intuit ceo shareholder meeting
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Intuit President and CEO, Brad Smith, met with stockholders on Thursday at the company’s Annual Shareholder meeting. During the meeting, Smith offered reflections on Intuit’s FY12 performance.TRANSCRIPT
Brad Smith
President & CEO
Annual Shareholder Meeting January 2013
Intuit - Confidential
Forward Looking Statements These presentation materials include forward-looking statements. There are a number of factors that could cause our results to differ materially from our expectations. Please see the section entitled “Cautions About Forward-Looking Statements” in the enclosed Appendix for information regarding forward-looking statements and related risks and uncertainties. You can also learn more about these risks in our Form 10-K for fiscal 2012 and our other SEC filings, which are available on the Investor Relations page of Intuit's website at www.intuit.com. We assume no obligation to update any forward-looking statement.
Non-GAAP Financial Measures These presentations include certain non-GAAP financial measures. Please see the section entitled “About Non-GAAP Financial Measures” in the enclosed Appendix for an explanation of management’s use of these measures and a reconciliation to the most directly comparable GAAP financial measures.
Intuit - Confidential
External Market Trends
Our Company Strategy
Reflections On Our Performance
Intuit - Confidential
External Market Trends
Our Company Strategy
Reflections On Our Performance
Intuit - Confidential
Revenue $4,151M 10%
Operating Income*
$1,404M 10%
EPS* $2.97 16%
FY’12 Financial Results
Actual Growth
*non-GAAP financial measure
My Reflections on FY’12 Performance
Intuit - Confidential
A solid year … we can do better
Grow organic revenue double digits #1
Grow revenue faster than expenses #2
Maintain a strong balance sheet
#3 Deploy cash to highest yield opportunities
#4
My Reflections on FY’12 Performance
Intuit - Confidential
• “We & Others”–Network Effects
• Product & Design Thinking
• Mobile First/Mobile Only
• Acquire & Delight New Users
Needs more work. . .
• Portfolio & Expense Mgt.
• Technical Debt Focus
• Mobile Momentum
• Rapid Experimentation
Making Progress. . .
• Talent Dev. & Engagement
My Reflections on FY’12 Performance
Intuit - Confidential
External Market Trends
Our Company Strategy
Reflections On Our Performance
Intuit - Confidential
1.9%
3.1% 3.6% 4.4% 3.5% 2.9% 4.1%
2.3%
1.2%
80
90
100
External Market Trends: Short Term
Small Business Indicators Small Business Indicators
Small Business Confidence Small Business Confidence
Small Business Confidence Small Business Revenue Index
Small Business Employment Index Savings Rate
5.0% 7.3%
9.9% 9.8% 8.1%
2008 2009 2010 2011 2012
U.S. Unemployment
Charge Volume: YoY Growth
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1
FY’11 FY’12
Consumer Indicators
7.1% 8.2%
5.6% 4.4% 3.8%
2008 2009 2010 2011 2012
2008 2009 2010 2011 2012
92
84 87.5
95
86.8
Q4
FY’13
Intuit - Confidential
2012 thru August
2008 2009 2010 2011 2012 thru August
-1.50%
0.00%
1.00%
Small Business Employment Index
2008 2009 2010 2011
-3.09% -2.90%
-0.18% 1.60% 0.09%
-4%
-2%
0%
2%
External Market Trends: Short Term
10
Small Business Indicators Small Business Indicators
80
90
100
2008 2009 2010 2011 2012
92
84
91 95
Small Business Confidence Small Business Confidence
Small Business Confidence Small Business Revenue Index
Savings Rate
7.1% 8.2%
5.6% 4.4% 4.0%
2008 2009 2010 2011 2012
1.9%
3.1% 3.6% 4.4% 3.5% 2.9%
4.1% 3.2%
5.0% 7.3%
9.9% 9.8% 8.1%
2008 2009 2010 2011 2012
U.S. Unemployment
Charge Volume: YoY Growth
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY’11 FY’12
Consumer Indicators
OUTLOOK: Sluggish Recovery
OPPORTUNITY: Our products are needed most in difficult times
Intuit - Confidential
Key takeaway: not immune, but resilient
FY'08 FY'09 FY'10 FY'11 FY'12
GDP Growth
$2,978 $3,073 $3,403
$3,772 $4,151
0%
-3%
2% 2% 2%
+10%
Intuit Revenue
Intuit - Confidential
Value Creation Shifts
Technology Shifts
Geographic Shifts
Implications
Demographic Shifts
Trends
Connected Services Economy
People and businesses increasingly turning to “connected services”
in a social, mobile, and global world
Traditional paper-based, human-produced, brick-
and-mortar bound services are the past
External Market Trends: longer term
Intuit - Confidential
FY’10-12 Operational Priorities
Intuit’s Strategy: how we accelerated results In
