Options Outstanding | ||||||
(Shares in thousands) | Number of Shares | Weighted Average Exercise Price Per Share | ||||
Balance at July 31, 2012 | 18,061 | $37.49 | ||||
Granted | 2,607 | 62.93 | ||||
Exercised | (5,826 | ) | 32.79 | |||
Canceled or expired | (636 | ) | 44.60 | |||
Balance at July 31, 2013 | 14,206 | 43.77 | ||||
Granted | 2,206 | 82.15 | ||||
Assumed in connection with acquisitions | 261 | 5.16 | ||||
Exercised | (5,041 | ) | 37.74 | |||
Canceled or expired | (694 | ) | 54.77 | |||
Balance at July 31, 2014 | 10,938 | 52.67 | ||||
Granted | 1,981 | 106.86 | ||||
Exercised | (3,704 | ) | 41.65 | |||
Canceled or expired | (502 | ) | 62.32 | |||
Balance at July 31, 2015 | 8,713 | $69.13 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Total fair value of RSUs vested | $ | 282 | $ | 204 | $ | 224 | |||||
Share-based compensation for RSUs | $ | 188 | $ | 143 | $ | 122 | |||||
Total tax benefit related to RSU share-based compensation expense | $ | 63 | $ | 49 | $ | 42 | |||||
Cash tax benefits realized for tax deductions for RSUs | $ | 96 | $ | 134 | $ | 77 |
Twelve Months Ended July 31, | |||||||||||
(In millions except per share amounts) | 2015 | 2014 | 2013 | ||||||||
Weighted average fair value of options granted (per share) | $ | 19.39 | $ | 21.34 | $ | 11.24 | |||||
Total fair value of options vested | $ | 33 | $ | 20 | $ | 41 | |||||
Aggregate intrinsic value of options exercised | $ | 191 | $ | 177 | $ | 166 | |||||
Share-based compensation expense for stock options and ESPP | $ | 54 | $ | 43 | $ | 44 | |||||
Total tax benefit for stock option and ESPP share-based compensation | $ | 12 | $ | 11 | $ | 13 | |||||
Cash received from option exercises | $ | 154 | $ | 190 | $ | 191 | |||||
Cash tax benefits realized related to tax deductions for non-qualified option exercises and disqualifying dispositions under all share-based payment arrangements | $ | 68 | $ | 63 | $ | 60 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Gross unrecognized tax benefits, beginning balance | $ | 40 | $ | 39 | $ | 38 | |||||
Increases related to tax positions from prior fiscal years, including acquisitions | 15 | 4 | 5 | ||||||||
Decreases related to tax positions from prior fiscal years | (1 | ) | (8 | ) | (12 | ) | |||||
Increases related to tax positions taken during current fiscal year | 5 | 5 | 9 | ||||||||
Settlements with tax authorities | (3 | ) | — | (1 | ) | ||||||
Gross unrecognized tax benefits, ending balance | $ | 56 | $ | 40 | $ | 39 |
Twelve Months Ended July 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Assumptions for stock options: | ||||||||
Expected volatility (range) | 22% - 24% | 22% - 24% | 22% - 27% | |||||
Weighted average expected volatility | 23 | % | 23 | % | 23 | % | ||
Risk-free interest rate (range) | 1.13% - 1.47% | 1.01% - 1.40% | 0.49% - 1.05% | |||||
Expected dividend yield | 0.93% - 1.05% | 0.92% - 1.06% | 1.02% - 1.18% | |||||
Assumptions for ESPP: | ||||||||
Expected volatility (range) | 20% - 23% | 19% - 22% | 20% - 24% | |||||
Weighted average expected volatility | 21 | % | 21 | % | 22 | % | ||
Risk-free interest rate (range) | 0.01% - 0.15% | 0.02% - 0.08% | 0.05% - 0.11% | |||||
Expected dividend yield | 0.96% - 1.19% | 0.94% - 1.15% | 1.04% - 1.17% |
July 31, 2015 | July 31, 2014 | ||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Due within one year | $ | 434 | $ | 435 | $ | 363 | $ | 363 | |||||||
Due within two years | 443 | 442 | 443 | 443 | |||||||||||
Due within three years | 156 | 156 | 303 | 303 | |||||||||||
Due after three years | 47 | 46 | 120 | 121 | |||||||||||
Total available-for-sale debt securities | $ | 1,080 | $ | 1,079 | $ | 1,229 | $ | 1,230 |
July 31, 2015 | July 31, 2014 | ||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Type of issue: | |||||||||||||||
Total cash and cash equivalents | $ | 970 | $ | 970 | $ | 994 | $ | 994 | |||||||
Available-for-sale debt securities: | |||||||||||||||
Municipal bonds | 507 | 506 | 700 | 701 | |||||||||||
Municipal auction rate securities | 15 | 15 | 21 | 21 | |||||||||||
Corporate notes | 546 | 546 | 466 | 466 | |||||||||||
U.S. agency securities | 12 | 12 | 42 | 42 | |||||||||||
Total available-for-sale debt securities | 1,080 | 1,079 | 1,229 | 1,230 | |||||||||||
Other long-term investments | 12 | 12 | 10 | 10 | |||||||||||
Total cash and cash equivalents, investments and funds held for customers | $ | 2,062 | $ | 2,061 | $ | 2,233 | $ | 2,234 |
July 31, 2015 | July 31, 2014 | ||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Classification on balance sheets: | |||||||||||||||
Cash and cash equivalents | $ | 808 | $ | 808 | $ | 849 | $ | 849 | |||||||
Investments | 890 | 889 | 1,064 | 1,065 | |||||||||||
Funds held for customers | 337 | 337 | 289 | 289 | |||||||||||
Long-term investments | 27 | 27 | 31 | 31 | |||||||||||
Total cash and cash equivalents, investments and funds held for customers | $ | 2,062 | $ | 2,061 | $ | 2,233 | $ | 2,234 |
July 31, 2015 | July 31, 2014 | ||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Classification on balance sheets: | |||||||||||||||
Cash and cash equivalents | $ | 808 | $ | 808 | $ | 849 | $ | 849 | |||||||
Investments | 890 | 889 | 1,064 | 1,065 | |||||||||||
Funds held for customers | 337 | 337 | 289 | 289 | |||||||||||
Long-term investments | 27 | 27 | 31 | 31 | |||||||||||
Total cash and cash equivalents, investments and funds held for customers | $ | 2,062 | $ | 2,061 | $ | 2,233 | $ | 2,234 |
July 31, 2015 | July 31, 2014 | ||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Type of issue: | |||||||||||||||
Total cash and cash equivalents | $ | 970 | $ | 970 | $ | 994 | $ | 994 | |||||||
Available-for-sale debt securities: | |||||||||||||||
Municipal bonds | 507 | 506 | 700 | 701 | |||||||||||
Municipal auction rate securities | 15 | 15 | 21 | 21 | |||||||||||
Corporate notes | 546 | 546 | 466 | 466 | |||||||||||
U.S. agency securities | 12 | 12 | 42 | 42 | |||||||||||
Total available-for-sale debt securities | 1,080 | 1,079 | 1,229 | 1,230 | |||||||||||
Other long-term investments | 12 | 12 | 10 | 10 | |||||||||||
Total cash and cash equivalents, investments and funds held for customers | $ | 2,062 | $ | 2,061 | $ | 2,233 | $ | 2,234 |
