[ X ] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended ~~April 30, 2001~~January 31, 2002 or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ~~____________~~______________ to ~~____________. COMMISSION FILE NUMBER~~______________ .

2535 ~~GARCIA AVENUE, MOUNTAIN VIEW,~~Garcia Avenue, Mountain View, CA 94043 ~~------------------------------------------- (Address~~

Indicate by a check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes X No ~~----- -----~~

Indicate the number of shares outstanding of each of the ~~issuer's~~issuer’s classes of common stock, as of the latest practicable date.

Approximately ~~209,143,388~~212,690,599 shares of Common Stock, $0.01 par value, as of ~~May~~January 31, ~~2001~~ ~~2 - --------------------------------------------------------------------------------~~ 2002

FORM 10-Q
INTUIT INC.
INDEX ~~- --------------------------------------------------------------------------------~~

~~JULY~~
(1)		Includes $9.5 million and $8.1 million of loans due from affiliates as of July 31, ~~APRIL 30, (In thousands; Unaudited) 2000~~ 2001 ~~----------- -----------~~ ~~ASSETS Current assets: Cash~~ and cash equivalents ...................... $ 416,953 $ 437,604 Short-term investments ......................... 1,050,220 1,129,929 Marketable securities .......................... 225,878 117,494 Customer deposits .............................. 181,678 221,944 Accounts receivable, net ........................ 67,420 103,310 Mortgage loans ................................. 60,330 145,964 Prepaid expenses and other current assets(1) ... 126,315 134,704 ----------- ----------- Total current assets ....................... 2,128,794 2,290,949 Property and equipment, net ..................... 167,707 181,635 Goodwill and intangibles, net ................... 438,878 487,667 Investments ..................................... 31,160 21,311 Other assets(2) ................................. 112,363 110,354 ----------- ----------- Total assets .................................... $ 2,878,902 $ 3,091,916 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable ............................... $ 79,145 $ 74,709 Payroll tax obligations ........................ 177,002 197,700 Escrow liabilities ............................. 32,077 105,046 Deferred revenue ............................... 107,578 82,374 Income taxes payable ........................... 110,743 66,374 Deferred income taxes .......................... 53,934 36,318 Other current liabilities ...................... 246,358 323,568 ----------- ----------- Total current liabilities .................. 806,837 886,089 Long-term obligations ........................... 538 15,786 Minority interest ............................... 238 836 Commitments and contingencies Stockholders' equity: Preferred stock ................................ -- -- Common stock and additional paid in capital .... 1,521,559 1,682,138 Deferred compensation .......................... (26,522) (23,657) Accumulated other comprehensive income, net .... 55,586 31,562 Retained earnings .............................. 520,666 499,162 ----------- ----------- Total stockholders' equity ................. 2,071,289 2,189,205 ----------- ----------- Total liabilities and stockholders' equity ...... $ 2,878,902 $ 3,091,916 =========== =========== January 31, 2002, respectively.

(1) Includes $7.2 million notes receivable from Venture Finance Software Corp. as of July 31, 2000. (2) Includes $6.5 million and $9.5 million loans due from affiliates as of July 31, 2000 and April 30, 2001, respectively.

INTUIT INC.
CONDENSED (In thousands, except per share data; Unaudited) Net revenue ...................................... $ 329,139 Costs and expenses: Cost of revenue ................................. 77,647 Customer service and technical support .......... 31,596 Selling and marketing ........................... 60,173 Research and development ........................ 40,779 General and administrative ...................... 20,027 Charge for purchased research and development ... Acquisition related costs ....................... 38,404 Reorganization costs ............................ Total costs and expenses ........................ 268,626 Income from operations ........................... 60,513 Interest and other income and expense, net ....... 14,516 Gain (loss) on marketable securities and other investments, net ............................... 422,206 Gain on divestiture .............................. Income before income tax, minority interest and cumulative effect of accounting change ......... 497,235 Income tax provision ............................. 200,204 Minority interest (income) ....................... Income (loss) before cumulative effect of accounting change .............................. 297,085 Cumulative effect of accounting change, net of taxes .......................................... Net income (loss) ................................ $ 297,085 Basic net income (loss) per share before cumulative effect of accounting change ......... $ 1.47 Cumulative effect of accounting change ........... Basic net income (loss) per share ................ $ 1.47 Shares used in per share amounts ................. 202,342 Diluted net income (loss) per share before cumulative effect of accounting change ......... $ 1.39 Cumulative effect of accounting change ........... Diluted net income (loss) per share .............. $ 1.39 Shares used in per share amounts ................. 214,362

INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED APRIL 30, (In thousands; Unaudited) 2000 2001 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) ........................................... $ 288,516 $ (21,504) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Acquisition related costs .............................. 128,746 213,144 Depreciation ........................................... 33,682 45,208 Net (gain) loss from marketable securities and other investments .......................................... (402,096) 87,307 Charge for purchased research and development .......... 1,312 238 Cumulative effect of accounting change ................. -- (23,857) Deferred income tax (benefit) provision ................ (3,121) 49,793 Gain on divestiture .................................... -- (1,639) Changes in operating assets and liabilities: Customer deposits ...................................... 8,621 (40,266) Accounts receivable .................................... (64,390) (35,445) Mortgage loans ......................................... 19,798 (85,634) Prepaid expenses and other current assets .............. 24,746 (10,071) Other assets ........................................... (17,050) 7,738 Accounts payable ....................................... 27,034 (14,711) Payroll tax obligations ................................ 10,077 20,702 Escrow liabilities ..................................... (26,594) 71,844 Deferred revenue ....................................... 23,134 (25,204) Income taxes payable ................................... 106,535 (44,369) Other current liabilities .............................. 43,601 40,932 Minority interest ...................................... (203) 598 --------- ----------- Net cash provided by operating activities ............ 202,348 234,804 --------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment .......................... (71,683) (58,011) Proceeds from the sale of marketable securities ............. 519,183 25,238 Purchase of marketable securities ........................... (16,500) -- Purchase of short-term investments .......................... (728,504) (2,581,316) Liquidation and maturity of short-term investments .......... 509,259 2,501,607 Acquisitions, net of cash acquired .......................... (54,584) (164,059) Purchase of long-term investments ........................... (7,157) (3,694) --------- ----------- Net cash provided (used) by investing activities .... 150,014 (280,235) --------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on long-term debt ........................ (3,348) (2,610) Net proceeds (payments) under warehouse line of credit ...... (11,105) 1,125 Net proceeds from issuance of common stock .................. 70,887 65,086 --------- ----------- Net cash provided by financing activities ........... 56,434 63,601 --------- ----------- Effect of foreign currency translation on cash and cash equivalents .................................. (919) 2,481 NET INCREASE IN CASH AND CASH EQUIVALENTS ..................... 407,877 20,651 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD .............. 554,230 416,953 --------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD .................... $ 962,107 $ 437,604 ========= ===========

INTUIT INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) ~~- --------------------------------------------------------------------------------~~

~~1. ~~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~ Summary of Significant Accounting Policies~~

Intuit Inc. (“Intuit”) has prepared the accompanying unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles for interim financial statements. The financial statements include the financial statements of Intuit and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain other previously reported amounts have been reclassified to conform to the current presentation format.

We have included all normal recurring adjustments considered necessary to give a fair presentation of our operating results for the periods shown. Results for the three and ~~nine~~six months ended ~~April 30, 2001~~January 31, 2002 do not necessarily indicate the results to be expected for the fiscal year ending July 31, ~~2001~~2002 or any other future period. All financial statements presented are restated to reflect the combined results of Intuit and our Rock Financial Corporation and Title Source, Inc. subsidiaries that were acquired on December 8, 1999 in a transaction that was accounted for as a pooling of interests. These statements and accompanying notes should be read together with the audited consolidated financial statements for the fiscal year ended July 31, ~~2000~~2001 included in ~~Intuit's~~Intuit’s Form 10-K, filed with the Securities and Exchange ~~Commission.~~ Commission on October 5, 2001.

To comply with generally accepted accounting principles, we make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures made in the accompanying notes. ~~Our most significant estimates~~Estimates are ~~related to reserves~~used for product returns and exchanges, reserves for rebates, ~~and~~ the ~~collectability~~collectibility of accounts ~~receivable.~~receivable, deferred taxes and other amounts. We also use estimates to determine the remaining economic lives and carrying value of goodwill, purchased intangibles, fixed assets and ~~deferred tax~~other long-lived assets. Despite our intention to establish accurate estimates and assumptions, actual results may differ from our estimates.

For our shrink-wrapped software products, ~~net of returns reserves, based on historical experience, provided that collection~~we recognize revenue when we ship products (which is when title passes) — either to retailers or directly to end user customers. We recognize revenue only if payment is probable and we have no significant remaining ~~obligations.~~obligations to the customer. We recognize revenue net of returns reserves based on historical returns experience. In some situations, we receive advance payments from our customers. Revenue associated with these advance payments is deferred until the products are shipped or services are provided. We also reduce revenue by the estimated cost of rebates when products are shipped.

We recognize revenue from ~~Internet products~~payroll processing and payroll tax filing services ~~when~~as the services are performed, provided we have no other obligations. We generally require customers to remit payroll and payroll tax liability funds to us in advance of the applicable payroll due date, via electronic funds transfer. We include in total net revenue the interest earned on invested balances resulting from timing differences between the collection of these funds from customers and the remittance of such funds to outside parties, because this interest income represents an integral part of the revenue generated from our services. We recognize this interest as it is ~~"earned" based on the nature of the particular product or service. For Internet products~~earned. However, interest income generated from our cash and ~~services that we provide over a period of time, we recognize revenue pro rata based on the contractual time period. However, where we provide or deliver the Internet product or service at one point~~cash equivalents balance is included in time, we recognize revenue upon delivery of the product or completion of the service. Intuit also offers several plans under which customers are charged for technical support assistance. We collect fees charged for these plans in advance and we recognize revenue over a period of time (generally one year). We include costs incurred for fee for support plans in cost of goods sold. other income because this interest income does not result from our operating activities.

We defer loan origination revenue and the associated commissions and processing costs on loans held for sale until the related loan is sold. We recognize gains and losses on loans at the time we sell them, based upon the difference between the selling price and the carrying value of the related loans sold. We recognize ~~loan servicing revenue as the related principal is collected. We recognize~~ interest income on mortgage loans held for sale as it is earned, and we recognize interest expenses on related borrowings as cost of revenue as we incur them.

We also offer several plans under which customers are charged for technical support assistance. For plans where we collect fees in advance, we recognize revenue over the life of the plan, which is generally one year. We include costs incurred for fee-for-support plans in cost of revenue.

We recognize revenue from other products and services when it is earned based on the nature of the particular product or service. For products and services that we provide over a period of time, we recognize revenue pro rata based on the contractual time period. However, where we provide or deliver the product or service at a specific point in time, we recognize revenue upon delivery of the product or completion of the service.

~~Costs incurred with the shipping and handling of our shrink-wrapped software products are recorded as cost of products in our results of operations.~~

Customer service and technical support costs include the costs associated with performing order processing, answering customer inquiries through ~~websites~~Web sites and other electronic means and providing ~~customer~~free technical support assistance to customers by telephone. In connection with the sale of certain products, ~~Intuit provides~~we provide a limited amount of free technical support ~~-6-~~ 7 assistance to customers. We do not defer the recognition of any revenue associated with sales of these products, since the cost of providing this free technical support and related customer service is insignificant. The technical support is provided within one year after the associated revenue is recognized and free product enhancements are minimal and infrequent. We accrue the estimated cost of providing this free support upon product shipment.

We consider highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Short-term investments ~~are considered~~consist of available-for-sale debt securities ~~and~~that are carried at ~~amortized cost, which approximates~~ fair value. Available-for-sale debt securities are classified as current assets based upon our intent and ability to use any and all of these securities as necessary to satisfy the significant short-term liquidity requirements that may arise from the highly seasonal and cyclical nature of our ~~business. Based on~~businesses. Because of our significant business seasonality, cash flow requirements ~~within quarters~~ may fluctuate dramatically from quarter to quarter and require us to use a significant amount of the short-term investments held as available-for-sale ~~debt~~ securities. ~~The following schedule summarizes the estimated fair value of our~~See Note 2 for more information about cash and cash equivalents and short-term ~~investments:~~
~~JULY 31, APRIL 30, 2000 2001 ---------- ----------~~ (In thousands) Cash and cash equivalents: Cash .................................... $ 4,298 $ 40,197 Certificate of deposits ................. -- 6,309 Money market funds ...................... 338,462 388,495 Commercial paper and corporate notes .... 29,543 -- Municipal bonds ......................... 44,650 2,603 ---------- ---------- $ 416,953 $ 437,604 ========== ========== Short-term investments: Certificates of deposit ............ $ 5,053 $ -- Corporate notes .................... 75,640 64,671 Municipal bonds .................... 920,360 1,045,258 U.S. Government securities ......... 49,167 20,000 ---------- ---------- $1,050,220 $1,129,929 ========== ==========
~~The following table outlines the estimated fair value of Intuit's available-for-sale debt securities held in short-term investments classified by the maturity date listed on the security.~~
~~JULY 31, APRIL 30, 2000 2001 ---------- ----------~~ (In thousands) Due within one year ........ $ 235,998 $ 181,690 Due within two years ....... 157,309 201,044 Due within three years ..... 13,039 1,785 Due after three years ...... 638,821 745,410 ---------- ---------- $1,045,167 $1,129,929 ========== ==========
~~-7-~~ 8 investments.

~~Marketable Securities ~~We currently hold several marketable securities, most of which we acquired in connection with strategic business transactions~~ and ~~relationships.~~ Other Investments~~

Our available-for-sale ~~equity~~marketable securities are carried at fair value and we include unrealized gains and losses, net of tax, in ~~stockholders'~~stockholders’ equity. We ~~have designated our investments in At Home Corporation (which does business as Excite@Home), VeriSign~~use the specific identification method to account for gains and ~~724 Solutions as trading securities and fluctuations in the market value of these shares are reported in net income. We held the following~~losses on marketable ~~securities at July 31, 2000 and April 30, 2001:~~
AVAILABLE-FOR-SALE EQUITY COST GROSS UNREALIZED ESTIMATED SECURITIES BASIS GAINS LOSSES FAIR VALUE - ------------------------- -------- --------- --------- ---------- (In thousands) JULY 31, 2000 Checkfree Corporation common stock $ 36,875 $ 115,000 $ -- $151,875 Homestore.com, Inc. common stock 1,689 10,626 -- 12,315 Quotesmith.com, Inc. common stock 5,645 -- (2,721) 2,924 S1 Corporation common stock 49,997 -- (25,302) 24,695 -------- --------- --------- -------- $ 94,206 $ 125,626 $ (28,023) $191,809 ======== ========= ========= ======== APRIL 30, 2001 Checkfree Corporation common stock $ 35,621 $ 60,592 $ -- $ 96,213 InsWeb Corporation common stock 10,810 -- (3,720) 7,090 S1 Corporation common stock 9,769 -- (3,313) 6,456 -------- --------- --------- -------- $ 56,200 $ 60,592 $ (7,033) $109,759 ======== ========= ========= ========
CUMULATIVE NET COST RECOGNIZED ESTIMATED TRADING SECURITIES BASIS LOSSES FAIR VALUE --------- -------------- ---------- (In thousands) JULY 31, 2000 Excite@Home common stock $ 119,366 $ (92,997) $26,369 VeriSign, Inc. common stock 4,916 (1,833) 3,083 724 Solutions, Inc. common stock 7,700 (3,083) 4,617 --------- --------- ------- $ 131,982 $ (97,913) $34,069 ========= ========= ======= APRIL 30, 2001 Excite@Home common stock $ 114,614 $(107,760) $ 6,854 VeriSign, Inc. common stock 2,458 (1,960) 498 724 Solutions, Inc. common stock 2,118 (1,735) 383 --------- --------- ------- $ 119,190 $(111,455) $ 7,735 ========= ========= =======
~~The cost basis of our marketable securities reflect adjustments for other than temporary impairments in value as well as sales of~~equity securities. Our ~~marketable securities~~other long-term investments are quoted on the Nasdaq National Market. All of our marketable securities are stocks of high technology companies that have been extremely volatile. The market prices of a number of these companies' stocks have declined substantially. Declines in the market prices of stocks we hold could continue. These declines have resulted, and could continue to result, in a material reduction in the carrying value of these assets and a negative impact on our operating results. For example, if our available-for-sale securities experience further declines in fair value that is considered other than temporary, we will record the additional loss in the period when the subsequent impairment becomes apparent. During the nine months ended April 30, 2001, we recorded a loss of $40.2 million to recognize an other than temporary decline in the value of our S1 sharesstated at cost. See Note 3 for the difference between our original cost of $51.50 per share and $10.06 per share, the fair value as of October 31, 2000 the date we made the impairment determination. -8- 9 During the nine months ended April 30, 2001, we sold 85,000 shares of Checkfree, 351,865 shares of Homestore.com, and 99,902 shares of 724 Solutions. In connection with these sales we recognized realized gains of $4.0 million, $ 11.1 million, and $0.1 million, respectively. In addition, we sold 9,715 shares of VeriSign, 1,197,327 shares of Quotesmith.com and 75,000 shares of Excite@Home and recognized aggregate realized losses of $5.1 million. Total net gains on sales of marketable securities were $10.1 million for the nine months ended April 30, 2001. This gain was offset by recognized losses of $42.2 million to reflect a decline in valuations of our trading securities and S1 options, and a loss of $55.2 million for other than temporary declines in the value ofmore information about our marketable securities and other investments. ~~This resulted in combined net losses on marketable securities and other investments of $87.3 million for the nine months ended April 30, 2001.~~

We record goodwill when the purchase price ~~exceeds the book value~~ of net tangible and intangible assets ~~acquired. Goodwill is amortized~~we acquire exceeds their fair value. We amortize goodwill on a straight-line basis over periods ranging from 3 to 5 years. ~~The~~We generally amortize the cost of identified intangibles ~~is generally amortized~~ on a straight-line basis over periods ranging from 1 to 15 years.

We regularly perform reviews to determine if the carrying values of our long-lived assets are impaired. The reviews look for ~~the existence of~~ facts or circumstances, either internal or external, ~~which~~that indicate that the carrying value of the asset ~~cannot~~may not be recovered. During the third quarter, events and circumstances indicated possible impairment of our long-lived assets consisting principally of acquired intangible assets and goodwill. These indicators included deterioration in the business climate for web-based companies and recent changes in our fiscal 2002 operating forecasts.

We ~~measured the~~measure impairment loss related to long-lived assets based on the amount by which the carrying amount of such assets ~~exceeded~~exceeds their fair values. Our measurement of fair value ~~was~~is generally based on an analysis of ~~the~~ future discounted cash ~~flows at the enterprise level.~~flows. In performing this analysis, we ~~used~~use the best information available in the circumstances, including reasonable and supportable assumptions and projections. The discounted cash flow analysis ~~considered~~considers the likelihood of possible outcomes and ~~was~~is based on our best estimate of projected future cash flows, including terminal value cash flows expected to result from the disposition of the assets at the end of their useful lives. The anticipated proceeds from the pending disposition of a portion of Venture Finance Software Corp. ("VFSC"), our Quicken Bill Manager business, assisted management in the determination of the fair value of the assets associated with VFSC as of April 30, 2001. Based on our analysis we recorded a charge of $51 million and $26 million to write down the goodwill associated with VFSC and SecureTax, respectively.flows. If necessary, we ~~will~~ perform subsequent calculations to measure the amount of the impairment loss based on the excess of the carrying value over the fair value of the impaired assets. If market values for the assets ~~are~~were not available, we would calculate the fair value ~~would be calculated~~ using the present value of estimated expected future discounted cash flows. The cash flow calculations, including the discount rate, would be based on ~~management's~~management’s best estimates, using appropriate assumptions and projections at the time. In June 2001, the Financial Accounting Standards Board (“FASB”) issued FAS 142, “Goodwill and ~~purchased intangible assets consisted~~Other Intangible Assets.” In October 2001, the FASB issued SFAS No. 144,“Accounting for the Impairment or Disposal of Long-Lived Assets.”We intend to implement both FAS 142 and FAS 144 beginning in the ~~following:~~
NET BALANCE AT LIFE IN ------------------------------- YEARS JULY 31, 2000 APRIL 30, 2001 ------- ------------- -------------- (in thousands) Goodwill................................ 3-5 $358,890 $370,200 Customer lists.......................... 3-5 57,890 60,926 Covenant not to compete................. 3-5 4,992 3,501 Purchased technology.................... 1-5 10,990 44,276 Assembled workforce..................... 2-5 1,976 4,216 Trade names and logos................... 1-15 4,140 4,548
~~Balances presented above are net~~first quarter of ~~total accumulated amortization of $465.3 million and $569.6 million at July 31, 2000 and April 30, 2001, respectively. -9-~~ 10 fiscal 2003. See“Recent Pronouncements”below for more information.

