INTUIT INC, 10-Q filed on 2/21/2014
Quarterly Report
Document and Entity Information Document
6 Months Ended
Jan. 31, 2014
Feb. 17, 2014
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
INTUIT INC 
 
Entity Central Index Key
0000896878 
 
Current Fiscal Year End Date
--07-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Jan. 31, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
283,313,817 
Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jan. 31, 2014
Jan. 31, 2013
Jan. 31, 2014
Jan. 31, 2013
Net revenue:
 
 
 
 
Product
$ 287 
$ 402 
$ 516 
$ 629 
Service and other
495 
482 
888 
817 
Total net revenue
782 
884 
1,404 
1,446 
Cost of revenue:
 
 
 
 
Cost of product revenue
45 
40 
74 
72 
Cost of service and other revenue
125 
121 
233 
224 
Amortization of acquired technology
6 
5 
12 
9 
Selling and marketing
352 
351 
610 
578 
Research and development
186 
169 
362 
337 
General and administrative
109 
107 
227 
201 
Amortization of other acquired intangible assets
5 
7 
9 
14 
Total costs and expenses
828 
800 
1,527 
1,435 
Operating income (loss) from continuing operations
(46)
84 
(123)
11 
Interest expense
(8)
(7)
(16)
(15)
Interest and other income, net
0 
1 
5 
3 
Income (loss) before income taxes
(54)
78 
(134)
(1)
Income tax provision (benefit)
(17)
13 
(40)
(12)
Net income (loss) from continuing operations
(37)
65 
(94)
11 
Net income from discontinued operations
0 
6 
46 
41 
Net income (loss)
$ (37)
$ 71 
$ (48)
$ 52 
Basic Net Income (Loss) Per Share
 
 
 
 
Basic net income (loss) per share from continuing operations
$ (0.13)
$ 0.22 
$ (0.33)
$ 0.04 
Basic net income per share from discontinued operations
$ 0.00 
$ 0.02 
$ 0.16 
$ 0.14 
Basic net income (loss) per share
$ (0.13)
$ 0.24 
$ (0.17)
$ 0.18 
Shares used in basic per share calculations
284 
296 
286 
296 
Diluted Net Income (Loss) Per Share
 
 
 
 
Diluted net income (loss) per share from continuing operations
$ (0.13)
$ 0.21 
$ (0.33)
$ 0.04 
Diluted net income per share from discontinued operations
$ 0.00 
$ 0.02 
$ 0.16 
$ 0.13 
Diluted net income (loss) per share
$ (0.13)
$ 0.23 
$ (0.17)
$ 0.17 
Shares used in diluted per share calculations
284 
303 
286 
302 
Dividends declared per common share
$ 0.19 
$ 0.17 
$ 0.38 
$ 0.34 
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jan. 31, 2014
Jan. 31, 2013
Jan. 31, 2014
Jan. 31, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income (loss)
$ (37)
$ 71 
$ (48)
$ 52 
Other comprehensive income (loss), net of income taxes:
 
 
 
 
Unrealized gains on available-for-sale debt securities
0 
0 
2 
0 
Unrealized gains on available-for-sale equity securities
(3)
0 
(4)
3 
Foreign currency translation gains (losses)
(6)
0 
(8)
1 
Total other comprehensive income (loss), net
(9)
0 
(10)
4 
Comprehensive income (loss)
$ (46)
$ 71 
$ (58)
$ 56 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Millions, unless otherwise specified
Jan. 31, 2014
Jul. 31, 2013
Current assets:
 
 
Cash and cash equivalents
$ 625 
$ 1,009 
Investments
706 
652 
Accounts receivable, net
435 
130 
Income taxes receivable
223 
62 
Deferred income taxes
135 
166 
Prepaid expenses and other current assets
127 
98 
Current assets of discontinued operations
0 
44 
Current assets before funds held for customers
2,251 
2,161 
Funds held for customers
290 
235 
Total current assets
2,541 
2,396 
Long-term investments
45 
83 
Property and equipment, net
573 
555 
Goodwill
1,295 
1,246 
Acquired intangible assets, net
158 
149 
Other assets
106 
102 
Long-term assets of discontinued operations
0 
955 
Total assets
4,718 
5,486 
Current liabilities:
 
 
Accounts payable
225 
137 
Accrued compensation and related liabilities
182 
218 
Deferred revenue
833 
495 
Other current liabilities
260 
156 
Current liabilities of discontinued operations
0 
39 
Current liabilities before customer fund deposits
1,500 
1,045 
Customer fund deposits
290 
235 
Total current liabilities
1,790 
1,280 
Long-term debt
499 
499 
Other long-term obligations
194 
167 
Long-term obligations of discontinued operations
0 
9 
Total liabilities
2,483 
1,955 
Commitments and contingencies
   
   
Stockholders’ equity:
 
 
Preferred stock
0 
0 
Common stock and additional paid-in capital
3,376 
3,201 
Treasury stock, at cost
(6,254)
(4,952)
Accumulated other comprehensive income
10 
20 
Retained earnings
5,103 
5,262 
Total stockholders’ equity
2,235 
3,531 
Total liabilities and stockholders’ equity
$ 4,718 
$ 5,486 
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
Total
USD ($)
Shares of Common Stock [Member]
Common Stock and Additional Paid In Capital [Member]
USD ($)
Treasury Stock [Member]
USD ($)
Accumulated Other Comprehensive Income [Member]
USD ($)
Retained Earnings [Member]
USD ($)
Beginning Balance at Jul. 31, 2012
$ 2,744 
 
$ 3,018 
$ (4,911)
$ 25 
$ 4,612 
Beginning Balance, shares at Jul. 31, 2012
 
295,289 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Comprehensive Income (Loss)
56 
 
 
 
4 
52 
Issuance of stock under employee stock plans, shares
 
4,814 
 
 
 
 
Issuance of treasury stock under employee stock plans
141 
 
16 
125 
 
 
Stock repurchases under stock repurchase programs, shares
(3,400)
(3,361)
 
 
 
 
Stock repurchases under stock repurchase programs
(200)
 
 
(200)
 
 
Cash dividends declared
(101)
 
 
 
 
(101)
Tax benefit from share-based compensation plans
56 
 
56 
 
 
 
Share-based compensation expense
96 
 
96 
 
 
 
Ending Balance at Jan. 31, 2013
2,792 
 
3,186 
(4,986)
29 
4,563 
Ending Balance, shares at Jan. 31, 2013
 
296,742 
 
 
 
 
Beginning Balance at Jul. 31, 2013
3,531 
 
3,201 
(4,952)
20 
5,262 
Beginning Balance, shares at Jul. 31, 2013
 
299,503 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Comprehensive Income (Loss)
(58)
 
 
 
(10)
(48)
Issuance of stock under employee stock plans, shares
 
4,188 
 
 
 
 
Issuance of treasury stock under employee stock plans
133 
 
33 
100 
 
 
Stock repurchases under stock repurchase programs, shares
(20,200)
(20,178)
 
 
 
 
Stock repurchases under stock repurchase programs
(1,402)
 
0 
(1,402)
 
 
Cash dividends declared
(111)
 
 
 
 
(111)
Tax benefit from share-based compensation plans
43 
 
43 
 
 
 
Share-based compensation expense
99 
 
99 
 
 
 
Ending Balance at Jan. 31, 2014
$ 2,235 
 
$ 3,376 
$ (6,254)
$ 10 
$ 5,103 
Ending Balance, shares at Jan. 31, 2014
 
283,513 
 
 
 
 
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical)
3 Months Ended 6 Months Ended
Jan. 31, 2014
Jan. 31, 2013
Jan. 31, 2014
Jan. 31, 2013
Statement of Stockholders' Equity [Abstract]
 
 
 
 
Dividends declared per common share
$ 0.19 
$ 0.17 
$ 0.38 
$ 0.34 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jan. 31, 2014
Jan. 31, 2013
Cash flows from operating activities:
 
 
Net income (loss)
$ (48)
$ 52 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
Depreciation
75 
82 
Amortization of acquired intangible assets
25 
30 
Share-based compensation expense
99 
96 
Pre-tax gain on sale of discontinued operations
(40)
(53)
Deferred income taxes
66 
48 
Tax benefit from share-based compensation plans
43 
56 
Excess tax benefit from share-based compensation plans
(43)
(56)
Other
11 
9 
Total adjustments
236 
212 
Changes in operating assets and liabilities:
 
 
Accounts receivable
(308)
(358)
Income taxes receivable
(161)
(104)
Prepaid expenses and other assets
(29)
(41)
Accounts payable
88 
58 
Accrued compensation and related liabilities
(49)
(48)
Deferred revenue
326 
217 
Other liabilities
87 
123 
Total changes in operating assets and liabilities
(46)
(153)
Net cash provided by operating activities
142 
111 
Cash flows from investing activities:
 
 
Purchases of available-for-sale debt securities
(320)
(210)
Sales of available-for-sale debt securities
145 
190 
Maturities of available-for-sale debt securities
147 
95 
Net change in money market funds and other cash equivalents held to satisfy customer fund obligations
(55)
6 
Net change in customer fund deposits
55 
(6)
Purchases of property and equipment
(93)
(115)
Acquisitions of businesses, net of cash acquired
(66)
(3)
Acquisitions of intangible assets, net of cash acquired
0 
(2)
Proceeds from divestiture of businesses
1,025 
60 
Other
(10)
(17)
Net cash provided by (used) in investing activities
828 
(2)
Cash flows from financing activities:
 
 
Net proceeds from issuance of stock under employee stock plans
125 
141 
Purchases of treasury stock
(1,402)
(200)
Cash dividends paid to stockholders
(111)
(101)
Excess tax benefit from share-based compensation plans
43 
56 
Net cash used in financing activities
(1,345)
(104)
Effect of exchange rates on cash and cash equivalents
(9)
1 
Net increase (decrease) in cash and cash equivalents
(384)
6 
Cash and cash equivalents at beginning of period
1,009 
393 
Cash and cash equivalents at end of period
$ 625 
$ 399 
Description of Business and Summary of Significant Accounting Policies
Description of Business and Summary of Significant Accounting Policies
Description of Business and Summary of Significant Accounting Policies
Description of Business
Intuit Inc. provides business and financial management solutions for small businesses, consumers, and accounting professionals. With flagship products and services that include QuickBooks, TurboTax and Quicken, we help customers solve important business and financial management problems, such as running a small business, paying bills, filing income tax returns, and managing personal finances. ProSeries and Lacerte are Intuit’s tax preparation offerings for professional accountants. Incorporated in 1984 and headquartered in Mountain View, California, we sell our products and services primarily in the United States.
Basis of Presentation
These condensed consolidated financial statements include the financial statements of Intuit and its wholly owned subsidiaries. We have eliminated all significant intercompany balances and transactions in consolidation. We have included all adjustments, consisting only of normal recurring items, which we considered necessary for a fair presentation of our financial results for the interim periods presented. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation, including amounts related to discontinued operations and reportable segments. See Note 4, “Discontinued Operations,” and Note 10, “Segment Information,” for more information.
As discussed in Note 4, we sold our Intuit Websites business in September 2012. In August 2013 we sold our Intuit Financial Services (IFS) business and our Intuit Health business. We have reclassified our statements of operations for all periods presented to reflect these three businesses as discontinued operations. We have also segregated the net assets of IFS from continuing operations on our balance sheet at July 31, 2013. The net assets of Intuit Websites and Intuit Health were not significant, so we have not segregated them from continuing operations on our balance sheet at July 31, 2013. Because the cash flows of our Intuit Websites, IFS, and Intuit Health discontinued operations were not material for any period presented, we have not segregated the cash flows of those businesses from continuing operations on our statements of cash flows. Unless noted otherwise, discussions in these notes pertain to our continuing operations.
These unaudited condensed consolidated financial statements and accompanying notes should be read together with the audited consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2013. Results for the six months ended January 31, 2014 do not necessarily indicate the results we expect for the fiscal year ending July 31, 2014 or any other future period.
Seasonality
Our QuickBooks, Consumer Tax, and Professional Tax offerings are highly seasonal. Revenue from our QuickBooks software products tends to be highest during our second and third fiscal quarters. Sales of income tax preparation products and services are heavily concentrated in the period from November through April. These seasonal patterns mean that our total net revenue is usually highest during our second quarter ending January 31 and third quarter ending April 30. We typically report losses in our first quarter ending October 31 and fourth quarter ending July 31. During these quarters, revenue from our tax businesses is minimal while core operating expenses such as research and development continue at relatively consistent levels.
Significant Accounting Policies
We describe our significant accounting policies in Note 1 to the financial statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2013. There have been no changes to our significant accounting policies during the first six months of fiscal 2014.
Computation of Net Income (Loss) Per Share
We compute basic net income or loss per share using the weighted average number of common shares outstanding during the period. We compute diluted net income per share using the weighted average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares include shares issuable upon the exercise of stock options and upon the vesting of restricted stock units (RSUs) under the treasury stock method.
We include stock options with combined exercise prices, unrecognized compensation expense and tax benefits that are less than the average market price for our common stock, and RSUs with unrecognized compensation expense and tax benefits that are less than the average market price for our common stock, in the calculation of diluted net income per share. We exclude stock options with combined exercise prices, unrecognized compensation expense and tax benefits that are greater than the average market price for our common stock, and RSUs with unrecognized compensation expense and tax benefits that are greater than the average market price for our common stock, from the calculation of diluted net income per share because their effect is anti-dilutive. Under the treasury stock method, the amount that must be paid to exercise stock options, the amount of compensation expense for future service that we have not yet recognized for stock options and RSUs, and the amount of tax benefits that will be recorded in additional paid-in capital when the awards become deductible are assumed to be used to repurchase shares.
In loss periods, basic net loss per share and diluted net loss per share are the same since the effect of potential common shares is anti-dilutive and therefore excluded.
The following table presents the composition of shares used in the computation of basic and diluted net income (loss) per share for the periods indicated.
 
