Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Jul. 31, 2016 | Aug. 25, 2016 | Jan. 29, 2016 | |
DEI [Abstract] | |||
Entity Registrant Name | INTUIT INC | ||
Entity Central Index Key | 896,878 | ||
Current Fiscal Year End Date | --07-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Jul. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 257,938,052 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 23.6 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | |
Net revenue: | |||
Product | $ 1,289 | $ 1,146 | $ 1,459 |
Service and other | 3,405 | 3,046 | 2,784 |
Total net revenue | 4,694 | 4,192 | 4,243 |
Cost of revenue: | |||
Cost of product revenue | 131 | 139 | 137 |
Cost of service and other revenue | 599 | 556 | 466 |
Amortization of acquired technology | 22 | 30 | 18 |
Selling and marketing | 1,289 | 1,288 | 1,157 |
Research and development | 881 | 798 | 714 |
General and administrative | 518 | 483 | 444 |
Amortization of other acquired intangible assets | 12 | 12 | 7 |
Goodwill and intangible asset impairment charges | 0 | 148 | 0 |
Total costs and expenses | 3,452 | 3,454 | 2,943 |
Operating income from continuing operations | 1,242 | 738 | 1,300 |
Interest expense | (35) | (27) | (31) |
Interest and other income (expense), net | (4) | 1 | 31 |
Income from continuing operations before income taxes | 1,203 | 712 | 1,300 |
Income tax provision | 397 | 299 | 447 |
Net income from continuing operations | 806 | 413 | 853 |
Net income (loss) from discontinued operations | 173 | (48) | 54 |
Net income | $ 979 | $ 365 | $ 907 |
Basic net income per share from continuing operations | $ 3.08 | $ 1.47 | $ 2.99 |
Basic net income (loss) per share from discontinued operations | 0.65 | (0.17) | 0.19 |
Basic net income per share | $ 3.73 | $ 1.30 | $ 3.18 |
Shares used in basic per share calculations | 262 | 281 | 285 |
Diluted net income per share from continuing operations | $ 3.04 | $ 1.45 | $ 2.94 |
Diluted net income (loss) per share from discontinued operations | 0.65 | (0.17) | 0.18 |
Diluted net income per share | $ 3.69 | $ 1.28 | $ 3.12 |
Shares used in diluted per share calculations | 265 | 286 | 291 |
Cash dividends declared per common share | $ 1.2 | $ 1 | $ 0.76 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income Statement - USD ($) $ in Millions | 12 Months Ended | |||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | ||
Net income | $ 979 | $ 365 | $ 907 | |
Other comprehensive income (loss), net of income taxes: | ||||
Realized gain reclassified to net income | [1] | 0 | 0 | (13) |
Foreign currency translation losses | (3) | (27) | (5) | |
Total other comprehensive loss, net | (2) | (28) | (22) | |
Comprehensive income | 977 | 337 | 885 | |
Interest and Other Income | ||||
Other comprehensive income (loss), net of income taxes: | ||||
Realized gain reclassified to net income | [1] | 21 | ||
Income Taxes | ||||
Other comprehensive income (loss), net of income taxes: | ||||
Related taxes on realized gain reclassified to net income | [1] | 8 | ||
Debt Securities | ||||
Other comprehensive income (loss), net of income taxes: | ||||
Unrealized gains (losses) on available-for-sale securities | 1 | (1) | 1 | |
Equity Securities | ||||
Other comprehensive income (loss), net of income taxes: | ||||
Unrealized gains (losses) on available-for-sale securities | $ 0 | $ 0 | $ (5) | |
[1] | Includes $21 million of realized gain on an available-for-sale equity security reclassified into interest and other income (expense), net on the consolidated statements of operations and $8 million of related income taxes. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jul. 31, 2016 | Jul. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 638 | $ 808 |
Investments | 442 | 889 |
Accounts receivable, net of allowance for doubtful accounts of $51 and $45 | 108 | 91 |
Income taxes receivable | 20 | 84 |
Deferred income taxes | 0 | 231 |
Prepaid expenses and other current assets | 102 | 94 |
Current assets of discontinued operations | 0 | 26 |
Current assets before funds held for customers | 1,310 | 2,223 |
Funds held for customers | 304 | 337 |
Total current assets | 1,614 | 2,560 |
Long-term investments | 28 | 27 |
Property and equipment, net | 1,031 | 682 |
Goodwill | 1,282 | 1,266 |
Acquired intangible assets, net | 44 | 87 |
Long-term deferred income taxes | 139 | 5 |
Other assets | 112 | 106 |
Long-term assets of discontinued operations | 0 | 235 |
Total assets | 4,250 | 4,968 |
Current liabilities: | ||
Short-term debt | 512 | 0 |
Accounts payable | 184 | 190 |
Accrued compensation and related liabilities | 289 | 283 |
Deferred revenue | 801 | 691 |
Other current liabilities | 161 | 150 |
Current liabilities of discontinued operations | 0 | 93 |
Current liabilities before customer fund deposits | 1,947 | 1,407 |
Customer fund deposits | 304 | 337 |
Total current liabilities | 2,251 | 1,744 |
Long-term debt | 488 | 500 |
Long-term deferred revenue | 204 | 152 |
Other long-term obligations | 146 | 172 |
Long-term obligations of discontinued operations | 0 | 68 |
Total liabilities | 3,089 | 2,636 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value Authorized - 1,345 shares total; 145 shares designated Series A; 250 shares designated Series B Junior Participating Issued and outstanding - None | 0 | 0 |
Common stock, $0.01 par value Authorized - 750,000 shares Outstanding - 257,853 shares at July 31, 2016 and 277,706 shares at July 31, 2015 | 3 | 3 |
Additional paid-in capital | 4,442 | 4,007 |
Treasury stock, at cost | (9,939) | (7,675) |
Accumulated other comprehensive loss | (32) | (30) |
Retained earnings | 6,687 | 6,027 |
Total stockholders’ equity | 1,161 | 2,332 |
Total liabilities and stockholders’ equity | $ 4,250 | $ 4,968 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Jul. 31, 2016 | Jul. 31, 2015 |
Allowance for Doubtful Accounts Receivable, Current | $ 51 | $ 45 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized (in shares) | 1,345,000 | 1,345,000 |
Preferred Stock, Shares Issued (in shares) | ||
Preferred Stock, Shares Outstanding (in shares) | ||
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized (in shares) | 750,000,000 | 750,000,000 |
Common Stock, Shares, Outstanding (in shares) | 257,853,000 | 277,706,000 |
Series A Preferred Stock | ||
Preferred Stock, Shares Authorized (in shares) | 145,000 | 145,000 |
Series B Preferred Stock | ||
Preferred Stock, Shares Authorized (in shares) | 250,000 | 250,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Beginning Balance, shares at Jul. 31, 2013 | 299,503,000 | |||||
Beginning Balance at Jul. 31, 2013 | $ 3,531 | $ 3 | $ 3,198 | $ (4,952) | $ 20 | $ 5,262 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Comprehensive income | 885 | (22) | 907 | |||
Issuance of treasury stock under employee stock plans, shares | 7,914,000 | |||||
Issuance of stock under employee stock plans | 173 | 74 | 99 | |||
Stock repurchases under stock repurchase programs, shares | (22,467,000) | |||||
Stock repurchases under stock repurchase programs | (1,577) | (1,577) | ||||
Cash dividends declared | (220) | (220) | ||||
Tax benefit from share-based compensation plans | 82 | 82 | ||||
Share-based compensation expense | 204 | 204 | ||||
Ending Balance, shares at Jul. 31, 2014 | 284,950,000 | |||||
Ending Balance at Jul. 31, 2014 | 3,078 | $ 3 | 3,558 | (6,430) | (2) | 5,949 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Comprehensive income | 337 | (28) | 365 | |||
Issuance of treasury stock under employee stock plans, shares | 6,565,000 | |||||
Issuance of stock under employee stock plans | 107 | 107 | ||||
Stock repurchases under stock repurchase programs, shares | (13,809,000) | |||||
Stock repurchases under stock repurchase programs | (1,245) | (1,245) | ||||
Cash dividends declared | (287) | (287) | ||||
Tax benefit from share-based compensation plans | 85 | 85 | ||||
Share-based compensation expense | $ 257 | 257 | ||||
Ending Balance, shares at Jul. 31, 2015 | 277,706,000 | 277,706,000 | ||||
Ending Balance at Jul. 31, 2015 | $ 2,332 | $ 3 | 4,007 | (7,675) | (30) | 6,027 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Comprehensive income | 977 | (2) | 979 | |||
Issuance of treasury stock under employee stock plans, shares | 4,963,000 | |||||
Issuance of stock under employee stock plans | 89 | 89 | ||||
Stock repurchases under stock repurchase programs, shares | (24,816,000) | |||||
Stock repurchases under stock repurchase programs | (2,264) | (2,264) | ||||
Cash dividends declared | (319) | (319) | ||||
Tax benefit from share-based compensation plans | 59 | 59 | ||||
Share-based compensation expense | $ 287 | 287 | ||||
Ending Balance, shares at Jul. 31, 2016 | 257,853,000 | 257,853,000 | ||||
Ending Balance at Jul. 31, 2016 | $ 1,161 | $ 3 | $ 4,442 | $ (9,939) | $ (32) | $ 6,687 |
Consolidated Statements of Sto7
Consolidated Statements of Stockholders' Equity (Parentheticals) - $ / shares | 12 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared per common share | $ 1.2 | $ 1 | $ 0.76 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | ||
Cash flows from operating activities: | ||||
Net income | $ 979 | $ 365 | $ 907 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation | 195 | 157 | 144 | |