We operate in markets that are highly competitive and rapidly changing. Significant technological changes, changes in customer requirements, the emergence of competitive products or services with new capabilities and other factors could negatively impact our operating results.

We are also subject to risks related to changes in the values of our ~~significant balances of,~~ marketable securities and private equity investments and short-term investments, as well as risks related to the collectability of our trade accounts receivable. At April 30, 2001, we held approximately $117.5 million in marketable securities, as described in "Marketable Securities," above. Fluctuations in the market value of our shares in Excite@Home, VeriSign and 724 Solutions result in recognized gains and losses in our statement of operations on an ongoing basis, since these investments are treated as trading securities. If there were an other than temporary impairment in any marketable securities held as available-for-sale, we would report this decline in our statement of operations.investments. See ~~"Marketable Securities," above in~~ Note 13 for a discussion of risks associated with ~~our marketable securities. At April 30, 2001, we held approximately $19.8 million in private equity investments, net of reserves for potential declines in value that are other than temporary.~~these assets. Our remaining investment portfolio is diversified and consists primarily of short-term investment-grade securities.

We sell a significant portion of our products through third-party resellers and distributors and, as a result, maintain one individually significant receivable balance with a major distributor. If the financial condition or operations of this distributor deteriorates substantially, our operating results could be adversely affected. We also face risks related to the collectibility of our trade accounts receivable. As of January 31, 2002, two of our major retail customers collectively accounted for approximately 20% of our accounts receivable balance. To appropriately manage ~~the credit~~this risk, ~~associated with accounts receivable, Intuit performs~~we perform ongoing evaluations of customer credit. Generally, ~~no collateral is required.~~we do not require collateral. We maintain reserves for estimated credit losses and these losses have historically been within our expectations. ~~At April 30, 2001,~~However, since we ~~had one distributor, that accounted for approximately 25%~~cannot predict future changes in the financial stability of our ~~accounts receivable balance.~~ customers, we cannot guarantee that our reserves will continue to be adequate.

In the normal course of our mortgage business, we enter into loan commitments to extend credit in order to meet the financing needs of our customers. Loan commitments are agreements to lend to a customer as long as all conditions specified in the contract are met. Commitments generally have fixed expiration dates or other termination clauses and may require the customer to pay a fee. We evaluate each ~~customer's~~customer’s creditworthiness on a case-by-case basis. ~~The amount of collateral we obtain is based on our credit evaluation of the customer.~~

Loan commitments subject us to market risks and credit risks. Market risk ~~occurs if~~is the risk that interest rates may rise after a loan commitment is made. To offset this risk on conventional mortgage loans and government-insured loans that are in process, we utilize mandatory forward sale ~~commitments and purchase puts and calls on U.S. Treasury securities.~~commitments. At ~~April 30, 2001,~~January 31, 2002, we had ~~$214.3~~$261.6 million in mandatory forward sale commitments for future delivery of ~~FNMA~~mortgages to Federal National Mortgage Association and ~~FHLMC securities.~~Federal Home Loan Mortgage Corporation. Loan commitments also involve credit risk relating to the ~~customer, which is not reflected on the balance sheet.~~customer. We use the same credit policies for making credit commitments as we do for the underlying loan product. ~~Loan commitments~~See Note 5 for more information on loan commitments.

On June 29, 2001, the FASB issued Statements of Financial Accounting Standards No. 141 (SFAS 141), “Business Combinations,” and No. 142 (SFAS 142), “Goodwill and Other Intangible Assets.”

SFAS 141 supersedes APB Opinion No. 16, “Business Combinations,” and eliminates the pooling-of-interests method of accounting for business combinations, thus requiring that all business combinations be accounted for using the purchase method. The requirements of SFAS 141 apply to ~~extend credit~~all business combinations initiated after June 30, 2001.

SFAS 142 supercedes APB Opinion No. 17, “Intangible Assets,” and provides that goodwill and other intangible assets that have an indefinite useful life will no longer be amortized. However, these assets must be reviewed at least annually for impairment. SFAS 142 applies to all business combinations completed after June 30, 2001. For business combinations completed before July 1, 2001, we will adopt SFAS 142 effective August 1, 2002. We are currently evaluating the impact of SFAS 142 on our financial position and statement of operations. We expect the adoption of SFAS 142 to reduce our ongoing quarterly amortization of goodwill expense significantly, commencing with the first quarter of fiscal 2003. However, it is possible that in the future, we would incur less frequent, but larger, impairment charges related to the goodwill already recorded, as well as goodwill arising out of future acquisitions as we continue to expand our business.

In October 2001, the FASB issued SFAS No. 144,“Accounting for the Impairment or Disposal of Long-Lived Assets,”which applies to financial statements issued for fiscal years beginning after December 15, 2001. SFAS 144 supersedes FASB Statement 121,“Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,”and portions of APB Opinion 30,“Reporting the Results of Operations.”SFAS 144 provides a single accounting model for long-lived assets we expect to dispose of and significantly changes the criteria for classifying an asset as held-for-sale. This classification is important because held-for-sale assets are not depreciated and are stated at the lower of fair value or carrying amount. SFAS 144 also requires expected future operating losses from discontinued operations to be displayed in the period(s) in which the losses are actually incurred, rather than when the amount of the loss is estimated, as presently required. We will adopt SFAS 144 effective August 1, 2002 and do not expect the adoption of SFAS 144 to have a material impact on our consolidated financial statements.

In November 2001, the Emerging Issues Task Force (“EITF”) released Issue No. 01-09, “Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor’s Product,” which applies to annual or interim financial statement periods beginning after December 15, 2001. The release provides that cash consideration (including sales incentives) that we give to our customers or resellers should be accounted for as a reduction of revenue unless we receive a benefit that is identifiable and that can be reasonably estimated. We will adopt this new release prospectively to transactions beginning in the third quarter of fiscal 2002. We do not expect the adoption of EITF Issue No. 01-09 to have a material impact on our total net revenue.

The functional currency of all our foreign subsidiaries is the local currency. Assets and liabilities of our foreign subsidiaries are translated at the exchange rate on the balance sheet date. Revenue, costs and expenses are translated at average rates of exchange in effect during the year. We report translation gains and losses as a separate component of stockholders’ equity. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statement of operations and were immaterial in all periods presented.

The following schedule summarizes the estimated fair value of our cash and cash equivalents and short-term investments:

July 31, January 31,
2001 2002

(In thousands)
Cash and cash equivalents:
Cash $ 33,427 $ 50,529
Certificates of deposit 5,600 5,200
Money market funds 406,077 430,327
Commercial paper and corporate notes — 2,499
Municipal bonds 5,000 —

$ 450,104 $ 488,555

Short-term investments:
Corporate notes $ 63,723 $ 44,221
Municipal bonds 1,030,442 943,565
U.S. Government securities 25,140 17,043

$ 1,119,305 $ 1,004,829

The following table outlines the estimated fair value of Intuit’s available-for-sale debt securities held in short-term investments classified by the maturity date of the security:

July 31, January 31,
2001 2002

(In thousands)
Due within one year $ 215,205 $ 237,785
Due within two years 221,620 178,583
Due within three years — 4,000
Due after three years 682,480 584,461

$ 1,119,305 $ 1,004,829

We held the following available-for-sale securities at July 31, ~~2000~~2001 and ~~April 30,~~January 31, 2002. The cost basis reflects adjustments for other-than-temporary impairments in value as well as sales of securities:

Gross Unrealized
Cost
Estimated
(In thousands) Basis Gains Losses Fair Value

July 31, 2001

Checkfree Corporation common stock $ 35,621 $ 37,215 $ — $ 72,836
S1 Corporation common stock 7,741 2,714 — 10,455

$ 43,362 $ 39,929 $ — $ 83,291

January 31, 2002

Checkfree Corporation common stock $ 35,621 $ — $ (628 ) $ 34,993
S1 Corporation common stock 4,924 2,812 — 7,736

$ 40,545 $ 2,812 $ (628 ) $ 42,729

We also held investments in At Home Corporation (which did business as Excite@Home) and 724 Solutions as of July 31, 2001. We designated those investments as trading securities and fluctuations in the market value of these shares were reported in the consolidated statement of operations. We sold all of the shares of these securities during the first quarter of fiscal 2002.

Our remaining marketable securities, which are quoted on the Nasdaq Stock Market, are stocks of high technology companies whose market prices have been extremely volatile and have declined substantially during the past two years. These declines have resulted, and could continue to result, in a material reduction in the carrying value of these assets. This has a negative impact on our operating results. If these securities experience further declines in fair value that are considered other-than-temporary, we will reflect the additional loss in our consolidated statement of operations in the period when the subsequent impairment becomes apparent.

~~The fair values of our long-term investments have also declined substantially since our initial investments due to the volatility and economic downturn in the high technology industry.~~

During the six months ended January 31, 2002, we sold 280,000 shares of S1 Corporation and recognized realized gains of $1.9 million. This gain was offset by a realized loss of $1.9 million recorded in connection with the sale of our options to purchase additional shares of S1. In addition, we sold 37,906 shares of 724 Solutions and 1,533,504 shares of Excite@Home and recognized aggregate losses of $1.6 million during the six months ended January 31, 2002. For our long-term investments, we recorded losses of $3.3 million for other-than-temporary declines in value and $5.7 million to reflect the declines in valuation. This resulted in combined net losses on marketable securities and other investments of $10.6 million for the six months ended January 31, 2002.

During fiscal 2001, ~~were as follows:~~
JULY 31, 2000 APRIL 30, 2001 -------------------------- -------------------------- FIXED-RATE VARIABLE-RATE FIXED-RATE VARIABLE-RATE ---------- ------------- ---------- ------------- (In thousands) Conventional prime loans... $167,000 $31,100 $377,091 $48,390 Sub-prime loans............ 4,200 1,700 3,239 587 High-LTV loans............. 600 -- 25 -- -------- ------- -------- ------- $171,800 $32,800 $380,355 $48,977 ======== ======= ======== =======
~~Recent Pronouncements In June 1998, the Financial Accounting Standards Board ("FASB") issued~~we adopted FAS 133, ~~"Accounting~~“Accounting for Derivative Instruments and Hedging Activities",” which establishes accounting and reporting standards for derivative instruments and hedging activities. It requires us to recognize all derivatives as either assets or liabilities on the balance sheet and ~~measure~~record those instruments at fair value. ~~It further provides criteria for designating derivative instruments~~In May 1999, we completed a $50 million investment (970,813 shares) in Security First Technologies, now known as S1 Corporation (“S1”). In connection with this agreement, we received options to purchase 4.8 million additional shares of S1 common stock, at ~~fair value, cash flow, or foreign currency hedges, and establishes accounting standards for reporting changes in the fair value~~a per-share purchase price of ~~the derivative instruments. Upon the date of adoption,~~$51.50. These options contained a net-exercise feature. In August 1, 2000, we recorded the cumulative effect of the change in accounting for derivatives for our ~~4.6~~4.8 million S1 options held in ~~long term~~long-term investments. This resulted in a one-time cumulative effect of $14.3 million, net of income taxes totaling $9.5 ~~million, as of August 1, 2000. The one-time cumulative effect created a decrease of $0.07 per share on the basic and diluted net loss per share for the nine month period ended April 30, 2001.~~million. FAS 133 requires the derivatives to be carried at fair value, so subsequent fluctuations in the fair value of these options ~~will be~~were included in our net ~~income.~~loss. For the three and ~~nine~~six months ended ~~April 30,~~January 31, 2001 these fluctuations resulted in a loss of ~~$3.4~~$2.4 million and ~~$13.4~~$10.0 million net of income taxes, ~~respectively.~~ which decreased the basic and diluted net loss per share for the periods by $0.01 and $0.05 per share. During the first quarter of fiscal 2002, we sold these options and recorded a realized loss of $1.9 million.

Goodwill and purchased intangible assets consisted of the following at the dates indicated:

Net balance at

Life in July 31, January 31,
Years 2001 2002

(In thousands)
Goodwill 3-5 $ 326,986 $ 269,270
Customer lists 3-5 53,423 45,302
Covenants not to compete 3-5 3,060 3,600
Purchased technology 1-5 24,078 23,033
Assembled workforce 2-5 3,598 2,605
Trade names and logos 1-15 4,189 4,790

$ 415,334 $ 348,600

~~Balances presented above are net of total accumulated amortization of $598.1 million at July 31, 2001 and $490.4 million at January 31, 2002.~~

As discussed in Note 1, we regularly perform reviews to determine if there are events or circumstances that indicate the carrying values of our goodwill and intangible assets may be impaired. During the three months ended January 31, 2002, events and circumstances indicated impairment of goodwill and intangible assets that we received in connection with our acquisitions of the Internet-based advertising business that we acquired from Venture Finance Software Corp. in August 2000 and the Site Solutions business that we acquired from Boston Light Corp. in August 1999.

Indicators of impairment for our Internet-based advertising business included a steep decline in demand for online advertising reflecting the industry-wide decline in Internet advertising spending and management’s assessment that revenues and profitability would continue to decline in the future based on analyses and forecasts completed during the second quarter of fiscal 2002. The primary indicator of impairment for our Site Solutions business was management’s decision to transfer the customer base of Site Solutions and collaborate with a third party. This collaboration eliminated our use of technology purchased from Boston Light and was effective during the second quarter of fiscal 2002.

In each case, we measured the impairment loss based on the amount by which the carrying amount of the assets exceeded their fair value based on lower projected profits and decreases in cash flow. Our measurement of fair value was based on an analysis of the future discounted cash flows as discussed in Note 1. Based on our analyses, we recorded charges of $22.6 million ($17.4 million to acquisition-related charges and $5.2 million to amortization of purchased software) to reduce the carrying value of the assets associated with our Internet-based advertising business to zero, and a charge of $4.7 million ($4.6 million to acquisition-related charges and $0.1 million to amortization of purchased software) to reduce the carrying value of assets relating to our Site Solutions business to zero. These businesses were included in our Personal Finance and Small Business Divisions.

We classify the following expenses as acquisition-related charges in our consolidated statements of operations:

Six Months Ended

January 31, January 31,
2001 2002

(In thousands)
Amortization of goodwill $ 68,624 $ 64,289
Amortization of purchased intangibles 11,726 13,807
Amortization of acquisition-related deferred compensation 2,330 3,084
Impairment charges — 22,006
Other 73 —

$ 82,753 $ 103,186

The following table ~~shows what adjusted net~~summarizes loan commitments to extend credit at July 31, 2001 and January 31, 2002:

July 31, 2001 January 31, 2002

Fixed-rate Variable-rate Fixed-rate Variable-rate

(In thousands)
Conventional prime loans $ 303,100 $ 72,500 $ 559,600 $ 194,200
Sub-prime loans 4,300 1,200 3,500 2,300

$ 307,400 $ 73,700 $ 563,100 $ 196,500

We compute basic income ~~and diluted net income~~or loss per share ~~would have been as if we had adopted this standard as of the beginning of fiscal 2000: -10-~~ 11
Nine Months Ended April 30, 2000 -------------------------------- As Adjusted As Reported ----------- ----------- (In thousands, except per share data) ~~Net income ....................................... $323,657 $288,516 Diluted net income per share ..................... $ 1.53 $ 1.37~~
In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin 101, Revenue Recognition in Financial Statements ("SAB 101"), as amended in March and June 2000. SAB 101 provides guidance on the recognition, presentation and disclosure of revenue in financial statements for all public registrants. We are required to adopt SAB 101 no later than our fourth quarter of 2001. The adoption of SAB 101 is not expected to have a material effect on our financial position or results of operations. 2. PER SHARE DATA Basic income per share is computed using the weighted average number of common shares outstanding during the period. ~~Diluted~~We compute diluted income or loss per share ~~is computed~~ using the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares consist of the shares issuable upon the exercise of stock options under the treasury stock method. In loss periods, basic and dilutive loss per share is identical since the impact of common equivalent shares is anti-dilutive. ~~3. COMPREHENSIVE NET INCOME Statement of Financial Accounting No.~~

SFAS 130, ~~"Reporting~~“Reporting Comprehensive ~~Income" ("SFAS 130")~~Income,” establishes standards for reporting and displaying comprehensive net income and its components in ~~stockholders'~~stockholders’ equity. However, it has no impact on our net income or loss as presented in our financial statements. SFAS 130 requires foreign currency translation adjustments and changes in the fair value of available-for-sale securities and short-term investments to be included in comprehensive ~~income.~~ income (loss).

The components of accumulated other comprehensive ~~net~~ income, net of ~~tax,~~income taxes, are as follows:
NINE MONTHS ENDED APRIL 30, --------------------------- 2000 2001 --------- -------- (In thousands) Beginning balance, net of tax..................... $ 79,144 $ 55,586 Unrealized gain (loss) on marketable securities... 447,333 (72,560) Realized (gain) loss on marketable securities..... (435,713) 28,518 Tax effect on marketable securities............... 20,241 17,808 Translation adjustment gain (loss), net of tax.... (910) 2,211 --------- -------- Ending balance, net of tax........................ $ 110,095 $ 31,562 ========= ========
~~4. ACQUISITIONS~~

Foreign
Marketable Short-term Currency
Six months ended January 31, 2001 Securities Investments Translation Total
(In thousands)
Beginning balance gain, net of income taxes $ 58,561 $ — $ (2,975 ) $ 55,586
Unrealized gain, net of income taxes of $5,154 7,731 — — 7,731
Reclassification adjustment for realized gain included in net loss, net of income tax benefit of $4,685 (7,027 ) — — (7,027 )
Translation adjustment gain — — 1,106 1,106

Ending balance, net of income taxes of $469 $ 59,265 $ — $ (1,869 ) $ 57,396

Six months ended January 31, 2002

(In thousands)

Beginning balance gain, net of income taxes $ 23,958 $ 4,686 $ (464 ) $ 28,180
Unrealized loss, net of income tax benefit of $14,588 and $915 (21,882 ) (1,372 ) — (23,254 )
Reclassification adjustment for realized gain included in net income, net of income tax benefit of $510 (766 ) — — (766 )
Translation adjustment gain — — 1,317 1,317

Ending balance, net of income tax benefit of $16,013 $ 1,310 $ 3,314 $ 853 $ 5,477

The following table of comprehensive income (loss) shows the gross current period gain (loss) on marketable securities and short-term investments and the reclassification of adjustments:

Three Months Six Months Three Months Six Months
Ended Ended Ended Ended
(in thousands) January 31, 2001 January 31, 2001 January 31, 2002 January 31, 2002

Net income (loss) $ 26,562 $ (7,203 ) $ 119,868 $ 27,441
Other comprehensive income (loss):
Change in unrealized gain (loss) on marketable securities 34,278 704 2,135 (22,648 )
Change in unrealized gain on short-term investments — — (570 ) (1,372 )
Change in foreign currency translation adjustments 1,169 1,106 2,076 1,317

$ 62,009 $ (5,393 ) $ 123,509 $ 4,738

On ~~August 30, 2000,~~November 2, 2001, we ~~purchased~~acquired substantially all of the ~~outstanding securities~~assets of ~~Venture Finance Software Corp. ("VFSC") that were not already held by Intuit (approximately 51%~~OMware, Inc. (“OMware”) for $35.5 million in Intuit stock, approximately ~~$118~~$2.6 million in acquisition costs and up to $8 million in Intuit stock to be issued contingent upon the achievement of certain future performance objectives by the business unit. Pursuant to separate agreements, Intuit will pay up to $2 million in cash ~~(including approximately $4.5 million in option exercise and tax payments in connection with VFSC options exercised immediately prior to the purchase).~~over two years as part of a senior management performance program. These amounts will be recorded as compensation expense as amounts are earned. We accounted for the acquisition of ~~VFSC~~OMware as a purchase for accounting purposes and allocated approximately ~~$113~~$35.6 million to identified intangible assets and goodwill. ~~These assets were determined to be impaired by $51 million as of April 30, 2001.~~ The ~~remaining balance of $52.8 million, net of accumulated depreciation year to date, is being amortized over approximately three years. -11-~~ 12 On December 20, 2000, we acquired all of the outstanding stock of EmployeeMatters, Inc., in exchange for approximately $41.9 million in Intuit stock, the elimination of approximately $8.0 million in bridge loans we extended to EmployeeMatters prior to the closing, and the assumption of approximately $3.4 million of liabilities. We accounted for the acquisition of EmployeeMatters as a purchase for accounting purposes and allocated approximately $53.3 million to identified intangible assets and goodwill. These assets are being amortized over periods of three to five years. On April 17, 2001, we acquired substantially all of the assets of Tax and Accounting Software Corporation ("TAASC"), for $63.0 million in cash and approximately $7.8 million in accrued costs. We accounted for the acquisition of TAASC as a purchase for accounting purposes and allocated approximately $69.8 million to identified intangible assets and goodwill. These assets are being amortized over five years. ~~We classify~~

In connection with the ~~following expenses as acquisition related costs in our statement of operations:~~
Three Months Ended April 30, Nine Months Ended April 30, (In thousands) 2000 2001 2000 2001 -------- -------- -------- -------- Amortization of goodwill $ 29,515 $ 37,880 $ 89,101 $106,504 Amortization of intangibles 6,758 6,458 20,573 18,184 Deferred compensation 1,137 1,233 2,882 3,563 Impairment charge -- 77,000 -- 77,000 Other 994 4 9,154 77 -------- -------- -------- -------- $ 38,404 $122,575 $121,710 $205,328 ======== ======== ======== ========
~~5. DISCONTINUED OPERATIONS AND DIVESTITURES On January 24, 2001, we sold selected assets~~sale of our Quicken ~~Insurance~~Bill Manager business ~~to InsWeb Corp. for approximately $10.8 million of InsWeb common stock. As a result of the divestiture,~~in May 2001, we recorded a ~~pre-tax gain~~$27 million long-term asset related to future consideration from the purchasing company, which was recorded as “other assets” on the balance sheet. We were entitled to cash and/or shares of ~~$1.6 million~~the purchaser’s common stock beginning in February 2002. As discussed in Note 1, we regularly perform reviews to determine if the carrying values of our long-lived assets are impaired. The reviews look for facts or circumstances, either internal or external, that indicate that the carrying value of an asset cannot be recovered. During the three months ended October 31, 2001, events and circumstances indicated impairment of this asset. These indicators included the deterioration of the purchasing company’s financial position (including cash flows and liquidity) and the decreased likelihood that it would receive future funding. We considered the implied fair value of our investment based on the purchasing company’s most recent round of planned funding, as well as the fair value of our investment if funding were received. Based on our analysis we recorded a ~~related tax provision~~charge of ~~$0.6~~$27 million in the ~~second~~first quarter of fiscal ~~2001. In addition, Intuit and InsWeb entered into a distribution agreement under which InsWeb became~~2002 to reduce the exclusive consumer insurance aggregator for Intuit's Quicken.com and QuickenInsurance Web sites and certain Quicken consumer desktop products. In exchange, Intuit is sharing associated revenues, which are subjectcarrying value of this asset to ~~certain minimums, over the 5-year term~~its fair value of ~~the distribution agreement. 6. BORROWINGS We have two~~zero.