novati
on
Fo
r G
ro
wth
• SaaS & PaaS (cloud computing, services, 3rd party/social contrib., data)
• Mobile Computing (platforms/devices, applications, business models)
• “Always On” Delivery (high availability, scalability, security)
• Mobile 1st/Mobile Only (design, capabilities, new mkts & biz models)
• Network Effect Platforms (“we & those we enable” – virtuous circle)
• Data For Delight (NED, new/improved user outcomes, stewardship)
g
Accelerate Our Transition To Connected Services
Drive Growth In Our Core Businesses
Build Adjacent Businesses & Enter New Geographies
Intuit’s Growth Strategies
• Acquire New Users (expand our categories, delightful 1st use, social)
• Retain Users (deliver the customer benefit, active use, E2E delight)
• Increase Revenue/User (up-sell, cross-sell, beyond-user paid)
• Extend The Core (find and solve important new problems)
• Advantaged Payments Network (transform SMB remote payments)
• Accelerate Global (small business platform, localized by others)
Intuit - Confidential
What has resulted: strong, growing businesses
Customer Behavior by Market # of prospects/customers (units)
Manual/ Non-Cons.
Category Competitors
Non-Category Competitors
Mobile
Intuit NP vs. Closest Comp. (+/-)
Category Size, Growth & Position
Payroll 6M SMBs
Fin. Mgmt 29M SMBs
Payments 29M SMBs
ProTax 400K Accts
Cons. Tax 146M returns
Digital Bank 250M txn accts
Category Definitions
Online Desktop
+15 +19
Online
+24 +30
Desktop
+1
Online
+1
+17
Desktop
+6
End Customers
+18
Financial Institutions
• $2.5B • 7% CAGR • #1
• $4.4B • 2% CAGR • #1
• $12B • 5% CAGR • #6
• $1.9B • 4% CAGR • #1
• $1.8B • 5% CAGR • #1
• $9B • 5% CAGR • #2
+11
QBMAS
-13
Desktop
Intuit - Confidential
60
M C
usto
mers
45
M H
oste
d
What has resulted: improved portfolio & lives
improvement from FY10
64% of revenue from Connected Svcs.
55 mobile apps averaging 4.3 stars
FY08 FY12
50% 64%
$1.5B
$2.7B
# Active Users (M’s) Revenue ($M’s)
FY08 FY12
0.1 7M
FY08 FY12
0
$70M
Strong Innovation Pipeline
Connected Services Reshaping Revenue
Focusing On Mobile Devices
Help families put up to $1,000 back in their pockets… $2.4B+ in consumer savings identified to date
Help people get the maximum tax refund… $58B in tax refunds, 1 out of every 3 tax returns e-filed
Help small businesses be more profitable… Customers revenues ~25% of U.S. GDP, pay 1 in 12 American workers
Help accountants be more productive… Serve half of all accounting firms
Improve FI profit per customer by 20%… Internet Banking customers equal to the 5th largest U.S. bank
Improving
Lives 60M
Improving
Lives 30M
45M Hosted
15M Hosted
$100M 10X in FY’12 from products that
didn’t exist 3 years ago
Intuit - Confidential
Stock Price Performance (%)
ROIC = 23.9% +3 pts/year over year
102% of Free Cash Flow
$0.60/share $0.68/share
Return to Shareholders in FY’12
Cash Returned to Shareholders
Implementation of Dividend
$1.1B Buybacks
& Dividends
Return on Invested Capital in FY’12
NASDAQ 15%
Intuit 105%
-100%
0%
100%
200%
July 2012
Aug 2007
What has resulted: strong return on investment
GDP Growth
5 Year Revenue CAGR
5 Year Operating Income CAGR
5 Year EPS CAGR
FY'08 FY'09 FY'10 FY'11 FY'12
$2,978 $3,073 $3,403 $3,772 $4,151 +10%
0%
-3%
2% 2% 2%
FY'08 FY'09 FY'10 FY'11 FY'12
+13%
$858 $941 $1,130 $1,275 $1,404
FY'08 FY'09 FY'10 FY'11 FY'12
+16%
$1.60 $1.85 $2.18 $2.56 $2.97
Intuit Revenue
Intuit - Confidential
“Prediction is very difficult, especially about the future” – Yogi Berra The World of 2020 Implications for Intuit
The market is shifting: view of the horizon
Solutions for the “Free Agent” Market
Global Citizens & “Free Agents”
• Participation-driven innovation • Increase in user/developer value creation
• Expectation of open & frictionless
• Ecosystem and network effects win
Winning Products & Network Effect Platforms
Intuit - Confidential
“Prediction is very difficult, especially about the future” – Yogi Berra The World of 2020 Implications for Intuit
The market is shifting: view of the horizon
Solutions for the “Free Agent” Market
Global Citizens & “Free Agents”
• Participation-driven innovation • Increase in user/developer value creation
• Expectation of open & frictionless
• Ecosystem and network effects win
Winning Products & Network Effect Platforms
• A world without borders • The cloud has no “borders”… empowering all
• 1B new middle class in emerging markets
• 30+% of workers are “contingent”
Global Innovative Growth Company