Amortization of acquired intangible assets | 43 | 74 | 53 | |
Goodwill and intangible asset impairment charges | 0 | 297 | 0 | |
Share-based compensation expense | 281 | 257 | 204 | |
Pre-tax gain on sale of discontinued operations (1) | [1] | (354) | 0 | (40) |
Net realized gain on sale of available-for-sale equity securities | 0 | 0 | (21) | |
Deferred income taxes | 70 | (100) | 93 | |
Tax benefit from share-based compensation plans | 59 | 85 | 82 | |
Excess tax benefit from share-based compensation plans | (59) | (85) | (82) | |
Other | 17 | 4 | 24 | |
Total adjustments | 252 | 689 | 457 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (20) | 24 | (5) | |
Income taxes receivable | 64 | (49) | 27 | |
Prepaid expenses and other assets | (10) | 22 | (14) | |
Accounts payable | (23) | 35 | 15 | |
Accrued compensation and related liabilities | (11) | 24 | 43 | |
Deferred revenue | 192 | 398 | 15 | |
Other liabilities | (22) | (4) | 1 | |
Total changes in operating assets and liabilities | 170 | 450 | 82 | |
Net cash provided by operating activities | 1,401 | 1,504 | 1,446 | |
Cash flows from investing activities: | ||||
Purchases of corporate and customer fund investments | (934) | (939) | (1,334) | |
Sales of corporate and customer fund investments | 1,165 | 620 | 346 | |
Maturities of corporate and customer fund investments | 187 | 475 | 567 | |
Net change in money market funds and other cash equivalents held to satisfy customer fund obligations | 58 | (49) | (54) | |
Net change in customer fund deposits | (33) | 49 | 54 | |
Proceeds from the sale of available-for-sale equity securities | 0 | 0 | 26 | |
Purchases of property and equipment | (416) | (142) | (104) | |
Capitalization of internal use software | (106) | (119) | (82) | |
Acquisitions of businesses, net of cash acquired | 0 | (95) | (471) | |
Proceeds from divestiture of businesses | 463 | 0 | 1,025 | |
Other | (13) | 18 | (22) | |
Net cash provided by (used in) investing activities | 371 | (182) | (49) | |
Cash flows from financing activities: | ||||
Proceeds from borrowings under revolving credit facilities | 995 | 0 | 0 | |
Repayments on borrowings under revolving credit facilities | (995) | 0 | 0 | |
Proceeds from long-term debt | 500 | 0 | 0 | |
Net proceeds from issuance of stock under employee stock plans | 89 | 107 | 165 | |
Cash paid for purchases of treasury stock | (2,264) | (1,245) | (1,577) | |
Dividends and dividend rights paid | (318) | (283) | (220) | |
Excess tax benefit from share-based compensation plans | 59 | 85 | 82 | |
Other | (6) | (1) | (1) | |
Net cash used in financing activities | (1,940) | (1,337) | (1,551) | |
Effect of exchange rates on cash and cash equivalents | (2) | (26) | (6) | |
Net decrease in cash and cash equivalents | (170) | (41) | (160) | |
Cash and cash equivalents at beginning of period | 808 | 849 | 1,009 | |
Cash and cash equivalents at end of period | 638 | 808 | 849 | |
Supplemental disclosure of cash flow information: | ||||
Interest paid | 37 | 32 | 32 | |
Income taxes paid | $ 389 | $ 222 | $ 240 | |
[1] | Because the cash flows of our discontinued operations were not material for any period presented, we have not segregated the cash flows of those businesses on these statements of cash flows. We have presented the effect of the pre-tax gains on the disposals on these statements of cash flows. See Note 7, “Discontinued Operations,” for more information. |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Jul. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business Intuit Inc. provides business and financial management solutions for small businesses, consumers, and accounting professionals. With flagship products and services that include QuickBooks and TurboTax, we help customers solve important business and financial management problems such as running a small business, paying bills, and filing income taxes. ProSeries and Lacerte are Intuit’s tax preparation offerings for professional accountants. Incorporated in 1984 and headquartered in Mountain View, California, we sell our products and services primarily in the United States. Basis of Presentation These consolidated financial statements include the financial statements of Intuit and its wholly owned subsidiaries. We have eliminated all significant intercompany balances and transactions in consolidation. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation, including amounts related to discontinued operations and reportable segments. See Note 7, “Discontinued Operations,” and Note 14, “Segment Information,” for more information. In fiscal 2014 we acquired Check Inc. (now known as Mint Bills). We have included the results of operations for this company in our consolidated results of operations from the date of acquisition. See Note 6, “Business Combinations,” for more information. As discussed in Note 7, in fiscal 2013 we sold our Intuit Financial Services (IFS) business and our Intuit Health business. In fiscal 2016 we sold our Demandforce, QuickBase, and Quicken businesses. We have reclassified our statements of operations for all periods presented to reflect all of these businesses as discontinued operations. We have also segregated the net assets of our Demandforce, QuickBase, and Quicken businesses from continuing operations on our balance sheet at July 31, 2015. Because the cash flows of all of these businesses were not material for any period presented, we have not segregated them on our statements of cash flows. Unless noted otherwise, discussions in these notes pertain to our continuing operations. Seasonality Our Consumer Tax offerings have significant seasonal patterns and revenue from those income tax preparation products and services is heavily concentrated in our third fiscal quarter ending April 30. Use of Estimates In preparing our consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP), we make certain estimates and assumptions that affect the amounts reported in our financial statements and the disclosures made in the accompanying notes. For example, we use estimates in determining the appropriate levels of reserves for product returns and rebates, the collectibility of accounts receivable, the appropriate levels of various accruals including accruals for litigation contingencies, the amount of our worldwide tax provision, and the realizability of deferred tax assets. We also use estimates in determining the remaining economic lives and fair values of acquired intangible assets, property and equipment, and other long-lived assets. In addition, we use assumptions to estimate the fair value of reporting units and share-based compensation. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates. Revenue Recognition We derive revenue from the sale of software subscriptions, hosted services, packaged software products, financial supplies, technical support plans, transaction fees, merchant services hardware, and multiple element arrangements that may include a combination of these items. We recognize revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists, we have delivered the product or performed the service, the fee is fixed or determinable, and collectibility is probable. Determining whether and when these criteria have been satisfied involves exercising judgment and using estimates and assumptions that can have a significant impact on the timing and amount of revenue that we recognize. In some situations, we receive advance payments from our customers. We defer revenue associated with these advance payments and the relative fair value of undelivered elements under multiple element arrangements until we ship the products or perform the services. We account for cash consideration (such as sales incentives) that we give to our customers or resellers as a reduction of revenue rather than as an operating expense unless we receive a benefit that we can identify and for which we can reasonably estimate the fair value. Product Revenue Prior to fiscal 2015, we recognized revenue from the sale of our packaged software products when legal title transferred. This generally occurred when our customers electronically downloaded products from the Internet, when we shipped the products or, in the case of certain agreements, when products were delivered to retailers. In the first quarter of fiscal 2015 we began delivering ongoing enhancements and certain connected services for QuickBooks and ProConnect desktop solutions that we sold from that time forward. As a result, we recognize revenue for these QuickBooks desktop solutions over the period that the enhancements and connected services are provided, which is approximately three years. We recognize revenue for these ProConnect desktop solutions as services are provided over the calendar year, once tax forms are available from taxing agencies and the agencies are able to receive electronic tax return submissions. We recognize revenue from the sale of our financial supplies such as printed check stock and merchant services hardware such as retail point-of-sale equipment and credit card readers for mobile phones when legal title transfers. This is generally when we ship the products. We record product revenue