As of January 31, 2002, we had one mortgage ~~lines of credit, which balances are reflected in escrow liabilities. The first~~ line of credit currently provides for up to $50 million principal amount of demand loans secured by mortgage loans and other assets. As of April 30, 2001 our outstanding balance was $3.7 million. Interest rates on loans vary depending on the type of underlying loan, and the loans are subject to sub-limits, advance rates and warehouse terms that vary depending on the type of underlying loan. The interest rates in effect at July 31, 2000 and April 30, 2001 were 7.89% and 5.96%, respectively, while the weighted average interest rates for the nine months ended April 30, 2000 and 2001 were 7.18% and 7.07%, respectively. We are required to maintain a minimum tangible net worth and to satisfy other financial covenants, as outlined in the line of credit agreements. We were in compliance with ~~the requirements as of July 31, 2000 and April 30, 2001. Our second line of credit advances~~no amounts outstanding. Advances may be drawn for working capital and sub-prime ~~high loan-to-value~~ and conventional prime mortgage ~~loans.~~loans, with the maximum amount based on a formula computation. Advances are due on demand and are collateralized by residential first and second mortgages. ~~Advances are based~~Interest is paid on a ~~formula computation, with interest due monthly.~~monthly basis. The maximum outstanding balance permitted under this line is $20 million. ~~During the second~~

11. Industry Segment and ~~third quarters of fiscal 2001 we had a zero balance outstanding for the line of credit. -12-~~ ~~13 7. OTHER CURRENT LIABILITIES Other current liabilities consisted of the following:~~
~~JULY 31, APRIL 30, (In thousands) 2000 2001 -------- ---------~~ Accrued compensation .............................. $ 49,303 $ 66,327 Short-term notes payable .......................... 34,286 37,884 Future payments due for CRI acquisition ........... 44,916 47,373 Rebates............................................ 21,552 34,485 Reserve for returns and exchanges ................. 60,979 68,654 Other accruals..................................... 35,322 68,845 -------- -------- $246,358 $323,568 ======== ========
~~8. INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION The following information is provided in accordance with Statement of Financial Accounting No.~~Geographic Information

SFAS 131, ~~"Disclosures~~“Disclosures about Segments of an Enterprise and Related ~~Information" ("SFAS 131"). SFAS 131~~Information,” establishes standards for ~~the way in which public~~ companies to disclose certain information about operating segments in the ~~company's~~company’s financial reports. ~~Since Internet-based revenues and expenses cut across all of~~Consistent with SFAS 131, we have determined our ~~business divisions,~~five operating segments, described below, based on factors such as how we ~~do not report results of~~managed our ~~Internet-based businesses as a separate business segment in our financial statements. Instead, each of our business divisions reports Internet-based revenues and expenses that are specific to its~~ operations and ~~are included in its~~how our chief operating decision maker viewed results.

Intuit does not track assets by operating segments. Consequently, we do not disclose assets by operating segments. The following unaudited results for the ~~nine~~six months ended ~~April 30, 2000~~January 31, 2001 and ~~2001~~2002 are broken out by our operating ~~segments:~~
NINE MONTHS ENDED SMALL CONSUMER GLOBAL APRIL 30, 2000 BUSINESS TAX FINANCE BUSINESS (In thousands) DIVISION DIVISION DIVISION DIVISION OTHER(1) CONSOLIDATED -------- -------- --------- -------- --------- ------------ Net revenue ........................................ $307,606 $365,473 $ 183,921 $74,566 $ -- $ 931,566 Segment operating income (loss) .................... 50,099 150,099 (18,818) 5,108 -- 186,488 Acquisition costs .................................. -- -- -- -- (130,058) (130,058) Reorganization costs ............................... -- -- -- -- (3,500) (3,500) Common expenses .................................... -- -- -- -- (1,077) (1,077) -------- -------- --------- ------- --------- --------- Sub-total operating income (loss) .................. 50,099 150,099 (18,818) 5,108 (134,635) 51,853 Interest income (expense) and other items .......... -- -- -- -- 29,981 29,981 Realized net gain (loss) on marketable securities .. -- -- -- -- 402,096 402,096 Gain on divestiture ................................ -- -- -- -- -- -- -------- -------- --------- ------- --------- --------- Net income (loss) before tax ....................... $ 50,099 $150,099 $ (18,818) $ 5,108 $ 297,442 $ 483,930 ======== ======== ========= ======= ========= =========
NINE MONTHS ENDED SMALL CONSUMER GLOBAL APRIL 30, 2001 BUSINESS TAX FINANCE BUSINESS (In thousands) DIVISION DIVISION DIVISION DIVISION OTHER CONSOLIDATED -------- -------- -------- -------- --------- ------------ Net revenue ........................................ $357,305 $437,177 $195,265 $80,545 $ -- $ 1,070,292 Segment operating income (loss) .................... 58,013 208,439 2,638 4,106 -- 273,196 Acquisition costs .................................. -- -- -- -- (216,786) (216,786) Reorganization costs ............................... -- -- -- -- -- -- Common expenses .................................... -- -- -- -- (15,132) (15,132) -------- -------- -------- ------- --------- ----------- Sub-total operating income (loss) .................. 58,013 208,439 2,638 4,106 (231,918) 41,278 Interest income (expense) and other items .......... -- -- -- -- 47,736 47,736 Realized net gain (loss) on marketable securities .. -- -- -- -- (87,307) (87,307) Gain on divestiture ................................ -- -- -- -- 1,639 1,639 -------- -------- -------- ------- --------- ----------- Net income (loss) before tax ....................... $ 58,013 $208,439 $ 2,638 $ 4,106 $(269,850) $ 3,346 ======== ======== ======== ======= ========= ===========
~~(1) Common expenses in fiscal 2000 have~~segments. Prior period information has been reclassified to conform to the current period financial presentation ~~format. -13-~~ ~~14 9. NOTES PAYABLE AND COMMITMENTS~~ for comparability.

(1)

Other includes reconciling items such as acquisition-related costs, including amortization of purchased software and charges for purchased research and development, and other common costs not allocated to specific segments.

In March 2001, our Japanese subsidiary, Intuit KK, refinanced its one-year loan agreement with a Japanese bank for approximately ~~$30.3~~$27.8 million. The loan is denominated in Japanese ~~yen and is therefore subject to foreign currency fluctuations when translated to U.S. dollars for reporting purposes.~~yen. The interest rate is variable based on the Tokyo inter-bank offered rate or the short-term prime rate offered in Japan. At ~~April 30, 2001,~~January 31, 2002, the rate was approximately ~~0.72%~~0.59%. The fair value of the loan approximates cost as the interest rate on the borrowings is adjusted periodically to reflect market rates, ~~(which~~which are currently significantly lower in Japan than in the United ~~States).~~States. We are obligated to pay interest only on the loan through March 2002. ~~10. INCOME TAXES~~

Intuit computes the provision (benefit) for income taxes by applying the estimated annual effective tax rate to recurring operations and other taxable items. Our effective tax rate for the second quarter and the first six months of fiscal 2002 differs from the federal statutory rate primarily because of a tax ~~credits, tax exempt interest~~benefit related to a divestiture that became available during the three months ended January 31, 2002.

In May 2001, Intuit’s Board of Directors authorized the company to repurchase up to $500 million of common stock from time to time in the open market over a three-year period. The stock repurchase program is intended to help offset some of the dilution resulting from the issuance of shares under Intuit’s employee stock plans. During the six months ended January 31, 2002, we had repurchased approximately 1,780,500 shares of our common stock under this program (which became treasury shares) for an aggregate cost of approximately $74.3 million. During this period we reissued 1,837,916 shares of treasury stock in connection with employee stock plans, which were valued at $78.0 million (using the average purchase price per Intuit share).

Repurchases through January 31, 2002 have had no significant impact upon our income ~~state taxes, non deductible acquisition costs~~or loss per share. Intuit intends to continue using its cash and ~~certain foreign losses. 11. LITIGATION~~ cash equivalents to fund these repurchases.

On March 3, 2000, a class action lawsuit, Bruce v. Intuit Inc., was filed in the United States District Court, Central District of California, Eastern Division. Two virtually identical lawsuits were later filed: Rubin v. Intuit Inc., was filed on March 8, 2000 in the United States District Court, Southern District of New York and Newby v. Intuit Inc. was filed on April 27, 2000, in the United States District Court, Central District of California, Eastern Division. The Bruce and Newby lawsuits were consolidated into one lawsuit, In re Intuit Privacy Litigation, filed on July 28, 2000 in the United States District Court of California, Eastern Division. Following ~~Intuit's~~Intuit’s successful motion to dismiss several of the claims, an amended complaint was filed on May 2, 2001. A similar lawsuit, Almanza v. Intuit Inc. was filed on March 22, 2000 in the Superior Court of the State of California, San Bernardino County, Rancho Cucamonga Division. An amended complaint in the Almanza suit was filed on October 26, 2000. These purported class actions ~~allege~~alleged violations of various federal and California statutes and common law claims for invasion of privacy based upon the alleged intentional disclosure to third parties of personal and private customer information entered at ~~Intuit's~~Intuit’s Quicken.com ~~website.~~Web site. The complaints ~~seek~~sought injunctive relief, orders to disgorge profits related to the alleged acts, and statutory and other damages. In August 2001, Intuit ~~believes these lawsuits~~and the plaintiffs’ counsel in all of the cases except Rubin reached an agreement in principle to resolve the cases, subject to court approval, based on terms that are ~~without merit and intends~~not material to ~~defend the litigation vigorously.~~ Intuit. The Rubin case was dismissed on November 19, 2001.

Intuit is subject to other legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of our business. We currently believe that the ultimate amount of liability, if any, for any pending claims of any type (either alone or combined) will not materially affect our financial position, results of operations or liquidity. However, the ultimate outcome of any litigation is uncertain, and either unfavorable or favorable outcomes could have a material negative impact. Regardless of outcome, litigation can have an adverse impact on Intuit because of defense costs, diversion of management resources and other factors. 12. SUBSEQUENT EVENTS Sale of Quicken Bill Manager On May 15, 2001, we sold the technology assets of our Quicken Bill Manager business to Princeton eCom Corporation. In exchange for these assets, Intuit is entitled to receive, at Princeton eCom's election to be made by February 2002, either shares of Princeton eCom common stock equal to approximately 20% of Princeton eCom's fully diluted shares or cash payments in four annual installments, beginning in February 2002, with each cash installment to equal 25% of the value, measured at the time of the payment, of the Princeton eCom shares that Intuit would have received if Princeton had elected to pay with shares of its stock. In addition, Intuit and Princeton eCom entered into several multi-year business agreements related to bill payment and presentment. Under these agreements, Intuit will offer Web-based Quicken Bill Manager-branded service processed by Princeton eCom and will receive a share in revenues derived from the services. Intuit will also receive certain payments if Princeton eCom licenses the Web-based user interface technology to third parties. Intuit will utilize Princeton eCom as a provider of bill payment and presentment services for Intuit's Quicken desktop bill management services. Princeton eCom was also granted a license to use the "Powered by Quicken Bill Manager" mark on third party sites. -14- 15 Share Repurchase Program On May 22, 2001, we announced that our board of directors has authorized a three-year stock repurchase program for the purchase up to $500 million of common stock. The program authorizes us to repurchase shares of common stock on the open market from time to time, depending on general market conditions and the trading price of our common stock. The company's cash and cash equivalents will fund the repurchases. -15- 16

ITEM 2 ~~MANAGEMENT'S~~
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS ~~- -------------------------------------------------------------------------------- CAUTIONS ABOUT FORWARD LOOKING STATEMENTS~~
Cautions about Forward Looking Statements

Throughout this Form 10-Q, you will find ~~"forward-looking"~~“forward-looking” statements, or statements about events or circumstances that have not yet occurred. In some cases, you can identify these statements by forward-looking words such as ~~"may," "might," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential"~~“may,” “will,” “should,” “plans,” “believes,” “predicts,” or ~~"continue,"~~“continue,” and other similar terms. These ~~forward-looking~~ statements include ~~among other things,~~statements about the ~~potential for~~seasonality of our ~~emerging~~ businesses, the trends we see in the revenue from our desktop software products and Quicken Loans, our projected costs and expenses, the effect of our new distribution arrangements in the retail channel and our payroll business, the anticipated future growth of our mortgage revenue, predictions about QuickBooks new user growth and upgrade rates for existing customers, expected trends in operating income and expenses and capital needs. These statements are only predictions, based on our current expectations about future events. We cannot guarantee future results, performance or achievements or guarantee that predictions or current expectations will be accurate. In addition, we will not necessarily update these statements if circumstances change in the future.The section “Risks That Could Affect Future Results” also contains forward-looking statements. These forward-looking statements involve risks and uncertainties and our actual results ~~performance or achievements~~ could differ ~~materially from those expressed~~materially. We cannot guarantee future results or ~~implied by the~~that current expectations will be accurate, and we will not update information in this Form 10-Q if any forward-looking ~~statements.~~statement later turns out to be inaccurate. The important factors that could cause our results to differ are discussed under ~~"Risks~~the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risks That Could Affect Future Results,"” at the end of ~~this~~ Item 2. ~~This~~You should read Item 2 ~~should also be read~~ in conjunction with the Consolidated Financial Statements and related Notes in Part I, Item 1 of this Form 10-Q and our fiscal ~~2000~~2001 Form ~~10K. OVERVIEW Intuit's~~10-K. We encourage you to read these sections carefully.

Intuit’s mission is to revolutionize how people manage their financial lives, and how small businesses and accounting professionals manage their businesses. We ~~strive to offer innovative products and services that will revolutionize how individuals and small businesses manage their activities. We offer a variety~~are the leading provider of small business accounting, tax preparation and personal finance software products and ~~related~~Web-based services that simplify complex financial tasks for consumers, small businesses and accounting professionals. Our principal products and services ~~that~~ include ~~Quicken(R)~~Quicken®, ~~QuickBooks(R)~~QuickBooks®, Quicken ~~TurboTax(R)~~TurboTax®, ~~ProSeries(R) and Lacerte(R) desktop software products, as well as an array of Internet-based products and services, including QuickBooks Deluxe Payroll service, QuickBase(R)~~ProSeries®, ~~Quicken TurboTax for the Web, Quicken.com(SM)~~Lacerte® and Quicken ~~Loans.(SM)~~ Loans®.

Our businesses are highly seasonal – particularly our tax business, ~~is highly seasonal.~~but also small business and personal finance to a lesser extent. Sales of tax products are heavily concentrated in the period from November through ~~March.~~April. Sales of personal finance and small business ~~and consumer finance~~ products are typically strongest during the calendar year-end holiday buying season and the beginning of the calendar year, and therefore ~~our~~ major product launches for these products usually occur in the fall or early winter to take advantage of these customer buying patterns. These seasonal patterns mean that our total net revenue is usually highest during ~~the~~our second and third fiscal quarters. We typically report a loss in our first and fourth quarters ~~ending January 31 and April 30. We experience~~when revenue from our seasonal businesses is relatively lower, ~~revenues for the quarters ending July 31 and October 31, while our~~but operating expenses to develop ~~and support~~new products and services continue at relatively consistent ~~levels during these periods. This can result in significant operating losses in the July 31 and October 31 quarters.~~levels. Operating results can also fluctuate for other reasons such as changes in product release dates, non-recurring events such as acquisitions, dispositions, gains and losses from marketable securities, and product price cuts in quarters ~~that have~~with relatively high fixed expenses. ~~Acquisitions~~

In preparing our financial statements, we make estimates, assumptions and ~~dispositions in particular~~judgments that can have a significant impact on our net revenue, operating income and net income, as well as on the ~~comparability~~value of ~~both~~certain assets on our ~~quarterly~~balance sheet. We believe that the estimates, assumptions and ~~annual results, and acquisition-related expenses continue to~~judgments involved in the accounting policies described below have ~~a negative~~the greatest potential impact on our ~~earnings. While desktop software and related products and services provide a majority of~~financial statements, so we consider these to be our revenue, our Internet-based revenue is continuing to grow. We use the term Internet-based revenue to include revenue from both Internet-enabled products and services as well as revenue generated by electronic ordering and/or delivery of traditional desktop software products and financial supplies. Since Internet-based revenues cut across all of our business divisions, we do not report results of our Internet-based revenues separately in our financial statements. Instead, each of our business divisions reports Internet-based revenues that are specific to its operations and are included in its results. -16- 17 We believe our internal emerging businesses will provide an opportunity to increase revenue in fiscal 2001 and beyond. We have made significant progress in several of these businesses in the past. During fiscal 2000, our web-based tax preparation and electronic filing services achieved profitability. During both the second and third quarter of fiscal 2001, the profitability of our Quicken Loans and payroll businesses improved significantly from the prior year. During the second quarter of fiscal 2001, we introduced QuickBooks for the Web, which provides basiccritical accounting functionality on the web, and QuickBase, a web-based tool that lets customers create, manage and share data from a browser. In February 2001, we announced the Intuit Developer Network, a program that gives software developers access to application programming interfaces (APIs) for various Intuit small business products, so that they can develop software applications that will be available to Intuit's small business customers. Despite this progress, investors should be aware that most of our emerging businesses are still in their initial stages and are not yet generating either profits or significant revenue. We anticipate increased spending in an effort to capitalize on new business opportunities. Year over year, as of April 30, 2001 we have doubled our investments in our internally developed emerging businesses. We expect to continue increasing our investment in emerging businesses during the remainder of fiscal 2001. See "Risks That Could Affect Future Results." RESULTS OF OPERATIONS The following tables set forth data from our consolidated statements of operations for the quarter and year-to-date ended April 30, 2000 and 2001. Results for all periods include activity for Rock Financial Corporation and Title Source, Inc. (collectively, "Rock"), which were acquired in December 1999. As the acquisition of Rock was accounted for as a pooling of interests, all prior periods have been restated to reflect the combined results of Rock and Intuit.policies. See Note 1 of the financial ~~statements. NET REVENUE~~statements for more information about these critical accounting policies, as well as descriptions of other significant accounting policies.