Intuit - Confidential
“Prediction is very difficult, especially about the future” – Yogi Berra The World of 2020 Implications for Intuit
The market is shifting: view of the horizon
Solutions for the “Free Agent” Market
Global Citizens & “Free Agents”
• Participation-driven innovation • Increase in user/developer value creation
• Expectation of open & frictionless
• Ecosystem and network effects win
Winning Products & Network Effect Platforms
Global Innovative Growth Company
• The mobile experience prevails • Connected devices that work seamlessly
• More intuitive interfaces – voice & gesture
• Weaving a web of apps – “mini-tasks”
“Mobile Defined” Connected Experiences
• A world without borders • The cloud has no “borders”… empowering all
• 1B new middle class in emerging markets
• 30+% of workers are “contingent”
Intuit - Confidential
“Prediction is very difficult, especially about the future” – Yogi Berra The World of 2020 Implications for Intuit
The market is shifting: view of the horizon
Solutions for the “Free Agent” Market
Global Citizens & “Free Agents”
• Participation-driven innovation • Increase in user/developer value creation
• Expectation of open & frictionless
• Ecosystem and network effects win
Winning Products & Network Effect Platforms
Global Innovative Growth Company
• The mobile experience prevails • Connected devices that work seamlessly
• More intuitive interfaces – voice & gesture
• Weaving a web of apps – “mini-tasks”
“Mobile Defined” Connected Experiences
• Humanizing the data • Life & business through the lens of data
• Personal informatics/“Moneyball” for SMB
• Beyond compliance – stewards of trust
Big Data for the Little Guy
• A world without borders • The cloud has no “borders”… empowering all
• 1B new middle class in emerging markets
• 30+% of workers are “contingent”
Intuit - Confidential
“Prediction is very difficult, especially about the future” – Yogi Berra The World of 2020 Implications for Intuit
The market is shifting: view of the horizon
Solutions for the “Free Agent” Market
Global Citizens & “Free Agents”
• Participation-driven innovation • Increase in user/developer value creation
• Expectation of open & frictionless
• Ecosystem and network effects win
Winning Products & Network Effect Platforms
Global Innovative Growth Company
• The mobile experience prevails • Connected devices that work seamlessly
• More intuitive interfaces – voice & gesture
• Weaving a web of apps – “mini-tasks”
“Mobile Defined” Connected Experiences
• Humanizing the data • Life & business through the lens of data
• Personal informatics/“Moneyball” for SMB
• Beyond compliance – stewards of trust
Big Data for the Little Guy
• A world without borders • The cloud has no “borders”… empowering all
• 1B new middle class in emerging markets
• 30+% of workers are “contingent”
Intuit - Confidential
External Market Trends
Our Company Strategy
Reflections On Our Performance
Intuit - Confidential
Our Mission: why we exist as a company
…and those who serve them
We serve these end customers
Consumers Small Businesses
Accountants Financial
Institutions Healthcare
Players
3rd Party Contributors
Financial… making & saving money,
grow & profit
Productivity… turning drudgery into time
for what matters most
Compliance… without even having to
think about it
Confidence… from the wisdom &
experience of others
“Better Money Outcomes”
To improve our customers’ financial lives so profoundly… they can’t imagine going back to the old way
Intuit - Confidential
Our Values: what we stand for
Integrity Without Compromise 1
Delight Customers
It’s the People
Innovate and Improve
Own the Outcome
We Care and Give Back
2
3
4
5
6
Intuit - Confidential
• Deliver the customer benefit • They actively use • They proactively recommend
Love Metrics
Customer Driven Innovation
Design for Delight Customer Driven Innovation
Core capabilities: how we differentiate We strive to create an entrepreneurial environment where small teams
innovate to delight customers…
Intuit - Confidential
• Deliver the customer benefit • They actively use • They proactively recommend
Love Metrics
Customer Driven Innovation
Design for Delight Customer Driven Innovation
We strive to create an entrepreneurial environment where small teams innovate to delight customers…
Core capabilities: how we differentiate
Intuit - Confidential
• Deliver the customer benefit • They actively use • They proactively recommend
Love Metrics
Customer Driven Innovation
