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Intuit Grows First-quarter Revenue 12 Percent; Reiterates Full-year Guidance

Stocks in this article: INTU

[C] On September 17, 2012 we sold our Intuit Websites business, which was a component of our Financial Management Solutions reporting segment, for approximately $60 million in cash and recorded a gain on disposal of approximately $32 million, net of income taxes.

We determined that Intuit Websites became discontinued operations in the fourth quarter of fiscal 2012. We have therefore segregated the operating results of Intuit Websites from continuing operations in our statements of operations for all periods prior to the sale. Net revenue from Intuit Websites was $9 million for the three months ended October 31, 2012 and $19 million for the three months ended October 31, 2011.

Net assets held for sale at July 31, 2012 consisted primarily of operating assets and liabilities that were not material, so we have not segregated them on our balance sheets. Because operating cash flows from the Intuit Websites business were also not material for any period presented, we have not segregated them from continuing operations on our statements of cash flows.

           

TABLE B

INTUIT INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES

(In millions, except per share amounts)

(Unaudited)

 

Three Months Ended

October 31, 2012       October 31, 2011
GAAP operating loss from continuing operations $ (69 ) $ (84 )
Amortization of acquired technology 5 3
Amortization of other acquired intangible assets 7 21
Share-based compensation expense 49   40  
Non-GAAP operating loss from continuing operations $ (8 ) $ (20 )
 
GAAP net loss $ (19 ) $ (64 )
Amortization of acquired technology 5 3
Amortization of other acquired intangible assets 7 21
Share-based compensation expense 49 40
Net gains on debt securities and other investments (11 )
Income tax effect of non-GAAP adjustments (19 ) (18 )
Net income (loss) from discontinued operations (32 ) 6  
Non-GAAP net loss $ (9 ) $ (23 )
 
GAAP diluted net loss per share $ (0.06 ) $ (0.21 )
Amortization of acquired technology 0.02 0.01
Amortization of other acquired intangible assets 0.02 0.07
Share-based compensation expense 0.17 0.13
Net gains on debt securities and other investments (0.04 )
Income tax effect of non-GAAP adjustments (0.07 ) (0.06 )
Net income (loss) from discontinued operations (0.11 ) 0.02  
Non-GAAP diluted net loss per share $ (0.03 ) $ (0.08 )
 
Shares used in diluted per share calculation 296   300  
 

See “About Non-GAAP Financial Measures” immediately following Table E for information on these measures, the items excluded from the most directly comparable GAAP measures in arriving at non-GAAP financial measures, and the reasons management uses each measure and excludes the specified amounts in arriving at each non-GAAP financial measure.

   

TABLE C

INTUIT INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

 

October 31, 2012

July 31, 2012

ASSETS
Current assets:
Cash and cash equivalents $ 216 $ 393
Investments 342 351
Accounts receivable, net 184 183
Income taxes receivable 165 53
Deferred income taxes 133 184
Prepaid expenses and other current assets 85   69
Current assets before funds held for customers 1,125 1,233
Funds held for customers 209   290
Total current assets 1,334 1,523
 
Long-term investments 75 75
Property and equipment, net 595 567
Goodwill 2,191 2,200
Acquired intangible assets, net 201 213
Other assets 98   106
Total assets $ 4,494   $ 4,684
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 167 $ 157
Accrued compensation and related liabilities 135 231
Deferred revenue 421 443
Other current liabilities 142   144
Current liabilities before customer fund deposits 865 975
Customer fund deposits 209   290
Total current liabilities 1,074 1,265
 
Long-term debt 499 499
Other long-term obligations 176   176
Total liabilities 1,749   1,940
 
Stockholders’ equity 2,745   2,744
Total liabilities and stockholders’ equity $ 4,494   $ 4,684
 
           

TABLE D

INTUIT INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 

Three Months Ended

October 31, 2012       October 31, 2011
Cash flows from operating activities:
Net loss $ (19 ) $ (64 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 40 44
Amortization of acquired intangible assets 14 28
Share-based compensation expense 49 40
Pre-tax gain on sale of discontinued operations (53 )
Deferred income taxes 53 (5 )
Tax benefit from share-based compensation plans 44 30
Excess tax benefit from share-based compensation plans (44 ) (29 )
Other 4   (6 )
Total adjustments 107   102  
Changes in operating assets and liabilities:
Accounts receivable (1 ) 5
Prepaid expenses, income taxes receivable and other assets (128 ) (78 )
Accounts payable 12 39
Accrued compensation and related liabilities (96 ) (74 )
Deferred revenue (16 ) (25 )
Income taxes payable 1
Other liabilities (4 ) (16 )
Total changes in operating assets and liabilities (233 ) (148 )
Net cash used in operating activities (145 ) (110 )
Cash flows from investing activities:
Purchases of available-for-sale debt securities (87 ) (197 )
Sales of available-for-sale debt securities 81 136
Maturities of available-for-sale debt securities 21 41
Net change in money market funds and other cash equivalents held to satisfy customer fund obligations 81 93
Net change in customer fund deposits (81 ) (93 )
Purchases of property and equipment (70 ) (44 )
Proceeds from divestiture of businesses 60
Other (5 ) 14  
Net cash provided by (used in) investing activities   (50 )
Cash flows from financing activities:
Net proceeds from issuance of treasury stock under employee stock plans 73 45
Purchases of treasury stock (100 ) (255 )
Cash dividends paid to stockholders (50 ) (45 )
Excess tax benefit from share-based compensation plans 44   29  
Net cash used in financing activities (33 ) (226 )
Effect of exchange rates on cash and cash equivalents 1   (3 )
Net decrease in cash and cash equivalents (177 ) (389 )
Cash and cash equivalents at beginning of period 393   722  
Cash and cash equivalents at end of period $ 216   $ 333  
 

TABLE E

INTUIT INC.
RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL MEASURES
TO PROJECTED GAAP REVENUE, OPERATING INCOME (LOSS), AND EPS
(In millions, except per share amounts)
(Unaudited)
 

Forward-Looking Guidance

GAAP

Range of Estimate

      Non-GAAP

Range of Estimate

From   To Adjmts From   To
Three Months Ending January 31, 2013
Revenue $ 1,020 $ 1,040 $ $ 1,020 $ 1,040
Operating income $ 130 $ 150 $ 60 [a] $ 190 $ 210
Diluted earnings per share $ 0.27 $ 0.30 $ 0.13 [b] $ 0.40 $ 0.43
 
Three Months Ending April 30, 2013
Revenue $ 2,155 $ 2,215 $ $ 2,155 $ 2,215
Diluted earnings per share $ 2.65 $ 2.70 $ 0.13 [c] $ 2.78 $ 2.83
 
Three Months Ending July 31, 2013
Revenue $ 728 $ 748 $ $ 728 $ 748
Diluted earnings per share $ (0.01 ) $ 0.01 $ 0.13 [d] $ 0.12 $ 0.14
 
Twelve Months Ending July 31, 2013
Revenue $ 4,550 $ 4,650 $ $ 4,550 $ 4,650
Operating income $ 1,315 $ 1,345 $ 255 [e] $ 1,570 $ 1,600
Diluted earnings per share $ 2.76 $ 2.82 $ 0.56 [f] $ 3.32 $ 3.38

See “About Non-GAAP Financial Measures” immediately following this Table E for information on these measures, the items excluded from the most directly comparable GAAP measures in arriving at non-GAAP financial measures, and the reasons management uses each measure and excludes the specified amounts in arriving at each non-GAAP financial measure.

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