Three Months Ended
 
 Six Months Ended
(In millions, except per share amounts)
January 31,
2014
 
January 31,
2013
 
January 31,
2014
 
January 31,
2013
Numerator:
 
 
 
 
 
 
 
Net income (loss) from continuing operations
$
(37
)
 
$
65

 
$
(94
)
 
$
11

Net income from discontinued operations
—

 
6

 
46

 
41

Net income (loss)
$
(37
)
 
$
71

 
$
(48
)
 
$
52

 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
Shares used in basic per share amounts:
 
 
 
 
 
 
 
Weighted average common shares outstanding
284

 
296

 
286

 
296

 
 
 
 
 
 
 
 
Shares used in diluted per share amounts:
 
 
 
 
 
 
 
Weighted average common shares outstanding
284

 
296

 
286

 
296

Dilutive common equivalent shares from stock options
 
 
 
 
 
 
 
and restricted stock awards
—

 
7

 
—

 
6

Dilutive weighted average common shares outstanding
284

 
303

 
286

 
302

 
 
 
 
 
 
 
 
Basic and diluted net income (loss) per share:
 
 
 
 
 
 
 
Basic net income (loss) per share from continuing operations
$
(0.13
)
 
$
0.22

 
$
(0.33
)
 
$
0.04

Basic net income per share from discontinued operations
—

 
0.02

 
0.16

 
0.14

Basic net income (loss) per share
$
(0.13
)
 
$
0.24

 
$
(0.17
)
 
$
0.18

 
 
 
 
 
 
 
 
Diluted net income (loss) per share from continuing operations
$
(0.13
)
 
$
0.21

 
$
(0.33
)
 
$
0.04

Diluted net income per share from discontinued operations
—

 
0.02

 
0.16

 
0.13

Diluted net income (loss) per share
$
(0.13
)
 
$
0.23

 
$
(0.17
)
 
$
0.17

 
 
 
 
 
 
 
 
Shares excluded from computation of diluted net income (loss) per share:
 
 
 
 
 
 
 
Weighted average stock options and restricted stock units that would have been included in the computation of dilutive common equivalent shares outstanding if net income had been reported in the period
19

 
—

 
17

 
—

 
 
 
 
 
 
 
 
Weighted average stock options and restricted stock units excluded from computation due to anti-dilutive effect
—

 
3

 
3

 
3


Concentration of Credit Risk and Significant Customers
No customer accounted for 10% or more of total net revenue in the three or six months ended January 31, 2014 or January 31, 2013. Due to the seasonality of our small business, consumer tax and personal finance offerings, one retail customer accounted for 19% of gross accounts receivable at January 31, 2014. No customer accounted for 10% or more of gross accounts receivable at July 31, 2013.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
The authoritative guidance defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, we consider the principal or most advantageous market for an asset or liability and assumptions that market participants would use when pricing the asset or liability. In addition, we consider and use all valuation methods that are appropriate in estimating the fair value of an asset or liability.
The authoritative guidance establishes a fair value hierarchy that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. In general, the authoritative guidance requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the measurement of its fair value. The three levels of input defined by the authoritative guidance are as follows:
•
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.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table summarizes financial assets and financial liabilities that we measured at fair value on a recurring basis at the dates indicated, classified in accordance with the fair value hierarchy described above.
 
January 31, 2014
 
July 31, 2013
(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
$
402

 
$
—

 
$
—

 
$
402

 
$
917

 
$
—

 
$
—

 
$
917

Available-for-sale debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Municipal bonds
—

 
517

 
—

 
517

 
—

 
489

 
—

 
489

Corporate notes
—

 
265

 
—

 
265

 
—

 
269

 
—

 
269

U.S. agency securities
—

 
71

 
—

 
71

 
—

 
69

 
—

 
69

Municipal auction rate securities
—

 
—

 
28

 
28

 
—

 
—

 
33

 
33

Available-for-sale corporate equity securities
28

 
—

 
—

 
28

 
33

 
—

 
—

 
33

Total available-for-sale securities
28

 
853

 
28

 
909

 
33

 
827

 
33

 
893

Total assets measured at fair value on a recurring basis
$
430

 
$
853

 
$
28

 
$
1,311

 
$
950

 
$
827

 
$
33

 
$
1,810

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior notes (1)
$
—

 
$
560

 
$
—

 
$
560

 
$
—

 
$
560

 
$
—

 
$
560

______________________________
(1)
Carrying value on our balance sheet at January 31, 2014 was $499 million and at July 31, 2013 was $499 million. See Note 6.

The following table summarizes our cash equivalents and available-for-sale debt and equity securities by balance sheet classification and level in the fair value hierarchy at the dates indicated.
 
January 31, 2014
 
July 31, 2013
(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
$
287

 
$
—

 
$
—

 
$
287

 
$
857

 
$
—

 
$
—

 
$
857

In funds held for customers
115

 
—

 
—

 
115

 
60

 
—

 
—

 
60

Total cash equivalents
$
402

 
$
—

 
$
—

 
$
402

 
$
917

 
$
—

 
$
—

 
$
917

Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In investments
$
28

 
$
678

 
$
—

 
$
706

 
$
—

 
$
652

 
$
—

 
$
652

In funds held for customers
—

 
175

 
—

 
175

 
—

 
175

 
—

 
175

In long-term investments
—

 
—

 
28

 
28

 
33

 
—

 
33

 
66

Total available-for-sale securities
$
28

 
$
853

 
$
28

 
$
909

 
$
33

 
$
827

 
$
33

 
$
893


We value our Level 1 assets, consisting primarily of money market funds, using quoted prices in active markets for identical instruments. Financial assets whose fair values we measure on a recurring basis using Level 2 inputs consist of municipal bonds, corporate notes, and U.S. agency securities. We measure the fair values of these assets with the help of a pricing service that either provides quoted market prices in active markets for identical or similar securities or uses observable inputs for their pricing without applying significant adjustments. Our fair value processes include controls that are designed to ensure that we record appropriate fair values for our Level 2 investments. These controls include comparison to pricing provided by a secondary pricing service or investment manager, validation of pricing sources and models, review of key model inputs, analysis of period-over-period price fluctuations, and independent recalculation of prices where appropriate.
Financial liabilities whose fair values we measure using Level 2 inputs consist of debt. See Note 6, “Long-Term Obligations,” for more information. We measure the fair value of our senior notes based on their trading prices and the interest rates we could obtain for other borrowings with similar terms.
Financial assets whose fair values we measure using significant unobservable (Level 3) inputs consist of municipal auction rate securities that are no longer liquid. We estimate the fair values of these auction rate securities using a discounted cash flow model. During the first six months of fiscal 2014 we redeemed $5 million of these securities at par, leaving a remaining balance of $28 million at January 31, 2014. We continued to classify them as long-term investments based on the maturities of the underlying securities at that date. We do not intend to sell our municipal auction rate securities and it is not more likely than not that we will be required to sell them before recovery at par, which may be at maturity.
There were no transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy during the six months ended January 31, 2014.
Cash and Cash Equivalents, Investments and Funds Held for Customers
Cash And Cash Equivalents Investments And Funds Held For Customers
Cash and Cash Equivalents, Investments and Funds Held for Customers
We consider highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist primarily of AAA-rated money market funds in all periods presented. Investments at January 31, 2014 consist of available-for-sale investment-grade debt securities that we carry at fair value and an available-for-sale corporate equity investment that we carry at fair value. Funds held for customers consist of cash and cash equivalents and investment grade available-for-sale debt securities in all periods presented. Long-term investments at January 31, 2014 consist primarily of municipal auction rate securities. See Note 2, “Fair Value Measurements,” for more information. Except for direct obligations of the United States government, securities issued by agencies of the United States government, and money market funds, we diversify our investments in debt securities by limiting our holdings with any individual issuer.


The following table summarizes our cash and cash equivalents, investments, and funds held for customers by balance sheet classification at the dates indicated.
 
January 31, 2014
 
July 31, 2013
(In millions)
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
Classification on balance sheets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
625

 
$
625

 
$
1,009

 
$
1,009

Investments
682

 
706

 
653

 
652

Funds held for customers
290

 
290

 
235

 
235

Long-term investments
45

 
45

 
54

 
83

Total cash and cash equivalents, investments, and funds
held for customers
$
1,642

 
$
1,666

 
$
1,951

 
$
1,979


The following table summarizes our cash and cash equivalents, investments, and funds held for customers by investment category at the dates indicated. See Note 2, “Fair Value Measurements,” for more information on our municipal auction rate securities.
 
January 31, 2014
 
July 31, 2013
(In millions)
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
Type of issue:
 
 
 
 
 
 
 
Total cash and cash equivalents
$
740

 
$
740

 
$
1,069

 
$
1,069

Available-for-sale debt securities:
 
 
 
 
 
 
 
Municipal bonds
516

 
517

 
489

 
489

Corporate notes
265

 
265

 
269

 
269

U.S. agency securities
71

 
71

 
69

 
69

Municipal auction rate securities
28

 
28

 
33

 
33

Total available-for-sale debt securities
880

 
881

 
860

 
860

Available-for-sale corporate equity securities
5

 
28

 
5

 
33

Other long-term investments
17

 
17

 
17

 
17

Total cash and cash equivalents, investments, and funds
held for customers
$
1,642

 
$
1,666

 
$
1,951

 
$
1,979


We use the specific identification method to compute gains and losses on investments. We include realized gains and losses on our available-for-sale debt securities in interest and other income, net in our statements of operations. Gross realized gains and losses on our available-for-sale debt securities for the six months ended January 31, 2014 and January 31, 2013 were not significant.
We accumulate unrealized gains and losses on our available-for-sale debt and equity securities, net of income taxes, in accumulated other comprehensive income in the stockholders’ equity section of our balance sheets. Gross unrealized gains and losses on our available-for-sale debt securities at January 31, 2014 and July 31, 2013 were not significant. The cumulative gross unrealized gain on our available-for-sale corporate equity security was approximately $23 million at January 31, 2014.
We periodically review our investment portfolios to determine if any investment is other-than-temporarily impaired due to changes in credit risk or other potential valuation concerns. We believe that the investments we held at January 31, 2014 were not other-than-temporarily impaired. Unrealized losses on available-for-sale debt securities at January 31, 2014 were not significant and were due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities. We do not intend to sell these investments and it is not more likely than not that we will be required to sell them before recovery at par, which may be at maturity.


