
|
|
24
|
|
|
111
|
|
|
(87
|
)
|
|
(78
|
)%
|
||||||
Net income from continuing operations
|
71
|
|
|
121
|
|
|
(50
|
)
|
|
(41
|
)%
|
|
20
|
|
|
63
|
|
|
(43
|
)
|
|
(68
|
)%
|
||||||
Diluted net income per share from continuing operations
|
$
|
0.23
|
|
|
$
|
0.40
|
|
|
$
|
(0.17
|
)
|
|
(43
|
)%
|
|
$
|
0.07
|
|
|
$
|
0.21
|
|
|
$
|
(0.14
|
)
|
|
(67
|
)%
|
(Dollars in millions)
|
Q2
FY13 |
|
Q2
FY12 |
|
%
Change
|
|
YTD
Q2 FY13 |
|
YTD
Q2 FY12 |
|
%
Change
|
||||||||||
Product revenue
|
$
|
112
|
|
|
$
|
116
|
|
|
|
|
$
|
201
|
|
|
$
|
205
|
|
|
|
||
Service and other revenue
|
96
|
|
|
63
|
|
|
|
|
187
|
|
|
123
|
|
|
|
||||||
Total segment revenue
|
$
|
208
|
|
|
$
|
179
|
|
|
17
|
%
|
|
$
|
388
|
|
|
$
|
328
|
|
|
18
|
%
|
% of total revenue
|
22
|
%
|
|
18
|
%
|
|
|
|
24
|
%
|
|
21
|
%
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating income
|
$
|
75
|
|
|
$
|
69
|
|
|
6
|
%
|
|
$
|
133
|
|
|
$
|
120
|
|
|
9
|
%
|
% of related revenue
|
36
|
%
|
|
39
|
%
|
|
|
|
34
|
%
|
|
37
|
%
|
|
|
(Dollars in millions)
|
Q2
FY13 |
|
Q2
FY12 |
|
%
Change
|
|
YTD
Q2 FY13 |
|
YTD
Q2 FY12 |
|
%
Change
|
||||||||||
Product revenue
|
$
|
74
|
|
|
$
|
69
|
|
|
|
|
$
|
145
|
|
|
$
|
137
|
|
|
|
||
Service and other revenue
|
70
|
|
|
59
|
|
|
|
|
134
|
|
|
112
|
|
|
|
||||||
Total segment revenue
|
$
|
144
|
|
|
$
|
128
|
|
|
13
|
%
|
|
$
|
279
|
|
|
$
|
249
|
|
|
12
|
%
|
% of total revenue
|
15
|
%
|
|
13
|
%
|
|
|
|
17
|
%
|
|
16
|
%
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating income
|
$
|
85
|
|
|
$
|
72
|
|
|
17
|
%
|
|
$
|
170
|
|
|
$
|
147
|
|
|
16
|
%
|
% of related revenue
|
59
|
%
|
|
57
|
%
|
|
|
|
61
|
%
|
|
59
|
%
|
|
|
(Dollars in millions)
|
Q2
FY13 |
|
Q2
FY12 |
|
%
Change
|
|
YTD
Q2 FY13 |
|
YTD
Q2 FY12 |
|
%
Change
|
||||||||||
Product revenue
|
$
|
7
|
|
|
$
|
6
|
|
|
|
|
$
|
13
|
|
|
$
|
12
|
|
|
|
||
Service and other revenue
|
110
|
|
|
93
|
|
|
|
|
218
|
|
|
181
|
|
|
|
||||||
Total segment revenue
|
$
|
117
|
|
|
$
|
99
|
|
|
18
|
%
|
|
$
|
231
|
|
|
$
|
193
|
|
|
19
|
%
|
% of total revenue
|
12
|
%
|
|
10
|
%
|
|
|
|
14
|
%
|
|
12
|
%
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating income
|
$
|
24
|
|
|
$
|
23
|
|
|
8
|
%
|
|
$
|
46
|
|
|
$
|
47
|
|
|
(1
|
)%
|
% of related revenue
|
21
|
%
|
|
23
|
%
|
|
|
|
20
|
%
|
|
24
|
%
|
|
|
(Dollars in millions)
|
Q2
FY13 |
|
Q2
FY12 |
|
%
Change
|
|
YTD
Q2 FY13 |
|
YTD
Q2 FY12 |
|
%
Change
|
||||||||||
Product revenue
|
$
|
54
|
|
|
$
|
63
|
|
|
|
|
$
|
61
|
|
|
$
|
74
|
|
|
|
||
Service and other revenue
|
162
|
|
|
232
|
|
|
|
|
191
|
|
|
262
|
|
|
|
||||||
Total segment revenue
|
$
|
216
|
|
|
$
|
295
|
|
|
(27
|
)%
|
|
$
|
252
|
|
|
$
|
336
|
|
|
(25
|
)%
|
% of total revenue
|
22
|
%
|
|
30
|
%
|
|
|
|
16
|
%
|
|
21
|
%
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating income (loss)
|
$
|
24
|
|
|
$
|
114
|
|
|
(79
|
)%
|
|
$
|
(3
|
)
|
|
$
|
86
|
|
|
(103
|
)%
|
% of related revenue
|
11
|
%
|
|
38