July 31, 2015 | July 31, 2014 | ||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Due within one year | $ | 434 | $ | 435 | $ | 363 | $ | 363 | |||||||
Due within two years | 443 | 442 | 443 | 443 | |||||||||||
Due within three years | 156 | 156 | 303 | 303 | |||||||||||
Due after three years | 47 | 46 | 120 | 121 | |||||||||||
Total available-for-sale debt securities | $ | 1,080 | $ | 1,079 | $ | 1,229 | $ | 1,230 |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Deferred tax assets: | |||||||
Accruals and reserves not currently deductible | $ | 36 | $ | 53 | |||
Deferred rent | 10 | 8 | |||||
Accrued and deferred compensation | 52 | 48 | |||||
Loss and tax credit carryforwards | 44 | 41 | |||||
Share-based compensation | 52 | 50 | |||||
Net basis difference in investments held for sale | 122 | — | |||||
Other, net | 6 | 1 | |||||
Total deferred tax assets | 322 | 201 | |||||
Deferred tax liabilities: | |||||||
Intangible assets | 87 | 97 | |||||
Property and equipment | 20 | 4 | |||||
Total deferred tax liabilities | 107 | 101 | |||||
Total net deferred tax assets | 215 | 100 | |||||
Valuation allowance | (30 | ) | (20 | ) | |||
Total net deferred tax assets, net of valuation allowance | $ | 185 | $ | 80 |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Reserve for product returns | $ | 12 | $ | 15 | |||
Reserve for rebates | 12 | 21 | |||||
Current portion of license fee payable | 10 | 10 | |||||
Current portion of deferred rent | 8 | 6 | |||||
Interest payable | 10 | 10 | |||||
Executive deferred compensation plan liabilities | 63 | 62 | |||||
Other | 35 | 26 | |||||
Total other current liabilities | $ | 150 | $ | 150 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Income from continuing operations before income taxes | $ | 712 | $ | 1,300 | $ | 1,185 | |||||
Statutory federal income tax | $ | 249 | $ | 455 | $ | 415 | |||||
State income tax, net of federal benefit | 15 | 17 | 17 | ||||||||
Federal research and experimentation credits | (19 | ) | (7 | ) | (23 | ) | |||||
Domestic production activities deduction | (19 | ) | (25 | ) | (29 | ) | |||||
Share-based compensation | 15 | 8 | 6 | ||||||||
Effects of non-U.S. operations | 12 | 1 | (2 | ) | |||||||
Non-deductible goodwill | 40 | — | — | ||||||||
Other, net | 6 | (2 | ) | (6 | ) | ||||||
Total provision for income taxes from continuing operations | $ | 299 | $ | 447 | $ | 378 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
United States | $ | 716 | $ | 1,276 | $ | 1,140 | |||||
Foreign | (4 | ) | 24 | 45 | |||||||
Total | $ | 712 | $ | 1,300 | $ | 1,185 |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Total deferred rent | $ | 49 | $ | 52 | |||
Total license fee payable | 34 | 41 | |||||
Long-term income tax liabilities | 45 | 32 | |||||
Long-term deferred income tax liabilities | 50 | 44 | |||||
Other | 13 | 14 | |||||
Total long-term obligations | 191 | 183 | |||||
Less current portion (included in other current liabilities) | (19 | ) | (17 | ) | |||
Long-term obligations due after one year | $ | 172 | $ | 166 |
(In millions) | Operating Lease Commitments | Purchase Obligations | |||||
Fiscal year ending July 31, | |||||||
2016 | $ | 74 | $ | 26 | |||
2017 | 72 | 12 | |||||
2018 | 58 | 55 | |||||
2019 | 50 | — | |||||
2020 | 47 | — | |||||
Thereafter | 221 | 1 | |||||
Total commitments | $ | 522 | $ | 94 | |||
Less minimum payments to be received from non-cancellable subleases | (13 | ) | |||||
Net operating lease commitments | $ | 509 |
Number of Shares (in thousands) | Weighted Average Remaining Contractual Life (in Years) | Weighted Average Exercise Price per Share | Aggregate Intrinsic Value (in millions) | |||||||||
Options outstanding | 8,713 | 5.50 | $69.13 | $332 | ||||||||
Options vested and expected to vest | 8,282 | 5.36 | $67.86 | $326 | ||||||||
Options exercisable | 4,389 | 3.50 | $51.55 | $244 |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Total deferred rent | $ | 49 | $ | 52 | |||
Total license fee payable | 34 | 41 | |||||
Long-term income tax liabilities | 45 | 32 | |||||
Long-term deferred income tax liabilities | 50 | 44 | |||||
Other | 13 | 14 | |||||
Total long-term obligations | 191 | 183 | |||||
Less current portion (included in other current liabilities) | (19 | ) | (17 | ) | |||
Long-term obligations due after one year | $ | 172 | $ | 166 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Current: | |||||||||||
Federal | $ | 253 | $ | 358 | $ | 328 | |||||
State | 20 | 21 | 30 | ||||||||
Foreign | 7 | 10 | 5 | ||||||||
Total current | 280 | 389 | 363 | ||||||||
Deferred: | |||||||||||
Federal | 14 | 51 | 4 | ||||||||
State | 1 | 5 | 1 | ||||||||
Foreign | 4 | 2 | 10 | ||||||||
Total deferred | 19 | 58 | 15 | ||||||||
Total provision for income taxes from continuing operations | $ | 299 | $ | 447 | $ | 378 |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Accounts receivable | $ | 19 | $ | 19 | |||
Deferred income taxes | 5 | 9 | |||||
Prepaid and other current assets | 2 | 1 | |||||
Property and equipment, net | 25 | 17 | |||||
Goodwill | 165 | 312 | |||||
Purchased intangible assets, net | 43 | 66 | |||||
Other assets | 2 | 1 | |||||
Total assets | 261 | 425 | |||||
Accounts payable | 7 | 16 | |||||
Accrued compensation | 21 | 16 | |||||
Deferred revenue | 48 | 31 | |||||
Other current liabilities | 17 | 17 | |||||
Long-term deferred revenue | 39 | 7 | |||||
Long-term obligations | 29 | 27 | |||||
Total liabilities | 161 | 114 | |||||
Net assets | $ | 100 | $ | 311 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Net revenue from discontinued operations: | |||||||||||
Intuit Financial Services | $ | — | $ | — | $ | 325 | |||||
Intuit Health | — | 1 | 16 | ||||||||
Intuit Websites | — | — | 10 | ||||||||
Demandforce | 115 | 107 | 80 | ||||||||
QuickBase | 70 | 57 | 47 | ||||||||
Quicken | 51 | 98 | 99 | ||||||||
Total net revenue from discontinued operations | $ | 236 | $ | 263 | $ | 577 | |||||
Income (loss) from discontinued operations before income taxes: | |||||||||||
Intuit Financial Services | $ | — | $ | — | $ | 52 | |||||
Intuit Health | — | (1 | ) | (71 | ) | ||||||
Demandforce | (63 | ) | (51 | ) | (41 | ) | |||||
QuickBase | 11 | 7 | 10 | ||||||||
