Intuit Inc.
(Nasdaq:INTU) reaffirmed its financial guidance for the first quarter
and full fiscal year 2015, which was first provided on Aug. 21. The
company's fiscal year runs from Aug. 1 to July 31.
This announcement is in conjunction with Intuit’s annual Investor
Day, being held today at the company’s Mountain View, Calif.,
headquarters. President and Chief Executive Officer Brad
Smith (@IntuitBrad)
will lead off the event with an overview of the company’s strategy.
“We’re energized going into fiscal year 2015. The platform shift to the
cloud is accelerating our strategy to grow our global online
ecosystems,” said Smith. “As we’ve done successfully in the past, we’re
leaning into this secular shift, solving new important problems for
customers and extending our market leadership position.”
Intuit business leaders will focus on the company’s two strategic
outcomes: to be the operating system behind small business success, and
to do the nations’ taxes in the United States and Canada. Neil Williams,
Intuit’s chief financial officer, will provide a financial overview for
fiscal year 2015.
How to Participate
The event will be broadcast live on Intuit’s website at http://investors.intuit.com/events/default.aspx.
A replay of the audio webcast will be available on Intuit’s website two
hours after the meeting ends.
Forward-looking Guidance
Intuit reaffirmed guidance for full fiscal year 2015 and the first
quarter of fiscal 2015, which ends Oct. 31.
These results factor in the company’s strategic decisions to invest in
the acceleration to cloud-based subscriptions and to improve the
company’s future desktop offerings to encourage migration to online
services. As a result, desktop software license revenue will be
recognized over time as services are delivered, rather than up front.
For fiscal year 2015, the company expects:
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Revenue of $4.275 billion to $4.375 billion, a decline of 3 to 5
percent.
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Adjusted revenue of $4.75 billion to $4.85 billion, growth of 5 to
8 percent. This guidance takes into account the expected increase
in deferred revenue due to the change in future desktop product
offerings, as well as acceleration in the QuickBooks Online
ecosystem growth, which impacts near-term revenue growth as
customers pay monthly subscription fees.
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GAAP operating income of $800 million to $830 million.
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Non-GAAP operating income of $1.11 billion to $1.14 billion.
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GAAP diluted earnings per share of $1.70 to $1.75.
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Non-GAAP diluted EPS of $2.45 to $2.50.
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Fiscal 2015 Revenue Guidance Bridge
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Add Impact of
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Fiscal 2015
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Add Impact of
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Accelerated
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Revenue
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Desktop Product
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QuickBooks
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Adjusted Fiscal
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$ millions
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Guidance
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Offering Change
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Online Growth
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2015 Revenue
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Revenue
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$4,275 - $4,375
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Approx. $400
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Approx. $75
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$4,750 - $4,850
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Revenue Growth
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(5%) – (3%)
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NA
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NA
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5% - 8%
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For the first quarter of fiscal 2015, Intuit expects:
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Revenue of $620 million to $630 million.
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GAAP operating loss of $155 million to $160 million.
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Non-GAAP operating loss of $80 million to $85 million.
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GAAP loss per share of $0.36 to $0.37.
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Non-GAAP loss per share of $0.20 to $0.21.
Long-term Outlook
Looking beyond fiscal 2015, the company also reaffirmed its financial
outlook for fiscal 2017:
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Revenue of approximately $5.8 billion, 9 percent growth on average
over the next three years.
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Non-GAAP earnings per share of approximately $5.00.
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Adjusting for share-based compensation expenses and amortization of
intangibles, GAAP earnings per share of approximately $4.25.
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QuickBooks Online subscribers of approximately 2 million, an increase
from 683,000 at the end of fiscal 2014, compounded annual growth rate
of more than 40 percent.
About Intuit Inc.
Intuit Inc. creates business and
financial management solutions that simplify the business of life for
small businesses, consumers and accounting professionals.
Its flagship products and services include QuickBooks®,
Quicken® and TurboTax®,
which make it easier to manage small
businesses and payroll
processing, personal finance,
and tax preparation and filing.
Mint.com provides a fresh, easy and
intelligent way for people to manage their money, while Demandforce®
offers marketing and communication tools for small businesses. ProSeries®
and Lacerte® are Intuit's
leading tax preparation offerings for professional accountants.