The following table summarizes our available-for-sale debt securities classified by the stated maturity date of the security at the dates indicated.
 
January 31, 2014
 
July 31, 2013
(In millions)
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
Due within one year
$
278

 
$
278

 
$
234

 
$
235

Due within two years
311

 
311

 
245

 
245

Due within three years
147

 
148

 
211

 
210

Due after three years
144

 
144

 
170

 
170

Total available-for-sale debt securities
$
880

 
$
881

 
$
860

 
$
860


Available-for-sale debt securities due after three years in the table above include our municipal auction rate securities. See Note 2, “Fair Value Measurements,” for more information. All of the remaining securities in that category had effective maturities of three years or less due to interest reset dates or mandatory call dates.
Discontinued Operations
Discontinued Operations
Discontinued Operations

Intuit Financial Services
On August 1, 2013 we completed the sale of our Intuit Financial Services (IFS) business for approximately $1.025 billion in cash. We recorded a gain on the disposal of IFS of approximately $36 million, net of income taxes, in the first quarter of fiscal 2014. The decision to sell the IFS business was a result of management's desire to focus resources on our offerings for small businesses, consumers, and accounting professionals. The IFS business comprised substantially all of our former Financial Services reporting segment.
We classified our IFS business as discontinued operations and have therefore segregated its operating results from continuing operations in our statements of operations for all periods presented. Revenue for IFS during the three and six months ended January 31, 2013 was $80 million and $160 million. Income before income taxes for IFS during the three and six months ended January 31, 2013 was $15 million and $26 million. We have also segregated the net assets of IFS from continuing operations on our balance sheet at July 31, 2013. Because operating cash flows from the IFS business were not material for any period presented, we have not segregated them from continuing operations on our statements of cash flows.
Intuit Health
In July 2013 management having the authority to do so formally approved a plan to sell our Intuit Health business and on August 19, 2013 we completed the sale for cash consideration that was not significant. We recorded a $4 million pre-tax loss on the disposal of Intuit Health that was more than offset by a related income tax benefit of approximately $14 million, resulting in a net gain on disposal of approximately $10 million in the first quarter of fiscal 2014. The decision to sell the Intuit Health business was a result of management's desire to focus resources on its offerings for small businesses, consumers, and accounting professionals. Intuit Health was part of our former Other Businesses reporting segment.
We classified our Intuit Health business as discontinued operations and have therefore segregated its operating results in our statements of operations for all periods presented. We have not segregated the net assets of Intuit Health from continuing operations on our balance sheets at July 31, 2013 because net assets held for sale consisted primarily of operating assets and liabilities that were not material. Because operating cash flows from the Intuit Health business were also not material for any period presented, we have not segregated them from continuing operations on our statements of cash flows.
Intuit Websites
On September 17, 2012 we sold our Intuit Websites business, which was a component of our former 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.
Current Liabilities
Current Liabilities
Current Liabilities
Unsecured Revolving Credit Facility
On February 17, 2012 we entered into an agreement with certain institutional lenders for a $500 million unsecured revolving credit facility that will expire on February 17, 2017. Advances under the credit facility will accrue interest at rates that are equal to, at our election, either JP Morgan's alternate base rate plus a margin that ranges from 0.0% to 0.5% or London Interbank Offered Rate (LIBOR) plus a margin that ranges from 0.9% to 1.5%. Actual margins under either election will be based on our senior debt credit ratings. The agreement includes customary affirmative and negative covenants, including financial covenants that require us to maintain a ratio of total debt to annual earnings before interest, taxes, depreciation and amortization (EBITDA) of not greater than 3.25 to 1.00 as of any date and a ratio of annual EBITDA to interest payable of not less than 3.00 to 1.00 as of the last day of each fiscal quarter. We remained in compliance with these covenants at all times during the quarter ended January 31, 2014. We may use amounts borrowed under this credit facility for general corporate purposes, including future acquisitions. To date we have not borrowed under this credit facility.
Other Current Liabilities
Other current liabilities were as follows at the dates indicated:
(In millions)
January 31,
2014
 
July 31,
2013
Reserve for product returns
$
71

 
$
20

Reserve for rebates
62

 
15

Current portion of license fee payable
10

 
10

Current portion of deferred rent
7

 
8

Interest payable
10

 
10

Executive deferred compensation plan liabilities
68

 
64

Other
32

 
29

Total other current liabilities
$
260

 
$
156


The balances of several of our other current liabilities, particularly our reserves for product returns and rebates, are affected by the seasonality of our business. See Note 1, “Description of Business and Summary of Significant Accounting Policies – Seasonality,” for more information.
Long-Term Obligations
Long-Term Obligations
Long-Term Obligations
Long-Term Debt
On March 12, 2007 we issued $500 million of 5.75% senior unsecured notes due on March 15, 2017 (the Notes). We carried the Notes at face value less the unamortized discount in long-term debt on our balance sheets at January 31, 2014 and July 31, 2013. The Notes are redeemable by Intuit at any time, subject to a make-whole premium, and include covenants that limit our ability to grant liens on our facilities and to enter into sale and leaseback transactions, subject to significant allowances. We paid $14 million in cash for interest on the Notes during the six months ended January 31, 2014 and $14 million in cash for interest on the Notes during the six months ended January 31, 2013.
Other Long-Term Obligations
Other long-term obligations were as follows at the dates indicated:
(In millions)
January 31,
2014
 
July 31,
2013
Total deferred rent
$
55

 
$
55

Total license fee payable
50

 
48

Long-term income tax liabilities
39

 
38

Long-term deferred revenue
16

 
32

Long-term deferred income tax liabilities
44

 
6

Other
8

 
7

Total long-term obligations
212

 
186

Less current portion (included in other current liabilities)
(18
)
 
(19
)
Long-term obligations due after one year
$
194

 
$
167

Income Taxes
Income Taxes
Income Taxes
Effective Tax Rate
We compute our provision for or benefit from income taxes by applying the estimated annual effective tax rate to income or loss from recurring operations and adding the effects of any discrete income tax items specific to the period.
Our effective tax rates for the three and six months ended January 31, 2014 were approximately 31% and 30%. Excluding discrete tax items primarily related to share-based compensation, our effective tax rates for those periods were approximately 34% and did not differ significantly from the federal statutory rate of 35%. The benefits we received from the domestic production activities deduction and the federal research and experimentation credit were substantially offset by state income taxes in both periods.
In January 2013 the American Taxpayer Relief Act of 2012 was signed into law. The Act included a reinstatement of the federal research and experimentation credit through December 31, 2013 that was retroactive to January 1, 2012. We recorded a discrete tax benefit for the retroactive effect during the three months ended January 31, 2013. As of January 31, 2014, the federal research and experimentation credit had not been reinstated.
Our effective tax rate for the three months ended January 31, 2013 was approximately 17% and we recorded a $12 million tax benefit on a pretax loss of $1 million for the six months ended January 31, 2013. Excluding discrete tax items primarily related to the reinstatement of the federal research and experimentation credit, our effective tax rates for the three and six months ended January 31, 2013 did not differ significantly from the federal statutory rate of 35%. The benefits we received from the domestic production activities deduction and the federal research and experimentation credit were substantially offset by state income taxes in both periods.
Unrecognized Tax Benefits and Other Considerations
The total amount of our unrecognized tax benefits at July 31, 2013 was $39 million. Net of related deferred tax assets, unrecognized tax benefits were $27 million at that date. If we were to recognize these net benefits, our income tax expense would reflect a favorable net impact of $27 million. There were no material changes to these amounts during the six months ended January 31, 2014. We do not believe that it is reasonably possible that there will be a significant increase or decrease in our unrecognized tax benefits over the next 12 months.
Stockholders' Equity
Stockholders' Equity
Stockholders’ Equity
Stock Repurchase Programs and Treasury Shares
Intuit’s Board of Directors has authorized a series of common stock repurchase programs. Shares of common stock repurchased under these programs become treasury shares. We repurchased 20.2 million shares for $1.4 billion under these programs during the six months ended January 31, 2014 and 3.4 million shares for $200 million under these programs during the six months ended January 31, 2013. At January 31, 2014, we had authorization from our Board of Directors to expend up to an additional $2.0 billion for stock repurchases through August 19, 2017. Future stock repurchases under the current program are at the discretion of management, and authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.
To facilitate our stock repurchase program, from time to time we repurchase shares in the open market. On August 23, 2013 we entered into an accelerated share repurchase (ASR) agreement with a large financial institution to repurchase $1.4 billion of Intuit's common stock on an accelerated basis. On August 23, 2013 we paid $1.4 billion to the financial institution and received an initial delivery of 17.6 million shares of Intuit common stock. On December 23, 2013 we received a final delivery of 2.6 million shares of Intuit common stock. We treated the ASR as a forward contract indexed to our own common stock. The forward contract met all of the applicable criteria for equity classification, so we did not account for it as a derivative instrument. We have reflected the shares delivered to us by the financial institution as treasury shares as of the date they were physically delivered in computing weighted average shares outstanding for both basic and diluted net loss per share. The repurchased shares did not have a material impact on our net loss per share calculations for the three or six months ended January 31, 2014.
Our treasury shares are repurchased at the market price on the trade date; accordingly, all amounts paid to reacquire these shares have been recorded as treasury stock on our balance sheets. Repurchased shares of our common stock are held as treasury shares until they are reissued or retired. When we reissue treasury stock, if the proceeds from the sale are more than the average price we paid to acquire the shares we record an increase in additional paid-in capital. Conversely, if the proceeds from the sale are less than the average price we paid to acquire the shares, we record a decrease in additional paid-in capital to the extent of increases previously recorded for similar transactions and a decrease in retained earnings for any remaining amount.
In the past we have satisfied option exercises and restricted stock unit vesting under our employee equity incentive plans by reissuing treasury shares, and we may do so again in the future. During the second quarter of fiscal 2014 we began issuing new shares of common stock to satisfy option exercises and RSU vesting under our 2005 Equity Incentive Plan. We have not yet determined the ultimate disposition of the shares that we have repurchased in the past, and consequently we continue to hold them as treasury shares.
Dividends on Common Stock
During the six months ended January 31, 2014 we declared and paid quarterly cash dividends that totaled $0.38 per share of outstanding common stock or $111 million. In February 2014 our Board of Directors declared a quarterly cash dividend of $0.19 per share of outstanding common stock payable on April 18, 2014 to stockholders of record at the close of business on April 10, 2014. Future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of our Board of Directors.
Share-Based Compensation Expense
The following table summarizes the total share-based compensation expense that we recorded in operating income (loss) from continuing operations for the periods shown.
 