Quicken | (136 | ) | 57 | 58 | |||||||
Total income (loss) from discontinued operations before income taxes | $ | (188 | ) | $ | 12 | $ | 8 | ||||
Net income (loss) from discontinued operations: | |||||||||||
Net income from Intuit Financial Services operations | $ | — | $ | — | $ | 34 | |||||
Net gain on disposal of Intuit Financial Services discontinued operations | — | 36 | 8 | ||||||||
Net loss from Intuit Health operations | — | — | (57 | ) | |||||||
Net gain on disposal of Intuit Health discontinued operations | — | 10 | 18 | ||||||||
Net gain on disposal of Intuit Websites discontinued operations | — | — | 32 | ||||||||
Net loss from Demandforce operations | (39 | ) | (30 | ) | (27 | ) | |||||
Net income from QuickBase operations | 7 | 4 | 6 | ||||||||
Net income (loss) from Quicken operations | (140 | ) | 34 | 37 | |||||||
Tax benefit from discontinued operations | 124 | — | — | ||||||||
Total net income (loss) from discontinued operations | $ | (48 | ) | $ | 54 | $ | 51 |
At July 31, 2015 | At July 31, 2014 | ||||||||||||||||||||||||||||||
(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 | $ | 533 | $ | — | $ | — | $ | 533 | $ | 507 | $ | — | $ | — | $ | 507 | |||||||||||||||
In funds held for customers | 162 | — | — | 162 | 145 | — | — | 145 | |||||||||||||||||||||||
Total cash and cash equivalents | $ | 695 | $ | — | $ | — | $ | 695 | $ | 652 | $ | — | $ | — | $ | 652 | |||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||||||
In investments | $ | — | $ | 889 | $ | — | $ | 889 | $ | — | $ | 1,065 | $ | — | $ | 1,065 | |||||||||||||||
In funds held for customers | — | 175 | — | 175 | — | 144 | — | 144 | |||||||||||||||||||||||
In long-term investments | — | — | 15 | 15 | — | — | 21 | 21 | |||||||||||||||||||||||
Total available-for-sale securities | $ | — | $ | 1,064 | $ | 15 | $ | 1,079 | $ | — | $ | 1,209 | $ | 21 | $ | 1,230 |
• | 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 unobservable 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 values are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation. |
At July 31, 2015 | At July 31, 2014 | ||||||||||||||||||||||||||||||
(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 | $ | 695 | $ | — | $ | — | $ | 695 | $ | 652 | $ | — | $ | — | $ | 652 | |||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||||||||||
Municipal bonds | — | 506 | — | 506 | — | 701 | — | 701 | |||||||||||||||||||||||
Municipal auction rate securities | — | — | 15 | 15 | — | — | 21 | 21 | |||||||||||||||||||||||
Corporate notes | — | 546 | — | 546 | — | 466 | — | 466 | |||||||||||||||||||||||
U.S. agency securities | — | 12 | — | 12 | — | 42 | — | 42 | |||||||||||||||||||||||
Total available-for-sale securities | — | 1,064 | 15 | 1,079 | — | 1,209 | 21 | 1,230 | |||||||||||||||||||||||
Total assets measured at fair value on a recurring basis | $ | 695 | $ | 1,064 | $ | 15 | $ | 1,774 | $ | 652 | $ | 1,209 | $ | 21 | $ | 1,882 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Senior notes (1) | $ | — | $ | 531 | $ | — | $ | 531 | $ | — | $ | 556 | $ | — | $ | 556 |
(1) | Carrying value on our balance sheets at July 31, 2015 was $500 million and at July 31, 2014 was $499 million. See Note 9. |
At July 31, 2015 | At July 31, 2014 | ||||||||||||||||||||||||||||||
(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 | $ | 533 | $ | — | $ | — | $ | 533 | $ | 507 | $ | — | $ | — | $ | 507 | |||||||||||||||
In funds held for customers | 162 | — | — | 162 | 145 | — | — | 145 | |||||||||||||||||||||||
Total cash and cash equivalents | $ | 695 | $ | — | $ | — | $ | 695 | $ | 652 | $ | — | $ | — | $ | 652 | |||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||||||
In investments | $ | — | $ | 889 | $ | — | $ | 889 | $ | — | $ | 1,065 | $ | — | $ | 1,065 | |||||||||||||||
In funds held for customers | — | 175 | — | 175 | — | 144 | — | 144 | |||||||||||||||||||||||
In long-term investments | — | — | 15 | 15 | — | — | 21 | 21 | |||||||||||||||||||||||
Total available-for-sale securities | $ | — | $ | 1,064 | $ | 15 | $ | 1,079 | $ | — | $ | 1,209 | $ | 21 | $ | 1,230 |
(In millions) | Balance July 31, 2013 | Goodwill Acquired/ Adjusted | Balance July 31, 2014 | Goodwill Acquired/ Adjusted | Goodwill Impairment Charges | Balance July 31, 2015 | |||||||||||||||||
Small Business | $ | 988 | $ | 225 | $ | 1,213 | $ | 58 | (114 | ) | $ | 1,157 | |||||||||||
Consumer Tax | 19 | (2 | ) | 17 | 1 | — | 18 | ||||||||||||||||
Professional Tax | 93 | — | 93 | (2 | ) | — | 91 | ||||||||||||||||
Totals | $ | 1,100 | $ | 223 | $ | 1,323 | $ | 57 | $ | (114 | ) | $ | 1,266 |
(Dollars in millions) | Customer Lists | Purchased Technology | Trade Names and Logos | Covenants Not to Compete or Sue | Total | ||||||||||||||
At July 31, 2015: | |||||||||||||||||||
Cost | $ | 243 | $ | 371 | $ | 24 | $ | 32 | $ | 670 | |||||||||
Accumulated amortization | (239 | ) | (294 | ) | (23 | ) | (27 | ) | (583 | ) | |||||||||
Acquired intangible assets, net | $ | 4 | $ | 77 | $ | 1 | $ | 5 | $ | 87 | |||||||||
Weighted average life in years | 5 | 5 | 4 | 9 | 5 | ||||||||||||||
At July 31, 2014: | |||||||||||||||||||
Cost | $ | 244 | $ | 336 | $ | 23 | $ | 32 | $ | 635 | |||||||||
Accumulated amortization | (231 | ) | (227 | ) | (19 | ) | (25 | ) | (502 | ) | |||||||||
Acquired intangible assets, net | $ | 13 | $ | 109 | $ | 4 | $ | 7 | $ | 133 | |||||||||
Weighted average life in years | 7 | 5 | 8 | 8 | 6 |
(In millions) | Expected Future Amortization Expense | ||
Twelve months ending July 31, | |||
2016 | $ | 37 | |
2017 | 24 | ||
2018 | 16 | ||
2019 | 7 | ||
2020 | 3 | ||
Thereafter | — | ||
Total expected future amortization expense | $ | 87 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Current: | |||||||||||
Federal | $ | 253 | $ | 358 | $ | 328 | |||||
State | 20 | 21 | 30 | ||||||||
Foreign | 7 | 10 | 5 | ||||||||
Total current | 280 | 389 | 363 | ||||||||
Deferred: | |||||||||||
Federal | 14 | 51 | 4 | ||||||||
State | 1 | 5 | 1 | ||||||||
Foreign | 4 | 2 | 10 | ||||||||
Total deferred | 19 | 58 | 15 | ||||||||
Total provision for income taxes from continuing operations | $ | 299 | $ | 447 | $ | 378 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