•		Net Revenue – Return and Rebate Reserves. As part of our revenue recognition policy, we estimate future product returns and rebate payments. These estimates determine our revenue reserves. We make these estimates based primarily on our past return and rebate experience. We also consider the volume and price mix of products in the retail channel, trends in retailer inventory, economic trends that might impact customer demand for our products (including the competitive environment), the economic value of the rebates being offered and other factors. In the past, actual returns and rebates have not generally exceeded our reserves. However, actual returns and rebates in any future period are inherently uncertain. If we changed our assumptions and estimates, our revenue reserves would change, which would impact the net revenue we report. In addition, if actual returns and rebates are significantly greater than the reserves we have established, the actual results would decrease our reported revenue. Conversely, if actual returns and rebates are significantly less than our reserves, this would increase our reported revenue.

•		Goodwill, Purchased Intangibles and Other Long-Lived Assets – Impairment Assessments. Under current accounting standards, that are to be modified at the start of our next fiscal year, we make judgments about the remaining useful lives of goodwill, purchased intangible assets and other long-lived assets whenever events or changes in circumstances indicate an other than temporary impairment in the remaining value of the assets recorded on our balance sheet. In order to judge the remaining useful life of an asset, we make various assumptions about the value of the asset in the future. This may include assumptions about future prospects for the business that the asset relates to and typically involves computations of the estimated future cash flows to be generated by these businesses. Based on these judgments and assumptions, we determine whether we need to take an impairment charge to reduce the value of the asset stated on our balance sheet to reflect its actual fair value. Judgments and assumptions about future values and remaining useful lives are complex and often subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts. Although we believe the judgments and assumptions we have made in the past have been reasonable and appropriate, different judgments and assumptions could materially impact our reported financial results. More conservative assumptions of the anticipated future benefits from these businesses would result in greater impairment charges, which would decrease net income and result in lower asset values on our balance sheet. Conversely, less conservative assumptions would result in smaller impairment charges, higher net income and higher asset values. See Notes 1“Goodwill, Purchased Intangible Assets and Other Long-lived Assets”, 4 and 9, for more details about how we make these judgments.

•		Concentration of Credit Risk – Reserves for Uncollectible Accounts Receivable. We make ongoing assumptions relating to collectibility of our accounts receivable. The accounts receivable amount on our balance sheet includes a reserve for accounts that might not be paid. In determining the amount of the reserve, we consider our historical level of credit losses. We also make judgments about the creditworthiness of significant customers based on ongoing credit evaluations, and we assess current economic trends that might impact the level of credit losses in the future. Our credit losses have generally been less than our reserve. However, since we cannot predict future changes in the financial stability of our customers, we cannot guarantee that our reserves will continue to be adequate. If actual credit losses are significantly greater than the reserve we have established, that would increase our general and administrative expenses and reduce our reported net income. Conversely, if actual credit losses are significantly less than our reserve, this would eventually decrease our general and administrative expenses and increase our reported net income. See Note 1 of the financial statements “Concentration of Credit Risk” for more details about our accounts receivable.

•		Income Taxes – Estimates of Effective Tax Rates, Deferred Taxes and Valuation Allowance. When we prepare our consolidated financial statements, we must estimate our income taxes in each jurisdictions where we conduct business. This requires us to estimate our actual current tax exposure and to assess temporary differences that result from differing treatment of certain items (such as deferred revenue) for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are shown on our consolidated balance sheet. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income. To the extent we believe that recovery is not likely, we must establish a valuation allowance. When we establish a valuation allowance or increase this allowance in an accounting period, we must record a tax expense in our statement of operations.

Significant management judgment is required to determine our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. Our net deferred tax asset as of January 31, 2002 was $236.5 million, net of the valuation allowance of $11.4 million. We recorded the valuation allowance to reflect uncertainties about whether we will be able to utilize some of our deferred tax assets (primarily consisting of certain net operating losses carried forward by our non-US subsidiaries) before they expire. The valuation allowance is based on our estimates of taxable income by the jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable. If actual results differ from these estimates or if we adjust these estimates in future periods, we may need to establish an additional valuation allowance, which could materially reduce our net income.

We have categorized the following total net revenue discussion ~~is categorized~~ by our business divisions. The table below shows each business ~~division's~~division’s percentage of our total net revenue for the ~~quarter~~three and ~~year-to-date~~six month periods ended ~~April 30, 2000~~January 31, 2001 and ~~2001.~~2002. Information for fiscal 2001 has been reclassified to conform to fiscal 2002 financial presentation for comparability. See Note 811 of the financial statements for additional information about our business ~~segments.~~
Q3 % Q3 % % YTD % YTD % % (Dollars in millions; CHANGE CHANGE Unaudited) FY00 REVENUE FY01 REVENUE Q3 FY00 REVENUE FY01 REVENUE YTD ------ ------- ------ ------- ------ ------ ------- -------- ------- ------ Small Business Division ..... $ 90.7 28% $103.5 24% 14% $307.6 33% $ 357.3 33% 16% Tax Division ................ 168.6 51% 232.5 55% 38% 365.5 39% 437.2 41% 20% Consumer Finance Division ... 43.2 13% 65.3 15% 51% 183.9 20% 195.2 18% 6% Global Business Division .... 26.6 8% 23.9 6% (10)% 74.6 8% 80.6 8% 8% Total net revenue........ $329.1 100% $425.2 100% 29% $931.6 100% $1,070.3 100% 15%
~~Small Business Division.~~ segments, which correspond to the business divisions described below.

Total Net Revenue % Total % Total % Total % Total
Q2 Net Q2 Net Q2 % YTD Net YTD Net YTD %
FY01 Revenue FY02 Revenue Change FY01 Revenue FY02 Revenue Change

(Dollars in millions)
Small Business
Product $ 127.5 $ 141.0 $ 196.6 $ 214.2
Service 23.6 34.4 42.5 60.7
Other 4.9 1.0 9.7 3.2

Subtotal 156.0 34 % 176.4 32 % 13 % 248.8 39 % 278.1 37 % 12 %

Tax
Product 183.0 215.5 194.0 223.8
Service 10.7 8.5 13.0 11.1
Other 2.7 1.3 2.7 1.4

Subtotal 196.4 43 % 225.3 41 % 15 % 209.7 33 % 236.3 31 % 13 %

��

Personal Finance
Product 29.8 30.5 59.8 55.3
Service 4.3 1.8 6.0 4.7
Other 12.3 14.9 27.2 27.0

Subtotal 46.4 10 % 47.2 9 % 2 % 93.0 14 % 87.0 11 % (6 %)

Quicken Loans
Product — — — —
Service 20.1 56.5 37.0 96.5
Other — — — —

Subtotal 20.1 4 % 56.5 10 % 181 % 37.0 5 % 96.5 13 % 161 %

Global Business
Product 32.0 35.8 41.7 44.1
Service 5.8 5.4 13.5 10.4
Other 0.9 0.6 1.4 3.6

Subtotal 38.7 9 % 41.8 8 % 8 % 56.6 9 % 58.1 8 % 3 %

Total net revenue
$ 457.6 100 % $ 547.2 100 % 20 % $ 645.1 100 % $ 756.0 100 % 17 %

Small Business Division product revenue is derived primarily from QuickBooks desktop software products, financial supplies and our Basic payroll ~~services, the QuickBooks Support Network ("QBSN"), and QuickBooks Internet Gateway services ("QBIG"). Revenue for the~~service. Small Business Division services revenue is derived primarily from our Deluxe and Premier payroll services and QuickBooks support plans.

Small Business Division total net revenue increased ~~by 14% and 16% for~~13% in the second quarter ~~and year to date ended April 30, 2001~~of fiscal 2002 compared to the ~~same periods in the prior year. Our QuickBooks business (including QuickBooks desktop products, QBSN and QBIG) experienced~~second quarter of fiscal 2001. Payroll revenue increased 32% from period to period. This increase reflected more than 40% revenue growth ~~of 5% and 9%~~ for the Basic and Deluxe offerings, with revenue for the Premier service roughly flat. Price increases accounted for a significant portion of the Basic and Deluxe revenue growth, although the number of customers for both offerings also increased by approximately 14%. Payroll revenue growth is expected to be slower during the second half of fiscal 2002 compared to the first half of fiscal 2002. See “Risks that Could Affect Future Results,” at the end of this Item 2.

Second quarter ~~and year to date ended April 30,~~revenue growth for the division also reflected strong growth from QuickBooks support plans. In August 2001, we began offering several higher-end support plans, which resulted in a significantly higher average selling price. Financial supplies revenue also increased moderately during the quarter.

QuickBooks revenue during the second quarter of fiscal 2002 remained flat compared to the same period alast year, ~~ago. This growth was primarily attributable to increased QBIG revenue~~reflecting declining end-of-life sales for our older QuickBooks 2001 products during the second quarter, as well as ~~higher average selling prices~~lower unit sales of our new QuickBooks 2002 products to retailers during the second quarter compared to sales of QuickBooks 2001 in the same quarter last year. In response to retailers’ desires to hold less inventory and obtain replenishments more quickly, we improved our inventory management and replenishment capabilities. One consequence of these changes was that we shipped fewer units of QuickBooks 2002 to retailers compared to shipments of QuickBooks 2001 during the same period last year. Because we primarily recognize revenue for retail sales when we ship products to retailers (see Note 1 of the financial statements), lower shipments to retailers resulted in less revenue compared to the same period last year. Notwithstanding the revenue decline, customer purchases of all versions of our new QuickBooks ~~desktop products.~~2002 products were strong, both in the retail channel and from direct sales. Units were up more than 20% and dollars increased more than 45% compared to QuickBooks 2001 purchases last year during the same launch-to-date period. Although these are early positive indicators of future revenue growth, it is too early to predict results for the full fiscal year.

Small Business Division total net revenue for the first six months of fiscal 2002 increased 12% compared to the first six months of fiscal 2001. Payroll had strong revenue growth reflecting price increases as well as some unit growth. QuickBooks support revenue also increased. These ~~factors~~increases were partially offset by ~~12% and 18% declines in unit sales for our QuickBooks desktop products for the quarter and year to date ended April 30, 2001. These results primarily reflect~~ a ~~year-over-year~~3% decline in the rate at which existing QuickBooks customers upgraded to a newer QuickBooks product, as well as lower acquisition rate of new users compared to the prior year. Year 2000 concerns skewed both the normal seasonal patterns and traditional annual upgrade patterns in fiscal 2000. Almost 50 percent of our customers upgraded last year due to Year 2000 concerns. QuickBooks revenue, ~~results also reflect slower economic growth~~reflecting a decline in the U.S. and other major markets for our QuickBooks products, which has resulted in slower new customer acquisition. Payroll services experienced revenue growth of 56% and 54% for the quarter and year to date, compared to the same periods a year ago. Significant price increases contributed to this growth for both our Basic Payroll Service and our -17- 18 online Deluxe Payroll Service. Both services also experienced solid growth in their customer base. While we believe our payroll business, and the Deluxe Payroll Service in particular, will provide us with a significant opportunity to generate recurring revenue in the future, we face a number of ongoing challenges and risks, including operational issues in activating payroll customers. See "Risks That Could Affect Future Results." units, partially offset by increased average selling prices.

Tax Division ~~Tax Division~~product revenue is derived primarily from Quicken TurboTax federal and state consumer desktop tax preparation ~~software,~~products and ProSeries and Lacerte professional tax preparation products. Tax Division services revenue is derived primarily from Quicken TurboTax for the Web online tax preparation services ~~ProSeries~~ and ~~Lacerte~~electronic filing services.

Tax division total net revenue increased 15% in the second quarter of fiscal 2002 compared to the second quarter of fiscal 2001. Revenue from our professional tax preparation products ~~and electronic tax filing services. Overall, Tax Division revenue for~~increased 28%, with about half of the quarter and year to date increased by 38% and 20%, respectively compared to the same periods last year. The increase in revenue was due to a combination of higher average selling prices to reflect product enhancements (such as the Automated Tax Return feature) and increased unit sales of our desktop and web-based tax preparation products. Our web-based preparation and electronic filing services experienced strong growth ~~during the current tax season. Year to date through April 30, 2001, web tax preparation revenue grew 130%~~resulting from the prior year, driven by price increases and a 73% increase in federal tax unit volume. We experienced an increase in the number of customers who take advantage of our free electronic tax preparation and filing through Quicken Tax Freedom Project, which accounted for approximately 50% of total Quicken TurboTax for the Web federal units. Our professional tax products experienced revenue growth of 17% and 10% for the quarter and year to date, respectively compared to the same periods a year ago. This growth in revenue was the result of higher average selling prices of our ProSeries and Lacerte unlimited-use products, as well as pay-per return unit growth. Although we are encouraged by the year to date results for our tax products, revenues for the full tax season are still subject to consumer product returns from our retail distribution channels. While we expect our reserves for returned products will be adequate to cover retailers' returns of unsold products during the next two quarters, higher than expected returns could have a negative impact on revenue for the full season. In April 2001, we completed our acquisition of Tax and Accounting Software ~~Corp. ("TAASC"), which offered~~Corporation in April 2001. Our recent efforts to reduce the sharing of professional tax products (by hard-coding the purchasing tax preparer’s name in the software) also contributed to revenue growth. The revenue growth also resulted from higher average selling prices for our ProSeries and Lacerte unlimited-use products.

We launched our consumer desktop tax preparation products on schedule and products reached retail shelves in late November 2001. Revenue from our consumer tax business increased 3% in the second quarter of fiscal 2002 compared to the second quarter of fiscal 2001. Revenue from TurboTax for the Web more than doubled, reflecting a ~~fully integrated suite of software tools for accounting and tax professionals. TAASC will become part~~significant price increase as well as some unit growth. Electronic filing units were also up. Revenue from TurboTax desktop products increased only slightly resulting from price increases. From fiscal 2000 to 2001, we saw an increasing portion of our ~~professional~~annual growth during the third quarter, and we expect that trend to continue this year. This trend results in part from more customers using our Web-based tax ~~division. See Note 4~~offerings, which have revenue peaks later in the season. In recent years retail sales have also shifted to later in the tax season. Given this trend, it is too early to predict results for the full tax season.

Revenue patterns for the Tax Division for the year-to-date periods were essentially identical to the second quarter trends described above, as we generate only minimal tax revenue during the first quarter of ~~the financial statements. Consumer~~each fiscal year.

Personal Finance Division ~~Consumer Finance Division~~product revenue ~~comes~~is derived primarily from Quicken desktop ~~products, Quicken Loans, advertising, sponsorship and placement fees from~~products. Personal Finance Division services revenue is minimal. Other revenue consists of Quicken.com and online transactions revenue.

Personal Finance Division total net revenue increased 2% in the second quarter of fiscal 2002 from the second quarter of fiscal 2001. The increase reflected continued revenue growth in our online transactions business. Partially offsetting this growth were a 6% decline in Quicken revenue and a 31% decline in Quicken.com revenue from the second quarter of fiscal 2001 to the second quarter of 2002. The decline in Quicken revenue reflected in part the market decline, in addition to the continuing decline of the personal finance desktop software category, as more personal finance functionality becomes available to consumers at no cost on the Internet. The decline in advertising revenue reflected the industry-wide decline in advertising spending by purchasers of Internet advertising.

Revenue patterns for the Personal Finance Division for the first six months of fiscal 2001 and 2002 were similar to the second quarter trends described above. Revenue decreased by 6%, reflecting declines in Quicken and ~~online transactions. Revenue for the Consumer Finance Division increased~~advertising revenue that were partially offset by 51% and 6% for the quarter and year to date, respectively compared to the same periods a year ago. The Consumer Finance Division benefited from revenue growth experienced by our Quicken Loans mortgage business of 209% and 68% for the quarter and year to date respectively, compared to the same periods a year ago. Mortgage revenue increases reflect both an increase in ~~volume of loans sold, as well as increase in margins earned on loan fees and~~online transactions revenue.

Quicken Loans Division revenue is derived primarily from gains on the sale of loans and post-closing servicing arrangements in bulk to participating financial institutions, and from loan fees we receive for originating loans. ~~Mortgage~~All revenue ~~growth~~generated by the division is services revenue.

Quicken Loans Division total net revenue increased 181% in the second quarter of fiscal 2002 compared to the second quarter of fiscal 2001. The volume of loans sold more than doubled, reflecting increased consumer demand to refinance mortgage loans in light of declining interest rates. The volume increase came primarily ~~attributable to process efficiencies~~from conventional loans. This was partially offset by a 6% decline in the average revenue per loan, reflecting a decrease in both average gains on sales of loans and ~~infrastructure improvements that we have made that allow us to capitalize on~~average loan fees. While revenue per loan from conventional loans increased, this was more than offset by decreases for government funded loans and alternative sub-prime loans. We expect the ~~mortgage rate environment. While we expect continued growth in our mortgage business, we do not expect~~ revenue ~~and profit~~ growth rates experienced by ~~our mortgage business year to date during fiscal 2001~~Quicken Loans to be ~~sustainable long-term. We face continuing challenges, including mortgage~~lower in the third and fourth quarters of fiscal 2002 compared to the first half of fiscal 2002 and on a year-over-year basis. Mortgage rate ~~fluctuations.~~increases, the impact of the economic climate on the housing market, business operation risks and other factors could negatively impact the volume of applications and closed loans, particularly our most mortgage-rate sensitive products such as conventional refinancing loans. See ~~"Risks That~~“Risks that Could Affect Future ~~Results." For~~Results,” at the ~~quarter our~~ end of this Item 2 and “Interest Rate Risk” in Item 3 below.

Quicken ~~product line~~Loans Division total net revenue ~~was roughly flat~~increased 161% in the first six months of fiscal 2002 compared to the same period a year ago. Year to date our Quicken products experienced a decline in revenues of 12%, compared to the prior year. Our year to date comparative results were negatively impacted by strong consumer demand during the prior year periods as a result of a significant number of customers upgrading due to Year 2000 concerns. In addition, Quicken.com advertising and sponsorship revenue declined due to reduced advertising spending by potential purchasers of Internet advertising. Our Quicken product line faces many challenges in the personal financial software category, including continued competition from Microsoft's Money product and from other web-based personal finance tracking and management tools that are becoming increasingly available at no cost to consumers. -18- 19 On May 15, 2001, we completed the sale of our Quicken Bill Manager business to Princeton eCom Corporation. See Note 12 of the financial statements for details about this transaction. We do not expect this transaction to have a material impact on revenue for the remainderfirst six months of fiscal 2001, ~~though it may have~~reflecting a 170% increase in loan volume. A large increase in conventional loan volume more than offset declines in government and alternative sub-prime loan volume. This volume growth was partially offset by a slight ~~positive impact on operating income.~~ decline in the average revenue per loan.

Global Business Division product revenue is derived primarily from Yayoi small business desktop accounting products in Japan, and QuickBooks, Quicken and QuickTax desktop software products in Canada. Global Business Division ~~revenues come~~services revenue primarily consists of revenue from ~~small business products~~software maintenance contracts sold with Yayoi software in ~~Japan, QuickBooks, Quicken and tax products in Canada, QuickBooks, Quicken and consumer tax products in Europe, and QuickBooks and Quicken products in Southeast Asia. Overall, the~~ Japan.

Global Business Division total net revenue ~~declined 10% for the quarter ended April 30, 2001 and~~ increased 8% ~~year to date compared to the same periods last year. The decline for the quarter is primarily due to relatively higher revenue~~ in the second quarter of fiscal 2002 compared to the ~~third~~second quarter ~~because~~ of ~~Canada's~~fiscal 2001. Revenue from Canada increased by 14% period to period. This reflected strong early ~~launch~~tax season results for QuickTax, which were partially offset by modest revenue declines for QuickBooks and Quicken. Revenue in Japan declined slightly during the quarter, with increased revenue from Yayoi more than offset by discontinuing the QuickBooks product line in Japan in the second quarter of fiscal 2002 compared to the ~~localized version~~second quarter of ~~QuickBooks~~fiscal 2001. ~~In addition, year~~

Global Business Division total net revenue increased 3% in the first six months of fiscal 2002 compared to ~~date we experienced~~the first six months of fiscal 2001. This increase included an increase of 8% in Canada, reflecting increased revenue for tax products and QuickBooks. Revenue in Japan increased 2%, with a ~~68% year-over-year~~ decline in QuickBooks ~~retail sales in Japan~~revenue more than offset by increases for the quarter due to prior year promotion activities that were discontinued in fiscal 2001. The year-to date increase in revenues can be attributed to overall growth in Canada's professional tax revenue as a result of an acquisition we made earlier in the current fiscal year,other small business products and ~~an increase in Europe revenue due to an earlier release of QuickBooks compared to last year. Partially offsetting the increases, we experienced an adverse foreign exchange rate impact year to date.~~
COST OF REVENUE Q3 % Q3 % % YTD % YTD % % (Dollars in millions; CHANGE CHANGE Unaudited) FY00 REVENUE FY01 REVENUE Q3 FY00 REVENUE FY01 REVENUE YTD ----- ------- ----- ------- ------ ------ ------- ------ ------- ------ Product and services........... $75.5 23% $77.5 18% 3% $225.1 24% $248.2 23% 10% Amortization of purchased software & other............. 2.1 1% 4.4 1% 110% 7.0 1% 11.2 1% 60% Total of cost of revenue... $77.6 24% $81.9 19% 6% $232.1 25% $259.4 24% 12%
services.