Three Months Ended
 
 Six Months Ended
(In millions, except per share amounts)
January 31,
2014
 
January 31,
2013
 
January 31,
2014
 
January 31,
2013
Cost of revenue
$
2

 
$
1

 
$
4

 
$
3

Selling and marketing
16

 
16

 
31

 
32

Research and development
16

 
13

 
30

 
26

General and administrative
18

 
14

 
34

 
29

Total share-based compensation expense
52

 
44

 
99

 
90

Income tax benefit
(16
)
 
(15
)
 
(32
)
 
(30
)
Decrease in net income or increase in net loss from continuing operations
$
36

 
$
29

 
$
67

 
$
60

Decrease in net income or increase in net loss per share:
 
 
 
 

 

Basic
$
0.13

 
$
0.10

 
$
0.23

 
$
0.20

Diluted
$
0.13

 
$
0.10

 
$
0.23

 
$
0.20



The table above excludes share-based compensation expense for our discontinued operations, which totaled approximately $3 million and $6 million for the three and six months ended January 31, 2013. Because we have not reclassified our statements of cash flows to segregate discontinued operations, the $6 million in share-based compensation for discontinued operations is included in share-based compensation expense on our statement of cash flows for the six months ended January 31, 2013.

Share-Based Awards Available for Grant
A summary of share-based awards available for grant under our 2005 Equity Incentive Plan for the six months ended January 31, 2014 was as follows:
(Shares in thousands)
Shares
Available
for Grant
Balance at July 31, 2013
12,120

Additional shares authorized
19,000

Options granted
(28
)
Restricted stock units granted (1)
(1,436
)
Share-based awards canceled/forfeited/expired (1)(2)
2,986

Balance at January 31, 2014
32,642

________________________________
(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.
Stock Option Activity and Related Share-Based Compensation Expense
A summary of stock option activity for the six months ended January 31, 2014 was as follows:
 
Options Outstanding
(Shares in thousands)
Number
of Shares
 
Weighted
Average
Exercise
Price
Per Share
Balance at July 31, 2013
14,206

 
$
43.77

Options assumed and converted in connection with acquisitions
17

 
13.61

Options granted
28

 
66.00

Options exercised
(3,064
)
 
38.12

Options canceled or expired
(447
)
 
52.77

Balance at January 31, 2014
10,740

 
$
45.02

 
 
 
 
Exercisable at January 31, 2014
6,395

 
$
36.38



At January 31, 2014, there was approximately $42 million of unrecognized compensation cost related to non-vested stock options that we expect to recognize as expense in the future. We will adjust unrecognized compensation cost for future changes in estimated forfeitures. We expect to recognize that cost over a weighted average vesting period of 2.0 years.
Restricted Stock Unit Activity and Related Share-Based Compensation Expense
A summary of restricted stock unit activity for the six months ended January 31, 2014 was as follows:
 
Restricted Stock Units
(Shares in thousands)
Number
of Shares
 
Weighted
Average
Grant Date
Fair Value
Nonvested at July 31, 2013
9,184

 
$
55.23

Granted
624

 
69.82

Restricted stock units assumed or granted in connection with acquisitions
656

 
69.48

Vested
(784
)
 
48.25

Forfeited
(1,161
)
 
63.65

Nonvested at January 31, 2014
8,519

 
$
56.89



At January 31, 2014, there was approximately $289 million of unrecognized compensation cost related to non-vested RSUs that we expect to recognize as expense in the future. We will adjust unrecognized compensation cost for future changes in estimated forfeitures. We expect to recognize that cost over a weighted average vesting period of 2.2 years.
Litigation
Litigation
Litigation
On January 13, 2012, two putative class actions were filed against Intuit Inc. in connection with our TurboTax income tax preparation software: Smith v. Intuit Inc. (U.S. District Court, Northern District of California) and Quildon v. Intuit Inc. (California Superior Court, Santa Clara County). The plaintiffs in both cases had asserted that the fees charged for the refund processing service offered within TurboTax are “refund anticipation loans” and the disclosures about those fees do not comply with California and federal laws. The Smith case was brought in federal court on behalf of a proposed nationwide class and subclasses; the Quildon case was brought in state court on behalf of a proposed California class and subclasses. In January 2013, for the purposes of settlement and without any admission of wrongdoing or liability, Intuit reached an agreement in principle to resolve all claims raised in the Smith and Quildon matters for an amount that is not material to our consolidated financial statements. We accrued that amount in the second quarter of fiscal 2013. In October 2013, the U.S. District Court granted final approval to the settlement of the Smith case. An objector lodged a notice of appeal of that order to the U.S. Court of Appeals for the Ninth Circuit. In January 2014, that appeal was dismissed and the Smith case was resolved. The parties have agreed to seek dismissal of the Quildon case. We currently believe that the likelihood of a material change to the proposed settlement amount is remote.
Intuit is subject to certain routine legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of our business, including assertions that we may be infringing patents or other intellectual property rights of others. We currently believe that, in addition to any amounts accrued, the amount of potential losses, if any, for any pending claims of any type (either alone or combined) will not have a material impact on our consolidated financial statements. The ultimate outcome of any litigation is uncertain and, regardless of outcome, litigation can have an adverse impact on Intuit because of defense costs, negative publicity, diversion of management resources and other factors. Our failure to obtain necessary license or other rights, or litigation arising out of intellectual property claims could adversely affect our business.
Segment Information
Segment Information
Segment Information
See Note 4, “Discontinued Operations,” for information about our Intuit Financial Services and Intuit Health businesses, which we classified as discontinued operations during fiscal 2013. Effective August 1, 2013, we reorganized our continuing businesses to align with our strategic focus on small businesses, consumers, and professional accountants. We also aligned our international businesses, all of which were in our former Other Businesses segment, into their respective lines of business and we are now managing those international businesses within their respective reportable segments. As a result of this reorganization, we have defined three reportable segments based on factors such as how we manage our operations and how our chief operating decision maker views results. We define the chief operating decision maker (CODM) as our Chief Executive Officer and our Chief Financial Officer. Our CODM organizes and manages our business primarily on the basis of product and service offerings. The CODM reviews revenue by reportable segment and by product line within each reportable segment, but reviews operating income or loss only at the reportable segment level.
Small Business. Our Small Business segment includes three main product lines – Small Business Financial Solutions, Small Business Management Solutions, and Accountant and Advisor – targeting the small business market.
•
Our Small Business Financial Solutions product line includes QuickBooks financial and business management software and services; QuickBooks technical support; and financial supplies. This product line also includes several payment processing services for small businesses, including merchant services such as credit and debit card processing; Web-based transaction processing services for online merchants; GoPayment mobile payment processing services; QuickBooks Point of Sale solutions; and secure online payments for small businesses and their customers through the Intuit Payment Network.
•
Our Small Business Management Solutions product line includes small business payroll products and services, including desktop payroll offerings such as QuickBooks Basic Payroll and QuickBooks Enhanced Payroll; online payroll offerings such as Quickbooks Online Payroll and Intuit Online Payroll; and full service payroll offerings such as QuickBooks Assisted Payroll and Intuit Full Service Payroll. This product line also includes Demandforce, which provides online marketing and customer communication solutions, and QuickBase.
•
Our Accountant and Advisor product line includes QuickBooks Accountant, QuickBooks Accountant Plus, and QuickBooks Online Accountant as well as the QuickBooks ProAdvisor Program and Cloud ProAdvisor Program, all of which are intended for the accounting professionals who serve small businesses.
Consumer. Our Consumer segment includes two product lines – Consumer Tax and Consumer Ecosystem – targeting consumers.
•
Consumer Tax includes TurboTax income tax preparation products and services and electronic tax filing services.
•
Consumer Ecosystem includes our personal finance offerings, Quicken and Mint.
Professional Tax. Our Professional Tax segment targets professional accountants and includes Lacerte, ProSeries, and Intuit Tax Online professional tax preparation products and services, electronic tax filing services, bank product transmission services, and training services.
All of our business segments operate primarily in the United States and sell primarily to customers in the United States. International total net revenue was approximately 5% of consolidated total net revenue for all periods presented.
We include expenses such as corporate selling and marketing, product development, and general and administrative expenses and share-based compensation expenses that are not allocated to specific segments in unallocated corporate items. Unallocated corporate items also include amortization of acquired technology, amortization of other acquired intangible assets, and goodwill and intangible asset impairment charges.
The accounting policies of our reportable segments are the same as those described in the summary of significant accounting policies in Note 1 to the financial statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2013. Except for goodwill and purchased intangible assets, we do not generally track assets by reportable segment and, consequently, we do not disclose total assets by reportable segment.
The following table shows our financial results by reportable segment for the periods indicated. Results for all periods presented have been adjusted to exclude results for our Intuit Websites, Intuit Financial Services, and Intuit Health businesses, which we have classified as discontinued operations for all periods presented. See Note 4, “Discontinued Operations,” for more information. Segment results for fiscal 2013 have also been reclassified to conform to the fiscal 2014 segment presentation, as described earlier in this footnote.
 
Three Months Ended
 
 Six Months Ended
(In millions)
January 31,
2014
 
January 31,
2013
 
January 31,
2014
 
January 31,
2013
Net revenue:
 
 
 
 
 
 
 
Small Business segment:
 
 
 
 
 
 
 
Small Business Financial Solutions
$
340

 
$
323

 
$
656

 
$
614

Small Business Management Solutions
202

 
175

 
391

 
339

Accountant and Advisor
18

 
20

 
33

 
34

  Total Small Business segment revenue
560

 
518

 
1,080

 
987

 
 
 
 
 
 
 
 
Consumer segment:
 
 
 
 
 
 
 
Consumer Tax
138

 
216

 
180

 
254

Consumer Ecosystem
49

 
43

 
84

 
77

  Total Consumer segment revenue
187

 
259

 
264

 
331

 
 
 
 
 
 
 
 
Professional Tax segment revenue
35

 
107

 
60

 
128

Total net revenue
$
782

 
$
884

 
$
1,404

 
$
1,446

 
 
 
 
 
 
 
 
Operating income (loss) from continuing operations:
 
 
 
 
 
 
 
Small Business segment
$
197

 
$
190

 
$
387

 
$
355

Consumer segment
(3
)
 
38

 
(27
)
 
21

Professional Tax segment
(9
)
 
66

 
(18
)
 
55

Total segment operating income
185

 
294

 
342

 
431

Unallocated corporate items:
 
 
 
 
 
 
 
Share-based compensation expense
(52
)
 
(44
)
 
(99
)
 
(90
)
Other common expenses
(168
)
 
(154
)
 
(345
)
 
(307
)
Amortization of acquired technology
(6
)
 
(5
)
 
(12
)
 
(9
)
Amortization of other acquired intangible assets
(5
)
 
(7
)
 
(9
)
 
(14
)
Total unallocated corporate items
(231
)
 
(210
)
 
(465
)
 
(420
)
Total operating income (loss) from continuing operations
$
(46
)
 
$
84

 
$
(123
)
 