Design for Delight Customer Driven Innovation
We strive to create an entrepreneurial environment where small teams innovate to delight customers…
Lean Experiment Loop
Core capabilities: how we differentiate
Intuit - Confidential
High Performing Organization
Employee
Lots of Delighted Customers Higher Stock Price
• Contribute to a better world • Live Intuit’s Operating Values • Leader in Corporate Social Resp.
• Talented & engaged workforce • We have the talent & skills to
delight our customers and accelerate growth
• Employee Engagement >85%... no work group <80%
• Pride in our performance • “Most Admired” recognition • “Most Innovative” recognition • “Best Places To Work” recognition
• Grow user & contributor bases • New user & contributor growth • Existing user & contributor retention
• Offerings that delight customers • Performance against delivering
the customer benefit (# or %) • Net Promoter scores >10 pts
better than best alternatives
• Solve more customer problems • # offerings used per customer • # of customers using offerings
launched in last 3 years
• Confidence in long term growth potential & our ability to deliver on commitments
• Grow organic revenue double digits, supplemented by acquisitions
• Grow revenue faster than expenses • Generate op. income leverage • Generate strong cash flow in line with
operating income
• Deploy cash to high yield oppty… risk adjusted returns of 15+% • Organic & inorganic oppty’s • Repurchase Intuit securities • Dividend
• Maintain a strong, conservative balance sheet
True North: how we measure success
Deliver Best We Can Be Results in the Current Period for Employees, Customers, & Shareholders, While Building the Foundation for a Stronger Future
Customer Shareholder
Intuit - Confidential
Intuit’s Strategy: how we accelerate results In
no
vati
on
Fo
r G
ro
wth
29
g
Accelerate Our Transition To Connected Services
Build Adjacent Businesses & Enter New Geographies
Intuit’s Growth Strategies
Drive Growth In Our Core Businesses
Drive Growth In Our Core Businesses
Delivering Awesome Product Experiences
Intuit - Confidential
Intuit’s Strategy: how we accelerate results In
no
vati
on
Fo
r G
ro
wth
30
g
Accelerate Our Transition To Connected Services
Build Adjacent Businesses & Enter New Geographies
Intuit’s Growth Strategies
Delivering Awesome Product Experiences
Drive Growth In Our Core Businesses
Delivering Awesome Product Experiences
Intuit - Confidential
Intuit’s Strategy: how we accelerate results In
no
vati
on
Fo
r G
ro
wth
31
g
Accelerate Our Transition To Connected Services
Intuit’s Growth Strategies
Delivering Awesome Product Experiences
Build Adjacent Businesses & Enter New Geographies
Enabling the Contributions of Others-
“Network Effect Platforms”
Build Adjacent Businesses & Enter New Geographies
Intuit - Confidential
Intuit’s Strategy: how we accelerate results In
no
vati
on
Fo
r G
ro
wth
32
g
Accelerate Our Transition To Connected Services
Intuit’s Growth Strategies
Delivering Awesome Product Experiences
Enabling the Contributions of Others-
“Network Effect Platforms”
Build Adjacent Businesses & Enter New Geographies
Enabling the Contributions of Others-
“Network Effect Platforms”
Intuit - Confidential
Intuit’s Strategy: how we accelerate results In
no
vati
on
Fo
r G
ro
wth
33
g
Intuit’s Growth Strategies
Delivering Awesome Product Experiences
Enabling the Contributions of Others-
“Network Effect Platforms”
Accelerate Our Transition To Connected Services
Using Data to Create Delight
Accelerate Our Transition To Connected Services
Intuit - Confidential
Intuit’s Strategy: how we accelerate results In
no
vati
on
Fo
r G
ro
wth
34
g
Intuit’s Growth Strategies
Delivering Awesome Product Experiences
Enabling the Contributions of Others-
“Network Effect Platforms”
Using Data to Create Delight
Accelerate Our Transition To Connected Services
Using Data to Create Delight
Intuit - Confidential
FY’13-15 Operational Priorities
g
Using Data to Create Delight
Delivering Awesome Product Experiences
Enabling the Contributions of Others-
“Network Effect Platforms”
Intuit’s Growth Strategies
Intuit’s Strategy: how we accelerate results
• Amazing 1st Use Experiences: delivering the customer benefit
• Reimagining Mobile 1st/ Mobile Only: design and capabilities
• Solving Multi-Sided Problems Well: creating a virtuous circle
• Expanding Globally: platforms localized by users and developers
• Enabling Customer Data: better products & break-through benefits