United States | $ | 716 | $ | 1,276 | $ | 1,140 | |||||
Foreign | (4 | ) | 24 | 45 | |||||||
Total | $ | 712 | $ | 1,300 | $ | 1,185 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Income from continuing operations before income taxes | $ | 712 | $ | 1,300 | $ | 1,185 | |||||
Statutory federal income tax | $ | 249 | $ | 455 | $ | 415 | |||||
State income tax, net of federal benefit | 15 | 17 | 17 | ||||||||
Federal research and experimentation credits | (19 | ) | (7 | ) | (23 | ) | |||||
Domestic production activities deduction | (19 | ) | (25 | ) | (29 | ) | |||||
Share-based compensation | 15 | 8 | 6 | ||||||||
Effects of non-U.S. operations | 12 | 1 | (2 | ) | |||||||
Non-deductible goodwill | 40 | — | — | ||||||||
Other, net | 6 | (2 | ) | (6 | ) | ||||||
Total provision for income taxes from continuing operations | $ | 299 | $ | 447 | $ | 378 |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Deferred tax assets: | |||||||
Accruals and reserves not currently deductible | $ | 36 | $ | 53 | |||
Deferred rent | 10 | 8 | |||||
Accrued and deferred compensation | 52 | 48 | |||||
Loss and tax credit carryforwards | 44 | 41 | |||||
Share-based compensation | 52 | 50 | |||||
Net basis difference in investments held for sale | 122 | — | |||||
Other, net | 6 | 1 | |||||
Total deferred tax assets | 322 | 201 | |||||
Deferred tax liabilities: | |||||||
Intangible assets | 87 | 97 | |||||
Property and equipment | 20 | 4 | |||||
Total deferred tax liabilities | 107 | 101 | |||||
Total net deferred tax assets | 215 | 100 | |||||
Valuation allowance | (30 | ) | (20 | ) | |||
Total net deferred tax assets, net of valuation allowance | $ | 185 | $ | 80 |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Current deferred income taxes | $ | 231 | $ | 124 | |||
Long-term deferred income taxes included in other assets | 4 | — | |||||
Long-term deferred income taxes included in other long-term obligations | (50 | ) | (44 | ) | |||
Total net deferred tax assets, net of valuation allowance | $ | 185 | $ | 80 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Gross unrecognized tax benefits, beginning balance | $ | 40 | $ | 39 | $ | 38 | |||||
Increases related to tax positions from prior fiscal years, including acquisitions | 15 | 4 | 5 | ||||||||
Decreases related to tax positions from prior fiscal years | (1 | ) | (8 | ) | (12 | ) | |||||
Increases related to tax positions taken during current fiscal year | 5 | 5 | 9 | ||||||||
Settlements with tax authorities | (3 | ) | — | (1 | ) | ||||||
Gross unrecognized tax benefits, ending balance | $ | 56 | $ | 40 | $ | 39 |
(In millions) | Operating Lease Commitments | Purchase Obligations | |||||
Fiscal year ending July 31, | |||||||
2016 | $ | 74 | $ | 26 | |||
2017 | 72 | 12 | |||||
2018 | 58 | 55 | |||||
2019 | 50 | — | |||||
2020 | 47 | — | |||||
Thereafter | 221 | 1 | |||||
Total commitments | $ | 522 | $ | 94 | |||
Less minimum payments to be received from non-cancellable subleases | (13 | ) | |||||
Net operating lease commitments | $ | 509 |
Twelve Months Ended July 31, | |||||||||||
(In millions, except per share amounts) | 2015 | 2014 | 2013 | ||||||||
Numerator: | |||||||||||
Net income from continuing operations | $ | 413 | $ | 853 | $ | 807 | |||||
Net income (loss) from discontinued operations | (48 | ) | 54 | 51 | |||||||
Net income | $ | 365 | $ | 907 | $ | 858 | |||||
Denominator: | |||||||||||
Shares used in basic per share amounts: | |||||||||||
Weighted average common shares outstanding | 281 | 285 | 297 | ||||||||
Shares used in diluted per share amounts: | |||||||||||
Weighted average common shares outstanding | 281 | 285 | 297 | ||||||||
Dilutive common equivalent shares from stock options and restricted stock awards | 5 | 6 | 6 | ||||||||
Dilutive weighted average common shares outstanding | 286 | 291 | 303 | ||||||||
Basic and diluted net income per share: | |||||||||||
Basic net income per share from continuing operations | $ | 1.47 | $ | 2.99 | $ | 2.72 | |||||
Basic net income (loss) per share from discontinued operations | (0.17 | ) | 0.19 | 0.17 | |||||||
Basic net income per share | $ | 1.30 | $ | 3.18 | $ | 2.89 | |||||
Diluted net income per share from continuing operations | $ | 1.45 | $ | 2.94 | $ | 2.66 | |||||
Diluted net income (loss) per share from discontinued operations | (0.17 | ) | 0.18 | 0.17 | |||||||
Diluted net income per share | $ | 1.28 | $ | 3.12 | $ | 2.83 | |||||
Weighted average stock options and restricted stock units excluded from calculation due to anti-dilutive effect | 2 | — | 3 |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Reserve for product returns | $ | 12 | $ | 15 | |||
Reserve for rebates | 12 | 21 | |||||
Current portion of license fee payable | 10 | 10 | |||||
Current portion of deferred rent | 8 | 6 | |||||
Interest payable | 10 | 10 | |||||
Executive deferred compensation plan liabilities | 63 | 62 | |||||
Other | 35 | 26 | |||||
Total other current liabilities | $ | 150 | $ | 150 |
Life in | July 31, | ||||||||
(Dollars in millions) | Years | 2015 | 2014 | ||||||
Equipment | 3-5 | $ | 447 | $ | 398 | ||||
Computer software | 3-6 | 552 | 507 | ||||||
Furniture and fixtures | 5 | 71 | 68 | ||||||
Leasehold improvements | 2-16 | 286 | 273 | ||||||
Land | NA | 7 | 6 | ||||||
Buildings | 5-30 | 192 | 192 | ||||||
Capital in progress | NA | 188 | 127 | ||||||
1,743 | 1,571 | ||||||||
Less accumulated depreciation and amortization | (1,061 | ) | (982 | ) | |||||
Total property and equipment, net | $ | 682 | $ | 589 |
Life in | July 31, | ||||||||
(Dollars in millions) | Years | 2015 | 2014 | ||||||
Equipment | 3-5 | $ | 447 | $ | 398 | ||||
Computer software | 3-6 | 552 | 507 | ||||||
Furniture and fixtures | 5 | 71 | 68 | ||||||
Leasehold improvements | 2-16 | 286 | 273 | ||||||
Land | NA | 7 | 6 | ||||||
Buildings | 5-30 | 192 | 192 | ||||||
Capital in progress | NA | 188 | 127 | ||||||
1,743 | 1,571 | ||||||||
Less accumulated depreciation and amortization | (1,061 | ) | (982 | ) | |||||
Total property and equipment, net | $ | 682 | $ | 589 |
Fiscal 2015 Quarter Ended | |||||||||||||||
(In millions, except per share amounts) | October 31 | January 31 | April 30 | July 31 | |||||||||||