Cost of Revenue % of % of % of % of
Q2 Related Q2 Related Q2 % YTD Related YTD Related YTD %
FY01 Revenue FY02 Revenue Change FY01 Revenue FY02 Revenue Change

(Dollars in millions)
Cost of revenue:
Cost of products $ 60.1 16 % $ 74.3 18 % 24 % $ 89.4 18 % $ 106.2 20 % 19 %
Cost of services 37.7 58 % 40.4 38 % 7 % 68.7 61 % 74.3 41 % 8 %
Cost of other revenue 6.0 29 % 6.4 36 % 7 % 12.6 31 % 12.9 37 % 2 %
Amortization of purchased software 3.9 — 7.2 — 85 % 6.8 — 8.9 — 31 %

Total cost of revenue
$ 107.7 24 % $ 128.3 23 % 19 % $ 177.5 28 % $ 202.3 27 % 14 %

There are ~~two~~four components of our cost of ~~revenue. The larger component is~~revenue: (1) cost of products, which includes the direct cost of manufacturing and shipping ~~products and offering~~desktop software products; (2) cost of services, which ~~includes~~reflects direct costs associated with providing services, including data center costs relating to delivering Internet-based ~~products~~services; (3) cost of other revenue, which includes costs associated with providing advertising and ~~services. The second component is the~~marketing and online transactions; and (4) amortization of purchased software, which isrepresents the cost of depreciating products or services we obtained through acquisitions over their useful lives. ~~Total cost~~

Cost of ~~revenue~~products as a percentage of product revenue ~~declined~~increased to ~~19%~~18% and ~~24%~~20% for the second quarter and ~~year to date ended April 30, 2001,~~the first six months of fiscal 2002, compared to ~~24%~~16% and ~~25%~~18% for the same periods in the prior year. These ~~declines are primarily~~increases were attributable in part to ~~improved~~higher product fulfillment unit costs associated with our new third-party retail distribution relationship for our shrink-wrap software products that began during the second quarter of fiscal 2002. This distribution relationship enables us to ship a larger percentage of our products directly to our retailers and allows us to provide inventory ~~management with lower excess and obsolete inventory expenses for all~~to our customers on a more timely basis, which should ultimately reduce product ~~lines. We expect cost~~returns. The increase in the first six months of ~~revenue for~~ fiscal ~~2001~~2002 also reflected incremental costs during the first quarter of fiscal 2002 to ~~be roughly flat compared to the prior year~~implement this new third-party retail distribution relationship.

Cost of services as a percentage of ~~revenue. -19-~~ 20
OPERATING EXPENSES Q3 % Q3 % % YTD % YTD % % (Dollars in FY00 REVENUE FY01 REVENUE CHANGE FY00 REVENUE FY01 REVENUE CHANGE millions; Unaudited) Q3 YTD ------ ------- ------ ------- ------ ------ ------- ------ ------- ------ Customer service and technical support .......... $ 31.6 10% $ 37.5 9% 19% $113.6 12% $116.1 11% 2% Selling and marketing ........ 60.2 18% 68.5 16% 14% 216.2 23% 215.2 20% (1)% Research and development ..... 40.8 12% 52.7 12% 29% 126.5 14% 155.2 15% 23% General and administrative ... 20.0 6% 23.9 6% 20% 64.8 7% 77.6 7% 20% Charge for purchased research and development.... -- -- 0.2 -- -- 1.3 -- 0.2 -- (85)% Acquisition related costs..... 38.4 12% 122.6 29% 219% 121.7 13% 205.3 19% 69% Reorganization costs.......... -- -- -- -- -- 3.5 -- -- -- (100)% Total operating expenses.. $191.0 58% $305.4 72% 60% $647.6 70% $769.6 72% 19%
services revenue decreased to 38% and 41% for the second quarter and the first six months of fiscal 2002, compared to 58% and 61% for the same periods in the prior year. These decreases were attributable primarily to our Quicken Loans Division, which experienced a significantly lower average cost per loan. The decline in average cost per loan reflected greater operational efficiencies, as well as a significant increase in total loan revenue being spread over a fixed cost base that increased only slightly. Our payroll business, which experienced revenue growth over a relatively fixed cost base, also contributed to these decreases.

Cost of other revenue as a percentage of other revenue increased to 36% and 37% for the second quarter and the first six months of fiscal 2002 compared to 29% and 31% for the same periods in the prior year. These increases were primarily due to increased data center costs related to our Personal Finance Division’s online transaction businesses.

Amortization of purchased software increased in all periods presented primarily due to charges related to the impairment of our Internet-based advertising business and our Site Solutions business. See Note 4 of the financial statements.

Operating Expenses % Total % Total % Total % Total
Q2 Net Q2 Net Q2 % YTD Net YTD Net YTD %
FY01 Revenue FY02 Revenue Change FY01 Revenue FY02 Revenue Change

(Dollars in millions)
Customer service and technical support $ 46.1 10 % $ 53.1 10 % 15 % $ 78.5 12 % $ 92.1 12 % 17 %
Selling and marketing 85.6 19 % 94.9 17 % 11 % 146.7 23 % 166.8 22 % 14 %
Research and development 54.6 12 % 53.3 10 % (2 %) 102.5 16 % 103.2 13 % 1 %
General and administrative 25.9 6 % 32.1 6 % 24 % 53.7 8 % 60.7 8 % 13 %
Acquisition-related charges 43.1 9 % 62.1 11 % 44 % 82.8 13 % 103.2 14 % 25 %
Loss on impairment of long-lived asset — 0 % — 0 % — — 0 % 27.0 4 % —

Totals
$ 255.3 56 % $ 295.5 54 % 16 % $ 464.2 72 % $ 553.0 73 % 19 %

Customer service and technical support expenses were 9%10% and ~~11%~~12% of total net revenue for the second quarter and ~~year to date ended April 30, 2001, compared to 10%~~the first six months of fiscal 2002 and ~~12% for the same~~2001. During both fiscal 2002 comparison periods, ~~of the prior year. This improvement reflects~~we benefited from the continued efficiency ~~gains~~ in providing customer service and technical support less expensively through websites and other electronic ~~means,~~means. However, this benefit was offset by higher direct sales and ~~from~~support costs in the ~~expansion~~second quarter and the first six months of fiscal 2002 associated with converting the ~~QuickBooks Support Network~~customers of Tax and Accounting Software Corporation (“TAASC”), which we acquired in April 2001, to our ~~other fee-for-support programs.~~ ProSeries and Lacerte professional tax products.

Selling and marketing expenses were ~~16%~~17% and ~~20%~~22% of total net revenue for the second quarter and ~~year to date ended April 30, 2001,~~the first six months of fiscal 2002, compared to ~~18%~~19% and 23% for the same periods of the prior year. The ~~decline~~declines in selling and marketing costs as a percentage of total net revenue for both ~~the quarter and year to date is partly~~fiscal 2002 comparison periods were primarily attributable to ~~a reclassification of certain Quicken Loans expenses from~~decreased sales and marketing expenses ~~to cost~~as a percentage of total net revenue for our Quicken Loans and Payroll businesses, which have experienced significant growth. These declines were partially offset by the expansion of our small business marketing programs in ~~fiscal 2001. In addition, in~~connection with the ~~prior year we incurred higher than normal~~launches of two new QuickBooks products (QuickBooks Premier and QuickBooks Premier: Accountant Edition), as well as the Intuit Developer Network. We expect selling and marketing expenses to ~~notify customers~~increase as a percentage of ~~Year 2000 issues and solutions. The year-over-year declines~~total net revenue as we market our new QuickBooks products as well as other products we expect to introduce during the remainder of fiscal 2002. We also ~~reflect relatively higher sales~~expect selling and marketing expenses to increase as interest rates increase in ~~the first half of fiscal 2000 due~~order to ~~aggressive marketing programs relating to the expansion of~~effectively market and support our Internet-based businesses and the extremely competitive consumer tax season with the entrance and subsequent exit of Microsoft's TaxSaver product, as well as relatively lower marketing expenditures during fiscal 2001 year to date for Quicken Loans ~~and QuickBooks Deluxe Payroll Service, as those services have begun to more fully leverage the value of the Intuit brands.~~ business.

Research and development expenses were ~~12%~~10% and ~~15%~~13% of total net revenue for the second quarter and ~~year to date ended April 30, 2001,~~the first six months of fiscal 2002, compared to 12% and ~~14%~~16% of total net revenue for the same periods of the prior year. We continued to invest in the initial elements of our Right for My Business strategy, including new QuickBooks Premier products launched in the second quarter of fiscal 2002, the Intuit Developer Network, and other new products that we expect to introduce later in the fiscal year. However, these expenses declined as a percentage of total net revenue during the comparison periods due in part to the revenue growth of both our Quicken Loans business and our Payroll business as well as improvements in our development process that resulted in significantly fewer product “bugs” and shorter development times for our new QuickBooks products. During the remainder of fiscal 2002, we expect to continue significant investments in research and development, particularly ~~for our emerging service businesses.~~ in the small business area.

General and administrative expenses were 6% and 7%8% of total net revenue for the second quarter and ~~year to date ended April 30, 2000~~the first six months of fiscal 2002 and ~~2001, respectively. For our entire~~2001. We experienced decreases in bad debt charges for both fiscal ~~year 2001, we expect general and administrative expenses to remain roughly flat as a percentage of revenue~~2002 comparison periods compared to ~~fiscal~~the same periods a year ago, when we had greater accounts receivable write offs due to the deteriorating financial condition of many Internet companies with whom we did business. These decreases were offset by increased insurance costs and costs associated with our acquisitions of OMware in November 2001 and Employee Matters, Inc. in the later part of December 2000. Charge for Purchased Research and Development. For the quarter ended April 30, 2001, we recorded a charge for purchased research and development of $0.2 million as a result of our acquisition of Tax and Accounting Software Corporation. During the first quarter of fiscal 2000, we recorded

Acquisition-related charges of $1.3 million for purchased research and development as a result of our Boston Light and Hutchison acquisitions. See Note 4 of the financial statements. In connection with these acquisitions, and with the assistance of third party appraisers, we determined the value of in-process projects under development for which technological feasibility had not been established. The value of the projects was determined by estimating the costs to develop the in-process technology into commercially feasible products, estimating the net cash flows we believed would result from the products and discounting these net cash flows back to their present value. -20- ~~21 Acquisition Related Costs. Acquisition related costs~~ include the amortization of goodwill, ~~and~~ purchased intangible assets and deferred compensation expenses arising from acquisitions, and impairment ~~charges. (See Note~~charges relating to certain acquired assets. These costs increased to $62.1 million and $103.2 million for the second quarter and the first six months of fiscal 2002, compared to $43.1 and $82.8 million for the same periods of the prior year. The increases were primarily attributable to impairment charges related to our Internet-based advertising business and our Site Solutions business. See Notes 1 and 4 of the financial statements.~~) These costs increased to $122.6 million and $205.3 million for the quarter and year to date, compared to $38.4 million and $121.7 million for the same periods a year ago.~~ The ~~quarter and year to date~~ increase ~~was the primarily attributable to an impairment charge of $77.0 million recorded~~ in the ~~third quarter~~first six months of fiscal ~~2001 During our review for impairment in the third quarter, events and circumstances indicated possible impairment~~2002 also reflected amortization of our long-lived assets consisting principally of acquired intangible assets and goodwill. These indicators included deterioration in the business climate for web-based companies and recent changes in our fiscal 2002 operating forecasts. We measured the impairment loss related to long-lived assets based on the amount by which the carrying amount of such assets exceeded their fair values. Our measurement of fair value was based on an analysis of the future discounted cash flows at the enterprise level. In performing this analysis, we used the best information available in the circumstances including reasonable and supportable assumptions and projections. The discounted cash flow analysis considered the likelihood of possible outcomes and was based on our best estimate of projected future cash flows, including terminal value cash flows expected to result from the disposition of the assets at the end of their useful lives. The anticipated proceeds from the pending disposition of a portion of Venture Finance Software Corp. ("VFSC"), our Quicken Bill Manager business assisted management in the determination of the fair value of the assetsintangibles associated with ~~VFSC as~~the acquisitions of Employee Matters in December 2000 and TAASC in April ~~30,~~ 2001. ~~Based on our analysis we recorded an impairment charge of $51 million and $26 million associated with VFSC and SecureTax, respectively.~~ Amortization expense related to completed acquisitions will continue to have a negative impact on our operating results in future periods. Assuming we do not experience any further impairment of value of the intangible assets that would require us to accelerate amortization, under the current accounting guidance, amortization will be approximately $185.6 million, $180.5 million, $156.5 million and $75.9 million for the years ending July 31, 2001 through 2004, respectively. See "Risks That Could Affect Future Results." If we complete additional acquisitions or if we are required to accelerate amortization or take impairment charges in the future, there would be an incremental negative impact on operating results. See ~~also "Risks that~~“Risks That Could Affect Future ~~Results" for a discussion~~Results.”

The loss on impairment of long-lived asset related to ~~goodwill amortization. Reorganization Costs. Reorganization costs reflect~~ the ~~costs associated~~impairment of assets we received in connection with the sale of our Quicken ~~Loans subsidiary (formerly Rock) closing numerous branch offices~~Bill Manager business in ~~Michigan in 1999, as it began~~May 2001. See Note 9 of the financial statements. We regularly perform reviews to ~~transition its mortgage business from~~determine if the carrying values of our long-lived assets are impaired. During the six months ended January 31, 2002, we recorded a ~~traditional branch-based business~~charge of $27 million to ~~an online~~reduce the carrying value of this asset to zero.

Non-Operating Income and ~~call center-based business. These costs totaled $3.5 million in the first quarter of fiscal 2000. -21-~~ ~~22 NON-OPERATING INCOME AND EXPENSES~~ Expenses

For the second quarter and ~~year to date ended April 30, 2001,~~the first six months of fiscal 2002, interest and other income and expense, net, ~~increased~~decreased to ~~$15.1~~$8.5 million and ~~$47.7~~$20.3 million compared to ~~$14.5~~$16.5 million and ~~$30.0~~$32.7 million for the same periods a year ~~ago. The increases reflect higher~~ago due to a sharp decline in the interest rates we earned on our cash and short-term investment ~~balances due primarily to proceeds from sales of marketable securities. Net gain (loss) from~~balances.

~~Gains (Losses) on Marketable Securities and Other ~~Investments.~~ Investments, Net of Taxes~~

For the second quarter ~~and year to date ended April 30, 2001,~~of fiscal 2002, we recorded ~~net losses~~a gain from marketable securities and other investments, net of ~~$(11.5) million and $(87.3)~~taxes, of $1.6 million, compared to ~~net gains~~a loss of ~~$422.2~~$71.9 million ~~and $402.1~~in the same period in the prior year. In the first six months of fiscal 2002, we recorded a loss of $10.6 million, compared to a loss of $75.8 million for the same ~~periods~~period a year ago. See Note 3 of the financial statements. The ~~losses incurred~~$10.6 million loss in the first six months of fiscal 2002 included, among other things, a $7.2 million loss attributable to declines during the ~~quarter~~period in the market prices of Excite@Home, 724 Solutions and ~~year to date ended April 30, 2001, are due primarily to~~our S1 options, and a loss of $3.3 million for other-than-temporary declines in ~~the values of~~value relating to certain ~~equity investments held as trading securities below our cost, as well as charges to reflect other than temporary declines in the values of certain private equity~~long-term investments. We ~~consider~~considered our shares of Excite@Home ~~VeriSign~~ and 724 Solutions common stock as trading securities. ~~See Note 1 of the financial statements.~~ As a result, ~~unrealized gains~~market fluctuations were reflected in our consolidated statement of operations for the period. However, we sold all of our remaining shares of these securities, as well as our S1 options, during the first quarter of fiscal 2002. As of January 31, 2002, we continued to hold marketable securities and ~~losses~~investments in privately held companies valued at approximately $56 million on our balance sheet, down from approximately $109 million as of July 31, 2001 due to ~~market fluctuations in these securities are included in~~sales and write-downs. We review the values of our ~~net income. Recent declines in the market have significantly reduced~~investments each quarter and make adjustments as appropriate. If the value of ~~our trading and available-for-sale securities, and we expect this volatility to continue for the foreseeable future. If the market value of~~ these ~~trading~~remaining securities continues to decline significantly in the future, it would have a negative impact on our ~~earnings. Other than temporary decline of the values of our available-for-sale and private equity investments could result in additional losses.~~ financial results.

For the second quarter and ~~year to date ended April 30, 2001,~~the first six months of fiscal 2002, we recorded an income tax provision (benefit) of ~~$55.3~~$13.7 million and ~~$38.6~~$(17.0) million on a pretax income of ~~$41.4~~$133.6 million and ~~$3.3 million.~~$10.4 million, resulting in effective tax rates of 10% and (164)%. This compares to an income tax provision (benefit) of ~~$200.2~~$14.2 million and ~~$195.6~~$(16.7) million on a pretax income (loss) of ~~$497.2~~$40.8 million and ~~$483.9~~$(38.1) million for the same periods of the prior year, resulting in effective tax rates of 35% and (44)%. The difference in the effective tax rates for the second quarter and the first six months of fiscal 2002 compared to the same periods a year ~~ago.~~ago was primarily due to the tax benefit related to a divestiture that became available during the second quarter of fiscal 2002. At ~~April 30,~~January 31, 2002 and July 31, 2001, ~~there was~~we had a valuation allowance of $11.4 million for tax assets of our global subsidiaries based on ~~management's~~management’s assessment that we may not receive the benefit of certain loss ~~carry forwards.~~ carryforwards.

~~Cumulative Effect of Change in Accounting ~~Change. During~~For Derivatives, Net~~

For the ~~first~~ quarter ~~of fiscal 2001,~~ended October 31, 2000, we recorded a cumulative gain of $14.3 million, net of taxes, as a result of a change in accounting ~~principle~~principles that ~~required us to recognize~~recognized the cumulative effect of ~~the increase in~~ the fair value of our S1 options as of August 1, 2000. See Note 13 of the financial statements. Subsequent fluctuations in the fair value of these options ~~will also be~~were included in our net income or net loss. ~~LIQUIDITY AND CAPITAL RESOURCES~~

At ~~April 30, 2001,~~January 31, 2002, our ~~unrestricted~~ cash and cash equivalents and short-term investments totaled ~~$437.6~~$1,493.4 million, a ~~$20.7~~$76.0 million ~~increase~~decrease from July 31, ~~2000. Year to date,~~2001.

We used $27.8 million in cash for our operations during the ~~improvement~~six months ended January 31, 2002. The primary components of cash used by operations were an increase of $144.8 million in ~~liquidity was the~~mortgage loans as a result of ~~net cash provided by operating~~increased loan volumes for the Quicken Loans division and ~~financing activities, which~~an increase of $234.2 million in accounts receivable due to the seasonality of our business. These were partially offset by ~~investing activities. Our operations provided $234.8~~increases in accrued liabilities and accounts payable of $137.8 million ~~in cash year~~(also due to ~~date. Cash from operating activities is driven by~~ the seasonality of our business, which typically results in the majority of net revenues and cash receipts occurring in the January and April quarters, though operating expenses are incurred throughout the year. In addition,business) as well as adjustments made for non-cash expenses, ~~such as amortization~~including acquisition-related charges and deferred compensation of ~~goodwill and other purchased intangibles~~$113.5 million, an impairment loss on long-lived asset of $213.1 million, which included a $77.0 million impairment charge, and losses on marketable securities and other investments, net, of $87.3 million, contributed to the cash provided by operations. The primary use of cash year to date was an increase in mortgage loans of $85.6 million due to increased activity in our mortgage business. In addition, we also recorded non-cash adjustments for a pre-tax cumulative accounting gain relating to a change in the method of accounting for derivatives of $23.9$27.0 million and ~~a net loss~~depreciation charges of ~~$21.5 million, year to date.~~ $32.0 million.