|
%
|
|
|
|
(1
|
)%
|
|
25
|
%
|
|
|
(Dollars in millions)
|
Q2
FY13 |
|
Q2
FY12 |
|
%
Change
|
|
YTD
Q2 FY13 |
|
YTD
Q2 FY12 |
|
%
Change
|
||||||||||
Product revenue
|
$
|
120
|
|
|
$
|
126
|
|
|
|
|
$
|
148
|
|
|
$
|
149
|
|
|
|
||
Service and other revenue
|
3
|
|
|
5
|
|
|
|
|
7
|
|
|
9
|
|
|
|
||||||
Total segment revenue
|
$
|
123
|
|
|
$
|
131
|
|
|
(7
|
)%
|
|
$
|
155
|
|
|
$
|
158
|
|
|
(2
|
)%
|
% of total revenue
|
13
|
%
|
|
13
|
%
|
|
|
|
10
|
%
|
|
10
|
%
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating income
|
$
|
72
|
|
|
$
|
81
|
|
|
(11
|
)%
|
|
$
|
62
|
|
|
$
|
67
|
|
|
(8
|
)%
|
% of related revenue
|
59
|
%
|
|
61
|
%
|
|
|
|
40
|
%
|
|
42
|
%
|
|
|
(Dollars in millions)
|
Q2
FY13 |
|
Q2
FY12 |
|
%
Change
|
|
YTD
Q2 FY13 |
|
YTD
Q2 FY12 |
|
%
Change
|
||||||||||
Product revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
||
Service and other revenue
|
93
|
|
|
92
|
|
|
|
|
186
|
|
|
181
|
|
|
|
||||||
Total segment revenue
|
$
|
93
|
|
|
$
|
92
|
|
|
1
|
%
|
|
$
|
186
|
|
|
$
|
181
|
|
|
3
|
%
|
% of total revenue
|
9
|
%
|
|
9
|
%
|
|
|
|
11
|
%
|
|
12
|
%
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating income
|
$
|
20
|
|
|
$
|
25
|
|
|
(20
|
)%
|
|
$
|
35
|
|
|
$
|
43
|
|
|
(19
|
)%
|
% of related revenue
|
22
|
%
|
|
28
|
%
|
|
|
|
19
|
%
|
|
24
|
%
|
|
|
(Dollars in millions)
|
Q2
FY13 |
|
Q2
FY12 |
|
%
Change
|
|
YTD
Q2 FY13 |
|
YTD
Q2 FY12 |
|
%
Change
|
||||||||||
Product revenue
|
$
|
35
|
|
|
$
|
39
|
|
|
|
|
$
|
61
|
|
|
$
|
64
|
|
|
|
||
Service and other revenue
|
32
|
|
|
36
|
|
|
|
|
63
|
|
|
65
|
|
|
|
||||||
Total segment revenue
|
$
|
67
|
|
|
$
|
75
|
|
|
(10
|
)%
|
|
$
|
124
|
|
|
$
|
129
|
|
|
(4
|
)%
|
% of total revenue
|
7
|
%
|
|
7
|
%
|
|
|
|
8
|
%
|
|
8
|
%
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating income
|
$
|
10
|
|
|
$
|
12
|
|
|
(17
|
)%
|
|
$
|
16
|
|
|
$
|
9
|
|
|
72
|
%
|
% of related revenue
|
15
|
%
|
|
16
|
%
|
|
|
|
13
|
%
|
|
7
|
%
|
|
|
(Dollars in millions)
|
Q2
FY13 |
|
% of
Related
Revenue
|
|
Q2
FY12 |
|
% of
Related
Revenue
|
|
YTD
Q2 FY13 |
|
% of
Related
Revenue
|
|
YTD
Q2 FY12 |
|
% of
Related
Revenue
|
||||||||||||
Cost of product revenue
|
$
|
40
|
|
|
10
|
%
|
|
$
|
52
|
|
|
12
|
%
|
|
$
|
72
|
|
|
11
|
%
|
|
$
|
84
|
|
|
13
|
%
|
Cost of service and other revenue
|
162
|
|
|
29
|
%
|
|
150
|
|
|
26
|
%
|
|
307
|
|
|
31
|
%
|
|
282
|
|
|
30
|
%
|
||||
Amortization of acquired technology
|
6
|
|
|
n/a
|
|
|
3
|
|
|
n/a
|
|
|
11
|
|
|
n/a
|
|
|
6
|
|
|
n/a
|
|
||||
Total cost of revenue
|
$
|
208
|
|
|
21
|
%
|
|
$
|
205
|
|
|
21
|
%
|
|
$
|
390
|
|
|
24
|
%
|
|
$
|
372
|
|
|
24
|
%
|
(Dollars in millions)
|
Q2
FY13 |
|
% of
Total
Net
Revenue
|
|
Q2
FY12 |
|
% of
Total
Net
Revenue
|
|
YTD
Q2 FY13 |
|
% of
Total
Net
Revenue
|
|
YTD
Q2 FY12 |
|
% of
Total
Net
Revenue
|
||||||||||||
Selling and marketing
|
$
|
372
|
|
|
38
|
%
|
|
$
|
330
|
|
|
33
|
%
|
|
$
|
623
|
|
|
39
|
%
|
|
$
|
546
|
|
|
34