To be a premier innovative growth company…
Accele
rati
ng
to
Co
nn
ecte
d S
ervic
es
Intuit - Confidential
Improving Our Customers’ Financial Lives So Profoundly…
Suppliers Gov’t
Developers
Consumers FIs
Accountants Employees
Small Businesses
Delivering awesome product experiences
Intuit - Confidential
Suppliers Gov’t
Developers
Consumers FIs
Accountants Employees
Small Businesses
Delivering awesome product experiences
Enabling the contributions of others
Improving Our Customers’ Financial Lives So Profoundly…
Intuit - Confidential
Suppliers Gov’t
Developers
Consumers FIs
Accountants Employees
Small Businesses
More than $2.4B in savings identified
Delivering awesome product experiences
Enabling the contributions of others
Using data to create delight
Improving Our Customers’ Financial Lives So Profoundly…
Intuit - Confidential
Suppliers Gov’t
Developers
Consumers FIs
Accountants Employees
Small Businesses
Delivering awesome product experiences
Enabling the contributions of others
Using data to create delight
Improving Our Customers’ Financial Lives So Profoundly…
Intuit - Confidential
Summary
We have strong assets & clear strategy to win
Our value proposition resonates… in the current period & longer term
Execution in FY12 was solid… but we can do better
“Prediction is very difficult, especially about the future” – Yogi Berra The World of 2020 Implications for Intuit
The market is shifting: view of the horizon
Solutions for the “Free Agent” Market
Global Citizens & “Free Agents”
33
• Participation-driven innovation • Increase in user/developer value creation
• Expectation of open & frictionless
• Ecosystem and network effects win
Winning Products & Network Effect Platforms
Global Innovative Growth Company
• The mobile experience prevails • Connected devices that work seamlessly
• More intuitive interfaces – voice & gesture
• Weaving a web of apps – “mini-tasks”
“Mobile Defined” Connected Experiences
• Humanizing the data • Life & business through the lens of data
• Personal informatics/“Moneyball” for SMB
• Beyond compliance – stewards of trust
Big Data for the Little Guy
• A world without borders • The cloud has no “borders”… empowering all
• 1B new middle class in emerging markets
• 30+% of workers are “contingent”
Appendix
Intuit - Confidential
TABLE 1: RECONCILIATIONS OF HISTORICAL NON-GAAP FINANCIAL MEASURES TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
2012 2011 2010 2009 2008 2007
GAAP operating income from continuing operations $1,177 $1,037 $904 $703 $662 $630
Amortization of acquired technology 14 12 43 54 51 29
Amortization of other acquired intangible assets 39 43 42 41 34 20
Charge for historical use of technology licensing rights - - - 13 - -
Goodwill and intangible asset impairment charge - 30 - - - -
Professional fees for business combinations 5 - 7 - - -
Share-based compensation expense 169 153 134 130 111 76
Non-GAAP operating income $1,404 $1,275 $1,130 $941 $858 $755
GAAP net income $792 $634 $574 $447 $477 $440
Amortization of acquired technology 14 12 43 54 51 29
Amortization of other acquired intangible assets 39 43 42 41 34 20
Charge for historical use of technology licensing rights - - - 13 - -
Goodwill and intangible asset impairment charge - 30 - - - -
Professional fees for business combinations 5 - 7 - - -
Share-based compensation expense 169 153 134 130 111 76
Pre-tax (gain) loss on disposal of assets and businesses - - - - (52) (32)
Net gains on debt securities and other investments (16) (2) (1) (1) (1) (2)
Income tax effects of non-GAAP adjustments (72) (75) (81) (86) (56) (28)
Discontinued operations (25) 18 (10) 12 (20) (1)
Non-GAAP net income $906 $813 $708 $610 $544 $502
GAAP diluted net income per share $2.60 $2.00 $1.77 $1.35 $1.41 $1.24
Non-GAAP diluted net income per share $2.97 $2.56 $2.18 $1.85 $1.60 $1.41
Shares used in diluted per share amounts 305 317 325 330 339 356
Non-GAAP tax rate 34% 34% 35% 33% 36% 36%
See "About Non-GAAP Financial Measures" immediately following Table 1 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.
(Dollars in millions, except per share amounts)
Intuit - Confidential