Investing activities ~~used $280.2~~provided $83.7 million in cash ~~year to date. The primary use~~for the six months ended January 31, 2002. We received proceeds of ~~cash~~$960.2 million from the maturity and sale of certain short-term investments, which was for business acquisitions, which included Venture Finance Software Corp. in the first quarter (for $118 million in cash), and Tax and Accounting Software Corp. in the third quarter (for $63 million in cash).partially offset by purchases of short-term investments of $844.5 million. As ~~part~~a result of our ~~continuing internal -22-~~ 23continued investment in information systems and infrastructure, ~~for our emerging business,~~ we also purchased ~~$58.0 million of~~ property and equipment ~~year to date. Financing~~of $31.6 million during the period.

We used $18.9 million in cash for our financing activities ~~provided $63.6~~for the six months ended January 31, 2002. The primary component of cash used was $74.3 million ~~year to date, primarily attributable to proceeds from the exercise~~for repurchasing of ~~employee~~treasury stock ~~options. We currently hold investments in a number of publicly traded companies (see~~through our stock repurchase program. See Note 114 of the financial ~~statements). The volatility of the stock market and the potential risk of fluctuating stock prices may have an impact on~~statements. This was partially offset by the proceeds of $57.6 million received from ~~future sales~~the issuance of these securities and therefore on our future liquidity. Due to our reporting of the Excite@Home, VeriSign and 724 Solutions shares as trading securities, future fluctuations in the carrying values of these stocks will impact our operating results. If future declines in our other marketable securities are deemed to be other than temporary, they will also impact our operating results. Investors should note that many high technology companies, including Excite@Home, VeriSign and 724 Solutions, have recently experienced significant declines in theircommon stock ~~prices. In connection with our acquisition of Computing Resources, Inc. in May 1999, we are required to pay three annual installments of $25 million, the second of which was paid in May 2001.~~ under employee stock plans.

In the normal course of business, we enter into leases for new or expanded facilities in both domestic and global locations. We also evaluate, on an ongoing basis, the merits of acquiring technology or businesses, or establishing strategic relationships with and investing in other companies. ~~Accordingly, it is possible that we~~We may decide to use cash and cash equivalents to fund such activities in the future. In May 2001, our Board of Directors authorized a stock repurchase program covering up to $500 million of common stock over a three-year period. As of January 31, 2002, we have repurchased $82.6 million of common stock under the program.

We believe that our cash and cash equivalents and short-term investments will be sufficient to meet anticipated seasonal working capital and capital expenditure requirements for at least the next twelve months. ~~RISKS THAT COULD AFFECT FUTURE RESULTS~~

The following table summarizes our contractual obligations:

Payments Due by Period
(Dollars in millions) Less than 1 1-3 4-5 After 5
Contractual Obligations year years years years Total

Short-term notes payable $ 36.8 $ — $ — $ — $ 36.8
Long-Term Debt — 12.2 — — 12.2
Operating Leases 30.6 80.8 40.9 43.0 195.3
Other Obligations 25.0 — — — 25.0

Total Contractual Cash Obligations $ 92.4 $ 93.0 $ 40.9 $ 43.0 $ 269.3

The following table summarizes our commercial commitments:

Amount of Commitment Expiration Per Period
(Dollars in millions) Less than 1 1-3 4-5 After 5
Other Commercial Commitments year years years years Total

Line of Credit $ — $ — $ — $ — $ —
Loan Commitments 759.6 — — — 759.6
Future Sale Commitments 261.6 — — — 261.6

Total Commercial Commitments $ 1,021.2 $ — $ — $ — $ 1,021.2

The factors discussed below are cautionary statements that identify important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements in this Form 10-Q. Our fiscal ~~2000~~2001 Form 10-K ~~contains~~and other SEC filings contain additional details about these risks, as well as other risks that could affect future results.

Our revenue and earnings are highly seasonal, which causes significant quarterly fluctuations in our revenue and net ~~income.~~income. Several of our businesses are highly seasonal -– particularly our tax business, but also small business and ~~consumer~~personal finance to a lesser extent. This causes significant quarterly fluctuations in our financial results. Revenue and ~~earnings~~operating results are usually strongest during the second and third fiscal quarters ending January 31 and April 30. We typically experience lower revenues, and ~~often~~ significant operating losses, in the ~~July~~first and fourth quarters ending October 31 and ~~October 31 quarters.~~ July 31.

Acquisition-related ~~charges~~costs can cause significant fluctuation in our net ~~income.~~income. Our ~~recent~~ acquisitions have resulted in significant expenses, including amortization of purchased software ~~goodwill and purchased intangibles, and~~(which is reflected in cost of revenue), as well as charges for in-process research and ~~development. Acquisition-related expenses~~development and amortization of goodwill, purchased intangibles and deferred compensation (which are reflected in operating expenses). Total acquisition-related costs in the categories identified above were ~~$80.9 million in fiscal 1998,~~ $100.7 million in fiscal 1999, $168.1 million in fiscal 2000, ~~and $216.8 in the nine months ended April 30, 2001, including a charge of $77~~$263.4 million in ~~the third quarter~~fiscal 2001 (including charges of ~~fiscal 2001~~$78.7 million to write down the long-lived intangible assets related to ~~two recent acquisitions (see Note 1~~three acquisitions), $69.3 million in the second quarter of fiscal 2002 and $112.1 million in the ~~financial statements).~~first six months of fiscal 2002. Additional acquisitions, and any additional ~~accelerated~~ impairment of the value of purchased assets, could have a significant negative impact on future operating results. ~~-23-~~ 24 Proposed Financial Accounting Standards Board guidelines relating to accounting for goodwill could make our acquisition-related charges less predictable in any given reporting period. On February 14, 2001, the FASB issued a limited revision of its Exposure Draft, Business Combinations and Intangible Assets that establishes a new standard for accounting for goodwill acquired in a business combination. It would continue to require recognition of goodwill as an asset but would not permit amortization of goodwill as currently required. Under the proposed statement, goodwill would be separately tested for impairment using a fair-value-based approach when an event occurs indicating the potential for impairment. Any required goodwill impairment charges would be presented as a separate line item within the operating section of the income statement. The shift from an amortization approach to an impairment approach would apply to previously recorded goodwill as well as goodwill arising from acquisitions completed after the application of the new standard. If the standard is adopted as described above, our goodwill amortization charges would cease. However, it is possible that in the future, we would incur less frequent, but larger, impairment charges related to the goodwill already recorded as well as goodwill arising out of future acquisitions as we continue to expand our business.

Gains and losses related to marketable securities and other investments can cause significant ~~fluctuation~~fluctuations in our net ~~income.~~income. Our investment activities have had a significant impact on our net income. We recorded pre-tax net gains from marketable securities and other investments of $579.2 million in fiscal 1999 and $481.1 million in fiscal 2000 and pre-tax net losses of $98.1 million in fiscal 2001. We recorded a pre-tax ~~net~~gain of $1.6 in the second quarter of fiscal 2002 and a pre-tax loss of ~~$87.3 for the nine months ended April 30, 2001. See Note 1 of the financial statements. Fiscal 2000 and 2001 decreases~~$10.6 million in the ~~market prices~~first six months of ~~our trading securities have resulted in significant reductions in our pre-tax income. Future price fluctuations in trading securities, and any~~fiscal 2002. Any additional significant long-term declines in value of ~~other~~these securities could reduce our net income in future periods.

Recent changes to Financial Accounting Standards Board guidelines relating to accounting for goodwill could make our acquisition-related charges less predictable in any given reporting period. The FASB recently adopted a new standard for accounting for goodwill acquired in a business combination. It continues to require recognition of goodwill as an asset but does not permit amortization of goodwill as previously required. Under the new statement, goodwill is separately tested for impairment using a fair-value-based approach when an event occurs indicating the potential for impairment. The shift from an amortization approach to an impairment approach applies to all acquisitions completed after June 30, 2001. When we adopt the new standard, which we expect will be in the first quarter of fiscal 2003, it will also apply to previously recorded goodwill and our goodwill amortization charges will cease as a result. However, it is possible that in the future, we would incur less frequent, but larger, impairment charges related to the goodwill already recorded and to goodwill arising out of future acquisitions as we continue to expand our business.

A general decline in economic conditions could lead to reduced demand for our products and ~~services.~~services. The recent downturn in general economic conditions has led to reduced demand for a variety of goods and services, including many technology products, and we believe the economic decline ~~has been~~was partially responsible for slower than expected growth in our Small Business ~~Division.~~Division since the beginning of fiscal 2001. If conditions continue to decline, or fail to improve, in geographic areas that are significant to us, such as the United States, Canada and Japan, we could see a significant decrease in the overall demand for our products and services that could harm our operating results. We face risks relating to customer privacy and security and increasing regulation, which could hinder the growth of our businesses - particularly our Internet-based businesses. Despite our efforts to address customer concerns about privacy and security, these issues still pose a significant risk, and we have experienced lawsuits and negative publicity relating to privacy issues. For example, during fiscal 2000 and fiscal 2001, there have been press articles criticizing our privacy and security practices as they relate to the connectivity of our desktop software to our web sites. We have faced lawsuits and negative press alleging that we improperly shared information about customers with third party "ad servers" for our web sites. A major breach of customer privacy or security by Intuit, or even by another company, could have serious consequences for our businesses - particularly our Internet businesses - including reduced customer interest and/or additional regulation by federal or state agencies. For example, if a "hacker" were able to overcome the security precautions we take to protect our customers' consumer tax preparation information, it could have a material negative impact on our operating results and our relationships with our customers. In addition, mandatory privacy and security standards and protocols are still being developed by government agencies, and we may incur significant expenses to comply with any requirements that are ultimately adopted. For example, under the Gramm Leach Bliley Act recently adopted by the federal government, by July 1, 2001 Intuit will be required to provide written notice of its privacy practices to many of its customers. We must give customers an opportunity to state their preferences regarding Intuit's use of their non-public personal information, and we must honor those preferences. If Internet use does not grow as a result of privacy or security concerns, increasing regulation or for other reasons, the growth of our Internet-based businesses would be hindered.

We face competitive pressures in all of our businesses, particularly our consumer tax preparation software business, which can have a negative impact on our revenue, profitability and market ~~position.~~position. There are formidable current and potential competitors in the private ~~sector, and we~~sector. For example, our primary competitor in the consumer tax preparation market has offered its products during part of this tax year at a price of $0 after a rebate. We also face potential competition from ~~publicly-funded~~publicly funded government entities seeking to competitively enter private markets in the United States for consumer electronic financial services. ~~Accordingly, we~~If federal and/or state governmental agencies are ultimately successful in their efforts to provide tax preparation and filing services to consumers, it could have a significant negative impact on our financial results in future years. We expect competition to remain intense during fiscal 2002.

If we fail to maintain reliable and responsive service levels for our electronic tax offerings, we could lose revenue and customers. Our online tax preparation and electronic tax filing services face significant challenges in maintaining high service levels, particularly during peak volume service times. For example, we have experienced relatively brief unscheduled interruptions in our electronic filing/and or tax preparation services during fiscal 2000 and 2001. We do not believe any prior service outages had a material financial impact, prevented customers from completing and filing their returns in a timely manner, or posed a risk that customer data would be lost or corrupted. However, we did experience negative publicity in some instances. The exact level of demand for Quicken TurboTax for the ~~rest~~Web and electronic filing for the remainder of the current tax year is impossible to predict, and we could experience adverse financial and public relations consequences if these services are unavailable for an extended period of time, or late in the tax season, due to technical difficulties or other reasons.

It is unlikely that the revenue and profit growth rates experienced by our Quicken Loans Division during fiscal 2001 and the first half of fiscal ~~2001. -24-~~ 25 2002 will be sustainable long-term, either on a year-over-year basis or on a sequential quarter basis. Mortgage rate increases, the impact of the economic climate on the housing market, business operation risks and other factors could result in significantly lower revenue and profit growth for our mortgage business. Increases in mortgage interest rates and other interest rates adversely affected our mortgage business during fiscal 2000, contributing to a significant revenue decline from fiscal 1999 to fiscal 2000. Conversely, declines in mortgage interest rates during fiscal 2001 and the first half of fiscal 2002 had a positive impact on revenue. If mortgage rates rise again, this could negatively impact the volume of applications and closed loans, particularly our most mortgage-rate sensitive products such as conventional refinancing loans. Fluctuations in non-mortgage rates also create risks with respect to the loans on our balance sheet and impact our cost of funds to provide loans. In addition, our ability to successfully streamline the online application, approval, and closing process will have a significant impact on our ability to attract customers to our mortgage service, and on our ability to continue increasing the percentage of our mortgage revenue generated through the online channel compared to branch offices. We must also maintain relationships with certain banks and other third parties who we rely on to provide access to capital, and later, purchase and service the loans. If we are unable to maintain key relationships, or if the terms of key relationships change to be less favorable to Intuit, it could have a negative impact on our mortgage business and on Intuit’s financial results.

It is unlikely that the revenue and profit growth rates experienced by our Payroll businesses during fiscal 2001 and the first half of fiscal 2002 will be sustainable long-term, either on a year-over-year basis or on a sequential quarter basis. We had strong revenue and profit growth during fiscal 2001, especially during the second half of the year, due to significant price increases, a shift toward a mix of higher-priced products and a large number of new payroll customers as a result of last year’s tax law changes. We increased prices again in the first quarter of fiscal 2002. We do not expect that future price increases will contribute as significantly to revenue growth as they have in the past 18 months.

If we are unable to generate significant growth from new sources of revenue for our QuickBooks business, our Small Business Division generally will not be able to achieve sustained growth. Sales to both existing customers and new customers of our QuickBooks desktop products since the beginning of fiscal 2001 have been lower than expected. We cannot rely solely on this source of revenue to provide sustainable future growth for our Small Business Division. We must generate significant revenue from broader markets and customer segments as well as from new products and services – including QuickBooks Premier: Accountant Edition designed for accountants, a new version of QuickBooks targeted at larger and more complex small businesses, and other recently announced new small business products.

Despite our efforts to adequately staff and equip our customer service and technical support operations, we cannot always respond promptly to customer requests for ~~assistance.~~assistance. We occasionally experience customer service and support problems, including longer than expected ~~"hold"~~“hold” times when our staffing is inadequate to handle higher than anticipated call volume, and a large number of inquiries from customers checking on the status of product orders when the timing of shipments fails to meet customer expectations. This can adversely affect customer relationships and our financial performance. In order to improve our customer service and technical support, we must continue to focus on eliminating underlying causes of service and support calls ~~(through~~through product improvements and better order fulfillment ~~processes),~~processes, and on more accurately anticipating demand for customer service and technical support.

We rely on two third-party vendors to handle all outsourced aspects of our primary retail desktop software product launches and to replenish product in the retail channel after the primary launch. To manufacture and distribute our primary retail products at the time of product launches and to replenish products in the retail channel after the primary launch, we have an exclusive manufacturing relationship with Modus Media, and an exclusive distribution arrangement with Ingram Micro Logistics. While we believe that relying on only two outsourcers for product launches and replenishment improves the efficiency and reliability of these activities, relying on any vendor for a significant aspect of our business can have severe negative consequences if the vendor fails to perform at acceptable service levels for any reason.

We rely on one third-party vendor to handle all outsourced aspects of our financial supplies business. We have an exclusive contract with John H. Harland Company to print and fulfill supplies orders for all of our checks and most other products for our financial supplies business. Harland fulfilled orders for about 75% to 80% of our supplies revenue in fiscal 2000 and 2001, and more than 80% of our supplies revenue for both the second quarter and the first six months of fiscal 2002. We believe that relying on one supplies vendor improves customer service and maximizes operational efficiencies for our supplies business. However, if there are significant problems with Harland’s performance, it could have a material negative impact on sales of supplies and on Intuit’s business as a whole.

We face risks relating to customer privacy and security and increasing regulation, which could hinder the growth of our businesses. Despite our efforts to address customer concerns about privacy and security, these issues still pose a significant risk, and we have experienced lawsuits and negative publicity relating to privacy issues. For example, during fiscal 2000 and fiscal 2001, there were press articles criticizing our privacy and security practices as they relate to the connectivity of our desktop software to our Web sites. We have faced lawsuits and negative press alleging that we improperly shared information about customers with third-party “ad servers” for our Web sites. A major breach of customer privacy or security by Intuit, or even by another company, could have serious consequences for our businesses, including reduced customer interest and/or additional regulation by federal or state agencies. In addition, the federal government has developed mandatory privacy and security standards and protocols, and we have incurred significant expenses to comply with these requirements. Additional similar federal and state laws may be passed in the future, and the cost of complying with additional legislation could have a negative impact on our operating results. If Internet use does not grow as a result of privacy or security concerns, increasing regulation or for other reasons, the growth of our Internet-based businesses would be hindered.

Actual product returns may exceed ~~return reserves.~~returns reserves, particularly for our tax preparation software. We ~~generally~~ ship ~~significantly~~ more desktop products to our distributors and retailers than we expect them to sell, in order to reduce the risk that distributors or retailers will run out of products. This is particularly true for our tax products, which have a short selling season. Like most software companies, we have a liberal product return policy and we have historically accepted significant product returns. We establish reserves for product returns in our financial statements, based on estimated future returns of products. We closely monitor levels of product sales and inventory in the retail channel in an effort to maintain reserves that are adequate to cover expected returns. In the past, returns have not generally exceeded these reserves. However, if we do experience actual returns that significantly exceed reserves, it would result in lower net revenue.

If we sublease three presently unoccupied leased facilities, or if we determine it is unlikely that we will use the facilities during the remainder of the lease terms, we could incur significant accounting charges, which would reduce our net income. Three of our leased facilities are currently unoccupied. If we are able to sublease a facility, the lease payments from the sublease tenant would likely be significantly lower than our payment obligations under our lease because of the poor economic climate and the soft real estate market. If we enter into a sublease, we will incur an accounting expense equal to the difference between the expected sublease payments and our required lease payments over the remaining term of the lease. If we do not continue to successfully refine and update the business and operating models for our Internet-based products and services and other emerging service businesses, and continue to improve the operational support for these businesses, the businesses will not achieve sustainable financial viability or broad customer acceptance. Our business models for our Internet-based businesses and other emerging service businesses have more complex and varied revenue streams than our traditional desktop software businesses. For these businesses to become and remain economically viable, we must continually refine their business and operating models to reflect evolving economic circumstances. These businesses also depend onsublease a ~~different operational infrastructure than our desktop software businesses,~~property and we must continually develop, expand and modify internal systems and procedures to support these businesses. In particular, our web-based tax preparation and electronic filing services must effectively handle extremely heavy customer demand during the peak tax season. If we are unable to meet customer expectations in a cost-effective manner,determine it could result in lost customers, negative publicity, and increased operating costs, which could have a significant negative impact on the financial and market success of these businesses. If we are unable to capitalize on new sources of revenue for our QuickBooks business, the business will not be able to achieve sustained growth. Sales of our QuickBooks desktop product for fiscal 2001 year to date are lower than expected, due to lower upgrades sales to existing customers compared to fiscal 2000, as well as lower than expected sales to new customers. We cannot rely solely on these sources of revenue to provide sustainable future growth for our Small Business Division. We must generate revenue from broader markets and customer segments as well as from new products and services. If we are unable to successfully restructure our QuickBooks Internet Gateway services and business model, the services will not achieve and maintain acceptance by customers and the third-party vendors who provide these services, and they will not generate long-term revenue growth or profitability. Intuit is refining its approach to selecting and working with QuickBooks Gateway vendors. Although we are seeing encouraging results for some services, such as merchant account services, that are more closely integrated with QuickBooks, we have ended relationships with most of our smaller alliance companies where the business results are not meeting our expectations or theirs. To maintain other current relationships, we may be required to adapt them in ways that are less attractive to us, financially or otherwise. In addition, QuickBooks Internet Gateway Services are currently available only to customers using QuickBooks 2000 or QuickBooks 2001, so customer adoption of the services is somewhat dependent on unit sales of newer QuickBooks products to new customers and to customers upgrading from older versions of the product. Customer upgrade and new user acquisition rates for QuickBooks 2001 have been lower than historical levels. -25- 26 In order to successfully grow our payroll services business, we must continue to improve the efficiency and effectiveness of our payroll processing operations and streamline customer activations for our Deluxe and Premier payroll processing service. The payroll processing business involves a number of business risks if we make errors in providing accurate and timely payroll information, cash deposits or tax return filings, including potential liability to customers, additional expense to correct product errors and loss of customers. For our Internet-based services (the Deluxe service, as well as the online Basic service), we must improve our operations to give customers more reliable connectivity to our data center to transmit and receive payroll data and tax tables. In order to expand the customer bases for our Deluxe and Premier payroll services, we must continue to focus on streamlining the service activation process for new customers. It is unlikely that we will use the ~~revenue and profit growth rates experienced by our mortgage business year-to-date~~facility during ~~fiscal 2001 will be sustainable long-term, either on a year-over-year basis or on a sequential quarter basis. Mortgage rate increases,~~ the ~~impact~~remaining term of the economic climate on the housing market, business operation risks and other factors could result in significantly lower revenue and profit growth for our mortgage business. Increases in mortgage rates and other interest rates adversely affected our mortgage business during 2000, contributing to a significant revenue decline from fiscal 1999 to fiscal 2000. Conversely, declines in mortgage rates during fiscal 2001 have had a positive impact on revenue. If mortgage rates rise again, this could negatively impact the volume of applications and closed loans, particularly our most mortgage-rate sensitive products such as conventional loans and refinancing loans. Fluctuations in non-mortgage rates also create risks with respect to the loans on our balance sheet and impact our cost of funds to provide loans. In addition, our ability to successfully streamline the online application, approval, and closing process will have a significant impact on our ability to attract customerslease, we would incur an accounting charge when we make that determination equal to our ~~mortgage service, and on our ability to continue increasing~~remaining payment obligations under the percentage of our mortgage revenue generated through the online channel compared to branch offices. We must also maintain relationships with certain banks and other third parties who we will rely on to provide access to capital, and later, service the loans. If we are unable to maintain key relationships, or if the terms of key relationships change to be less favorable to Intuit, it could have a negative impact on our mortgage business and on Intuit's financial results. lease.