Founded in 1983, Intuit had revenue of $4.5 billion in its fiscal year
2014. The company has approximately 8,000 employees with major offices
in the United States, Canada,
the United Kingdom, India
and other locations. More information can be found at www.intuit.com.
Intuit and the Intuit logo, among others, are registered trademarks
and/or registered service marks of Intuit Inc. in the United States and
other countries.
About Non-GAAP Financial Measures
This press release and accompanying table include non-GAAP financial
measures. For a description of these non-GAAP financial measures,
including the reasons management uses each measure, and reconciliations
of these non-GAAP financial measures to the most directly comparable
financial measures prepared in accordance with Generally Accepted
Accounting Principles, please see the section of the accompanying tables
titled "About Non-GAAP Financial Measures" as well as the related Table
1. A copy of the press release issued by Intuit today can be found on
the investor relations page of Intuit's Web site.
Cautions About Forward-looking Statements
This press release contains forward-looking statements, including
forecasts of expected growth and future financial results of Intuit and
its reporting segments; Intuit’s prospects for the business in fiscal
2015 and beyond; expectations regarding growth opportunities from
connected services; expectations regarding Intuit’s growth outside the
US; expectations regarding timing and growth of revenue for each of
Intuit’s reporting segments and from current or future products and
services; expectations regarding customer growth; expectations regarding
changes to our products and marketing campaigns and their impact on
Intuit’s business; expectations regarding the amount and timing of any
future dividends or share repurchases; the impact of acquisitions and
divestitures on Intuit’s business; expectations regarding availability
of our offerings; all of the statements under the headings
“Forward-looking Guidance” and “Long Term Outlook”, and expectations
regarding the impact of our refreshed company strategy, strategic
outcomes and organization changes on Intuit’s business. Because these
forward-looking statements involve risks and uncertainties, there are
important factors that could cause our actual results to differ
materially from the expectations expressed in the forward-looking
statements. More details about the risks that may impact our business
are included in our Form 10-K for fiscal 2014 and in our other SEC
filings. You can locate these reports through our website at http://investors.intuit.com.
Forward-looking statements are based on information as of Sept. 30, 2014
and we do not undertake any duty to update any forward-looking statement
or other information in these materials.
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TABLE 1
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INTUIT INC.
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RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL
MEASURES
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TO PROJECTED GAAP REVENUE, OPERATING INCOME (LOSS), AND EPS
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(In millions, except per share amounts)
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(Unaudited)
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Forward-Looking Guidance
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GAAP
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Non-GAAP
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Range of Estimate
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Range of Estimate
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From
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To
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Adjmts
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From
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To
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Three Months Ending October 31, 2014
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Revenue
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$
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620
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$
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630
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$
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—
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$
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620
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$
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630
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Operating loss
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$
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(160
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)
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$
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(155
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$
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75
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[a]
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$
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(85
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)
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$
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(80
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Diluted loss per share
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$
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(0.37
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)
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$
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(0.36
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)
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$
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0.16
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[b]
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$
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(0.21
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)
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$
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(0.20
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)
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Twelve Months Ending July 31, 2015
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Revenue
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$
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4,275
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$
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4,375
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$
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—
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$
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4,275
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$
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4,375
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Operating income
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$
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800
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$
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830
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$
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310
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[c]
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$
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1,110
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$
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1,140
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Diluted earnings per share
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$
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1.70
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$
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1.75
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$
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0.75
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[d]
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$
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2.45
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$
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2.50
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See “About Non-GAAP Financial Measures” immediately following this
Table 1 for information on these measures, the items excluded from
the most directly comparable GAAP measures in arriving at non-GAAP
financial measures, and the reasons management uses each measure and
excludes the specified amounts in arriving at each non-GAAP
financial measure.
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[a]
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Reflects estimated adjustments for share-based compensation expense
of approximately $59 million; amortization of acquired technology of
approximately $10 million; and amortization of other acquired
intangible assets of approximately $6 million.
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[b]
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Reflects the estimated adjustments in item [a] and income taxes
related to these adjustments.
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[c]
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Reflects estimated adjustments for share-based compensation expense
of approximately $253 million; amortization of acquired technology
of approximately $34 million; and amortization of other acquired
intangible assets of approximately $23 million.
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[d]
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Reflects the estimated adjustments in item [c] and income taxes
related to these adjustments.