$
11

Description of Business and Summary of Significant Accounting Policies (Policies)
Basis of Presentation 
Basis of Presentation
These condensed consolidated financial statements include the financial statements of Intuit and its wholly owned subsidiaries. We have eliminated all significant intercompany balances and transactions in consolidation. We have included all adjustments, consisting only of normal recurring items, which we considered necessary for a fair presentation of our financial results for the interim periods presented. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation, including amounts related to discontinued operations and reportable segments. See Note 4, “Discontinued Operations,” and Note 10, “Segment Information,” for more information.
As discussed in Note 4, we sold our Intuit Websites business in September 2012. In August 2013 we sold our Intuit Financial Services (IFS) business and our Intuit Health business. We have reclassified our statements of operations for all periods presented to reflect these three businesses as discontinued operations. We have also segregated the net assets of IFS from continuing operations on our balance sheet at July 31, 2013. The net assets of Intuit Websites and Intuit Health were not significant, so we have not segregated them from continuing operations on our balance sheet at July 31, 2013. Because the cash flows of our Intuit Websites, IFS, and Intuit Health discontinued operations were not material for any period presented, we have not segregated the cash flows of those businesses from continuing operations on our statements of cash flows. Unless noted otherwise, discussions in these notes pertain to our continuing operations.
These unaudited condensed consolidated financial statements and accompanying notes should be read together with the audited consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2013. Results for the six months ended January 31, 2014 do not necessarily indicate the results we expect for the fiscal year ending July 31, 2014 or any other future period.
Seasonality 
Seasonality
Our QuickBooks, Consumer Tax, and Professional Tax offerings are highly seasonal. Revenue from our QuickBooks software products tends to be highest during our second and third fiscal quarters. Sales of income tax preparation products and services are heavily concentrated in the period from November through April. These seasonal patterns mean that our total net revenue is usually highest during our second quarter ending January 31 and third quarter ending April 30. We typically report losses in our first quarter ending October 31 and fourth quarter ending July 31. During these quarters, revenue from our tax businesses is minimal while core operating expenses such as research and development continue at relatively consistent levels.
Computation of Net Income (Loss) Per Share 
Computation of Net Income (Loss) Per Share
We compute basic net income or loss per share using the weighted average number of common shares outstanding during the period. We compute diluted net income per share using the weighted average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares include shares issuable upon the exercise of stock options and upon the vesting of restricted stock units (RSUs) under the treasury stock method.
We include stock options with combined exercise prices, unrecognized compensation expense and tax benefits that are less than the average market price for our common stock, and RSUs with unrecognized compensation expense and tax benefits that are less than the average market price for our common stock, in the calculation of diluted net income per share. We exclude stock options with combined exercise prices, unrecognized compensation expense and tax benefits that are greater than the average market price for our common stock, and RSUs with unrecognized compensation expense and tax benefits that are greater than the average market price for our common stock, from the calculation of diluted net income per share because their effect is anti-dilutive. Under the treasury stock method, the amount that must be paid to exercise stock options, the amount of compensation expense for future service that we have not yet recognized for stock options and RSUs, and the amount of tax benefits that will be recorded in additional paid-in capital when the awards become deductible are assumed to be used to repurchase shares.
In loss periods, basic net loss per share and diluted net loss per share are the same since the effect of potential common shares is anti-dilutive and therefore excluded.
Description of Business and Summary of Significant Accounting Policies (Tables)
Composition of shares used in the computation of basic and diluted net income per share
The following table presents the composition of shares used in the computation of basic and diluted net income (loss) per share for the periods indicated.
 
Three Months Ended
 
 Six Months Ended
(In millions, except per share amounts)
January 31,
2014
 
January 31,
2013
 
January 31,
2014
 
January 31,
2013
Numerator:
 
 
 
 
 
 
 
Net income (loss) from continuing operations
$
(37
)
 
$
65

 
$
(94
)
 
$
11

Net income from discontinued operations
—

 
6

 
46

 
41

Net income (loss)
$
(37
)
 
$
71

 
$
(48
)
 
$
52

 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
Shares used in basic per share amounts:
 
 
 
 
 
 
 
Weighted average common shares outstanding
284

 
296

 
286

 
296

 
 
 
 
 
 
 
 
Shares used in diluted per share amounts:
 
 
 
 
 
 
 
Weighted average common shares outstanding
284

 
296

 
286

 
296

Dilutive common equivalent shares from stock options
 
 
 
 
 
 
 
and restricted stock awards
—

 
7

 
—

 
6

Dilutive weighted average common shares outstanding
284

 
303

 
286

 
302

 
 
 
 
 
 
 
 
Basic and diluted net income (loss) per share:
 
 
 
 
 
 
 
Basic net income (loss) per share from continuing operations
$
(0.13
)
 
$
0.22

 
$
(0.33
)
 
$
0.04

Basic net income per share from discontinued operations
—

 
0.02

 
0.16

 
0.14

Basic net income (loss) per share
$
(0.13
)
 
$
0.24

 
$
(0.17
)
 
$
0.18

 
 
 
 
 
 
 
 
Diluted net income (loss) per share from continuing operations
$
(0.13
)
 
$
0.21

 
$
(0.33
)
 
$
0.04

Diluted net income per share from discontinued operations
—

 
0.02

 
0.16

 
0.13

Diluted net income (loss) per share
$
(0.13
)
 
$
0.23

 
$
(0.17
)
 
$
0.17

 
 
 
 
 
 
 
 
Shares excluded from computation of diluted net income (loss) per share:
 
 
 
 
 
 
 
Weighted average stock options and restricted stock units that would have been included in the computation of dilutive common equivalent shares outstanding if net income had been reported in the period
19

 
—

 
17

 
—

 
 
 
 
 
 
 
 
Weighted average stock options and restricted stock units excluded from computation due to anti-dilutive effect
—

 
3

 
3

 
3

Fair Value Measurements (Tables)
Financial assets and liabilities measured at fair value on recurring basis 
The following table summarizes financial assets and financial liabilities that we measured at fair value on a recurring basis at the dates indicated, classified in accordance with the fair value hierarchy described above.
 
January 31, 2014
 
July 31, 2013
(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
$
402

 
$
—

 
$
—

 
$
402

 
$
917

 
$
—

 
$
—

 
$
917

Available-for-sale debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Municipal bonds
—

 
517

 
—

 
517

 
—

 
489

 
—

 
489

Corporate notes
—

 
265

 
—

 
265

 
—

 
269

 
—

 
269

U.S. agency securities
—

 
71

 
—

 
71

 
—

 
69

 
—

 
69

Municipal auction rate securities
—

 
—

 
28

 
28

 
—

 
—

 
33

 
33

Available-for-sale corporate equity securities
28

 
—

 
—

 
28

 
33

 
—

 
—

 
33

Total available-for-sale securities
28

 
853

 
28

 
909

 
33

 
827

 
33

 
893

Total assets measured at fair value on a recurring basis
$
430

 
$
853

 
$
28

 
$
1,311

 
$
950

 
$
827

 
$
33

 
$
1,810

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior notes (1)
$
—

 
$
560

 
$
—

 
$
560

 
$
—

 
$
560

 
$
—

 
$
560

______________________________
(1)
Carrying value on our balance sheet at January 31, 2014 was $499 million and at July 31, 2013 was $499 million. See Note 6.
Cash equivalents and available-for-sale debt and equity securities by balance sheet classification and level in the fair value hierarchy 
The following table summarizes our cash equivalents and available-for-sale debt and equity securities by balance sheet classification and level in the fair value hierarchy at the dates indicated.
 
January 31, 2014
 
July 31, 2013
(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
$
287

 
$
—

 
$
—

 
$
287

 
$
857

 
$
—

 
$
—

 
$
857

In funds held for customers
115

 
—

 
—

 
115

 
60

 
—

 
—

 
60

Total cash equivalents
$
402

 
$
—

 
$
—

 
$
402

 
$
917

 
$
—

 
$
—

 
$
917

Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In investments
$
28

 
$
678

 
$
—

 
$
706

 
$
—

 
$
652

 
$
—

 
$
652

In funds held for customers
—

 
175

 
—

 
175

 
—

 
175

 
—

 
175

In long-term investments
—

 
—

 
28

 
28

 
33

 
—

 
33

 
66

Total available-for-sale securities
$
28

 
$
853

 
$
28

 
$
909

 
$
33

 
$
827

 
$
33

 
$
893

Cash and Cash Equivalents, Investments and Funds Held for Customers (Tables)
Cash and cash equivalents, investments and funds held for customers by balance sheet classification 
The following table summarizes our cash and cash equivalents, investments, and funds held for customers by balance sheet classification at the dates indicated.
 
January 31, 2014
 
July 31, 2013
(In millions)
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
Classification on balance sheets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
625

 
$
625

 
$
1,009

 
$
1,009

Investments
682

 
706

 
653

 
652

Funds held for customers
290

 
290

 
235

 
235

Long-term investments
45

 
45

 
54

 
83

Total cash and cash equivalents, investments, and funds
held for customers
$
1,642

 
$
1,666

 
$
1,951

 
$
1,979

Cash and cash equivalents, investments and funds held for customers by investment category 
The following table summarizes our cash and cash equivalents, investments, and funds held for customers by investment category at the dates indicated. See Note 2, “Fair Value Measurements,” for more information on our municipal auction rate securities.
 
January 31, 2014
 
July 31, 2013
(In millions)
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
Type of issue:
 
 
 
 
 
 
 
Total cash and cash equivalents
$
740

 
$
740

 
$
1,069

 
$
1,069

Available-for-sale debt securities:
 
 
 
 
 
 
 
Municipal bonds
516

 
517

 
489

 
489

Corporate notes
265

 
265

 
269

 
269

U.S. agency securities
71

 
71

 
69

 
69

Municipal auction rate securities
28

 
28

 
33

 
33

Total available-for-sale debt securities
880

 
881

 
860

 
860

Available-for-sale corporate equity securities
5

 
28

 
5

 
33

Other long-term investments
17

 
17

 
17

 
17

Total cash and cash equivalents, investments, and funds
held for customers
$
1,642

 
$
1,666

 
$
1,951

 
$
1,979

Available-for-sale debt securities classified by the stated maturity date of the security 
The following table summarizes our available-for-sale debt securities classified by the stated maturity date of the security at the dates indicated.
 
January 31, 2014
 
July 31, 2013
(In millions)
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
Due within one year
$
278

 
$
278

 
$
234

 
$
235

Due within two years
311

 
311

 
245

 
245

Due within three years
147

 
148

 
211

 
210

Due after three years
144

 
144

 
170

 
170

Total available-for-sale debt securities
$
880

 
$
881

 
$
860

 
$
860

Current Liabilities (Tables)
Other current liabilities
Other current liabilities were as follows at the dates indicated:
(In millions)
January 31,
2014
 
July 31,
2013
Reserve for product returns
$
71

 
$
20

Reserve for rebates
62

 
15

Current portion of license fee payable
10

 
10

Current portion of deferred rent
7

 
8

Interest payable
10

 
10

Executive deferred compensation plan liabilities
68

 
64

Other
32

 
29

Total other current liabilities
$
260

 
$
156

Long-Term Obligations (Tables)
Other long-term obligations
Other long-term obligations were as follows at the dates indicated:
(In millions)
January 31,
2014
 
July 31,
2013
Total deferred rent
$
55

 
$
55

Total license fee payable
50

 
48

Long-term income tax liabilities
39

 
38

Long-term deferred revenue
16

 
32

Long-term deferred income tax liabilities
44

 
6

Other
8

 
7

Total long-term obligations
212

 
186

Less current portion (included in other current liabilities)
(18
)
 
(19
)
Long-term obligations due after one year
$
194

 
$
167

Stockholders' Equity (Tables)
Total share-based compensation expense 
The following table summarizes the total share-based compensation expense that we recorded in operating income (loss) from continuing operations for the periods shown.
 