net of our sales tax obligations. We sell some of our QuickBooks and TurboTax desktop software products on consignment to certain retailers. We begin recognizing revenue for these consignment transactions only when the end-user sale has occurred. For software products that are sold on a subscription basis and include periodic updates, we recognize revenue ratably over the period that we provide services to the customer. We reduce product revenue from distributors and retailers for estimated returns that are based on historical returns experience and other factors, such as the volume and price mix of products in the retail channel, return rates for prior releases of the product, trends in retailer inventory, and economic trends that might impact customer demand for our products (including the competitive environment and the timing of new releases of our product). We also reduce product revenue for the estimated redemption of rebates on certain current product sales. Our estimated reserves for distributor and retailer sales incentive rebates are based on distributors’ and retailers’ actual performance against the terms and conditions of rebate programs. Our reserves for end user rebates are estimated based on the terms and conditions of the specific promotional rebate program, actual sales during the promotion, and historical redemption trends by product and by type of promotional program. Service and Other Revenue Our service revenue consists primarily of hosted services such as QuickBooks Online, QuickBooks desktop software term licenses, TurboTax Online, payroll services, electronic merchant payment processing services, and electronic tax filing and advice services. Our service revenue also includes QuickBooks technical support plans in our Small Business segment. We recognize revenue from hosted services as the services are performed, provided we have no other remaining obligations to these customers. We generally require customers to remit payroll tax funds to us in advance of the payroll date via electronic funds transfer. We include in total net revenue the interest that we earn on these funds between the time that we collect them from customers and the time that we remit them to outside parties. Service revenue for electronic payment processing services that we provide to merchants is recorded net of interchange fees charged by credit card associations. We offer several QuickBooks technical support plans and recognize support revenue over the life of the plans. Other revenue consists primarily of revenue from revenue-sharing and royalty arrangements with third-party partners. We typically recognize this revenue as earned based upon reporting provided to us by our partners. Multiple Element Arrangements We enter into multiple element revenue arrangements in which a customer may purchase a combination of software, upgrades, hosted services, technical support, and hardware. Multiple Element Arrangements That Contain Software and Software-Related Elements For multiple element arrangements that contain only software and software-related elements, such as QuickBooks desktop software and paid technical support plans, we allocate and defer revenue for the undelivered elements based on their vendor-specific objective evidence of fair value (VSOE). VSOE is the price charged when that element is sold separately. In situations where VSOE exists for all elements (delivered and undelivered), we allocate the total revenue to be earned under the arrangement among the various elements, based on their relative fair value. For arrangements where VSOE exists only for the undelivered elements, we defer the full fair value of the undelivered elements and recognize the difference between the total arrangement fee and the amount deferred for the undelivered items as revenue. If VSOE does not exist for an undelivered service element, we recognize the revenue from the entire arrangement as the services are delivered. If VSOE does not exist for undelivered elements that are specified products or features, we defer revenue until the earlier of the delivery of all elements or the point at which we determine VSOE for these undelivered elements. We recognize revenue related to the delivered products or services only if: (1) the above revenue recognition criteria are met; (2) any undelivered products or services are not essential to the functionality of the delivered products and services; (3) payment for the delivered products or services is not contingent upon delivery of the remaining products or services; and (4) we have an enforceable claim to receive the amount due in the event that we do not deliver the undelivered products or services. Multiple Element Arrangements That Contain Non-Software Elements For multiple element arrangements that contain non-software elements such as hosted services or credit card readers for mobile phones, we: (1) determine whether and when each element has been delivered; (2) determine the fair value of each element using the selling price hierarchy of vendor-specific evidence of fair value (VSOE) if available, third-party evidence (TPE) if VSOE is not available, and estimated selling price (ESP) if neither VSOE nor TPE is available; and (3) allocate the total price among the various elements using the relative selling price method. Once we have allocated the total price among the various elements, we recognize revenue when the revenue recognition criteria described above are met for each element. VSOE generally exists when we sell the deliverable separately and we are normally able to establish VSOE for all deliverables in these multiple element arrangements; however, in certain limited instances VSOE cannot be established. This may be because we do not sell the element separately, do not price products or services within a narrow range, or have a limited sales history. When VSOE cannot be established, we attempt to establish selling price for each element based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. When we are unable to establish selling price using VSOE or TPE, we use ESP in our allocation of arrangement consideration. ESP is the estimated price at which we would sell a product or service if it were sold on a stand-alone basis. We determine ESP for a product or service by considering multiple factors including, but not limited to, pricing practices, market conditions, competitive landscape, type of customer, geographies, stage of product lifecycle, internal costs, and gross margin objectives. Significant pricing practices that we take into consideration include historic contractually stated prices, volume discounts where applicable, and our price lists. The determination of ESP is made through consultation with and formal approval by management, taking into consideration our overall go-to-market strategy. Shipping and Handling We record the amounts we charge our customers for the shipping and handling of our software products as product revenue and we record the related costs as cost of product revenue in our statements of operations. Customer Service and Technical Support We include the costs of providing customer service under paid technical support contracts and as included in certain software subscriptions on the cost of service and other revenue line in our statements of operations. We also include the costs of customer service and technical support associated with our online or hosted offerings in cost of service and other revenue. We include the costs of customer service and free technical support related to desktop offerings in selling and marketing expense in our statements of operations. Customer service and technical support costs include costs associated with performing order processing, answering customer inquiries by telephone and through websites, e-mail and other electronic means, and providing free technical support assistance to customers. We expense the cost of providing this free support as incurred. Software Development Costs We expense software development costs as we incur them until technological feasibility has been established, at which time those costs are capitalized until the product is available for general release to customers. To date, our software has been available for general release concurrent with the establishment of technological feasibility and, accordingly, we have not capitalized any development costs. Costs we incur to enhance our existing products or after the general release of the service using the product are expensed in the period they are incurred and included in research and development expense in our statements of operations. Internal Use Software We capitalize costs related to development of hosted services that we provide to our customers and internal use of enterprise-level business and finance software in support of our operational needs. Costs incurred in the application development phase are capitalized and amortized on a straight-line basis over their useful lives, which are generally three to five years. Costs related to planning and other preliminary project activities and to post-implementation activities are expensed as incurred. We test these assets for impairment whenever events or