Intuit Growth and Financial Forecast
About Non-GAAP Financial Measures
The accompanying presentation dated September 10, 2008 contains non-GAAP financial measures. Table 1 and Table 2 reconcile the non-GAAP financial
measures in that presentation to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP).
These non-GAAP financial measures include non-GAAP operating income (loss), non-GAAP net income (loss) 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 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 assessing the performance of the organization, our operating segments or our
senior management. Segment managers are not held accountable for share-based compensation expenses, acquisition-related costs, or the other excluded items
that may impact their business units' operating income (loss) and, accordingly, we exclude these amounts from our measures of segment performance. We also
exclude these amounts from our budget and planning process. We believe that our non-GAAP financial measures also facilitate the comparison of results for
current periods and guidance for future periods with results for past periods. We exclude the following items from our non-GAAP financial measures:
• Share-based compensation expenses. Our non-GAAP financial measures exclude share-based compensation expenses, which consist of expenses for stock
options, restricted stock, restricted stock units and purchases of common stock under our Employee Stock Purchase Plan. Segment managers are not held
accountable for share-based compensation expenses impacting their business units' operating income (loss) and, accordingly, we exclude share-based
compensation expenses from our measures of segment performance. While share-based compensation is a significant expense affecting our results of operations,
management excludes share-based compensation from our budget and planning process. We exclude share-based compensation expenses from our non-GAAP
financial measures for these reasons and the other reasons stated above. We compute weighted average dilutive shares using the method required by SFAS
123(R) for both GAAP and non-GAAP diluted net income per share.
• Amortization of purchased intangible assets and acquisition-related charges. In accordance with GAAP, amortization of purchased intangible assets in cost of
revenue includes amortization of software and other technology assets related to acquisitions and acquisition-related charges in operating expenses includes
amortization of other purchased intangible assets such as customer lists, covenants not to compete and trade names. Acquisition activities are managed on a
corporate-wide basis and segment managers are not held accountable for the acquisition-related costs impacting their business units' operating income (loss).
We exclude these amounts from our measures of segment performance and from our budget and planning process. We exclude these items from our non-GAAP
financial measures for these reasons, the other reasons stated above and because we believe that excluding these items facilitates comparisons to the results of
other companies in our industry, which have their own unique acquisition histories.
• Gains and losses on disposals of businesses and assets. We exclude these amounts from our non-GAAP financial measures for the reasons stated above and
because they are unrelated to our ongoing business operating results.
• Gains and losses on marketable equity securities and other investments. We exclude these amounts from our non-GAAP financial measures for the reasons
stated above and because they are unrelated to our ongoing business operating results.
• Income tax effects of excluded items. Our non-GAAP financial measures exclude the income tax effects of the adjustments described above that relate to the
current period as well as adjustments for similar items that relate to prior periods. We exclude the impact of these tax items for the reasons stated above and
because management believes that they are not indicative of our ongoing business operations.
• 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 for the reasons stated above and
because they are unrelated to our ongoing business operations.
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