Three Months Ended
 
 Six Months Ended
(In millions, except per share amounts)
January 31,
2014
 
January 31,
2013
 
January 31,
2014
 
January 31,
2013
Cost of revenue
$
2

 
$
1

 
$
4

 
$
3

Selling and marketing
16

 
16

 
31

 
32

Research and development
16

 
13

 
30

 
26

General and administrative
18

 
14

 
34

 
29

Total share-based compensation expense
52

 
44

 
99

 
90

Income tax benefit
(16
)
 
(15
)
 
(32
)
 
(30
)
Decrease in net income or increase in net loss from continuing operations
$
36

 
$
29

 
$
67

 
$
60

Decrease in net income or increase in net loss per share:
 
 
 
 

 

Basic
$
0.13

 
$
0.10

 
$
0.23

 
$
0.20

Diluted
$
0.13

 
$
0.10

 
$
0.23

 
$
0.20

Summary of share-based awards available for grant 
A summary of share-based awards available for grant under our 2005 Equity Incentive Plan for the six months ended January 31, 2014 was as follows:
(Shares in thousands)
Shares
Available
for Grant
Balance at July 31, 2013
12,120

Additional shares authorized
19,000

Options granted
(28
)
Restricted stock units granted (1)
(1,436
)
Share-based awards canceled/forfeited/expired (1)(2)
2,986

Balance at January 31, 2014
32,642

________________________________
(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.
Summary of stock option activity 
A summary of stock option activity for the six months ended January 31, 2014 was as follows:
 
Options Outstanding
(Shares in thousands)
Number
of Shares
 
Weighted
Average
Exercise
Price
Per Share
Balance at July 31, 2013
14,206

 
$
43.77

Options assumed and converted in connection with acquisitions
17

 
13.61

Options granted
28

 
66.00

Options exercised
(3,064
)
 
38.12

Options canceled or expired
(447
)
 
52.77

Balance at January 31, 2014
10,740

 
$
45.02

 
 
 
 
Exercisable at January 31, 2014
6,395

 
$
36.38

Summary of restricted stock unit activity 
A summary of restricted stock unit activity for the six months ended January 31, 2014 was as follows:
 
Restricted Stock Units
(Shares in thousands)
Number
of Shares
 
Weighted
Average
Grant Date
Fair Value
Nonvested at July 31, 2013
9,184

 
$
55.23

Granted
624

 
69.82

Restricted stock units assumed or granted in connection with acquisitions
656

 
69.48

Vested
(784
)
 
48.25

Forfeited
(1,161
)
 
63.65

Nonvested at January 31, 2014
8,519

 
$
56.89

Segment Information (Tables)
Financial results by reportable segment
The following table shows our financial results by reportable segment for the periods indicated. Results for all periods presented have been adjusted to exclude results for our Intuit Websites, Intuit Financial Services, and Intuit Health businesses, which we have classified as discontinued operations for all periods presented. See Note 4, “Discontinued Operations,” for more information. Segment results for fiscal 2013 have also been reclassified to conform to the fiscal 2014 segment presentation, as described earlier in this footnote.
 
Three Months Ended
 
 Six Months Ended
(In millions)
January 31,
2014
 
January 31,
2013
 
January 31,
2014
 
January 31,
2013
Net revenue:
 
 
 
 
 
 
 
Small Business segment:
 
 
 
 
 
 
 
Small Business Financial Solutions
$
340

 
$
323

 
$
656

 
$
614

Small Business Management Solutions
202

 
175

 
391

 
339

Accountant and Advisor
18

 
20

 
33

 
34

  Total Small Business segment revenue
560

 
518

 
1,080

 
987

 
 
 
 
 
 
 
 
Consumer segment:
 
 
 
 
 
 
 
Consumer Tax
138

 
216

 
180

 
254

Consumer Ecosystem
49

 
43

 
84

 
77

  Total Consumer segment revenue
187

 
259

 
264

 
331

 
 
 
 
 
 
 
 
Professional Tax segment revenue
35

 
107

 
60

 
128

Total net revenue
$
782

 
$
884

 
$
1,404

 
$
1,446

 
 
 
 
 
 
 
 
Operating income (loss) from continuing operations:
 
 
 
 
 
 
 
Small Business segment
$
197

 
$
190

 
$
387

 
$
355

Consumer segment
(3
)
 
38

 
(27
)
 
21

Professional Tax segment
(9
)
 
66

 
(18
)
 
55

Total segment operating income
185

 
294

 
342

 
431

Unallocated corporate items:
 
 
 
 
 
 
 
Share-based compensation expense
(52
)
 
(44
)
 
(99
)
 
(90
)
Other common expenses
(168
)
 
(154
)
 
(345
)
 
(307
)
Amortization of acquired technology
(6
)
 
(5
)
 
(12
)
 
(9
)
Amortization of other acquired intangible assets
(5
)
 
(7
)
 
(9
)
 
(14
)
Total unallocated corporate items
(231
)
 
(210
)
 
(465
)
 
(420
)
Total operating income (loss) from continuing operations
$
(46
)
 
$
84

 
$
(123
)
 
$
11

Description of Business and Summary of Significant Accounting Policies (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended
Jan. 31, 2014
Business_Unit
Jan. 31, 2013
Jan. 31, 2014
Business_Unit
Jan. 31, 2013
Jan. 31, 2014
Customer Concentration Risk [Member]
customers
Jan. 31, 2013
Customer Concentration Risk [Member]
customers
Jan. 31, 2014
Customer Concentration Risk [Member]
Sales Revenue, Services, Net [Member]
customers
Jan. 31, 2013
Customer Concentration Risk [Member]
Sales Revenue, Services, Net [Member]
customers
Jan. 31, 2014
Customer Concentration Risk [Member]
Accounts Receivable [Member]
customers
Jul. 31, 2013
Line of Credit [Member]
Accounts Receivable [Member]
customers
Composition of shares used in the computation of basic and diluted net income per share
 
 
 
 
 
 
 
 
 
 
Number of businesses discontinued
3 
 
3 
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
$ (37)
$ 65 
$ (94)
$ 11 
 
 
 
 
 
 
Net income from discontinued operations
0 
6 
46 
41 
 
 
 
 
 
 
Net income (loss)
$ (37)
$ 71 
$ (48)
$ 52 
 
 
 
 
 
 
Shares used in basic per share amounts:
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
284 
296 
286 
296 
 
 
 
 
 
 
Shares used in diluted per share amounts:
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
284 
296 
286 
296 
 
 
 
 
 
 
Dilutive common equivalent shares from stock options and restricted stock awards (shares)
0 
7 
0 
6 
 
 
 
 
 
 
Dilutive weighted average common shares outstanding
284 
303 
286 
302 
 
 
 
 
 
 
Basic and diluted net income (loss) per share:
 
 
 
 
 
 
 
 
 
 
Basic net income (loss) per share from continuing operations
$ (0.13)
$ 0.22 
$ (0.33)
$ 0.04 
 
 
 
 
 
 
Basic net income per share from discontinued operations
$ 0.00 
$ 0.02 
$ 0.16 
$ 0.14 
 
 
 
 
 
 
Basic net income (loss) per share
$ (0.13)
$ 0.24 
$ (0.17)
$ 0.18 
 
 
 
 
 
 
Diluted net income (loss) per share from continuing operations
$ (0.13)
$ 0.21 
$ (0.33)
$ 0.04 
 
 
 
 
 
 
Diluted net income per share from discontinued operations
$ 0.00 
$ 0.02 
$ 0.16 
$ 0.13 
 
 
 
 
 
 
Diluted net income (loss) per share
$ (0.13)
$ 0.23 
$ (0.17)
$ 0.17 
 
 
 
 
 
 
Weighted average stock options and restricted stock units that would have been included in the computation of dilutive common equivalent shares outstanding if net income had been reported in the period (shares)
19 
0 
17 
0 
 
 
 
 
 
 
Weighted average stock options and restricted stock units excluded from computation due to anti-dilutive effect (shares)
0 
3 
3 
3 
 
 
 
 
 
 
Concentration Risk, Number of Customers
 
 
 
 
0 
0 
0 
0 
1 
0 
Concentration Risk, Percentage
 
 
 
 
 
 
 
 
19.00% 
 
Fair Value Measurements (Details) (USD $)
In Millions, unless otherwise specified
Jan. 31, 2014
Jul. 31, 2013
Available-for-sale debt securities:
 
 
Total available-for-sale securities
$ 1,666 
$ 1,979 
Liabilities:
 
 
Long-term debt
499 
499 
Municipal bonds [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
517 
489 
Corporate notes [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
265 
269 
U.S. agency securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
71 
69 
Municipal auction rate securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
28 
33 
Available-for-sale corporate equity securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
28 
33 
Fair Value, Measurements, Recurring |
Total Fair Value
 
 
Assets:
 
 
Cash equivalents, primarily money market funds
402 
917 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
909 
893 
Total assets measured at fair value on a recurring basis
1,311 
1,810 
Liabilities:
 
 
Senior notes
560 1
560 1
Fair Value, Measurements, Recurring |
Total Fair Value |
Municipal bonds [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
517 
489 
Fair Value, Measurements, Recurring |
Total Fair Value |
Corporate notes [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
265 
269 
Fair Value, Measurements, Recurring |
Total Fair Value |
U.S. agency securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
71 
69 
Fair Value, Measurements, Recurring |
Total Fair Value |
Municipal auction rate securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
28 
33 
Fair Value, Measurements, Recurring |
Total Fair Value |
Available-for-sale corporate equity securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
28 
33 
Fair Value, Measurements, Recurring |
Level 1
 
 
Assets:
 
 
Cash equivalents, primarily money market funds
402 
917 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
28 
33 
Total assets measured at fair value on a recurring basis
430 
950 
Liabilities:
 
 
Senior notes
0 1
0 1
Fair Value, Measurements, Recurring |
Level 1 |
Municipal bonds [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Level 1 |
Corporate notes [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Level 1 |
U.S. agency securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Level 1 |
Municipal auction rate securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Level 1 |
Available-for-sale corporate equity securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
28 
33 
Fair Value, Measurements, Recurring |
Level 2
 
 
Assets:
 
 
Cash equivalents, primarily money market funds
0 
0 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
853 
827 
Total assets measured at fair value on a recurring basis
853 
827 
Liabilities:
 
 
Senior notes
560 1
560 1
Fair Value, Measurements, Recurring |
Level 2 |
Municipal bonds [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
517 
489 
Fair Value, Measurements, Recurring |
Level 2 |
Corporate notes [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
265 
269 
Fair Value, Measurements, Recurring |
Level 2 |
U.S. agency securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
71 
69 
Fair Value, Measurements, Recurring |
Level 2 |
Municipal auction rate securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Level 2 |
Available-for-sale corporate equity securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Level 3
 
 
Assets:
 
 
Cash equivalents, primarily money market funds
0 
0 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
28 
33 
Total assets measured at fair value on a recurring basis
28 
33 
Liabilities:
 
 
Senior notes
0 1
0 1
Fair Value, Measurements, Recurring |
Level 3 |
Municipal bonds [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Level 3 |
Corporate notes [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Level 3 |
U.S. agency securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Level 3 |
Municipal auction rate securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
28 
33 
Fair Value, Measurements, Recurring |
Level 3 |
Available-for-sale corporate equity securities [Member]
 
 
Available-for-sale debt securities:
 