INTUIT INC. ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying presentation dated January 17, 2013 contains non-GAAP financial measures. Table 1 reconciles the non-GAAP financial measures in that presentation to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP net income (loss) per share, and free cash flow. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures. We exclude the following items from all of our non-GAAP financial measures: • Share-based compensation expense • Amortization of acquired technology • Amortization of other acquired intangible assets • Goodwill and intangible asset impairment charges • Charges for historical use of technology licensing rights • Professional fees for business combinations We also exclude the following items from non-GAAP net income (loss) and diluted net income (loss) per share: • Gains and losses on debt securities and other investments • Income tax effects of excluded items and certain discrete tax items • Discontinued operations
About Non-GAAP Financial Measures
Intuit - Confidential
We believe that these non-GAAP financial measures provide meaningful supplemental information regarding Intuit’s operating results primarily because they exclude amounts that we do not consider part of ongoing operating results when planning and forecasting and when assessing the performance of the organization, our individual operating segments, or our senior management. Segment managers are not held accountable for share-based compensation expense, amortization, or the other excluded items and, accordingly, we exclude these amounts from our measures of segment performance. We believe that our non-GAAP financial measures also facilitate the comparison by management and investors of results for current periods and guidance for future periods with results for past periods. The following are descriptions of the items we exclude from our non-GAAP financial measures. Share-based compensation expenses. These consist of non-cash expenses for stock options, restricted stock units and our Employee Stock Purchase Plan. When considering the impact of equity awards, we place greater emphasis on overall shareholder dilution rather than the accounting charges associated with those awards. Amortization of acquired technology and amortization of other acquired intangible assets. When we acquire an entity, we are required by GAAP to record the fair values of the intangible assets of the entity and amortize them over their useful lives. Amortization of acquired technology in cost of revenue includes amortization of software and other technology assets of acquired entities. Amortization of other acquired intangible assets in operating expenses includes amortization of assets such as customer lists, covenants not to compete and trade names. Goodwill and intangible asset impairment charges. We exclude from our non-GAAP financial measures non-cash charges to adjust the carrying values of goodwill and other acquired intangible assets to their estimated fair values. Charges for historical use of technology licensing rights. We exclude from our non-GAAP financial measures the portion of technology licensing fees that relates to historical use of that technology. Professional fees for business combinations. We exclude from our non-GAAP financial measures the professional fees we incur to complete business combinations. These include investment banking, legal and accounting fees. Gains and losses on debt securities and other investments. We exclude from our non-GAAP financial measures gains and losses that we record when we sell or impair available-for-sale debt securities and other investments. Income tax effects of excluded items and certain discrete tax items. We exclude from our non-GAAP financial measures the income tax effects of the items described above, as well as income tax effects related to business combinations. In addition, the effects of one-time income tax adjustments recorded in a specific quarter for GAAP purposes are reflected on a forecasted basis in our non-GAAP financial measures. This is consistent with how we plan, forecast and evaluate our operating results. Operating results and gains and losses on the sale of discontinued operations. From time to time, we sell or otherwise dispose of selected operations as we adjust our portfolio of businesses to meet our strategic goals. In accordance with GAAP, we segregate the operating results of discontinued operations as well as gains and losses on the sale of these discontinued operations from continuing operations on our GAAP statements of operations but continue to include them in GAAP net income or loss and net income or loss per share. We exclude these amounts from our non-GAAP financial measures. .