|
%
|
Research and development
|
179
|
|
|
19
|
%
|
|
164
|
|
|
16
|
%
|
|
357
|
|
|
22
|
%
|
|
327
|
|
|
21
|
%
|
||||
General and administrative
|
109
|
|
|
11
|
%
|
|
95
|
|
|
10
|
%
|
|
207
|
|
|
12
|
%
|
|
187
|
|
|
12
|
%
|
||||
Amortization of other acquired intangible assets
|
7
|
|
|
1
|
%
|
|
10
|
|
|
1
|
%
|
|
14
|
|
|
1
|
%
|
|
31
|
|
|
2
|
%
|
||||
Total operating expenses
|
$
|
667
|
|
|
69
|
%
|
|
$
|
599
|
|
|
60
|
%
|
|
$
|
1,201
|
|
|
74
|
%
|
|
$
|
1,091
|
|
|
69
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
January 31,
2013 |
|
January 31,
2012 |
|
January 31,
2013 |
|
January 31,
2012 |
||||||||
Interest income
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
4
|
|
Net gain (loss) on executive deferred compensation
plan assets
|
3
|
|
|
1
|
|
|
4
|
|
|
(1
|
)
|
||||
Gain on disposition of stock warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Other
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
1
|
|
||||
Total interest and other income, net
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
14
|
|
(Dollars in millions)
|
January 31,
2013 |
|
July 31,
2012 |
|
$
Change
|
|
%
Change
|
|||||||
Cash, cash equivalents and investments
|
$
|
678
|
|
|
$
|
744
|
|
|
$
|
(66
|
)
|
|
(9
|
)%
|
Long-term investments
|
88
|
|
|
75
|
|
|
13
|
|
|
17
|
%
|
|||
Long-term debt
|
499
|
|
|
499
|
|
|
—
|
|
|
—
|
%
|
|||
Working capital
|
316
|
|
|
258
|
|
|
58
|
|
|
22
|
%
|
|||
Ratio of current assets to current liabilities
|
1.2 : 1
|
|
|
1.2 : 1
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||
(Dollars in millions)
|
January 31,
2013 |
|
January 31,
2012 |
|
$
Change
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
111
|
|
|
$
|
150
|
|
|
$
|
(39
|
)
|
Investing activities
|
(2
|
)
|
|
(65
|
)
|
|
63
|
|
|||
Financing activities
|
(104
|
)
|
|
(526
|
)
|
|
422
|
|
|||
Effect of exchange rate changes on cash
|
1
|
|
|
(4
|
)
|
|
5
|
|
|||
Increase (decrease) in cash and cash equivalents
|
$
|
6
|
|
|
$
|
(445
|
)
|
|
$
|
451
|
|
•
|
our expectations and beliefs regarding future conduct and growth of the business;
|
•
|
our expectation of a shift in revenue as a result of late tax legislation;
|
•
|
our expectation that we will solve problems faster and more efficiently for our growing base of customers by moving to more open platforms with application programming interfaces that enable the contributions of end users and third-party developers;
|
•
|
our expectation that we will continue to invest significant resources in our product development, marketing and sales capabilities in the future;
|
•
|
our expectation that connected services revenue as a percentage of our total revenue will continue to grow in the future;
|
•
|
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 repurchase our common stock on a quarterly basis;
|
•
|
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 assessments and estimates that determine our effective tax rate;
|
•
|