 
Total available-for-sale securities
$ 0 
$ 0 
Fair Value Measurements (Details 1) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jan. 31, 2014
Level 3
Jan. 31, 2014
Fair Value, Measurements, Recurring
Total Fair Value
Jul. 31, 2013
Fair Value, Measurements, Recurring
Total Fair Value
Jan. 31, 2014
Fair Value, Measurements, Recurring
Level 1
Jul. 31, 2013
Fair Value, Measurements, Recurring
Level 1
Jan. 31, 2014
Fair Value, Measurements, Recurring
Level 2
Jul. 31, 2013
Fair Value, Measurements, Recurring
Level 2
Jan. 31, 2014
Fair Value, Measurements, Recurring
Level 3
Jul. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Jan. 31, 2014
Cash and Cash Equivalents [Member]
Jul. 31, 2013
Cash and Cash Equivalents [Member]
Jan. 31, 2014
Cash and Cash Equivalents [Member]
Fair Value, Measurements, Recurring
Total Fair Value
Jul. 31, 2013
Cash and Cash Equivalents [Member]
Fair Value, Measurements, Recurring
Total Fair Value
Jan. 31, 2014
Cash and Cash Equivalents [Member]
Fair Value, Measurements, Recurring
Level 1
Jul. 31, 2013
Cash and Cash Equivalents [Member]
Fair Value, Measurements, Recurring
Level 1
Jan. 31, 2014
Cash and Cash Equivalents [Member]
Fair Value, Measurements, Recurring
Level 2
Jul. 31, 2013
Cash and Cash Equivalents [Member]
Fair Value, Measurements, Recurring
Level 2
Jan. 31, 2014
Cash and Cash Equivalents [Member]
Fair Value, Measurements, Recurring
Level 3
Jul. 31, 2013
Cash and Cash Equivalents [Member]
Fair Value, Measurements, Recurring
Level 3
Jan. 31, 2014
Cash equivalents In funds held for customers
Fair Value, Measurements, Recurring
Total Fair Value
Jul. 31, 2013
Cash equivalents In funds held for customers
Fair Value, Measurements, Recurring
Total Fair Value
Jan. 31, 2014
Cash equivalents In funds held for customers
Fair Value, Measurements, Recurring
Level 1
Jul. 31, 2013
Cash equivalents In funds held for customers
Fair Value, Measurements, Recurring
Level 1
Jan. 31, 2014
Cash equivalents In funds held for customers
Fair Value, Measurements, Recurring
Level 2
Jul. 31, 2013
Cash equivalents In funds held for customers
Fair Value, Measurements, Recurring
Level 2
Jan. 31, 2014
Cash equivalents In funds held for customers
Fair Value, Measurements, Recurring
Level 3
Jul. 31, 2013
Cash equivalents In funds held for customers
Fair Value, Measurements, Recurring
Level 3
Jan. 31, 2014
Available-for-sale securities In investments
Fair Value, Measurements, Recurring
Total Fair Value
Jul. 31, 2013
Available-for-sale securities In investments
Fair Value, Measurements, Recurring
Total Fair Value
Jan. 31, 2014
Available-for-sale securities In investments
Fair Value, Measurements, Recurring
Level 1
Jul. 31, 2013
Available-for-sale securities In investments
Fair Value, Measurements, Recurring
Level 1
Jan. 31, 2014
Available-for-sale securities In investments
Fair Value, Measurements, Recurring
Level 2
Jul. 31, 2013
Available-for-sale securities In investments
Fair Value, Measurements, Recurring
Level 2
Jan. 31, 2014
Available-for-sale securities In investments
Fair Value, Measurements, Recurring
Level 3
Jul. 31, 2013
Available-for-sale securities In investments
Fair Value, Measurements, Recurring
Level 3
Jan. 31, 2014
Available-for-sale securities In funds held for customers
Fair Value, Measurements, Recurring
Total Fair Value
Jul. 31, 2013
Available-for-sale securities In funds held for customers
Fair Value, Measurements, Recurring
Total Fair Value
Jan. 31, 2014
Available-for-sale securities In funds held for customers
Fair Value, Measurements, Recurring
Level 1
Jul. 31, 2013
Available-for-sale securities In funds held for customers
Fair Value, Measurements, Recurring
Level 1
Jan. 31, 2014
Available-for-sale securities In funds held for customers
Fair Value, Measurements, Recurring
Level 2
Jul. 31, 2013
Available-for-sale securities In funds held for customers
Fair Value, Measurements, Recurring
Level 2
Jan. 31, 2014
Available-for-sale securities In funds held for customers
Fair Value, Measurements, Recurring
Level 3
Jul. 31, 2013
Available-for-sale securities In funds held for customers
Fair Value, Measurements, Recurring
Level 3
Jan. 31, 2014
Available-for-sale securities In long-term investments
Fair Value, Measurements, Recurring
Total Fair Value
Jul. 31, 2013
Available-for-sale securities In long-term investments
Fair Value, Measurements, Recurring
Total Fair Value
Jan. 31, 2014
Available-for-sale securities In long-term investments
Fair Value, Measurements, Recurring
Level 1
Jul. 31, 2013
Available-for-sale securities In long-term investments
Fair Value, Measurements, Recurring
Level 1
Jan. 31, 2014
Available-for-sale securities In long-term investments
Fair Value, Measurements, Recurring
Level 2
Jul. 31, 2013
Available-for-sale securities In long-term investments
Fair Value, Measurements, Recurring
Level 2
Jan. 31, 2014
Available-for-sale securities In long-term investments
Fair Value, Measurements, Recurring
Level 3
Jul. 31, 2013
Available-for-sale securities In long-term investments
Fair Value, Measurements, Recurring
Level 3
Cash equivalents:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents
 
$ 402 
$ 917 
$ 402 
$ 917 
$ 0 
$ 0 
$ 0 
$ 0 
$ 625 
$ 1,009 
$ 287 
$ 857 
$ 287 
$ 857 
$ 0 
$ 0 
$ 0 
$ 0 
$ 115 
$ 60 
$ 115 
$ 60 
$ 0 
$ 0 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities
 
$ 909 
$ 893 
$ 28 
$ 33 
$ 853 
$ 827 
$ 28 
$ 33 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 706 
$ 652 
$ 28 
$ 0 
$ 678 
$ 652 
$ 0 
$ 0 
$ 175 
$ 175 
$ 0 
$ 0 
$ 175 
$ 175 
$ 0 
$ 0 
$ 28 
$ 66 
$ 0 
$ 33 
$ 0 
$ 0 
$ 28 
$ 33 
Number of auction rate securities redeemed
5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of auction rate securities still outstanding
28 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and Cash Equivalents, Investments and Funds Held for Customers Classification on Balance Sheets (Details) (USD $)
In Millions, unless otherwise specified
Jan. 31, 2014
Jul. 31, 2013
Jan. 31, 2013
Jul. 31, 2012
Cash and Cash Equivalents Items [Line Items]
 
 
 
 
Cash and cash equivalents, Amortized Cost
$ 625 
$ 1,009 
$ 399 
$ 393 
Available-for-sale Securities, Fair Value Disclosure
1,666 
1,979 
 
 
Cash and Cash Equivalents and Available-for-sale Securities, Amortized Cost Basis
1,642 
1,951 
 
 
Cash and Cash Equivalents and Available-for-sale Securities, Fair Value Disclosure
1,666 
1,979 
 
 
Cash and Cash Equivalents [Member]
 
 
 
 
Cash and Cash Equivalents Items [Line Items]
 
 
 
 
Cash and cash equivalents, Amortized Cost
625 
1,009 
 
 
Cash and Cash Equivalents, Fair Value Disclosure
625 
1,009 
 
 
Investments [Member]
 
 
 
 
Cash and Cash Equivalents Items [Line Items]
 
 
 
 
Available-for-sale Securities, Amortized Cost Basis
682 
653 
 
 
Available-for-sale Securities, Fair Value Disclosure
706 
652 
 
 
Funds held for customers [Member]
 
 
 
 
Cash and Cash Equivalents Items [Line Items]
 
 
 
 
Available-for-sale Securities, Amortized Cost Basis
290 
235 
 
 
Available-for-sale Securities, Fair Value Disclosure
290 
235 
 
 
Long-term investments [Member]
 
 
 
 
Cash and Cash Equivalents Items [Line Items]
 
 
 
 
Available-for-sale Securities, Amortized Cost Basis
45 
54 
 
 
Available-for-sale Securities, Fair Value Disclosure
$ 45 
$ 83 
 
 
Cash and Cash Equivalents, Investments and Funds Held for Customers Type of issue (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jan. 31, 2014
Jul. 31, 2013
Jan. 31, 2013
Jul. 31, 2012
Jan. 31, 2014
Total cash and cash equivalents [Member]
Jul. 31, 2013
Total cash and cash equivalents [Member]
Jan. 31, 2014
Available-for-sale debt securities [Member]
Jul. 31, 2013
Available-for-sale debt securities [Member]
Jan. 31, 2014
Municipal bonds [Member]
Jul. 31, 2013
Municipal bonds [Member]
Jan. 31, 2014
Corporate notes [Member]
Jul. 31, 2013
Corporate notes [Member]
Jan. 31, 2014
U.S. agency securities [Member]
Jul. 31, 2013
U.S. agency securities [Member]
Jan. 31, 2014
Municipal auction rate securities [Member]
Jul. 31, 2013
Municipal auction rate securities [Member]
Jan. 31, 2014
Available-for-sale equity securities [Member]
Jul. 31, 2013
Available-for-sale equity securities [Member]
Jan. 31, 2014
Other long-term investments [Member]
Jul. 31, 2013
Other long-term investments [Member]
Cash and Cash Equivalents Items [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents, Amortized Cost
$ 625 
$ 1,009 
$ 399 
$ 393 
$ 740 
$ 1,069 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale Securities [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale Securities, Amortized Cost Basis
880 
860 
 
 
 
 
880 
860 
516 
489 
265 
269 
71 
69 
28 
33 
 
 
 
 
Available-for-sale Equity Securities, Amortized Cost Basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5 
5 
 
 
Available-for-sale Securities, Amortized Cost Basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
17 
17 
Total cash and cash equivalents investments and funds held for customers
1,642 
1,951 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale Securities, Fair Value Disclosure
1,666 
1,979 
 
 
740 
1,069 
881 
860 
517 
489 
265 
269 
71 
69 
28 
33 
28 
33 
17 
17 
Available-for-sale Securities, Gross Umrealized Gains
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 23 
 
 
 
Cash and Cash Equivalents, Investments and Funds Held for Customers Classified by the stated maturity date (Details) (USD $)
In Millions, unless otherwise specified
Jan. 31, 2014
Jul. 31, 2013
Available-for-sale Securities, Debt Maturities
 
 
Due within one year, Amortized Cost
$ 278 
$ 234 
Due within one year, Fair Value
278 
235 
Due within two years, Amortized Cost
311 
245 
Due within two years, Fair Value
311 
245 
Due within three years, Amortized Cost
147 
211 
Due within three years, Fair Value
148 
210 
Due after three years, Amortized Cost
144 
170 
Due after three years, Fair Value
144 
170 
Total available-for-sale debt securiites, Amortized Cost
880 
860 
Total available-for-sale debt securiites, Fair Value
$ 881 
$ 860 
Discontinued Operations (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 0 Months Ended
Jan. 31, 2014
Jan. 31, 2013
Aug. 2, 2013
Intuit Financial Services [Member]
Jan. 31, 2014
Intuit Financial Services [Member]
Jan. 31, 2014
Intuit Financial Services [Member]
Oct. 31, 2013
Intuit Health [Member]
Sep. 17, 2012
Intuit Websites [Member]
Discontinued Operations (Textuals)
 
 
 
 
 
 
 
Gross proceeds from sale of business
$ 1,025 
$ 60 
$ 1,025 
 
 
 
$ 60 
Net gain on disposal of business
 
 
 
36 
 
10 
32 
Net revenue from discontinued operations
 
 
 
80 
160 
 
 
Discontinued operation, income before income tax
 
 
 
15 
26 
 
 
Pre-tax loss on sale of discontinued operations
40 
53 
 
 
 
(4)
 
Tax effect on sale of discontinued operations
 
 
 
 
 
$ (14)
 
Current Liabilities (Details) (USD $)
0 Months Ended
Feb. 17, 2012
Current Liabilities (Textuals)
 
Unsecured revolving credit facility
$ 500,000,000 
Line of Credit New [Member]
 
Current Liabilities (Textuals)
 
Maximum ratio of debt to annual earnings before interest, taxes, depreciation and amortization as per agreement
3.25 
Minimum ratio of annual earnings before interest, taxes, depreciation and amortization to interest payable as per agreement
3.00 
JP Morgan Alternate Base [Member] |
Line of Credit [Member] |
Minimum [Member]
 
Current Liabilities (Textuals)
 
Basis spread on variable rate
0.00% 
JP Morgan Alternate Base [Member] |
Line of Credit [Member] |
Maximum [Member]
 
Current Liabilities (Textuals)
 
Basis spread on variable rate
0.50% 
LIBOR [Member] |
Line of Credit [Member] |
Minimum [Member]
 