changes in circumstances occur that could impact their recoverability. Advertising We expense all advertising costs as we incur them to selling and marketing expense in our statements of operations. We recorded advertising expense of approximately $229 million for the twelve months ended July 31, 2016 , $229 million for the twelve months ended July 31, 2015 , and $171 million for the twelve months ended July 31, 2014 . Leases We review all leases for capital or operating classification at their inception. We use our incremental borrowing rate in the assessment of lease classification and define the initial lease term to include the construction build-out period but to exclude lease extension periods. We conduct our operations primarily under operating leases. For leases that contain rent escalations, we record the total rent payable during the lease term, as defined above, on a straight-line basis over the term of the lease. We record the difference between the rent paid and the straight-line rent in a deferred rent account in other current liabilities or other long-term obligations, as appropriate, on our balance sheets. We record landlord allowances as deferred rent liabilities in other current liabilities or other long-term obligations, as appropriate, on our balance sheets. We record landlord cash incentives as operating activity on our statements of cash flows. We record other landlord allowances as non-cash investing and financing activities on our statements of cash flows. We classify the amortization of landlord allowances as a reduction of occupancy expense in our statements of operations. Capitalization of Interest Expense We capitalize interest on capital projects, including facilities build-out projects and internal use computer software projects. Capitalization commences with the first expenditure for the project and continues until the project is substantially complete and ready for its intended use. We amortize capitalized interest to depreciation expense using the straight-line method over the same lives as the related assets. Capitalized interest was not significant for any period presented. Foreign Currency The functional currencies of our international operating subsidiaries are generally the local currencies. We translate the assets and liabilities of our foreign subsidiaries at the exchange rates in effect on the balance sheet date. We translate their revenue, costs and expenses at the average rates of exchange in effect during the period. We include translation gains and losses in the stockholders’ equity section of our balance sheets. We include net gains and losses resulting from foreign exchange transactions in interest and other income in our statements of operations. Translation gains and losses and transaction gains and losses were not significant for any period presented. Income Taxes We estimate our income taxes based on the various jurisdictions where we conduct business. Significant judgment is required in determining our worldwide income tax provision. We estimate our current tax liability and assess temporary differences that result from differing treatments of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which we show on our balance sheet. We must then assess the likelihood that our deferred tax assets will be realized. To the extent we believe that realization is not likely, we establish a valuation allowance. When we establish a valuation allowance or increase this allowance in an accounting period, we record a corresponding income tax expense in our statement of operations. We review the need for a valuation allowance to reflect uncertainties about whether we will be able to utilize some of our deferred tax assets before they expire. The valuation allowance analysis is based on our estimates of taxable income for the jurisdictions in which we operate and the periods over which our deferred tax assets will be realizable. While we have considered future taxable income in assessing the need for a valuation allowance for the periods presented, we could be required to record a valuation allowance to take into account additional deferred tax assets that we may be unable to realize. An increase in the valuation allowance would have an adverse impact, which could be material, on our income tax provision and net income in the period in which we record the increase. We recognize and measure benefits for uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained upon audit, including resolution of any related appeals or litigation processes. For tax positions that are more likely than not of being sustained upon audit, the second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Significant judgment is required to evaluate uncertain tax positions. We evaluate our uncertain tax positions on a quarterly basis. Our evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which we make the change, which could have a material impact on our effective tax rate and operating results. A description of our accounting policies associated with tax-related contingencies and valuation allowances assumed as part of a business combination is provided under “Business Combinations” below. Computation of Net Income (Loss) Per Share We compute basic net income or loss per share using the weighted average number of common shares outstanding during the period. We compute diluted net income per share using the weighted average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of the shares issuable upon the exercise of stock options and upon the vesting of restricted stock units (RSUs) under the treasury stock method. We include stock options with combined exercise prices, unrecognized compensation expense and tax benefits that are less than the average market price for our common stock, and RSUs with combined unrecognized compensation expense and tax benefits that are less than the average market price for our common stock, in the calculation of diluted net income per share. We exclude stock options with combined exercise prices, unrecognized compensation expense and tax benefits that are greater than the average market price for our common stock, and RSUs with combined unrecognized compensation expense and tax benefits that are greater than the average market price for our common stock, from the calculation of diluted net income per share because their effect is anti-dilutive. Under the treasury stock method, the amount that must be paid to exercise stock options, the amount of compensation expense for future service that we have not yet recognized for stock options and RSUs, and the amount of tax benefits that will be recorded in additional paid-in capital when the awards become deductible are assumed to be used to repurchase shares. All of the RSUs we grant have dividend rights. Dividend rights are accumulated and paid when the underlying RSUs vest. Since the dividend rights are subject to the same vesting requirements as the underlying equity awards they are considered a contingent transfer of value. Consequently, the RSUs are not considered participating securities and we do not present them separately in earnings per share. The following table presents the composition of shares used in the computation of basic and diluted net income per share for the periods indicated. Twelve Months Ended July 31, (In millions, except per share amounts) 2016 2015 2014 Numerator: Net income from continuing operations $ 806 $ 413 $ 853 Net income (loss) from discontinued operations 173 (48 ) 54 Net income $ 979 $ 365 $ 907 Denominator: Shares used in basic per share amounts: Weighted average common shares outstanding 262 281 285 Shares used in diluted per share amounts: Weighted average common shares outstanding 262 281 285 Dilutive common equivalent shares from stock options and restricted stock awards 3 5 6 Dilutive weighted average common shares outstanding 265 286 291 Basic and diluted net income per share: Basic net income per share from continuing operations $ 3.08 $ 1.47 $ 2.99 Basic net income (loss) per share from discontinued operations 0.65 (0.17 ) 0.19 Basic net income per share $ 3.73 $ 1.30 $ 3.18 Diluted net income per share from continuing operations $ 3.04 $ 1.45 $ 2.94 Diluted net income (loss) per share from discontinued operations 0.65 (0.17 ) 0.18 Diluted net income per share $ 3.69 $ 1.28 $ 3.12 Weighted average stock options and restricted stock units excluded from calculation due to anti-dilutive effect 2 2 — Cash Equivalents and Investments We consider highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist primarily of AAA-rated money market funds in all periods presented. Investments consist of available-for-sale investment-grade debt securities that we carry at fair value. Except for direct obligations of the United States government, securities issued by agencies of the United States government, and money market funds, we diversify our investments by limiting our holdings with any individual issuer. We use the specific identification method to compute gains and losses on investments. We record unrealized gains and losses on investments, net of tax, in accumulated other comprehensive income in the stockholders’ equity section of our balance sheets and reflect unrealized gain and loss activity in other comprehensive income on our statement of comprehensive income. We generally classify available-for-sale debt securities as current assets based upon our ability and intent 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 nature of our businesses. Because of our significant business seasonality, stock repurchase programs, and acquisition opportunities, cash flow requirements may fluctuate dramatically from quarter to quarter and require us to use a significant amount of the investments we hold as available-for-sale securities. Accounts Receivable and Allowances for Doubtful Accounts Accounts receivable are recorded at the invoiced amount and are not interest bearing. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review our accounts receivable by aging category to identify significant customers or invoices with known disputes or collectibility issues. For those invoices not specifically identified as uncollectible, we provide an allowance based on the age of the receivable. In determining the amount of the allowance, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. We also consider our historical level of credit losses and current economic trends that might impact the level of future credit losses. When we determine that amounts are uncollectible we write them off against the allowance. Funds Held for Customers and Customer Fund Deposits Funds held for customers represent cash held on behalf of our customers that is invested in cash and cash equivalents and investment grade available-for-sale debt securities. Customer fund deposits consist of amounts we owe on behalf of our customers, such as direct deposit payroll funds and payroll taxes. Property and Equipment Property and equipment is stated at the lower of cost or realizable value, net of accumulated depreciation. We calculate depreciation using the straight-line method over the estimated useful lives of the assets, which range from two to 30 years. We amortize leasehold improvements using the straight-line method over the lesser of their estimated useful lives or remaining lease terms. We include the amortization of assets that are recorded under capital leases in depreciation expense. We review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We did not record any significant property impairment charges during the twelve months ended July 31, 2016 , 2015 , or 2014 . Business Combinations The acquisition method of accounting for business combinations requires us to use significant estimates and assumptions, including fair value estimates, as of the business combination date and to refine those estimates as necessary during the measurement period (defined as the period, not to exceed one year, in which we may adjust the provisional amounts recognized for a business combination). Under the acquisition method of accounting we recognize separately from goodwill the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquiree, generally at the acquisition date fair value. We measure goodwill as of the acquisition date as the excess of consideration transferred, which we also measure at fair value, over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed. Costs that we incur to complete the business combination such as investment banking, legal and other professional fees are not considered part of consideration and we charge them to general and administrative expense as they are incurred. Under the acquisition method we also account for acquired company restructuring activities that we initiate separately from the business combination. Should the initial accounting for a business combination be incomplete by the end of a reporting period that falls within the measurement period, we report provisional amounts in our financial statements. During the measurement period, we adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date and we record those adjustments to our financial statements. We apply those measurement period adjustments that we determine to be significant retrospectively to comparative information in our financial statements, including adjustments to depreciation and amortization expense. Under the acquisition method of accounting for business combinations, if we identify changes to acquired deferred tax asset valuation allowances or liabilities related to uncertain tax positions during the measurement period and they relate to new information obtained about facts and circumstances that existed as of the acquisition date, those changes are considered a measurement period adjustment and we record the offset to goodwill. We record all other changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions in current period income tax expense. This accounting applies to all of our acquisitions regardless of acquisition date. Goodwill, Acquired Intangible Assets and Other Long-Lived Assets Goodwill We record goodwill when the fair value of consideration transferred in a business combination exceeds the fair value of the identifiable assets acquired and liabilities assumed. Goodwill and other intangible assets that have indefinite useful lives are not amortized, but we test them for impairment annually during our fourth fiscal quarter and whenever an event or change in circumstances indicates that the carrying value of the asset may not be recoverable. For goodwill, we perform a two-step impairment test. In the first step, we compare the fair value of each reporting unit to its carrying value. In accordance with authoritative guidance, we define fair value as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We consider and use all valuation methods that are appropriate in estimating the fair value of our reporting units and generally use a weighted combination of income and market approaches. Under the income approach, we estimate the fair value of each reporting unit based on the present value of future cash flows. We use a number of assumptions in our discounted cash flow model, including market factors specific to the business, the amount and timing of estimated future cash flows to be generated by the business over an extended period of time, long-term growth rates for the business, and a rate of return that considers the relative risk of achieving the cash flows and the time value of money. Under the market approach, we estimate the fair value of each reporting unit based on market multiples of revenue, operating income, and earnings for comparable publicly traded companies engaged in similar |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jul. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair Value Hierarchy The authoritative guidance defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, we consider the principal or most advantageous market for an asset or liability and assumptions that market participants would use when pricing the asset or liability. In addition, we consider and use all valuation methods that are appropriate in estimating the fair value of an asset or liability. The authoritative guidance establishes a fair value hierarchy that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. In general, the authoritative guidance requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the measurement of its fair value. The three levels of input defined by the authoritative guidance are as follows: • Level 1 uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. • Level 2 uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices in active markets for similar assets or liabilities: quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data for substantially the full term of the assets or liabilities. • Level 3 uses one or more unobservable inputs that are supported by little or no market activity and that are significant to the determination of fair value. Level 3 assets and liabilities include those whose fair values are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes financial assets and financial liabilities that we measured at fair value on a recurring basis at the dates indicated, classified in accordance with the fair value hierarchy described above. At July 31, 2016 At July 31, 2015 (In millions) Level 1 Level 2 Level 3 Total Fair Value Level 1 Level 2 Level 3 Total Fair Value Assets: Cash equivalents, primarily money market funds $ 416 $ — $ — $ 416 $ 695 $ — $ — $ 695 Available-for-sale debt securities: Municipal bonds — 186 — 186 — 506 — 506 Municipal auction rate securities — — 15 15 — — 15 15 Corporate notes — 420 — 420 — 546 — 546 U.S. agency securities — 36 — 36 — 12 — 12 Total available-for-sale securities — 642 15 657 — 1,064 15 1,079 Total assets measured at fair value on a recurring basis $ 416 $ 642 $ 15 $ 1,073 $ 695 $ 1,064 $ 15 $ 1,774 Liabilities: Senior notes (1) $ — $ 515 $ — $ 515 $ — $ 531 $ — $ 531 ______________________ (1) Carrying value on our balance sheets at July 31, 2016 was $500 million and at July 31, 2015 was $500 million. See Note 8, “Current Liabilities – Short-Term Debt” for more information. The following table summarizes our cash equivalents and available-for-sale debt securities by balance sheet classification and level in the fair value hierarchy at the dates