our belief that it is not reasonably possible that there will be a significant increase or decrease in our unrecognized tax benefits over the next 12 months;
|
•
|
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, competition and other trends that affect 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
|
||||||
November 1, 2012 through November 30, 2012
|
|
840,000
|
|
|
$
|
59.55
|
|
|
840,000
|
|
|
$
|
1,590,037,922
|
|
December 1, 2012 through December 31, 2012
|
|
779,800
|
|
|
$
|
60.43
|
|
|
779,800
|
|
|
$
|
1,542,914,795
|
|
January 1, 2013 through January 31, 2013
|
|
46,565
|
|
|
$
|
61.33
|
|
|
46,565
|
|
|
$
|
1,540,059,014
|
|
Total
|
|
1,666,365
|
|
|
$
|
60.01
|
|
|
1,666,365
|
|
|
|
1.
|
All of the shares purchased as part of publicly announced plans during the three months ended
January 31, 2013
were purchased under a plan we announced on
August 18, 2011
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 15, 2014
. At
January 31, 2013
, authorization from our Board of Directors to expend up to
$1.5
billion remained available under that plan.
|
Exhibit
Number
|
|
Exhibit Description
|
|
Filed
Herewith
|
|
Incorporated by
Reference
|
|
|
|
|
|
|
|
10.01+
|
|
Form of Director Restricted Stock Units Initial Grant Agreement
|
|
X
|
|
|
|
|
|
|
|
|
|
10.02+
|
|
Form of Director Restricted Stock Units Initial Grant Agreement for Mid-Year Directors
|
|
X
|
|
|
|
|
|
|
|
|
|
10.03+
|
|
Form of Director Restricted Stock Units Succeeding Grant Agreement
|
|
X
|
|
|
|
|
|
|
|
|
|
10.04+
|
|
Form of Director Restricted Stock Units Succeeding Grant Agreement for Mid-Year Directors
|
|
X
|
|
|
|
|
|
|
|
|
|
10.05+
|
|
Form of Director Restricted Stock Units Conversion Grant 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:
|
March 1, 2013
|
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+
|
|
Form of Director Restricted Stock Units Initial Grant Agreement
|
|
X
|
|
|
|
|
|
|
|
|
|
10.02+
|
|
Form of Director Restricted Stock Units Initial Grant Agreement for Mid-Year Directors
|
|
X
|
|
|
|
|
|
|
|
|
|
10.03+
|
|
Form of Director Restricted Stock Units Succeeding Grant Agreement
|
|
X
|
|
|
|
|
|
|
|
|
|
10.04+
|
|
Form of Director Restricted Stock Units Succeeding Grant Agreement for Mid-Year Directors
|
|
X
|
|
|
|
|
|
|
|
|
|
10.05+
|
|
Form of Director Restricted Stock Units Conversion Grant 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
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32.02*
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Section 1350 Certification (Chief Financial Officer)
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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101.LAB
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XBRL Taxonomy Extension Label Linkbase
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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Indicates a management contract or compensatory plan or arrangement.