Total net revenue | $ | 612 | $ | 749 | $ | 2,135 | $ | 696 | |||||||
Cost of revenue | 159 | 188 | 202 | 176 | |||||||||||
All other costs and expenses | 562 | 650 | 867 | 650 | |||||||||||
Operating income (loss) from continuing operations | (109 | ) | (89 | ) | 1,066 | (130 | ) | ||||||||
Net income (loss) from continuing operations | (81 | ) | (60 | ) | 656 | (102 | ) | ||||||||
Net income (loss) from discontinued operations | (3 | ) | (6 | ) | (155 | ) | 116 | ||||||||
Net income (loss) | (84 | ) | (66 | ) | 501 | 14 | |||||||||
Basic net income (loss) per share from continuing operations | $ | (0.28 | ) | $ | (0.21 | ) | $ | 2.37 | $ | (0.37 | ) | ||||
Basic net income (loss) per share from discontinued operations | (0.01 | ) | (0.02 | ) | (0.56 | ) | 0.42 | ||||||||
Basic net income (loss) per share | $ | (0.29 | ) | $ | (0.23 | ) | $ | 1.81 | $ | 0.05 | |||||
Diluted net income (loss) per share from continuing operations | $ | (0.28 | ) | $ | (0.21 | ) | $ | 2.33 | $ | (0.37 | ) | ||||
Diluted net income (loss) per share from discontinued operations | (0.01 | ) | (0.02 | ) | (0.55 | ) | 0.42 | ||||||||
Diluted net income (loss) per share | $ | (0.29 | ) | $ | (0.23 | ) | $ | 1.78 | $ | 0.05 |
Fiscal 2014 Quarter Ended | |||||||||||||||
(In millions, except per share amounts) | October 31 | January 31 | April 30 | July 31 | |||||||||||
Total net revenue | $ | 565 | $ | 711 | $ | 2,318 | $ | 649 | |||||||
Cost of revenue | 133 | 164 | 158 | 166 | |||||||||||
All other costs and expenses | 509 | 602 | 673 | 538 | |||||||||||
Operating income (loss) from continuing operations | (77 | ) | (55 | ) | 1,487 | (55 | ) | ||||||||
Net income (loss) from continuing operations | (57 | ) | (42 | ) | 980 | (28 | ) | ||||||||
Net income (loss) from discontinued operations | 46 | 5 | 4 | (1 | ) | ||||||||||
Net income (loss) | (11 | ) | (37 | ) | 984 | (29 | ) | ||||||||
Basic net income (loss) per share from continuing operations | $ | (0.20 | ) | $ | (0.15 | ) | $ | 3.45 | $ | (0.10 | ) | ||||
Basic net income (loss) per share from discontinued operations | 0.16 | 0.02 | 0.02 | — | |||||||||||
Basic net income (loss) per share | $ | (0.04 | ) | $ | (0.13 | ) | $ | 3.47 | $ | (0.10 | ) | ||||
Diluted net income (loss) per share from continuing operations | $ | (0.20 | ) | $ | (0.15 | ) | $ | 3.38 | $ | (0.10 | ) | ||||
Diluted net income (loss) per share from discontinued operations | 0.16 | 0.02 | 0.01 | — | |||||||||||
Diluted net income (loss) per share | $ | (0.04 | ) | $ | (0.13 | ) | $ | 3.39 | $ | (0.10 | ) |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Unrealized gains on available-for-sale debt securities | $ | — | $ | 1 | |||
Foreign currency translation adjustments | (30 | ) | (3 | ) | |||
Total accumulated other comprehensive loss | $ | (30 | ) | $ | (2 | ) |
(Dollars in millions) | Customer Lists | Purchased Technology | Trade Names and Logos | Covenants Not to Compete or Sue | Total | ||||||||||||||
At July 31, 2015: | |||||||||||||||||||
Cost | $ | 243 | $ | 371 | $ | 24 | $ | 32 | $ | 670 | |||||||||
Accumulated amortization | (239 | ) | (294 | ) | (23 | ) | (27 | ) | (583 | ) | |||||||||
Acquired intangible assets, net | $ | 4 | $ | 77 | $ | 1 | $ | 5 | $ | 87 | |||||||||
Weighted average life in years | 5 | 5 | 4 | 9 | 5 | ||||||||||||||
At July 31, 2014: | |||||||||||||||||||
Cost | $ | 244 | $ | 336 | $ | 23 | $ | 32 | $ | 635 | |||||||||
Accumulated amortization | (231 | ) | (227 | ) | (19 | ) | (25 | ) | (502 | ) | |||||||||
Acquired intangible assets, net | $ | 13 | $ | 109 | $ | 4 | $ | 7 | $ | 133 | |||||||||
Weighted average life in years | 7 | 5 | 8 | 8 | 6 |
Twelve Months Ended July 31, | |||||||||||
(In millions except per share amounts) | 2015 | 2014 | 2013 | ||||||||
Cost of service and other revenue | $ | 6 | $ | 7 | $ | 4 | |||||
Selling and marketing | 69 | 53 | 55 | ||||||||
Research and development | 80 | 59 | 50 | ||||||||
General and administrative | 87 | 67 | 57 | ||||||||
Total share-based compensation expense from continuing operations | 242 | 186 | 166 | ||||||||
Income tax benefit | (75 | ) | (60 | ) | (55 | ) | |||||
Decrease in net income from continuing operations | $ | 167 | $ | 126 | $ | 111 | |||||
Decrease in net income per share from continuing operations: | |||||||||||
Basic | $ | 0.59 | $ | 0.44 | $ | 0.37 | |||||
Diluted | $ | 0.58 | $ | 0.43 | $ | 0.37 |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Current deferred income taxes | $ | 231 | $ | 124 | |||
Long-term deferred income taxes included in other assets | 4 | — | |||||
Long-term deferred income taxes included in other long-term obligations | (50 | ) | (44 | ) | |||
Total net deferred tax assets, net of valuation allowance | $ | 185 | $ | 80 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Net revenue from discontinued operations: | |||||||||||
Intuit Financial Services | $ | — | $ | — | $ | 325 | |||||
Intuit Health | — | 1 | 16 | ||||||||
Intuit Websites | — | — | 10 | ||||||||
Demandforce | 115 | 107 | 80 | ||||||||
QuickBase | 70 | 57 | 47 | ||||||||
Quicken | 51 | 98 | 99 | ||||||||
Total net revenue from discontinued operations | $ | 236 | $ | 263 | $ | 577 | |||||
Income (loss) from discontinued operations before income taxes: | |||||||||||
Intuit Financial Services | $ | — | $ | — | $ | 52 | |||||
Intuit Health | — | (1 | ) | (71 | ) | ||||||
Demandforce | (63 | ) | (51 | ) | (41 | ) | |||||
QuickBase | 11 | 7 | 10 | ||||||||
Quicken | (136 | ) | 57 | 58 | |||||||
Total income (loss) from discontinued operations before income taxes | $ | (188 | ) | $ | 12 | $ | 8 | ||||
Net income (loss) from discontinued operations: | |||||||||||
Net income from Intuit Financial Services operations | $ | — | $ | — | $ | 34 | |||||
Net gain on disposal of Intuit Financial Services discontinued operations | — | 36 | 8 | ||||||||
Net loss from Intuit Health operations | — | — | (57 | ) | |||||||
Net gain on disposal of Intuit Health discontinued operations | — | 10 | 18 | ||||||||
Net gain on disposal of Intuit Websites discontinued operations | — | — | 32 | ||||||||
Net loss from Demandforce operations | (39 | ) | (30 | ) | (27 | ) | |||||
Net income from QuickBase operations | 7 | 4 | 6 | ||||||||