Our ability to conduct business could be impacted by a variety of factors such as electrical power interruptions, earthquakes, fires, terrorist activities and other similar ~~events.~~events. Our business operations depend on the efficient and uninterrupted operation of a large number of computer and communications hardware and software systems. These systems are vulnerable to damage or interruption from electrical power interruptions, telecommunication failures, earthquakes, fires, floods, terrorist activities and their aftermath, and other similar events. Recently, electrical power in certain locations in California has been interrupted for short periods of time in the form of "rolling blackouts." We have principal facilities (including our primary data center) located in California. To date, our business operations have not been materially impacted by these outages. However, it is possible that rolling blackouts will continue in the foreseeable future and our facilities could be significantly affected in the future. We currently have short-term alternate sources of power (in the form of backup batteries and generators) for all of our critical customer-facing operations in California, including our primary data center. However, if rolling blackouts become more frequent and/or longer in duration, it is possible that our alternative sources of power would be insufficient to allow us to continue our operations without interruption. Other unpredictable events ~~such as earthquakes, fires and floods,~~ could also impact our ability to continue our business operations. For our Internet-based services, ~~the~~ system failures of our internal server operations or those of various third-party ~~Internet~~ service providers ~~online service providers and other website operators~~ could result in interruption in our services to our customers. Any significant interruptions in our ability to conduct our business operations could reduce our revenue and operating income. Our business interruption insurance may not adequately compensate us for the impact of interruptions to our business operations. ~~-26-~~ 27

ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ~~- -------------------------------------------------------------------------------- SHORT-TERM INVESTMENT PORTFOLIO~~
Short-Term Investment Portfolio

We do not hold derivative financial instruments in our short-term investment portfolio. Our short-term investments consist of instruments that meet quality standards consistent with our investment policy. This policy dictates that, for short-term investments, we diversify our holdings and limit our short-term investments with any individual issuer in a managed portfolio to a maximum of $5 million. ~~Our policy also dictates that all short-term investments mature in 24 months or less. MARKETABLE SECURITIES~~

We carried ~~significant~~ balances in marketable equity securities as of ~~April 30, 2001. These securities~~January 31, 2002 that are subject to considerable market risk due to their volatility. ~~Fluctuations~~If our available-for-sale securities experience further declines in fair value that are considered other-than-temporary, we will reflect the additional loss in our net income in the ~~carrying value of our shares of Excite@Home, VeriSign and 724 Solutions will have an immediate impact on our earnings because we report these shares as trading securities.~~period when the subsequent impairment becomes apparent. See Note 13 of the financial ~~statement notes~~statements for more information regarding risks related to our investments in marketable ~~securities and the impact of our trading securities on our reported net income. INTEREST RATE RISK~~ securities.

Interest rate risk represents a component of market risk to us and represents the possibility that changes in interest rates will cause unfavorable changes in our net income and in the value of our interest rate sensitive assets, liabilities and commitments, particularly those that relate to our mortgage ~~business.~~and payroll businesses. In a higher interest rate environment, borrower demand for mortgage loans generally declines, adversely affecting our mortgage loan business. Interest rate movements also affect the interest income earned on loans we hold for sale in the secondary market, interest expense on our lines of credit, the value of our mortgage loans and ultimately the gain or loss on the sale of those mortgage loans. In addition, interest rate movements affect the interest income ~~earned~~we earn on payroll customer funds we hold and investments we hold in our short-term investment portfolio, ~~and~~as well as the value of ~~those~~our short-term investments.

As part of our risk management programs, we enter into financial agreements and purchase financial instruments in the normal course of business to manage our exposure to interest rate risk with respect to our conventional mortgage loans and our government-insured loans (together, ~~"Prime Loans"~~“Prime Loans”), but not with respect to our sub-prime loans or home equity lines of credit. We use these financial agreements and financial instruments for the explicit purpose of managing interest rate risks to protect the value of our mortgage loan portfolio and not for trading purposes.

We actively monitor and manage our exposure to interest rate risk on Prime Loans, which is incurred in the normal course of business. The ~~committed~~portfolio of prime loans, including those in the pipeline, and ~~closed pipelines of Prime Loans, as well as~~ the related forward commitments ~~and derivatives,~~ are valued ~~daily.~~on a daily basis. We refer to the loans, pipeline, ~~commitments~~ and ~~derivatives~~forward commitments together as the ~~"Hedge~~“Hedge Position."” We evaluate the Hedge Position against a spectrum of interest rate scenarios to determine expected net changes in the fair values of the Hedge Position in relation to the changes in interest rates. ~~We evaluate~~Based on our interest rate risk exposure daily using models that estimate changes in the fair value of the Hedge Position and compare those changes against the fair value of the underlying assets and commitments. -27- ~~28 The following table shows the maturity~~analysis of our ~~mortgage loans held for sale and home equity lines of credit: PRINCIPAL AMOUNTS BY EXPECTED MATURITY: (in thousands, except interest rates; Unaudited)~~
EXPECTED MATURITY DATE(1) PERIOD ENDING APRIL 30, FAIR VALUE ---------------------------------------- APRIL 30, 2001hedge position at January 31, 2002, ~~2003 2004 2005 TOTAL 2001 ---- ---- ---- ---- ---- ----- ----~~ ASSETS: Mortgage Loans................. $144,050 -- -- -- -- $144,050 $148,121 Average Interest Rate...... 7.82% 7.82% LIABILITIES: Lines of Credit................ $ 3,705 -- -- -- -- $ 3,705 $ 3,800 Average Interest Rate...... 5.96% 5.96%
(1) In the ordinary course of our mortgage business, expected maturity is based on the assumption that loans will be re-sold in the indicated period. Based on the carrying values of our mortgage loans held for sale and lines of credit that we held at April 30, 2001, we do not believe that short-term changes in interest rates will have a material effect on the interest income we earn on loans held for sale in the secondary market ~~interest expense on our lines of credit~~ or the value of mortgage loans. See Notes 1, 5 and 610 of the financial ~~statement notes~~statements for more information regarding risks related to our mortgage loans and lines of credit. ~~IMPACT OF FOREIGN CURRENCY RATE CHANGES Most local currencies~~

~~A change in interest rates may also potentially have a material impact on the interest income earned on our cash equivalents and short-term investments held at January 31, 2002.~~

~~Impact of ~~our international subsidiaries have slightly weakened during the first nine months of fiscal 2001. Because we~~Foreign Currency Rate Changes~~

We translate foreign currencies into U.S dollars for reporting ~~purposes,~~purposes; currency fluctuations can have an impact, though generally immaterial, on our results. We believe that our exposure to currency exchange fluctuation risk is insignificant primarily because our global subsidiaries invoice customers and satisfy their financial obligations almost exclusively in their local currencies. For the two quarters presented there was an immaterial currency exchange impact from our intercompany transactions. Currency exchange risk is also minimized since foreign debt is due ~~almost~~ exclusively in local foreign currencies. As of ~~April 30, 2001,~~January 31, 2002, we did not engage in foreign currency hedging activities. ~~- --------------------------------------------------------------------------------~~

PART II
ITEM 1
LEGAL PROCEEDINGS ~~- --------------------------------------------------------------------------------~~
On March 3, 2000, a class action lawsuit, Bruce v. Intuit Inc., was filed in the United States District Court, Central District of California, Eastern Division. Two virtually identical lawsuits were later filed: Rubin v. Intuit Inc., was filed on March 8, 2000 in the United States District Court, Southern District of New York and Newby v. Intuit Inc. was filed on April 27, 2000, in the United States District Court, Central District of California, Eastern Division. The Bruce and Newby lawsuits were consolidated into one lawsuit, In re Intuit Privacy Litigation, filed on July 28, 2000 in the United States District Court of California, Eastern Division. Following ~~Intuit's~~Intuit’s successful motion to dismiss several of the claims, an amended complaint was filed on May 2, 2001. A similar lawsuit, Almanza v. Intuit Inc. was filed on March 22, 2000 in the Superior Court of the State of California, San Bernardino County, Rancho Cucamonga Division. An amended complaint in the Almanza suit was filed on October 26, 2000. These purported class actions ~~allege~~alleged violations of various federal and California statutes and common law claims for invasion of privacy based upon the alleged intentional disclosure to third parties of personal and private customer information entered at ~~Intuit's~~Intuit’s Quicken.com ~~website.~~Web site. The complaints ~~seek~~sought injunctive relief, orders to disgorge profits related to the alleged acts, and statutory and other damages. In August 2001, Intuit ~~believes these lawsuits~~and the plaintiffs’ counsel in all of the cases except Rubin reached an agreement in principle to resolve the cases, subject to court approval, based on terms that are ~~without merit and intends~~not material to ~~defend the litigation vigorously.~~ Intuit. The Rubin case was dismissed on November 19, 2001.
Intuit is subject to other legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of our business. We currently believe that the ultimate amount of liability, if any, for any pending claims of any type (either alone or combined) will not materially affect our financial position, results of operations or liquidity. However, the ultimate outcome of any litigation is uncertain, and either unfavorable or favorable outcomes could have a material negative impact. Regardless of outcome, litigation can have an adverse impact on Intuit because of defense costs, diversion of management resources and other factors. ~~-28-~~ ~~29 - --------------------------------------------------------------------------------~~
-34-

PART II
ITEM 2
CHANGES IN SECURITIES AND USE OF PROCEEDS

(a)		Not applicable

(b)		Not applicable

(c)		On November 2, 2001, we issued 924,973 shares of our common stock as part of the consideration for our purchase of substantially all of the assets of OMware, Inc. (“OMware”), a provider of construction management software, pursuant to an Asset Purchase Agreement signed on August 22, 2001. We issued the shares to OMware, which in turn distributed the shares to its shareholders. Of these shares, 88,518 were issued to two individual shareholders of OMware, but they are being held in escrow to secure certain indemnity obligations of those shareholders under the Asset Purchase Agreement. We will also issue up to an additional $8 million of stock to the two individuals on August 1, 2002 and/or August 1, 2003, if the construction software business achieves certain future performance objectives. The shares issued and issuable in this transaction have been and will be issued without registration under the 1933 Act in reliance on an exemption under Section 3(a)(10) of the 1933 Act, after a hearing on the fairness of the transaction held under the provisions of the California Corporate Securities Law of 1968.

ITEM 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

~~At Intuit’s Annual Meeting of Stockholders on January 18, 2002, our stockholders voted on the following proposals:~~

Proposal to amend Intuit’s 1996 Employee Stock Purchase Plan to increase the number of shares of common stock available for issuance under that plan by 600,000 shares:

Proposal to amend Intuit’s 1996 Directors Stock Option Plan to increase the number of shares of common stock available for issuance under that plan by 90,000 shares and to add annual option grants for members of the Audit and Compensation Committees of our Board of Directors:

Proposal to ratify the appointment of Ernst & Young LLP as Intuit’s independent auditors for fiscal 2002:

ITEM 5
OTHER MATTERS ~~- --------------------------------------------------------------------------------~~
CHANGES IN EXECUTIVE OFFICERS As

On January 17, 2002, we promoted Lorrie M. Norrington, Senior Vice President, Small Business Division, to the position of ~~June 12, 2001, Intuit's executive officers were as follows:~~
~~NAME AGE POSITION - ---- --- --------~~ Stephen M. Bennett 47 President, Chief Executive Officer and Director; Acting Senior Vice President, Small Business Division William V. Campbell 60 Chairman of the Board of Directors Scott D. Cook 48 Chairman of the Executive Committee of the Board of Directors Thomas A. Allanson 43 Senior Vice President, Tax Division Alan A. Gleicher 48 Senior Vice President, Global Business Division Richard William Ihrie 51 Senior Vice President and Chief Technology Officer Greg J. Santora 50 Senior Vice President and Chief Financial Officer Raymond G. Stern 39 Senior Vice President, Corporate Strategy and Marketing Sonita Ahmed 44 Vice President, Finance and Corporate Controller Caroline F. Donahue 40 Vice President, Sales Linda Fellows 52 Vice President, Investor Relations and Treasurer Elisabeth M. Lang 44 Vice President, Corporate Public Relations and Marketing Communication Carol Novello 36 Vice President - Marketing, Small Business Division Enrico Roderick 42 Vice President, Personal Finance Group Catherine L. Valentine 48 Vice President, General Counsel and Corporate SecretaryExecutive Vice President, Small Business and Personal Finance Division.
On January 17, 2002, we promoted Sherry Whiteley, 41 Vice President, Human Resources,
to the position of Senior Vice President, Human Resources.

On February 1, 2002, we promoted William C. Emerson to the position of Intuit Vice President, Quicken Loans Division and to Chief Executive Officer of Quicken Loans, Inc., a subsidiary of Intuit. Mr. ~~Allanson~~Emerson joined Intuit ~~in September 2000~~ as Vice President of ~~Tax Strategy and was promoted to Senior Vice President of the Tax Division~~Mortgage Operations for Quicken Loans in ~~April 2001.~~June 2000. Prior to joining Intuit, he was ~~with GE Capital Colonial Pacific Leasing (a vendor financial services business)~~President of Rock Home Loans @ Michigan National Bank from April 1999 to June 2000, Vice President of Branch Production and Operations at Rock Financial Corporation from May ~~1995 through August 2000, serving as President from October~~ 1998 to ~~August 2000. He was Sales Effectiveness Leader/GM~~April 1999, and Vice President of Call Center Production and Operations at Rock Financial Corporation from ~~September~~January 1997 to ~~October 1998 and was Manager, Marketing Equipment Business (an electrical distribution and control business) from~~ May ~~1995 through September 1997.~~1998. Mr. ~~Allanson~~Emerson holds a Bachelor of Science degree in ~~mechanical engineering~~Business Administration from ~~Auburn~~Penn State University. ~~-29-~~ ~~30 - --------------------------------------------------------------------------------~~

~~On February 15, 2002, Michael L. Hrastinski, Senior Vice President and Chief Information Officer, resigned from Intuit.~~

ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K ~~- -------------------------------------------------------------------------------- (a) THE FOLLOWING EXHIBITS ARE FILED AS PART OF THIS REPORT:~~
We have filed the following exhibits as part of this report:
~~10.01 Amendment~~
Incorporated By Reference
Exhibit
No. 1, Exhibit Description Filed with
this
Form 10-Q Form File No. Date Filed
10.01# Term Sheet for Fulfillment Products and Services for FSG and P-TAP Non-Imprintable Products between John H. Harland Company (“Harland”) and Intuit, dated October 25, 2001 X
10.02# Agreement for Purchase of Intuit-owned Inventory for FSG and P-TAP Non-Imprintable Products between Harland and Intuit, dated October 25, 2001 X
10.03+ Intuit Inc. 1993 Equity Incentive Plan, as amended through January ~~17, 2001, to Employment Agreement~~16, 2002 X
10.04+ Intuit Inc. 2002 Equity Incentive Plan, as amended through January 18, 2002, and form of grant document under the Plan S-8 333-81446 01/25/02
10.05+ Intuit Inc. 1996 Employee Stock Purchase Plan, as amended through January 18, 2002 S-8 333-81328 01/24/02
10.06+ Intuit Inc. 1996 Directors Stock Option Plan, as amended through January 18, 2002, and form of grant documents under the plan S-8 333-81324 01/24/02
10.07+ Amended and Restated Secured Balloon Payment Promissory Note between Intuit ~~Inc.~~and Richard W. Ihrie, dated November 26, 2001 X
10.08+ Amended and Restated Secured Promissory Note between Intuit and Brooks W. Fisher, dated November 26, 2001 X
10.09+ Amended and Restated Secured Balloon Payment Promissory Note between Intuit and Stephen M. Bennett, ~~date January 21, 2000 10.02 Amendment No. 1,~~ dated ~~January 17,~~November 26, 2001 ~~to Restricted Stock Purchase~~ X
10.10+ Separation Agreement between Intuit ~~Inc.~~and Michael L. Hrastinski, dated February 15, 2002 X
10.11+ Amended and Restated Secured Full Recourse Balloon Payment Promissory Note (and related Stock Pledge Agreement) between Intuit and Stephen M. Bennett, dated February 19, 2002 X
# We have requested confidential treatment for certain portions of this document pursuant to an application for confidential treatment sent to the Securities and Exchange Commission (the “SEC”). We omitted such portions from this filing and filed them separately with respect to 150,000 shares of Intuit Common Stock 10.03 Amendment No. 1, dated January 17, 2001, to Restricted Stock Purchase Agreement between Intuit Inc. and Stephen M. Bennett with respect to 75,000 shares of Intuit Common Stock 10.04 Secured Full Recourse Promissory Note and Stock Pledge Agreement, dated March 30, 2001, between Intuit Inc. and Stephen M. Bennett 10.05 Letter from Intuit to Stephen M. Bennett, dated April 6, 2001, confirming forgiveness of certain loan interest 10.06 Separation Agreement between Daniel T. H. Nye and Intuit Inc. dated March 26, 2001 10.07 Amendment No. 1 dated May 29, 2001, to Secured Balloon Payment Bridge Loan Promissory Note between Intuit Inc. and Thomas A. Allanson the SEC.
+ Management compensatory plan or arrangement.
~~- ---------------- (b) REPORTS ON FORM 8-K: (1) On April 17, 2001, Intuit filed a report~~
~~-38-~~

Reports on Form 8-K ~~to report under Item 5 that it had acquired~~filed during the ~~assets~~second quarter of Tax and Accounting Software Corporation. (2) On May 24, 2001, Intuit filed a report on Form 8-K to report under Item 5 (a) the sale of its Quicken Bill Manager business to Princeton eCom Corporation; (b) the authorization of a $500 million three-year stock repurchase program; and (c) its financial results for the quarter ended April 30, 2001. Intuit's balance sheet as of April 30, 2000 and 2001, and statement of operations for the three months and nine months ended April 30, 2000 and 2001 were included in the Form 8-K. - -------------------------------------------------------------------------------- fiscal 2002:

1.		On November 8, 2001, Intuit filed a Form 8-K to report under Item 5 that, on November 2, 2001, it had completed its acquisition of OMware, Inc. We did not file financial statements with this report.

2.		On November 16, 2001, Intuit filed a Form 8-K to report under Item 5 its financial results for the quarter ended October 31, 2001. We included in the 8-K Intuit’s consolidated balance sheets and statements of operations as of and for the first quarter ended October 31, 2001.

3.		On January 24, 2002, Intuit filed a Form 8-K to report under Item 5 announcing that we had promoted Lorrie Norrington, Senior Vice President for the Small Business Division, to Executive Vice President, Small Business and Personal Finance Division.

4.		On February 14, 2002, Intuit filed a Form 8-K to report under Item 5 its financial results for the quarter ended January 31, 2002. We included in the 8-K Intuit’s consolidated balance sheets and statements of operations as of and for the second quarter ended January 31, 2002.