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*
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This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended.
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5.
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Taxes
: You are ultimately liable and responsible for all taxes owed by you in connection with this Award. The Company makes no representation or undertaking regarding the tax treatment of the grant, vesting, or settlement of this Award or the subsequent sale of any of the Shares. The Company does not commit and is under no obligation to structure this Award to reduce or eliminate your tax liability.
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4.
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Rights as a Stockholder; Dividend Equivalent Rights
. You shall have no voting or other rights as a stockholder with respect to the Shares of Common Stock underlying the Award until such Shares of Common Stock have been issued to you. Notwithstanding the preceding sentence, you shall be entitled to receive payment of the equivalent of any and all dividends declared by the Company on its Common Stock on each date on which dividends are paid on and after the date of grant of the Award in an amount equal to the amount of such dividends multiplied by the number of Shares of Common Stock underlying the then outstanding portion of the Award. These dividend equivalents shall be paid upon the later of (a) the date dividends are paid to the common stockholders of the Company, or (b) the date the Restricted Stock Units with respect to which such dividend equivalents are payable become vested and the underlying Shares of Common Stock are issued (it being understood that no dividend equivalents will be paid with respect to Shares underlying any Restricted Stock Units that do not vest, but that dividend equivalent rights equal to the dividends declared on the Company's Common Stock from and after the date of grant of the unvested Restricted Stock Units shall be paid as and when such Restricted Stock Units vest and the underlying Shares of Common Stock are issued).
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5.
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Taxes
: You are ultimately liable and responsible for all taxes owed by you in connection with this Award. The Company makes no representation or undertaking regarding the tax treatment of the grant, vesting, or settlement of this Award or the subsequent sale of any of the Shares. The Company does not commit and is under no obligation to structure this Award to reduce or eliminate your tax liability.
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1.
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Termination
: In the event you experience a Termination prior to a Vesting Date, the following provisions will govern the vesting of this Award:
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(a)
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Termination Generally
: In the event of your Termination prior to a Vesting Date for any reason other than due to your death or Total Disability (or pursuant to Section 1(d), below), this Award will cease to vest and you will have no right or claim to the unvested portion of the Award, which shall terminate immediately following your Termination under this Section 1(a).
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(b)
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Termination due to Death
: In the event of your Termination prior to a Vesting Date due to your death, this Award will vest on the date of your Termination as to 100% of the Number of Shares.
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(c)
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Termination due to Total Disability
: In the event of your Termination prior to a Vesting Date due to your Total Disability, this Award will vest on the date of your Termination as to 100% of the Number of Shares. Total Disability is defined in Section 10.5(d) of the Plan.
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(d)
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In the event that the date of the annual meeting of the Company's stockholders occurs within twelve months of the prior year's annual meeting of the Company's stockholders (or within twelve months of the Date of Grant, if such Date of Grant is later than the first business day following the date of such prior year's annual meeting of the Company's stockholders), in the event of your Termination on the date of such annual meeting your Award will vest on the date of your Termination as to 100% of the Number of Shares.
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2.
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Corporate Transaction
: In the event of a Corporate Transaction (as defined in the Plan, subject to the sentence that follows), this Award will vest as to 100% of the Shares. Any transaction included in the definition of Corporate Transaction per the Plan that does not constitute a “change in the ownership or effective control” of the Company, or “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Treasury Regulations 1.409A-3(a)(5) and 1.409A-3(i)(5) shall not be treated as a Corporate Transaction for purposes of this Award.
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3.