Net income (loss) from Quicken operations | (140 | ) | 34 | 37 | |||||||
Tax benefit from discontinued operations | 124 | — | — | ||||||||
Total net income (loss) from discontinued operations | $ | (48 | ) | $ | 54 | $ | 51 |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Accounts receivable | $ | 19 | $ | 19 | |||
Deferred income taxes | 5 | 9 | |||||
Prepaid and other current assets | 2 | 1 | |||||
Property and equipment, net | 25 | 17 | |||||
Goodwill | 165 | 312 | |||||
Purchased intangible assets, net | 43 | 66 | |||||
Other assets | 2 | 1 | |||||
Total assets | 261 | 425 | |||||
Accounts payable | 7 | 16 | |||||
Accrued compensation | 21 | 16 | |||||
Deferred revenue | 48 | 31 | |||||
Other current liabilities | 17 | 17 | |||||
Long-term deferred revenue | 39 | 7 | |||||
Long-term obligations | 29 | 27 | |||||
Total liabilities | 161 | 114 | |||||
Net assets | $ | 100 | $ | 311 |
Twelve Months Ended July 31, | |||||||||||
(In millions, except per share amounts) | 2015 | 2014 | 2013 | ||||||||
Numerator: | |||||||||||
Net income from continuing operations | $ | 413 | $ | 853 | $ | 807 | |||||
Net income (loss) from discontinued operations | (48 | ) | 54 | 51 | |||||||
Net income | $ | 365 | $ | 907 | $ | 858 | |||||
Denominator: | |||||||||||
Shares used in basic per share amounts: | |||||||||||
Weighted average common shares outstanding | 281 | 285 | 297 | ||||||||
Shares used in diluted per share amounts: | |||||||||||
Weighted average common shares outstanding | 281 | 285 | 297 | ||||||||
Dilutive common equivalent shares from stock options and restricted stock awards | 5 | 6 | 6 | ||||||||
Dilutive weighted average common shares outstanding | 286 | 291 | 303 | ||||||||
Basic and diluted net income per share: | |||||||||||
Basic net income per share from continuing operations | $ | 1.47 | $ | 2.99 | $ | 2.72 | |||||
Basic net income (loss) per share from discontinued operations | (0.17 | ) | 0.19 | 0.17 | |||||||
Basic net income per share | $ | 1.30 | $ | 3.18 | $ | 2.89 | |||||
Diluted net income per share from continuing operations | $ | 1.45 | $ | 2.94 | $ | 2.66 | |||||
Diluted net income (loss) per share from discontinued operations | (0.17 | ) | 0.18 | 0.17 | |||||||
Diluted net income per share | $ | 1.28 | $ | 3.12 | $ | 2.83 | |||||
Weighted average stock options and restricted stock units excluded from calculation due to anti-dilutive effect | 2 | — | 3 |
At July 31, 2015 | At July 31, 2014 | ||||||||||||||||||||||||||||||
(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 | $ | 695 | $ | — | $ | — | $ | 695 | $ | 652 | $ | — | $ | — | $ | 652 | |||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||||||||||
Municipal bonds | — | 506 | — | 506 | — | 701 | — | 701 | |||||||||||||||||||||||
Municipal auction rate securities | — | — | 15 | 15 | — | — | 21 | 21 | |||||||||||||||||||||||
Corporate notes | — | 546 | — | 546 | — | 466 | — | 466 | |||||||||||||||||||||||
U.S. agency securities | — | 12 | — | 12 | — | 42 | — | 42 | |||||||||||||||||||||||
Total available-for-sale securities | — | 1,064 | 15 | 1,079 | — | 1,209 | 21 | 1,230 | |||||||||||||||||||||||
Total assets measured at fair value on a recurring basis | $ | 695 | $ | 1,064 | $ | 15 | $ | 1,774 | $ | 652 | $ | 1,209 | $ | 21 | $ | 1,882 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Senior notes (1) | $ | — | $ | 531 | $ | — | $ | 531 | $ | — | $ | 556 | $ | — | $ | 556 |
(1) | Carrying value on our balance sheets at July 31, 2015 was $500 million and at July 31, 2014 was $499 million. See Note 9. |
(In millions) | Balance July 31, 2013 | Goodwill Acquired/ Adjusted | Balance July 31, 2014 | Goodwill Acquired/ Adjusted | Goodwill Impairment Charges | Balance July 31, 2015 | |||||||||||||||||
Small Business | $ | 988 | $ | 225 | $ | 1,213 | $ | 58 | (114 | ) | $ | 1,157 | |||||||||||
Consumer Tax | 19 | (2 | ) | 17 | 1 | — | 18 | ||||||||||||||||
Professional Tax | 93 | — | 93 | (2 | ) | — | 91 | ||||||||||||||||
Totals | $ | 1,100 | $ | 223 | $ | 1,323 | $ | 57 | $ | (114 | ) | $ | 1,266 |
Fiscal 2015 Quarter Ended | |||||||||||||||
(In millions, except per share amounts) | October 31 | January 31 | April 30 | July 31 | |||||||||||
Total net revenue | $ | 612 | $ | 749 | $ | 2,135 | $ | 696 | |||||||
Cost of revenue | 159 | 188 | 202 | 176 | |||||||||||
All other costs and expenses | 562 | 650 | 867 | 650 | |||||||||||
Operating income (loss) from continuing operations | (109 | ) | (89 | ) | 1,066 | (130 | ) | ||||||||
Net income (loss) from continuing operations | (81 | ) | (60 | ) | 656 | (102 | ) | ||||||||
Net income (loss) from discontinued operations | (3 | ) | (6 | ) | (155 | ) | 116 | ||||||||
Net income (loss) | (84 | ) | (66 | ) | 501 | 14 | |||||||||
Basic net income (loss) per share from continuing operations | $ | (0.28 | ) | $ | (0.21 | ) | $ | 2.37 | $ | (0.37 | ) | ||||
Basic net income (loss) per share from discontinued operations | (0.01 | ) | (0.02 | ) | (0.56 | ) | 0.42 | ||||||||
Basic net income (loss) per share | $ | (0.29 | ) | $ | (0.23 | ) | $ | 1.81 | $ | 0.05 | |||||
Diluted net income (loss) per share from continuing operations | $ | (0.28 | ) | $ | (0.21 | ) | $ | 2.33 | $ | (0.37 | ) | ||||
Diluted net income (loss) per share from discontinued operations | (0.01 | ) | (0.02 | ) | (0.55 | ) | 0.42 | ||||||||
Diluted net income (loss) per share | $ | (0.29 | ) | $ | (0.23 | ) | $ | 1.78 | $ | 0.05 |
Fiscal 2014 Quarter Ended | |||||||||||||||
(In millions, except per share amounts) | October 31 | January 31 | April 30 | July 31 | |||||||||||
Total net revenue | $ | 565 | $ | 711 | $ | 2,318 | $ | 649 | |||||||
Cost of revenue | 133 | 164 | 158 | 166 | |||||||||||
All other costs and expenses | 509 | 602 | 673 | 538 | |||||||||||
Operating income (loss) from continuing operations | (77 | ) | (55 | ) | 1,487 | (55 | ) | ||||||||
Net income (loss) from continuing operations | (57 | ) | (42 | ) | 980 | (28 | ) | ||||||||
Net income (loss) from discontinued operations | 46 | 5 | 4 | (1 | ) | ||||||||||
Net income (loss) | (11 | ) | (37 | ) | 984 | (29 | ) | ||||||||
Basic net income (loss) per share from continuing operations | $ | (0.20 | ) | $ | (0.15 | ) | $ | 3.45 | $ | (0.10 | ) | ||||