Current Liabilities (Textuals)
 
Basis spread on variable rate
0.90% 
LIBOR [Member] |
Line of Credit [Member] |
Maximum [Member]
 
Current Liabilities (Textuals)
 
Basis spread on variable rate
1.50% 
Current Liabilities Other current liabilities (Details) (USD $)
In Millions, unless otherwise specified
Jan. 31, 2014
Jul. 31, 2013
Other Liabilities, Current [Abstract]
 
 
Reserve for product returns
$ 71 
$ 20 
Reserve for rebates
62 
15 
Current portion of license fee payable
10 
10 
Current portion of deferred rent
7 
8 
Interest payable
10 
10 
Executive deferred compensation plan liabilities
68 
64 
Other
32 
29 
Total other current liabilities
$ 260 
$ 156 
Long-Term Obligations (Details) (USD $)
6 Months Ended
Jan. 31, 2014
Jan. 31, 2013
Jul. 31, 2013
Mar. 12, 2007
5.75 percent fixed-rate notes due 2017 [Member]
Long Term Obligations (Textuals)
 
 
 
 
Senior notes
 
 
 
$ 500,000,000 
Senior notes, rate
 
 
 
5.75% 
Cash paid for interest on the Notes
14,000,000 
14,000,000 
 
 
Other long-term obligations
 
 
 
 
Total deferred rent
55,000,000 
 
55,000,000 
 
Total license fee payable
50,000,000 
 
48,000,000 
 
Long-term income tax liabilities
39,000,000 
 
38,000,000 
 
Long-term deferred revenue
16,000,000 
 
32,000,000 
 
Long-term deferred income tax liabilities
44,000,000 
 
6,000,000 
 
Other
8,000,000 
 
7,000,000 
 
Total long-term obligations
212,000,000 
 
186,000,000 
 
Less current portion (included in other current liabilities)
(18,000,000)
 
(19,000,000)
 
Long-term obligations due after one year
$ 194,000,000 
 
$ 167,000,000 
 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jan. 31, 2014
Jan. 31, 2013
Jan. 31, 2014
Jan. 31, 2013
Jul. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
 
 
Effective tax rate
31.00% 
17.00% 
30.00% 
 
 
Effective tax rate excluding the impact of discrete tax items
34.00% 
 
34.00% 
 
 
Federal statutory income tax rate
35.00% 
 
35.00% 
35.00% 
 
Income tax benefit
$ (17)
$ 13 
$ (40)
$ (12)
 
Income loss before income taxes
(54)
78 
(134)
(1)
 
Total amount of unrecognized tax benefits
 
 
 
 
39 
Unrecognized tax benefits, net of related deferred tax assets
 
 
 
 
27 
Favorable net impact to income tax expense due to recognition of tax benefits
 
 
 
 
$ 27 
Stockholders' Equity (Details) (USD $)
0 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended 1 Months Ended
Dec. 23, 2013
Aug. 23, 2013
Jan. 31, 2014
Jan. 31, 2013
Jan. 31, 2014
Jan. 31, 2013
Jan. 31, 2014
Stock Options [Member]
Jan. 31, 2014
Restricted Stock Units (RSUs) [Member]
Jan. 31, 2014
Cost of revenue [Member]
Jan. 31, 2013
Cost of revenue [Member]
Jan. 31, 2014
Cost of revenue [Member]
Jan. 31, 2013
Cost of revenue [Member]
Jan. 31, 2014
Selling and marketing [Member]
Jan. 31, 2013
Selling and marketing [Member]
Jan. 31, 2014
Selling and marketing [Member]
Jan. 31, 2013
Selling and marketing [Member]
Jan. 31, 2014
Research and development [Member]
Jan. 31, 2013
Research and development [Member]
Jan. 31, 2014
Research and development [Member]
Jan. 31, 2013
Research and development [Member]
Jan. 31, 2014
General and administrative [Member]
Jan. 31, 2013
General and administrative [Member]
Jan. 31, 2014
General and administrative [Member]
Jan. 31, 2013
General and administrative [Member]
Jan. 31, 2014
New Program [Member]
Feb. 28, 2014
Dividend Declared [Member]
Stockholders' Equity (Textuals)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock repurchased, share
2,600,000 
 
 
 
20,200,000 
3,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock repurchased, value
 
 
 
 
$ 1,402,000,000 
$ 200,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock Repurchase Program, Remaining Authorized Repurchase Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,000,000,000 
 
Accelerated share repurchase program, amount to be repurchased
 
1,400,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial amount paid under accelerated share repurchase agreement
 
(1,400,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock repurchased under the agreement
 
17,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Stock, Dividends, Per Share, Cash Paid
 
 
 
 
$ 0.38 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments of dividends
 
 
 
 
111,000,000 
101,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends declared per common share
 
 
$ 0.19 
$ 0.17 
$ 0.38 
$ 0.34 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.19 
Total share-based compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allocated Share-based Compensation Expense
 
 
52,000,000 
44,000,000 
99,000,000 
90,000,000 
 
 
2,000,000 
1,000,000 
4,000,000 
3,000,000 
16,000,000 
16,000,000 
31,000,000 
32,000,000 
16,000,000 
13,000,000 
30,000,000 
26,000,000 
18,000,000 
14,000,000 
34,000,000 
29,000,000 
 
 
Income tax benefit
 
 
(16,000,000)
(15,000,000)
(32,000,000)
(30,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Decrease in net income
 
 
36,000,000 
29,000,000 
67,000,000 
60,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Decrease in net income per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic (dollars per share)
 
 
$ 0.13 
$ 0.10 
$ 0.23 
$ 0.20 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted (dollars per share)
 
 
$ 0.13 
$ 0.10 
$ 0.23 
$ 0.20 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share based compensation expense for discontinued operations
 
 
 
3,000,000 
 
6,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based awards available for grant
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares Available for Grant, Beginning Balance
 
 
 
 
12,120,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional shares authorized
 
 
 
 
19,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options granted
 
 
 
 
(28,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted stock units granted
 
 
 
 
(1,436,000)1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based awards canceled/forfeited/expired
 
 
 
 
2,986,000 1 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares Available for Grant, Ending Balance
 
 
32,642,000 
 
32,642,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pool Shares Reduced For Each Share Granted
 
 
 
 
2.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pool Shares Increased For Each Share Forfeited
 
 
 
 
2.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary of stock option activity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares, Beginning Balance
 
 
 
 
14,206,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average exercise price per share, Beginning Balance
 
 
 
 
$ 43.77 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options assumed and converted in connection with acquisitions, number of shares
 
 
 
 
17,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options assumed and converted in connection with acquisitions, weighted average exercise price
 
 
 
 
$ 13.61 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options granted, number of shares
 
 
 
 
28,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options granted, weighted average exercise price per share
 
 
 
 
$ 66.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options exercised, number of shares
 
 
 
 
(3,064,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options exercised, weighted average exercise price per share
 
 
 
 
$ 38.12 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options canceled or expired, number of shares
 
 
 
 
(447,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options canceled or expired, weighted average exercise price per share
 
 
 
 
$ 52.77 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares, Ending Balance
 
 
10,740,000 
 
10,740,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average exercise price per share, Ending Balance
 
 
$ 45.02 
 
$ 45.02 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable
 
 
6,395,000 
 
6,395,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average exercise price per share, Exercisable
 
 
$ 36.38 
 
$ 36.38 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary of restricted stock unit activity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested at beginning of period
 
 
 
 
9,184,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested, Weighted Average Grant Date Fair Value, at beginning of period
 
 
 
 
$ 55.23 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted, Number of shares
 
 
 
 
624,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted, Weighted Average Grant Date Fair Value
 
 
 
 
$ 69.82 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted stock units assumed or granted in connection with acquisitions, Number of shares
 
 
 
 
656,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted stock units assumed or granted in connection with acquisitions, Weighted Average Grant Date Fair Value
 
 
 
 
$ 69.48 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested, Number of Shares
 
 
 
 
(784,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested, Weighted Average Grant Date Fair Value
 
 
 
 
$ 48.25 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forfeited, Number of Shares
 
 
 
 
(1,161,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forfeited, Weighted Average Grant Date Fair Value
 
 
 
 
$ 63.65 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested at end of period
 
 
8,519,000 
 
8,519,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested, Weighted Average Grant Date Fair Value, at end of period
 
 
$ 56.89 
 
$ 56.89 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation cost related to non-vested share based compensation expense
 
 
 
 
 
 
$ 42,000,000 
$ 289,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected weighted average vesting period to recognize compensation cost related to share based compensation expense, in years
 
 
 
 
 
 
2 years 
2 years 2 months 12 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Litigation (Details)
0 Months Ended
Jan. 13, 2012
claim
Commitments and Contingencies Disclosure [Abstract]
 
Number of class action claims filed
2 
Segment Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jan. 31, 2014
Jan. 31, 2013
Jan. 31, 2014
Segment
Jan. 31, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Number of Reportable Segments
 
 
3 
 
Financial results by reportable segment
 
 
 
 
Net revenue
$ 782 
$ 884 
$ 1,404 
$ 1,446 
Operating income (loss) from continuing operations
(46)
84 
(123)
11 
Unallocated corporate items:
 
 
 
 
Share-based compensation expense
(52)
(44)
(99)
(90)
Amortization of acquired technology
(6)
(5)
(12)
(9)
Amortization of other acquired intangible assets
(5)
(7)
(9)
(14)
Operating Segments [Member]
 
 
 
 
Financial results by reportable segment
 
 
 
 
Operating income (loss) from continuing operations
185 
294 
342 
431 
Small Business Segment [Member]
 
 
 
 
Financial results by reportable segment
 
 
 
 
Net revenue
560 
518 
1,080 
987 
Operating income (loss) from continuing operations
197 
190 
387 
355 
Small Business Segment [Member] |
Small Business Financial Solutions [Member]
 
 
 
 
Financial results by reportable segment
 
 
 
 
Net revenue
340 
323 
656 
614 
Small Business Segment [Member] |
Small Business Management Solutions [Member]
 
 
 
 
Financial results by reportable segment
 
 
 
 
Net revenue
202 
175 
391 
339 
Small Business Segment [Member] |
Accountant and Advisor [Member]
 
 
 
 
Financial results by reportable segment
 
 
 
 
Net revenue
18 
20 
33 
34 
Consumer Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Number of Product Lines
2 
 
2 
 
Financial results by reportable segment
 
 
 
 
Net revenue
187 
259 
264 
331 
Operating income (loss) from continuing operations
(3)
38 
(27)
21 
Consumer Segment [Member] |
Consumer Tax [Member]
 
 
 
 
Financial results by reportable segment
 
 
 
 
Net revenue
138 
216 
180 
254 
Consumer Segment [Member] |
Consumer Ecosystem [Member]
 
 
 
 
Financial results by reportable segment
 
 
 
 
Net revenue
49 
43 
84 
77 
Professional Tax Segment [Member]
 
 
 
 
Financial results by reportable segment
 
 
 
 
Net revenue
35 
107 
60 
128 
Operating income (loss) from continuing operations
(9)
66 
(18)
55 
Segment Reconciling Items [Member]
 
 
 
 
Unallocated corporate items:
 
 
 
 
Share-based compensation expense
(52)
(44)
(99)
(90)
Other common expenses
(168)
(154)
(345)
(307)
Amortization of acquired technology
(6)
(5)
(12)
(9)
Amortization of other acquired intangible assets
(5)
(7)
(9)
(14)
Total unallocated corporate items
$ (231)
$ (210)
$ (465)
$ (420)
Maximum [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
International Total Net Revenue As A Percentage Of Total
5.00% 
5.00% 
5.00% 
5.00%