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INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated September 30, 2014 contains
non-GAAP financial measures. Table 1 reconciles the non-GAAP financial
measures in that press release to the most directly comparable financial
measures prepared in accordance with Generally Accepted Accounting
Principles (GAAP). These non-GAAP financial measures include non-GAAP
operating income (loss), non-GAAP net income (loss) and non-GAAP net
income (loss) per share.
Non-GAAP financial measures should not be considered as a substitute
for, or superior to, measures of financial performance prepared in
accordance with GAAP. These non-GAAP financial measures do not reflect a
comprehensive system of accounting, differ from GAAP measures with the
same names and may differ from non-GAAP financial measures with the same
or similar names that are used by other companies.
We compute non-GAAP financial measures using the same consistent method
from quarter to quarter and year to year. We may consider whether other
significant items that arise in the future should be excluded from our
non-GAAP financial measures.
We exclude the following items from all of our non-GAAP financial
measures:
-
Share-based compensation expense
-
Amortization of acquired technology
-
Amortization of other acquired intangible assets
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Goodwill and intangible asset impairment charges
-
Professional fees for business combinations
We also exclude the following items from non-GAAP net income (loss) and
diluted net income (loss) per share:
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Gains and losses on debt securities and other investments
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Income tax effects of excluded items and related discrete tax items
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Discontinued operations
We believe that these non-GAAP financial measures provide meaningful
supplemental information regarding Intuit’s operating results primarily
because they exclude amounts that we do not consider part of ongoing
operating results when planning and forecasting and when assessing the
performance of the organization, our individual operating segments or
our senior management. Segment managers are not held accountable for
share-based compensation expense, amortization, or the other excluded
items and, accordingly, we exclude these amounts from our measures of
segment performance. We believe that our non-GAAP financial measures
also facilitate the comparison by management and investors of results
for current periods and guidance for future periods with results for
past periods.
The following are descriptions of the items we exclude from our non-GAAP
financial measures.
Share-based compensation expenses. These consist of non-cash
expenses for stock options, restricted stock units and our Employee
Stock Purchase Plan. When considering the impact of equity awards, we
place greater emphasis on overall shareholder dilution rather than the
accounting charges associated with those awards.
Amortization of acquired technology and amortization of other
acquired intangible assets. When we acquire an entity, we are
required by GAAP to record the fair values of the intangible assets of
the entity and amortize them over their useful lives. Amortization of
acquired technology in cost of revenue includes amortization of software
and other technology assets of acquired entities. Amortization of other
acquired intangible assets in operating expenses includes amortization
of assets such as customer lists, covenants not to compete and trade
names.
Goodwill and intangible asset impairment charges. We exclude from
our non-GAAP financial measures non-cash charges to adjust the carrying
values of goodwill and other acquired intangible assets to their
estimated fair values.
Professional fees for business combinations. We exclude from our
non-GAAP financial measures the professional fees we incur to complete
business combinations. These include investment banking, legal and
accounting fees.
Gains and losses on debt securities and other investments. We
exclude from our non-GAAP financial measures gains and losses that we
record when we sell or impair available-for-sale debt securities and
other investments.
Income tax effects of excluded items and certain discrete tax items.
We use a long-term non-GAAP tax rate for evaluating operating results
and for planning, forecasting, and analyzing future periods. This
long-term non-GAAP tax rate eliminates the effects of non-recurring and
period specific items which can vary in size and frequency. Based on our
current long-term projections, we used a long-term non-GAAP tax rate of
34% which is consistent with the average of our normalized fiscal year
tax rate over a four year period that includes the past three fiscal
years plus the current fiscal year forecast.
Operating results and gains and losses on the sale of discontinued
operations. From time to time, we sell or otherwise dispose of
selected operations as we adjust our portfolio of businesses to meet our
strategic goals. In accordance with GAAP, we segregate the operating
results of discontinued operations as well as gains and losses on the
sale of these discontinued operations from continuing operations on our
GAAP statements of operations but continue to include them in GAAP net
income or loss and net income or loss per share. We exclude these
amounts from our non-GAAP financial measures.
The reconciliations of the forward-looking non-GAAP financial measures
to the most directly comparable GAAP financial measures in Table 1
include all information reasonably available to Intuit at the date of
this press release. These tables include adjustments that we can
reasonably predict. Events that could cause the reconciliation to change
include acquisitions and divestitures of businesses, goodwill and other
asset impairments, and sales of available-for-sale debt securities and
other investments.
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