Basic net income (loss) per share from discontinued operations | 0.16 | 0.02 | 0.02 | — | |||||||||||
Basic net income (loss) per share | $ | (0.04 | ) | $ | (0.13 | ) | $ | 3.47 | $ | (0.10 | ) | ||||
Diluted net income (loss) per share from continuing operations | $ | (0.20 | ) | $ | (0.15 | ) | $ | 3.38 | $ | (0.10 | ) | ||||
Diluted net income (loss) per share from discontinued operations | 0.16 | 0.02 | 0.01 | — | |||||||||||
Diluted net income (loss) per share | $ | (0.04 | ) | $ | (0.13 | ) | $ | 3.39 | $ | (0.10 | ) |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Net revenue: | |||||||||||
Small Business segment | $ | 2,108 | $ | 2,158 | $ | 1,988 | |||||
Consumer Tax segment | 1,800 | 1,663 | 1,552 | ||||||||
Professional Tax segment | 284 | 422 | 406 | ||||||||
Total net revenue | $ | 4,192 | $ | 4,243 | $ | 3,946 | |||||
Operating income from continuing operations: | |||||||||||
Small Business segment | 696 | 852 | 806 | ||||||||
Consumer Tax segment | 1,131 | 1,075 | 964 | ||||||||
Professional Tax segment | 108 | 268 | 260 | ||||||||
Total segment operating income | 1,935 | 2,195 | 2,030 | ||||||||
Unallocated corporate items: | |||||||||||
Share-based compensation expense | (242 | ) | (186 | ) | (166 | ) | |||||
Other common expenses | (765 | ) | (684 | ) | (626 | ) | |||||
Amortization of acquired technology | (30 | ) | (18 | ) | (13 | ) | |||||
Amortization of other acquired intangible assets | (12 | ) | (7 | ) | (17 | ) | |||||
Goodwill and intangible asset impairment charges | (148 | ) | — | — | |||||||
Total unallocated corporate items | (1,197 | ) | (895 | ) | (822 | ) | |||||
Total operating income from continuing operations | $ | 738 | $ | 1,300 | $ | 1,208 |
(Shares in thousands) | Number of Shares | Weighted Average Grant Date Fair Value | ||||
Nonvested at July 31, 2012 | 9,607 | $46.79 | ||||
Granted | 4,048 | 62.76 | ||||
Vested | (3,670 | ) | 43.00 | |||
Forfeited | (801 | ) | 48.16 | |||
Nonvested at July 31, 2013 | 9,184 | 55.23 | ||||
Granted | 3,896 | 71.37 | ||||
Assumed or granted in connection with acquisitions | 782 | 71.00 | ||||
Vested | (2,820 | ) | 53.98 | |||
Forfeited | (1,587 | ) | 61.76 | |||
Nonvested at July 31, 2014 | 9,455 | 62.46 | ||||
Granted | 3,501 | 100.18 | ||||
Assumed or granted in connection with acquisitions | 292 | 91.87 | ||||
Vested | (3,155 | ) | 67.00 | |||
Forfeited | (1,177 | ) | 62.32 | |||
Nonvested at July 31, 2015 | 8,916 | $76.64 |
(Shares in thousands) | Shares Available for Grant | |
Balance at July 31, 2012 | 21,760 | |
Options granted | (2,607 | ) |
Restricted stock units granted (1) | (9,310 | ) |
Share-based awards canceled/forfeited/expired (1)(2) | 2,277 | |
Balance at July 31, 2013 | 12,120 | |
Additional shares authorized | 19,000 | |
Options granted | (2,206 | ) |
Restricted stock units granted (1) | (8,959 | ) |
Share-based awards canceled/forfeited/expired (1)(2) | 4,248 | |
Balance at July 31, 2014 | 24,203 | |
Options granted | (1,981 | ) |
Restricted stock units granted (1) | (8,053 | ) |
Share-based awards canceled/forfeited/expired (1)(2) | 3,014 | |
Balance at July 31, 2015 | 17,183 |
(1) | RSUs granted from the pool of shares available for grant under our 2005 Equity Incentive Plan 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. |
(In millions) | Beginning Balance | Additions Charged to Expense/ Revenue | Deductions | Ending Balance | |||||||||||
Year ended July 31, 2015 | |||||||||||||||
Allowance for doubtful accounts | $ | 40 | $ | 57 | $ | (52 | ) | $ | 45 | ||||||
Reserve for product returns | 15 | 68 | (71 | ) | 12 | ||||||||||
Reserve for rebates | 21 | 97 | (106 | ) | 12 | ||||||||||
Year ended July 31, 2014 | |||||||||||||||
Allowance for doubtful accounts | $ | 38 | $ | 50 | $ | (48 | ) | $ | 40 | ||||||
Reserve for product returns | 14 | 74 | (73 | ) | 15 | ||||||||||
Reserve for rebates | 14 | 103 | (96 | ) | 21 | ||||||||||
Year ended July 31, 2013 | |||||||||||||||
Allowance for doubtful accounts | $ | 46 | $ | 49 | $ | (57 | ) | $ | 38 | ||||||
Reserve for product returns | 16 | 92 | (94 | ) | 14 | ||||||||||
Reserve for rebates | 16 | 107 | (109 | ) | 14 |
Notes: | The table above excludes balances and activity for our discontinued operations for all periods presented. |
(In millions) | Expected Future Amortization Expense | ||
Twelve months ending July 31, | |||
2016 | $ | 37 | |
2017 | 24 | ||
2018 | 16 | ||
2019 | 7 | ||
2020 | 3 | ||
Thereafter | — | ||
Total expected future amortization expense | $ | 87 |
• | QuickBooks financial and business management online services and desktop software; QuickBooks technical support; and financial supplies. |
• | QuickBooks Accountant, QuickBooks Accountant Plus, and QuickBooks Online Accountant as well as the QuickBooks ProAdvisor Program, all of which are intended for the accounting professionals who serve small businesses. |
• | Small business payroll products and services, including online payroll offerings such as Quickbooks Online Payroll and Intuit Online Payroll; desktop payroll offerings such as QuickBooks Basic Payroll and QuickBooks Enhanced Payroll; and full service payroll offerings such as Intuit Full Service Payroll and QuickBooks Assisted Payroll. |
• | Payment processing services for small businesses, including merchant services such as credit and debit card processing; Web-based transaction processing services for online merchants; secure online payments for small businesses and their customers through the Intuit Commerce Network; GoPayment mobile payment processing services; and QuickBooks Point of Sale solutions. |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Net revenue: | |||||||||||
Small Business segment | $ | 2,108 | $ | 2,158 | $ | 1,988 | |||||
Consumer Tax segment | 1,800 | 1,663 | 1,552 | ||||||||
Professional Tax segment | 284 | 422 | 406 | ||||||||
Total net revenue | $ | 4,192 | $ | 4,243 | $ | 3,946 | |||||
Operating income from continuing operations: | |||||||||||
Small Business segment | 696 | 852 | 806 | ||||||||
Consumer Tax segment | 1,131 | 1,075 | 964 | ||||||||
Professional Tax segment | 108 | 268 | 260 | ||||||||
Total segment operating income | 1,935 | 2,195 | 2,030 | ||||||||
Unallocated corporate items: | |||||||||||