About Non-GAAP Financial Measures (cont)
Intuit - Confidential
This presentation includes "forward-looking statements" which are subject to safe harbors created under the U.S. federal securities laws. All statements included in
this presentation that address activities, events or developments that Intuit expects, believes or anticipates will or may occur in the future are forward looking
statements, including: our expected market, customer and share growth; our opportunities and strategies to grow our business; our expected revenue, operating
income and earnings per share results and growth; our expectations regarding future dividends and ROIC improvements; our expectations for our product and service
offerings and cross-sell opportunities; and future market trends. Because these forward-looking statements involve risks and uncertainties, there are important
factors that could cause our actual results to differ materially from the expectations expressed in the forward-looking statements. These factors include, without
limitation, the following: inherent difficulty in predicting consumer behavior; difficulties in receiving, processing, or filing customer tax submissions; consumers may
not respond as we expected to our advertising and promotional activities; product introductions and price competition from our competitors can have unpredictable
negative effects on our revenue, profitability and market position; governmental encroachment in our tax businesses or other governmental activities or public policy
affecting the preparation and filing of tax returns could negatively affect our operating results and market position; we may not be able to successfully innovate and
introduce new offerings and business models to meet our growth and profitability objectives, and current and future products and services may not adequately
address customer needs and may not achieve broad market acceptance, which could harm our operating results and financial condition; business interruption or
failure of our information technology and communication systems may impair the availability of our products and services, which may damage our reputation and
harm our future financial results; as we upgrade and consolidate our customer facing applications and supporting information technology infrastructure, any problems
with these implementations could interfere with our ability to deliver our offerings; any failure to properly use and protect personal customer information and data
could harm our revenue, earnings and reputation; if we are unable to develop, manage and maintain critical third party business relationships, our business may be
adversely affected; increased government regulation of our businesses may harm our operating results; if we fail to process transactions effectively or fail to
adequately protect against potential fraudulent activities, our revenue and earnings may be harmed; any significant offering quality problems or delays in our
offerings could harm our revenue, earnings and reputation; our participation in the Free File Alliance may result in lost revenue opportunities and cannibalization of
our traditional paid franchise; the continuing global economic downturn may continue to impact consumer and small business spending, financial institutions and tax
filings, which could negatively affect our revenue and profitability; our businesses are highly seasonal and the timing of our revenue between quarters is difficult to
predict, which may cause significant quarterly fluctuations in our financial results; our financial position may not make repurchasing shares or declaring dividends
advisable; our inability to adequately protect our intellectual property rights may weaken our competitive position and reduce our revenue and earnings; our
acquisition and divestiture activities may disrupt our ongoing business, may involve increased expenses and may present risks not contemplated at the time of the
transactions; our use of significant amounts of debt to finance acquisitions or other activities could harm our financial condition and results of operation; and litigation
involving intellectual property, antitrust, shareholder and other matters may increase our costs. More details about these and other risks that may impact our
business are included in our Form 10-K for fiscal 2012 and in our other SEC filings, available through our website at www.intuit.com. Fiscal 2013 guidance speaks
only as of the date it was publicly issued by Intuit. Other forward-looking statements represent the judgment of the management of Intuit as of the date of this
presentation. We do not undertake any duty to update any forward-looking statement or other information in this presentation.
Cautions About Forward-Looking Statements