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Automatic Deferral; Issuance of Shares under this Award
: Payment of the Award shall be automatically deferred until the earliest of: (a) five years from the Date of Grant; (b) Termination (for any reason); or (c) a Corporate Transaction (as described in Section 2, above) (the first to occur, the “Settlement Date”). The Company will issue you the Shares subject to this Award (a) as soon as practicable after the Settlement Date, and in no case later than December 31 of the year in which the Settlement Date occurs, or (b) in the event that you voluntarily make a valid election to further defer payment of the Award at a time and in the manner permitted under Section 409A of the Code, at the time specified in your election. All
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4.
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Rights as a Stockholder; Dividend Equivalent Rights
. You shall have no voting or other rights as a stockholder with respect to the Shares of Common Stock underlying the Award until such Shares of Common Stock have been issued to you. Notwithstanding the preceding sentence, you shall be entitled to receive payment of the equivalent of any and all dividends declared by the Company on its Common Stock on each date on which dividends are paid on and after the date of grant of the Award in an amount equal to the amount of such dividends multiplied by the number of Shares of Common Stock underlying the then outstanding portion of the Award. These dividend equivalents shall be paid upon the later of (a) the date dividends are paid to the common stockholders of the Company, or (b) the date the Restricted Stock Units with respect to which such dividend equivalents are payable become vested and the underlying Shares of Common Stock are issued (it being understood that no dividend equivalents will be paid with respect to Shares underlying any Restricted Stock Units that do not vest, but that dividend equivalent rights equal to the dividends declared on the Company's Common Stock from and after the date of grant of the unvested Restricted Stock Units shall be paid as and when such Restricted Stock Units vest and the underlying Shares of Common Stock are issued).
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5.
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Taxes
: You are ultimately liable and responsible for all taxes owed by you in connection with this Award. The Company makes no representation or undertaking regarding the tax treatment of the grant, vesting, or settlement of this Award or the subsequent sale of any of the Shares. The Company does not commit and is under no obligation to structure this Award to reduce or eliminate your tax liability.
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6.
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Disputes
: Any question concerning the interpretation of this Agreement and any controversy that may arise under this Agreement, shall be determined by the Committee. Such decision by the Committee shall be final and binding.
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7.
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Choice of Law
: Because this Agreement relates to terms and conditions under which you may be issued shares of Common Stock of Intuit Inc., a Delaware corporation, an essential term of this Agreement is that it shall be governed by the laws of the State of Delaware, without regard to choice of law principles of Delaware or other jurisdictions. Any action, suit, or proceeding relating to this Agreement or the Award granted hereunder shall be brought in the state or federal courts of competent jurisdiction in Santa Clara County in the State of California.
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4.
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Rights as a Stockholder; Dividend Equivalent Rights
. You shall have no voting or other rights as a stockholder with respect to the Shares of Common Stock underlying the Award until such Shares of Common Stock have been issued to you. Notwithstanding the preceding sentence, you shall be entitled to receive payment of the equivalent of any and all dividends declared by the Company on its Common Stock on each date on which dividends are paid on and after the date of grant of the Award in an amount equal to the amount of such dividends multiplied by the number of Shares of Common Stock underlying the then outstanding portion of the Award. These dividend equivalents shall be paid upon the later of (a) the date dividends are paid to the common stockholders of the Company, or (b) the date the Restricted Stock Units with respect to which such dividend equivalents are payable become vested and the underlying Shares of Common Stock are issued (it being understood that no dividend equivalents will be paid with respect to Shares underlying any Restricted Stock Units that do not vest, but that dividend equivalent rights equal to the dividends declared on the Company's Common Stock from and after the date of grant of the unvested Restricted Stock Units shall be paid as and when such Restricted Stock Units vest and the underlying Shares of Common Stock are issued).
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5.
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Taxes
: You are ultimately liable and responsible for all taxes owed by you in connection with this Award. The Company makes no representation or undertaking regarding the tax treatment of the grant, vesting, or settlement of this Award or the subsequent sale of any of the Shares. The Company does not commit and is under no obligation to structure this Award to reduce or eliminate your tax liability.
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4.
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Taxes
: You are ultimately liable and responsible for all taxes owed by you in connection with this Award. The Company makes no representation or undertaking regarding the tax treatment of the grant, vesting, or settlement of this Award or the subsequent sale of any of the Shares. The Company does not commit and is under no obligation to structure this Award to reduce or eliminate your tax liability.
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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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