Share-based compensation expense | (242 | ) | (186 | ) | (166 | ) | |||||
Other common expenses | (765 | ) | (684 | ) | (626 | ) | |||||
Amortization of acquired technology | (30 | ) | (18 | ) | (13 | ) | |||||
Amortization of other acquired intangible assets | (12 | ) | (7 | ) | (17 | ) | |||||
Goodwill and intangible asset impairment charges | (148 | ) | — | — | |||||||
Total unallocated corporate items | (1,197 | ) | (895 | ) | (822 | ) | |||||
Total operating income from continuing operations | $ | 738 | $ | 1,300 | $ | 1,208 |
Twelve Months Ended July 31, | |||||||||||
(In millions except per share amounts) | 2015 | 2014 | 2013 | ||||||||
Cost of service and other revenue | $ | 6 | $ | 7 | $ | 4 | |||||
Selling and marketing | 69 | 53 | 55 | ||||||||
Research and development | 80 | 59 | 50 | ||||||||
General and administrative | 87 | 67 | 57 | ||||||||
Total share-based compensation expense from continuing operations | 242 | 186 | 166 | ||||||||
Income tax benefit | (75 | ) | (60 | ) | (55 | ) | |||||
Decrease in net income from continuing operations | $ | 167 | $ | 126 | $ | 111 | |||||
Decrease in net income per share from continuing operations: | |||||||||||
Basic | $ | 0.59 | $ | 0.44 | $ | 0.37 | |||||
Diluted | $ | 0.58 | $ | 0.43 | $ | 0.37 |
Twelve Months Ended July 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Assumptions for stock options: | ||||||||
Expected volatility (range) | 22% - 24% | 22% - 24% | 22% - 27% | |||||
Weighted average expected volatility | 23 | % | 23 | % | 23 | % | ||
Risk-free interest rate (range) | 1.13% - 1.47% | 1.01% - 1.40% | 0.49% - 1.05% | |||||
Expected dividend yield | 0.93% - 1.05% | 0.92% - 1.06% | 1.02% - 1.18% | |||||
Assumptions for ESPP: | ||||||||
Expected volatility (range) | 20% - 23% | 19% - 22% | 20% - 24% | |||||
Weighted average expected volatility | 21 | % | 21 | % | 22 | % | ||
Risk-free interest rate (range) | 0.01% - 0.15% | 0.02% - 0.08% | 0.05% - 0.11% | |||||
Expected dividend yield | 0.96% - 1.19% | 0.94% - 1.15% | 1.04% - 1.17% |
(Shares in thousands) | Shares Available for Grant | |
Balance at July 31, 2012 | 21,760 | |
Options granted | (2,607 | ) |
Restricted stock units granted (1) | (9,310 | ) |
Share-based awards canceled/forfeited/expired (1)(2) | 2,277 | |
Balance at July 31, 2013 | 12,120 | |
Additional shares authorized | 19,000 | |
Options granted | (2,206 | ) |
Restricted stock units granted (1) | (8,959 | ) |
Share-based awards canceled/forfeited/expired (1)(2) | 4,248 | |
Balance at July 31, 2014 | 24,203 | |
Options granted | (1,981 | ) |
Restricted stock units granted (1) | (8,053 | ) |
Share-based awards canceled/forfeited/expired (1)(2) | 3,014 | |
Balance at July 31, 2015 | 17,183 |
(1) | RSUs granted from the pool of shares available for grant under our 2005 Equity Incentive Plan 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. |
Options Outstanding | ||||||
(Shares in thousands) | Number of Shares | Weighted Average Exercise Price Per Share | ||||
Balance at July 31, 2012 | 18,061 | $37.49 | ||||
Granted | 2,607 | 62.93 | ||||
Exercised | (5,826 | ) | 32.79 | |||
Canceled or expired | (636 | ) | 44.60 | |||
Balance at July 31, 2013 | 14,206 | 43.77 | ||||
Granted | 2,206 | 82.15 | ||||
Assumed in connection with acquisitions | 261 | 5.16 | ||||
Exercised | (5,041 | ) | 37.74 | |||
Canceled or expired | (694 | ) | 54.77 | |||
Balance at July 31, 2014 | 10,938 | 52.67 | ||||
Granted | 1,981 | 106.86 | ||||
Exercised | (3,704 | ) | 41.65 | |||
Canceled or expired | (502 | ) | 62.32 | |||
Balance at July 31, 2015 | 8,713 | $69.13 |
Number of Shares (in thousands) | Weighted Average Remaining Contractual Life (in Years) | Weighted Average Exercise Price per Share | Aggregate Intrinsic Value (in millions) | |||||||||
Options outstanding | 8,713 | 5.50 | $69.13 | $332 | ||||||||
Options vested and expected to vest | 8,282 | 5.36 | $67.86 | $326 | ||||||||
Options exercisable | 4,389 | 3.50 | $51.55 | $244 |
Twelve Months Ended July 31, | |||||||||||
(In millions except per share amounts) | 2015 | 2014 | 2013 | ||||||||
Weighted average fair value of options granted (per share) | $ | 19.39 | $ | 21.34 | $ | 11.24 | |||||
Total fair value of options vested | $ | 33 | $ | 20 | $ | 41 | |||||
Aggregate intrinsic value of options exercised | $ | 191 | $ | 177 | $ | 166 | |||||
Share-based compensation expense for stock options and ESPP | $ | 54 | $ | 43 | $ | 44 | |||||
Total tax benefit for stock option and ESPP share-based compensation | $ | 12 | $ | 11 | $ | 13 | |||||
Cash received from option exercises | $ | 154 | $ | 190 | $ | 191 | |||||
Cash tax benefits realized related to tax deductions for non-qualified option exercises and disqualifying dispositions under all share-based payment arrangements | $ | 68 | $ | 63 | $ | 60 |
(Shares in thousands) | Number of Shares | Weighted Average Grant Date Fair Value | ||||
Nonvested at July 31, 2012 | 9,607 | $46.79 | ||||
Granted | 4,048 | 62.76 | ||||
Vested | (3,670 | ) | 43.00 | |||
Forfeited | (801 | ) | 48.16 | |||
Nonvested at July 31, 2013 | 9,184 | 55.23 | ||||
Granted | 3,896 | 71.37 | ||||
Assumed or granted in connection with acquisitions | 782 | 71.00 | ||||
Vested | (2,820 | ) | 53.98 | |||
Forfeited | (1,587 | ) | 61.76 | |||
Nonvested at July 31, 2014 | 9,455 | 62.46 | ||||
Granted | 3,501 | 100.18 | ||||
Assumed or granted in connection with acquisitions | 292 | 91.87 | ||||
Vested | (3,155 | ) | 67.00 | |||
Forfeited | (1,177 | ) | 62.32 | |||
Nonvested at July 31, 2015 | 8,916 | $76.64 |
Twelve Months Ended July 31, | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Total fair value of RSUs vested | $ | 282 | $ | 204 | $ | 224 | |||||
Share-based compensation for RSUs | $ | 188 | $ | 143 | $ | 122 | |||||
Total tax benefit related to RSU share-based compensation expense | $ | 63 | $ | 49 | $ | 42 | |||||
Cash tax benefits realized for tax deductions for RSUs | $ | 96 | $ | 134 | $ | 77 |
July 31, | |||||||
(In millions) | 2015 | 2014 | |||||
Unrealized gains on available-for-sale debt securities | $ | — | $ | 1 | |||
Foreign currency translation adjustments | (30 | ) | (3 | ) | |||
Total accumulated other comprehensive loss | $ | (30 | ) | $ | (2 | ) |