~~SIGNATURES ~~- --------------------------------------------------------------------------------~~~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTUIT INC. (REGISTRANT) Date: June 13, 2001 By: /s/ Greg J. Santora ---------------------------------------------------- Greg J. Santora Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) -30-


Delaware		77-0034661
(State of incorporation)		(IRS employer identification no.)


		CONDENSED CONSOLIDATED BALANCE SHEETS
		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
PART II
	ITEM 1 LEGAL PROCEEDINGS
PART II
	ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS
	ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 5 OTHER MATTERS
	ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT INDEX
EXHIBIT 10.01
EXHIBIT 10.02
EXHIBIT 10.03
EXHIBIT 10.07
EXHIBIT 10.08
EXHIBIT 10.09
EXHIBIT 10.10
EXHIBIT 10.11



PART I	FINANCIAL INFORMATION	Page
		Number

ITEM 1:	Financial Statements

	Condensed Consolidated Balance Sheets as of July 31, ~~2000~~2001 and ~~April 30, 2001.............................~~ January 31, 2002	3

	Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~April 30, 2000~~January 31, 2001 and ~~2001......~~ 2002	4

	Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~April 30, 2000~~January 31, 2001 and ~~2001................~~ 2002	5

	Notes to Condensed Consolidated Financial Statements ~~........~~	6

ITEM 2: ~~Management's~~	Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations.......................... 16~~ Operations	18

ITEM 3:	Quantitative and Qualitative Disclosures about Market ~~Risk...... 27~~ Risk	32

PART II	OTHER INFORMATION

ITEM 1:	Legal ~~Proceedings............................................... 28~~ Proceedings	34

ITEM 2:	Changes in Securities and Use of Proceeds	35

ITEM 4:	Submission of Matters to a Vote of Security Holders	36

ITEM 5:	Other ~~Matters................................................... 29~~ Matters	37

ITEM 6:	Exhibits and Reports on Form ~~8-K................................ 30 Signatures...................................................... 30~~ 8-K	38

	Signatures	40


				July 31,			January 31,
(In thousands)				2001			2002

ASSETS				(unaudited)
Current assets:
	Cash and cash equivalents			$	450,104		$	488,555
	Short-term investments				1,119,305			1,004,829
	Marketable securities				85,307			42,729
	Customer deposits				230,410			256,313
	Accounts receivable, net				27,990			262,513
	Mortgage loans				123,241			268,025
	Deferred income taxes				77,948			90,247
	Prepaid expenses and other current assets				33,617			32,652

			Total current assets		2,147,922			2,445,863

Property and equipment, net					185,969			183,389
Goodwill and intangibles, net					415,334			348,600
Long-term deferred income taxes					145,905			146,205
Investments					24,107			13,170
Other assets (1)					42,499			13,651

Total assets				$	2,961,736		$	3,150,878

		LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
	Accounts payable			$	66,400		$	100,440
	Payroll service obligations				205,067			217,724
	Escrow liabilities				23,373			37,906
	Drafts payable				63,518			70,962
	Deferred revenue				137,305			156,337
	Income taxes payable				82,661			42,091
	Short-term note payable				38,672			36,753
	Other current liabilities				170,966			263,286

			Total current liabilities		787,962			925,499

Long-term obligations					12,413			12,249
Minority interest					35			35
Commitments and contingencies					—			—
Stockholders’ equity:
Preferred stock					—			—
Common stock and additional paid in capital					1,725,490			1,765,115
Treasury stock, at cost					(8,497	)		(4,755	)
Deferred compensation					(21,720	)		(18,056	)
Accumulated other comprehensive income, net					28,180			5,477
Retained earnings					437,873			465,314

			Total stockholders’ equity		2,161,326			2,213,095

Total liabilities and stockholders’ equity				$	2,961,736		$	3,150,878


			Three Months Ended					Six Months Ended
			January 31,					January 31,
			2001			2002		2001			2002

(In thousands, except per share data; unaudited)
Net revenue:
	Products		$	372,252		$	422,827	$	492,075		$	537,410
	Services			64,453			106,623		111,993			183,417
	Other			20,855			17,795		41,014			35,184

		Total net revenue		457,560			547,245		645,082			756,011

Costs and expenses:
	Cost of revenue:
		Cost of products		60,110			74,318		89,410			106,244
		Cost of services		37,743			40,394		68,698			74,273
		Cost of other revenue		5,966			6,352		12,605			12,899
		Amortization of purchased software		3,858			7,171		6,845			8,877
	Customer service and technical support			46,134			53,139		78,530			92,092
	Selling and marketing			85,567			94,931		146,667			166,826
	Research and development			54,599			53,263		102,477			103,203
	General and administrative			25,914			32,123		53,697			60,716
	Acquisition-related charges			43,074			62,099		82,753			103,186
	Loss on impairment of long-lived asset			—			—		—			27,000

		Total costs and expenses		362,965			423,790		641,682			755,316

Income from operations				94,595			123,455		3,400			695
Interest and other income and expense, net				16,548			8,526		32,666			20,323
Gains (losses) on marketable securities and other investments, net				(71,935	)		1,632		(75,803	)		(10,622	)
Gain on divestiture				1,639			—		1,639			—

Income (loss) before income taxes, minority interest and cumulative effect of accounting change				40,847			133,613		(38,098	)		10,396
Income tax provision (benefit)				14,188			13,745		(16,728	)		(17,045	)
Minority interest				97			—		147			—

Income (loss) before cumulative effect of accounting change				26,562			119,868		(21,517	)		27,441
Cumulative effect of accounting change, net of income taxes of $9,543				—			—		14,314			—

Net income (loss)			$	26,562		$	119,868	$	(7,203	)	$	27,441

Basic net income (loss) per share before cumulative effect of accounting change			$	0.13		$	0.56	$	(0.10	)	$	0.13
Cumulative effect of accounting change				—			—		0.07			—

Basic net income (loss) per share			$	0.13		$	0.56	$	(0.03	)	$	0.13

Shares used in per share amounts				207,594			212,520		206,661			211,780

Diluted net income (loss) per share before cumulative effect of accounting change			$	0.12		$	0.55	$	(0.10	)	$	0.13
Cumulative effect of accounting change				—			—		0.07			—

Diluted net income (loss) per share			$	0.12		$	0.55	$	(0.03	)	$	0.13

Shares used in per share amounts				215,927			219,355		206,661			217,914


			Gross Unrealized
	Cost							Estimated
(In thousands)	Basis		Gains		Losses			Fair Value

July 31, 2001
Checkfree Corporation common stock	$	35,621	$	37,215	$	—		$	72,836
S1 Corporation common stock		7,741		2,714		—			10,455

	$	43,362	$	39,929	$	—		$	83,291

January 31, 2002
Checkfree Corporation common stock	$	35,621	$	—	$	(628	)	$	34,993
S1 Corporation common stock		4,924		2,812		—			7,736

	$	40,545	$	2,812	$	(628	)	$	42,729


			Net balance at

	Life in		July 31,		January 31,
	Years		2001		2002

(In thousands)
Goodwill		3-5	$	326,986	$	269,270
Customer lists		3-5		53,423		45,302
Covenants not to compete		3-5		3,060		3,600
Purchased technology		1-5		24,078		23,033
Assembled workforce		2-5		3,598		2,605
Trade names and logos		1-15		4,189		4,790

			$	415,334	$	348,600


	July 31, 2001				January 31, 2002

	Fixed-rate		Variable-rate		Fixed-rate		Variable-rate

(In thousands)
Conventional prime loans	$	303,100	$	72,500	$	559,600	$	194,200
Sub-prime loans		4,300		1,200		3,500		2,300

	$	307,400	$	73,700	$	563,100	$	196,500


							Foreign
	Marketable			Short-term			Currency
Six months ended January 31, 2001	Securities			Investments			Translation			Total

(In thousands)
Beginning balance gain, net of income taxes	$	58,561		$	—		$	(2,975	)	$	55,586
Unrealized gain, net of income taxes of $5,154		7,731			—			—			7,731
Reclassification adjustment for realized gain included in net loss, net of income tax benefit of $4,685		(7,027	)		—			—			(7,027	)
Translation adjustment gain		—			—			1,106			1,106

Ending balance, net of income taxes of $469	$	59,265		$	—		$	(1,869	)	$	57,396

Six months ended January 31, 2002
(In thousands)
Beginning balance gain, net of income taxes	$	23,958		$	4,686		$	(464	)	$	28,180
Unrealized loss, net of income tax benefit of $14,588 and $915		(21,882	)		(1,372	)		—			(23,254	)
Reclassification adjustment for realized gain included in net income, net of income tax benefit of $510		(766	)		—			—			(766	)
Translation adjustment gain		—			—			1,317			1,317

Ending balance, net of income tax benefit of $16,013	$	1,310		$	3,314		$	853		$	5,477


		Three Months		Six Months			Three Months			Six Months
		Ended		Ended			Ended			Ended
(in thousands)		January 31, 2001		January 31, 2001			January 31, 2002			January 31, 2002

Net income (loss)		$	26,562	$	(7,203	)	$	119,868		$	27,441
Other comprehensive income (loss):
	Change in unrealized gain (loss) on marketable securities		34,278		704			2,135			(22,648	)
	Change in unrealized gain on short-term investments		—		—			(570	)		(1,372	)
	Change in foreign currency translation adjustments		1,169		1,106			2,076			1,317

		$	62,009	$	(5,393	)	$	123,509		$	4,738


Six months ended			Small				Personal		Quicken		Global
January 31, 2001			Business		Tax		Finance		Loans		Business
(In thousands)			Division		Division		Division		Division		Division		Other (1)			Consolidated

Product revenue			$	196,594	$	193,982	$	59,772	$	—	$	41,727	$	—		$	492,075
	Service revenue			42,433		13,003		6,026		37,022		13,509		—			111,993
	Other revenue			9,712		2,717		27,186		—		1,399		—			41,014

		Total net revenue		248,739		209,702		92,984		37,022		56,635		—			645,082

	Segment operating income			91,371		82,413		21,581		1,497		8,369		—			205,231
	Common expenses			—		—		—		—		—		(112,233	)		(112,233	)

	Sub-total operating income (loss)			91,371		82,413		21,581		1,497		8,369		(112,233	)		92,998
	Realized net losses on marketable securities			—		—		—		—		—		(75,803	)		(75,803	)
	Acquisition-related costs			—		—		—		—		—		(89,598	)		(89,598	)
	Interest and other income and expense, net			—		—		—		—		—		32,666			32,666
	Gain on divestiture			—		—		—		—		—		1,639			1,639

	Net income (loss) before taxes, minority interest and cumulative accounting change		$	91,371	$	82,413	$	21,581	$	1,497	$	8,369	$	(243,329	)	$	(38,098	)


*Total Net Revenue*							% Total					% Total								% Total					% Total
				Q2			Net			Q2		Net			Q2 %			YTD		Net			YTD		Net			YTD %
				FY01			Revenue			FY02		Revenue			Change			FY01		Revenue			FY02		Revenue			Change

(Dollars in millions)
Small Business
	Product			$	127.5					$	141.0							$	196.6				$	214.2
	Service				23.6						34.4								42.5					60.7
	Other				4.9						1.0								9.7					3.2

		Subtotal			156.0			34	%		176.4		32	%		13	%		248.8		39	%		278.1		37	%		12	%

Tax
	Product				183.0						215.5								194.0					223.8
	Service				10.7						8.5								13.0					11.1
	Other				2.7						1.3								2.7					1.4

		Subtotal			196.4			43	%		225.3		41	%		15	%		209.7		33	%		236.3		31	%		13	%
						��
Personal Finance
	Product				29.8						30.5								59.8					55.3
	Service				4.3						1.8								6.0					4.7
	Other				12.3						14.9								27.2					27.0

		Subtotal			46.4			10	%		47.2		9	%		2	%		93.0		14	%		87.0		11	%		(6	%)

Quicken Loans
	Product				—						—								—					—
	Service				20.1						56.5								37.0					96.5
	Other				—						—								—					—

		Subtotal			20.1			4	%		56.5		10	%		181	%		37.0		5	%		96.5		13	%		161	%

Global Business
	Product				32.0						35.8								41.7					44.1
	Service				5.8						5.4								13.5					10.4
	Other				0.9						0.6								1.4					3.6

		Subtotal			38.7			9	%		41.8		8	%		8	%		56.6		9	%		58.1		8	%		3	%


			Total net revenue	$	457.6			100	%	$	547.2		100	%		20	%	$	645.1		100	%	$	756.0		100	%		17	%


*Cost of Revenue*					% of					% of								% of					% of
			Q2		Related			Q2		Related			Q2 %			YTD		Related			YTD		Related			YTD %
			FY01		Revenue			FY02		Revenue			Change			FY01		Revenue			FY02		Revenue			Change

(Dollars in millions)
Cost of revenue:
	Cost of products		$	60.1		16	%	$	74.3		18	%		24	%	$	89.4		18	%	$	106.2		20	%		19	%
	Cost of services			37.7		58	%		40.4		38	%		7	%		68.7		61	%		74.3		41	%		8	%
	Cost of other revenue			6.0		29	%		6.4		36	%		7	%		12.6		31	%		12.9		37	%		2	%
	Amortization of purchased software			3.9		—			7.2		—			85	%		6.8		—			8.9		—			31	%

		Total cost of revenue	$	107.7		24	%	$	128.3		23	%		19	%	$	177.5		28	%	$	202.3		27	%		14	%


*Operating Expenses*				% Total					% Total								% Total					% Total
		Q2		Net			Q2		Net			Q2 %			YTD		Net			YTD		Net			YTD %
		FY01		Revenue			FY02		Revenue			Change			FY01		Revenue			FY02		Revenue			Change

(Dollars in millions)
Customer service and technical support		$	46.1		10	%	$	53.1		10	%		15	%	$	78.5		12	%	$	92.1		12	%		17	%
Selling and marketing			85.6		19	%		94.9		17	%		11	%		146.7		23	%		166.8		22	%		14	%
Research and development			54.6		12	%		53.3		10	%		(2	%)		102.5		16	%		103.2		13	%		1	%
General and administrative			25.9		6	%		32.1		6	%		24	%		53.7		8	%		60.7		8	%		13	%
Acquisition-related charges			43.1		9	%		62.1		11	%		44	%		82.8		13	%		103.2		14	%		25	%
Loss on impairment of long-lived asset			—		0	%		—		0	%		—			—		0	%		27.0		4	%		—

	Totals	$	255.3		56	%	$	295.5		54	%		16	%	$	464.2		72	%	$	553.0		73	%		19	%


		Payments Due by Period
(Dollars in millions)		Less than 1		1-3		4-5		After 5
Contractual Obligations		year		years		years		years		Total

Short-term notes payable		$	36.8	$	—	$	—	$	—	$	36.8
Long-Term Debt			—		12.2		—		—		12.2
Operating Leases			30.6		80.8		40.9		43.0		195.3
Other Obligations			25.0		—		—		—		25.0

	Total Contractual Cash Obligations	$	92.4	$	93.0	$	40.9	$	43.0	$	269.3


		Amount of Commitment Expiration Per Period
(Dollars in millions)		Less than 1		1-3		4-5		After 5
Other Commercial Commitments		year		years		years		years		Total

Line of Credit		$	—	$	—	$	—	$	—	$	—
Loan Commitments			759.6		—		—		—		759.6
Future Sale Commitments			261.6		—		—		—		261.6

	Total Commercial Commitments	$	1,021.2	$	—	$	—	$	—	$	1,021.2


	For		Withheld

Stephen M. Bennett		187,313,421		2,158,684
Christopher W. Brody		188,477,321		994,784
William V. Campbell		187,134,869		2,337,236
Scott D. Cook		188,145,978		1,326,127
L. John Doerr		188,116,366		1,355,739
Donna L. Dubinsky		188,430,956		1,041,149
Michael R. Hallman		188,475,312		996,793
Stratton D. Sclavos		186,025,825		3,446,280


For			102,811,067
Against			85,674,550
Abstain			986,488
Broker Non-Votes			0


For			186,092,425
Against			2,435,822
Abstain			943,858
Broker Non-Votes			0


For			121,933,756
Against			66,471,684
Abstain			1,066,665
Broker Non-Votes			0

			Incorporated By Reference
Exhibit No. 1,	Exhibit Description	Filed with this Form 10-Q	Form	File No.	Date Filed
10.01#	Term Sheet for Fulfillment Products and Services for FSG and P-TAP Non-Imprintable Products between John H. Harland Company (“Harland”) and Intuit, dated October 25, 2001	X
10.02#	Agreement for Purchase of Intuit-owned Inventory for FSG and P-TAP Non-Imprintable Products between Harland and Intuit, dated October 25, 2001	X
10.03+	Intuit Inc. 1993 Equity Incentive Plan, as amended through January ~~17, 2001, to Employment Agreement~~16, 2002	X
10.04+	Intuit Inc. 2002 Equity Incentive Plan, as amended through January 18, 2002, and form of grant document under the Plan		S-8	333-81446	01/25/02
10.05+	Intuit Inc. 1996 Employee Stock Purchase Plan, as amended through January 18, 2002		S-8	333-81328	01/24/02
10.06+	Intuit Inc. 1996 Directors Stock Option Plan, as amended through January 18, 2002, and form of grant documents under the plan		S-8	333-81324	01/24/02
10.07+	Amended and Restated Secured Balloon Payment Promissory Note between Intuit ~~Inc.~~and Richard W. Ihrie, dated November 26, 2001	X
10.08+	Amended and Restated Secured Promissory Note between Intuit and Brooks W. Fisher, dated November 26, 2001	X
10.09+	Amended and Restated Secured Balloon Payment Promissory Note between Intuit and Stephen M. Bennett, ~~date January 21, 2000 10.02 Amendment No. 1,~~ dated ~~January 17,~~November 26, 2001 ~~to Restricted Stock Purchase~~	X
10.10+	Separation Agreement between Intuit ~~Inc.~~and Michael L. Hrastinski, dated February 15, 2002	X
10.11+	Amended and Restated Secured Full Recourse Balloon Payment Promissory Note (and related Stock Pledge Agreement) between Intuit and Stephen M. Bennett, dated February 19, 2002	X

#		We have requested confidential treatment for certain portions of this document pursuant to an application for confidential treatment sent to the Securities and Exchange Commission (the “SEC”). We omitted such portions from this filing and filed them separately with respect to 150,000 shares of Intuit Common Stock 10.03 Amendment No. 1, dated January 17, 2001, to Restricted Stock Purchase Agreement between Intuit Inc. and Stephen M. Bennett with respect to 75,000 shares of Intuit Common Stock 10.04 Secured Full Recourse Promissory Note and Stock Pledge Agreement, dated March 30, 2001, between Intuit Inc. and Stephen M. Bennett 10.05 Letter from Intuit to Stephen M. Bennett, dated April 6, 2001, confirming forgiveness of certain loan interest 10.06 Separation Agreement between Daniel T. H. Nye and Intuit Inc. dated March 26, 2001 10.07 Amendment No. 1 dated May 29, 2001, to Secured Balloon Payment Bridge Loan Promissory Note between Intuit Inc. and Thomas A. Allanson the SEC.




+		Management compensatory plan or arrangement.


			INTUIT INC. (Registrant)


Date: February 28, 2002	By:	/s/ Greg J. Santora

			Greg J. Santora Senior Vice President and Chief Financial Officer (Authorized Officer and Principal Financial Officer)


Exhibit
Number		Description

10.01#		Term Sheet for Fulfillment Products and Services for FSG and P-TAP Non-Imprintable Products between John H. Harland Company (“Harland”) and Intuit, dated October 25, 2001

10.02#		Agreement for Purchase of Intuit-owned Inventory for FSG and P-TAP Non-Imprintable Products between Harland and Intuit, dated October 25, 2001

10.03+		Intuit Inc. 1993 Equity Incentive Plan, as amended through January 16, 2002

10.07+		Amended and Restated Secured Balloon Payment Promissory Note between Intuit and Richard W. Ihrie, dated November 26, 2001

10.08+		Amended and Restated Secured Promissory Note between Intuit and Brooks W. Fisher, dated November 26, 2001

10.09+		Amended and Restated Secured Balloon Payment Promissory Note between Intuit and Stephen M. Bennett, dated November 26, 2001

10.10+		Separation Agreement between Intuit and Michael L. Hrastinski, dated February 15, 2002

10.11+		Amended and Restated Secured Full Recourse Balloon Payment Promissory Note (and related Stock Pledge Agreement) between Intuit and Stephen M. Bennett, dated February 19, 2002