shown: At July 31, 2016 At July 31, 2015 (In millions) Level 1 Level 2 Level 3 Total Fair Value Level 1 Level 2 Level 3 Total Fair Value Cash equivalents: In cash and cash equivalents $ 312 $ — $ — $ 312 $ 533 $ — $ — $ 533 In funds held for customers 104 — — 104 162 — — 162 Total cash and cash equivalents $ 416 $ — $ — $ 416 $ 695 $ — $ — $ 695 Available-for-sale securities: In investments $ — $ 442 $ — $ 442 $ — $ 889 $ — $ 889 In funds held for customers — 200 — 200 — 175 — 175 In long-term investments — — 15 15 — — 15 15 Total available-for-sale securities $ — $ 642 $ 15 $ 657 $ — $ 1,064 $ 15 $ 1,079 We value our Level 1 assets, consisting primarily of money market funds, using quoted prices in active markets for identical instruments. Financial assets whose fair values we measure on a recurring basis using Level 2 inputs consist of municipal bonds, corporate notes and U.S. agency securities. We measure the fair values of these assets with the help of a pricing service that either provides quoted market prices in active markets for identical or similar securities or uses observable inputs for their pricing without applying significant adjustments. Our fair value processes include controls that are designed to ensure that we record appropriate fair values for our Level 2 investments. These controls include comparison to pricing provided by a secondary pricing service or investment manager, validation of pricing sources and models, review of key model inputs, analysis of period-over-period price fluctuations, and independent recalculation of prices where appropriate. Financial liabilities whose fair values we measure using Level 2 inputs consist of senior unsecured notes. See Note 8, “ Current Liabilities – Short-Term Debt,” for more information. We measure the fair value of our senior notes based on their trading prices and the interest rates we could obtain for other borrowings with similar terms. Financial assets whose fair values we measure using significant unobservable (Level 3) inputs consist of municipal auction rate securities that are no longer liquid. We estimate the fair values of the auction rate securities using a discounted cash flow model. Using our discounted cash flow model, we determined that the fair values of the municipal auction rate securities we held at July 31, 2016 , 2015 , and 2014 were approximately equal to their par values and as a result we recorded no decrease in their fair values during the twelve months then ended. We continue to classify them as long-term investments based on the maturities of the underlying securities at that date. We do not intend to sell our municipal auction rate securities. In addition, it is more likely than not that we will not be required to sell them before recovery at par, which may be at maturity. There were no transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy during the twelve months ended July 31, 2016 , 2015 or 2014 . Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis Assets measured at fair value on a non-recurring basis include reporting units measured at fair value in a goodwill impairment test. Estimates of fair value for reporting units fall under Level 3 of the fair value hierarchy. During the fourth quarters of fiscal 2016 , fiscal 2015 , and fiscal 2014 we performed our annual goodwill impairment tests. Using the methodology described in Note 1, we determined that the estimated fair values of all of our reporting units exceeded their carrying values and that they were not impaired. During the third quarter of fiscal 2015 there was a significant decline in the revenue and operating income forecast for our Consumer Ecosystem reporting unit. As a result of this development, we performed an interim impairment test of goodwill and acquired intangible assets for that reporting unit. We concluded that the carrying value of goodwill associated with our Consumer Ecosystem reporting unit was impaired and we recorded an impairment charge of $263 million that reduced the carrying value of goodwill to $211 million as of April 30, 2015. The amount of the impairment charge was determined by comparing the carrying value of goodwill assigned to the reporting unit with the implied fair value of the goodwill. We used a weighted combination of a discounted cash flow model (income approach) and comparisons to publicly traded companies engaged in similar businesses (market approach) to estimate the fair value of our Consumer Ecosystem reporting unit. Key assumptions that we used in the income approach included the amount and timing of estimated future cash flows to be generated by the business over an extended period of time, long-term growth rates for the business, and a rate of return that considered the relative risk of achieving the cash flows and the time value of money. For the market approach, we estimated the fair value of the reporting unit based on market multiples of revenue, operating income, and earnings for comparable publicly traded companies engaged in similar businesses. We believe that the assumptions used to determine the impairment amount for the goodwill of this reporting unit are reasonable. During the fourth quarter of fiscal 2015 management approved a plan to sell our Quicken business, which was part of our Consumer Ecosystem reporting unit, and we accounted for it as discontinued operations. As a result, we reclassified a portion of the goodwill impairment charge that we recorded in the third quarter of fiscal 2015 to discontinued operations based on the relative fair values of Quicken and the remaining components of our Consumer Ecosystem reporting unit. On April 1, 2016 we completed the sale for cash consideration that was not significant. |
Cash and Cash Equivalents, Inve
Cash and Cash Equivalents, Investments and Funds Held for Customers | 12 Months Ended |
Jul. 31, 2016 | |
Cash and Cash Equivalents, Investments and Funds Held for Customers [Abstract] | |
Cash and Cash Equivalents, Investments and Funds Held for Customers | Cash and Cash Equivalents, Investments and Funds Held for Customers The following table summarizes our cash and cash equivalents, investments and funds held for customers by balance sheet classification at the dates indicated. July 31, 2016 July 31, 2015 (In millions) Amortized Cost Fair Value Amortized Cost Fair Value Classification on balance sheets: Cash and cash equivalents $ 638 $ 638 $ 808 $ 808 Investments 441 442 890 889 Funds held for customers 304 304 337 337 Long-term investments 28 28 27 27 Total cash and cash equivalents, investments and funds held for customers $ 1,411 $ 1,412 $ 2,062 $ 2,061 The following table summarizes our cash and cash equivalents, investments and funds held for customers by investment category at the dates indicated. See Note 2 for more information on our municipal auction rate securities. July 31, 2016 July 31, 2015 (In millions) Amortized Cost Fair Value Amortized Cost Fair Value Type of issue: Total cash and cash equivalents $ 742 $ 742 $ 970 $ 970 Available-for-sale debt securities: Municipal bonds 186 186 507 506 Municipal auction rate securities 15 15 15 15 Corporate notes 419 420 546 546 U.S. agency securities 36 36 12 12 Total available-for-sale debt securities 656 657 1,080 1,079 Other long-term investments 13 13 12 12 Total cash and cash equivalents, investments and funds held for customers $ 1,411 $ 1,412 $ 2,062 $ 2,061 We include realized gains and losses on our available-for-sale debt securities in interest and other income or expense, net in our statements of operations. Gross realized gains and losses on our available-for-sale debt securities for the twelve months ended July 31, 2016 , 2015 and 2014 were not significant. We accumulate unrealized gains and losses on our available-for-sale debt securities, net of tax, in accumulated other comprehensive income or loss in the stockholders’ equity section of our balance sheets. Gross unrealized gains and losses on our available-for-sale debt securities at July 31, 2016 and July 31, 2015 were not significant. We periodically review our investment portfolios to determine if any investment is other-than-temporarily impaired due to changes in credit risk or other potential valuation concerns. We believe that the investments that we held at July 31, 2016 were not other-than-temporarily impaired. Unrealized losses on available-for-sale debt securities at July 31, 2016 were not significant and are due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities. We do not intend to sell these investments. In addition, it is more likely than not that we will not be required to sell them before recovery at par, which may be at maturity. The following table summarizes our available-for-sale debt securities classified by the stated maturity date of the security at the dates indicated. July 31, 2016 July 31, 2015 (In millions) Amortized Cost Fair Value Amortized Cost Fair Value Due within one year $ 285 $ 285 $ 434 $ 435 Due within two years 209 210 443 442 Due within three years 143 143 156 156 Due after three years 19 19 47 46 Total available-for-sale debt securities $ 656 $ 657 $ 1,080 $ 1,079 Available-for-sale debt securities due after three years in the table above include our municipal auction rate securities. See Note 2, “Fair Value Measurements,” for more information. All of the remaining securities in that category had interest reset dates or mandatory call dates within three years of the dates indicated in the table. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jul. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following at the dates indicated: Life in July 31, (Dollars in millions) Years 2016 2015 Equipment 3-5 $ 533 $ 447 Computer software 3-6 619 552 Furniture and fixtures 5 73 71 Leasehold improvements 2-16 296 286 Land NA 60 7 Buildings 5-30 403 192 Capital in progress NA 256 188 2,240 1,743 Less accumulated depreciation and amortization (1,209 ) (1,061 ) Total property and equipment, net $ 1,031 $ 682 __________________________ NA = Not Applicable In January 2016 we completed the purchase of certain leased facilities for $262 million in cash. Capital in progress at July 31, 2016 and July 31, 2015 consisted primarily of costs related to internal use software projects and land and buildings that we are in the process of constructing on our headquarters campus in Mountain View, California. The balance of land and buildings in the capital in progress account was $172 million at July 31, 2016 and $100 million at July 31, 2015. As discussed in Note 1, “Description of Business and Summary of Significant Accounting Policies – Internal Use Software , ” we capitalize costs related to the development of computer software for internal use. We capitalized internal use software costs totaling $103 million for the twelve months ended July 31, 2016 ; $116 million for the twelve months ended July 31, 2015 ; and $80 million for the twelve months ended July 31, 2014 . These amounts included capitalized labor costs of $80 million, $89 million and $46 million, respectively. Costs related to internal use software projects are included in the capital in progress category of property and equipment until project completion, at which time they are transferred to the computer software category. |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets | 12 Months Ended |
Jul. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets Goodwill Changes in the carrying value of goodwill by reportable segment during the twelve months ended July 31, 2016 and July 31, 2015 were as shown in the following table. Our reportable segments are described in Note 14, “Segment Information.” (In millions) Balance July 31, 2014 Goodwill Acquired/ Adjusted Goodwill Impairment Charges Balance July 31, 2015 Goodwill Acquired/ Adjusted Balance July 31, 2016 Small Business $ 1,213 $ 58 $ (114 ) $ 1,157 $ 16 $ 1,173 Consumer Tax 17 1 — 18 — 18 ProConnect 93 (2 ) — 91 — 91 Totals $ 1,323 $ 57 $ (114 ) $ 1,266 $ 16 $ 1,282 We had no accumulated goodwill impairment losses for our continuing operations at July 31, 2014 . See Note 2, “ Fair Value Measurements – Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis,” for a description of the goodwill impairment charge we recorded for our Consumer Ecosystem reporting unit in fiscal 2015. The increase in goodwill in our Small Business segment during the twelve months ended July 31, 2015 was due to a number of small acquisitions, none of which were individually significant. Acquired Intangible Assets The following table shows the cost, accumulated amortization and weighted average life in years for our acquired intangible assets at the dates indicated. The weighted average lives are calculated for assets that are not fully amortized. (Dollars in millions) Customer Lists Purchased Technology Trade Names and Logos Covenants Not to Compete or Sue Total At July 31, 2016: Cost $ 241 $ 369 $ 23 $ 32 $ 665 Accumulated amortization (240 ) (329 ) (23 ) (29 ) (621 ) Acquired intangible assets, net $ 1 $ 40 $ — $ 3 $ 44 Weighted average life in years 5 6 NA 9 6 At July 31, 2015: Cost $ 243 $ 371 $ 24 $ 32 $ 670 Accumulated amortization (239 ) (294 ) (23 ) (27 ) (583 ) Acquired intangible assets, net $ 4 $ 77 $ 1 $ 5 $ 87 Weighted average life in years 5 5 4 9 5 The following table shows the expected future amortization expense for our acquired intangible assets at July 31, 2016 . Amortization of purchased technology is charged to cost of service and other revenue and to amortization of acquired technology in our statements of operations. Amortization of other acquired intangible assets such as customer lists is charged to amortization of other acquired intangible assets in our statements of operations. If impairment events occur, they could accelerate the timing of acquired intangible asset charges. (In millions) Expected Future Amortization Expense Twelve months ending July 31, 2017 $ 21 2018 14 2019 6 2020 3 2021 — Thereafter — Total expected future amortization expense $ 44 |
Business Combinations
Business Combinations | 12 Months Ended |
Jul. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Check Inc. (Mint Bills) On June 16, 2014 we acquired all of the outstanding equity interests of Check Inc. for total cash and other consideration of approximately $369 million . The $369 million included total purchase consideration of approximately $342 million and $27 million for the fair value of assumed equity awards that is being charged to expense over service periods of up to four years. Check provides a mobile application that automates and consolidates the bill payment process in one place, reducing complexity for consumers. Check is now known as Mint Bills and is part of our Small Business segment. See Note 14, “ Segment Information,” for more information. We have included the results of operations for Check in our consolidated results of operations from the date of acquisition. Their results of operations for periods prior to the date of acquisition were not material when compared with our consolidated results of operations. Under the acquisition method of accounting we allocated the fair value of the total purchase consideration of $342 million to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The fair values assigned to the identifiable intangible assets acquired were based on estimates and assumptions determined by management. We recorded the excess of consideration over the aggregate fair values as goodwill. Using information available at the time the acquisition closed, we allocated approximately $14 million of the consideration to net tangible assets and approximately $35 million of the consideration to identified intangible assets. We recorded the excess consideration of approximately $293 million as goodwill, none of which is deductible for income tax purposes. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Jul. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations Demandforce, QuickBase, and Quicken In the fourth quarter of fiscal 2015 management having the authority to do so formally approved a plan to sell our Demandforce, QuickBase, and Quicken businesses. On February 1, 2016 we completed the sale of our Demandforce business. On April 1, 2016 we completed the sales of our QuickBase and Quicken businesses. We received $463 million in cash and recorded a pre-tax gain of $354 million and a net gain of $173 million on the disposal of these three businesses in fiscal 2016. The decision to sell these businesses was a result of management’s desire to focus resources on our core small business and tax strategy. Demandforce and QuickBase were part of our Small Business segment and Quicken was part of our former Consumer segment. We determined that our Demandforce, QuickBase, and Quicken businesses became long-lived assets held for sale in the fourth quarter of fiscal 2015. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. Since the carrying value of these three businesses at July 31, 2015 was less than the estimated fair value less cost to sell, no adjustments to the carrying values of these long-lived assets were necessary. We also classified our Demandforce, QuickBase, and Quicken businesses as discontinued operations in the fourth quarter of fiscal 2015 and have therefore segregated their operating results from continuing operations in our statements of operations for all periods presented. We have also segregated the net assets of these businesses from continuing operations on our balance sheet at July 31, 2015. Because the cash flows of these businesses were not material for any period presented, we have not segregated them on our statements of cash flows. See the table later in this Note 7 for more information on the operating results of Demandforce, QuickBase, and Quicken. The carrying amounts of the major classes of assets and liabilities of Demandforce, QuickBase, and Quicken at July 31, 2015 are shown in the following table. July 31, (In millions) 2015 Accounts receivable $ 19 Deferred income taxes 5 Prepaid and other current assets 2 Property and equipment, net 25 Goodwill 165 Purchased intangible assets, net 43 Other assets 2 Total assets 261 Accounts payable 7 Accrued compensation 21 Deferred revenue 48 Other current liabilities 17 Long-term deferred revenue 39 Long-term obligations 29 Total liabilities 161 Net assets $ 100 Intuit Financial Services On July 1, 2013 we signed a definitive agreement to sell our Intuit Financial Services (IFS) business and on August 1, 2013 we completed the sale for approximately $1.025 billion in cash. We recorded a $44 million pre-tax gain on the disposal of IFS that was partially offset by a related income tax provision of approximately $8 million , resulting in a net gain on disposal of approximately $36 million in the first quarter of fiscal 2014. The decision to sell the IFS business was a result of management’s desire to focus resources on our offerings for small businesses, consumers, and accounting professionals. The IFS business comprised substantially all of our former Financial Services reportable segment. We determined that our IFS business became a long-lived asset held for sale in the fourth quarter of fiscal 2013. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. Since the carrying value of IFS at July 31, 2013 was less than the estimated fair value less cost to sell, no adjustment to the carrying value of this long-lived asset was necessary. We also classified our IFS business as discontinued operations in the fourth quarter of fiscal 2013 and have therefore segregated its operating results from continuing operations in our statements of operations for all periods presented. See the table later in this Note for more information. Because operating cash flows from the IFS business were not material for any period presented, we have not segregated them from continuing operations on our statements of cash flows. Intuit Health In July 2013 management having the authority to do so formally approved a plan to sell our Intuit Health business and on August 19, 2013 we completed the sale for cash consideration that was not significant. We recorded a $4 million pre-tax loss on the disposal of Intuit Health that was more than offset by a related income tax benefit of approximately $14 million, resulting in a net gain on disposal of approximately $10 million in the first quarter of fiscal 2014. The decision to sell the Intuit Health business was a result of management’s desire to focus resources on our offerings for small businesses, consumers, and accounting professionals. Intuit Health was part of our former Other Businesses reportable segment. We determined that our Intuit Health business became a long-lived asset held for sale in the fourth quarter of fiscal 2013. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. Since the carrying value of Intuit Health at July 31, 2013 was less than the estimated fair value less cost to sell, no adjustment to the carrying value of this long-lived asset was necessary. We also classified our Intuit Health business as discontinued operations in the fourth quarter of fiscal 2013 and have segregated its operating results in our statements of operations for all periods presented. See the table later in this Note for more information. Because operating cash flows from the Intuit Health business were also not material for any period presented, we have not segregated them from continuing operations on our statements of cash flows. Net Income (Loss) from Discontinued Operations Net revenue from discontinued operations, income or loss from discontinued operations before income taxes, and the components of net income (loss) from discontinued operations were as follows for the periods indicated: Twelve Months Ended July 31, (In millions) 2016 2015 2014 Net revenue from discontinued operations: Intuit Financial Services $ — $ — $ — Intuit Health — — 1 Demandforce 49 115 107 QuickBase 54 70 57 Quicken 34 51 98 Total net revenue from discontinued operations $ 137 $ 236 $ 263 Income (loss) from discontinued operations before income taxes: Intuit Financial Services $ — $ — $ — Intuit Health — — (1 ) Demandforce (10 ) (63 ) (51 ) QuickBase 10 11 7 Quicken (2 ) (136 ) 57 Total income (loss) from discontinued operations before income taxes $ (2 ) $ (188 ) $ 12 Net income (loss) from discontinued operations: Net income from Intuit Financial Services operations $ — $ — $ — Net gain on disposal of Intuit Financial Services discontinued operations — — 36 Net loss from Intuit Health operations — — — Net gain on disposal of Intuit Health discontinued operations — — 10 Net loss from Demandforce operations (6 ) (39 ) (30 ) Net income from QuickBase operations 6 7 4 Net income (loss) from Quicken operations — (140 ) 34 Net gain on disposal of Demandforce, QuickBase, and Quicken 173 124 — Total net income (loss) from discontinued operations $ 173 $ (48 ) $ 54 The net gain on disposal of Demandforce, QuickBase, and Quicken for the twelve months ended July 31, 2015 was comprised of tax benefits from the anticipated sales of those businesses. See Note 10, “ Income Taxes ,” for more information. |
Current Liabilities
Current Liabilities | 12 Months Ended |
Jul. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Current Liabilities | Current Liabilities Short-Term Debt On March 12, 2007 we issued $500 million of 5.75% senior unsecured notes due on March 15, 2017. We carried these notes at face value less the unamortized discount on our balance sheets at July 31, 2016 and July 31, 2015 . Because their contractual maturities are now within one year, we transferred the notes from long-term liabilities to current liabilities during the third quarter of fiscal 2016. The notes are redeemable by Intuit at any time, subject to a make-whole premium, and include covenants that limit our ability to grant liens on our facilities and to enter into sale and leaseback transactions, subject to significant allowances. We remained in compliance with these covenants at all times during the fiscal year ended July 31, 2016 . Interest on the notes is payable semi-annually on March 15 and September 15. We paid $29 million in cash for interest on the notes during each of the twelve months ended July 31, 2016 , July 31, 2015 , and July 31, 2014 . Unsecured Revolving Credit Facilities On February 17, 2012 we entered into an agreement with certain institutional lenders for an unsecured revolving credit facility that was due to expire on February 17, 2017. On February 1, 2016 the $745 million outstanding balance was paid in full and the credit facility was terminated. On February 1, 2016 we entered into a master credit agreement with certain institutional lenders for a new five -year credit facility in an aggregate principal amount of $1.5 billion . The master credit agreement includes a $500 million unsecured term loan and a $1 billion unsecured revolving credit facility that will expire on February 1, 2021. See Note 9, “ Long-Term Obligations and Commitments – Long-Term Debt,” for more information regarding the term loan. Under the new master credit agreement we may, subject to certain customary conditions, on one or more occasions increase commitments under the revolving credit facility in an amount not to exceed $250 million in the aggregate and may extend the maturity date up to two times. Advances under the revolving credit facility accrue interest at rates that are equal to, at our election, either Bank of America's alternate base rate plus a margin that ranges from 0.0% to 0.5% or the London Interbank Offered Rate (LIBOR) plus a margin that ranges from 0.9% to 1.5% . Actual margins under either election will be based on our senior debt credit ratings. The master credit agreement includes customary affirmative and negative covenants, including financial covenants that require us to maintain a ratio of total debt to annual earnings before interest, taxes, depreciation and amortization (EBITDA) of not greater than 3.25 to 1.00 as of any date and a ratio of annual EBITDA to annual interest expense of not less than 3.00 to 1.00 as of the last day of each fiscal quarter. We remained in compliance with these covenants at all times during the fiscal year ended July 31, 2016 . During the twelve months ended July 31, 2016 we borrowed and repaid $250 million under this revolving credit facility and at July 31, 2016 no amounts were outstanding. Other Current Liabilities Other current liabilities were as follows at the dates indicated: July 31, (In millions) 2016 2015 Reserve for product returns $ 7 $ 12 Reserve for rebates 14 12 Current portion of license fee payable 10 10 Current portion of deferred rent 6 8 Interest payable 11 10 Executive deferred compensation plan liabilities 69 63 Other 44 35 Total other current liabilities $ 161 $ 150 |
Long-Term Obligations and Commi
Long-Term Obligations and Commitments | 12 Months Ended |
Jul. 31, 2016 | |
Long-Term Obligations and Commitments [Abstract] | |
Long-Term Obligations and Commitments | Long-Term Obligations and Commitments Long-Term Debt On February 1, 2016 we entered into a master credit agreement with certain institutional lenders for a new five -year credit facility in an aggregate principal amount of $1.5 billion . The master credit agreement includes a $500 million unsecured term loan and a $1 billion unsecured revolving credit facility that will expire on February 1, 2021. See Note 8, “ Current Liabilities – Unsecured Revolving Credit Facilities,” for more information regarding the revolving credit facility. Under the master credit agreement we may, subject to certain customary conditions, on one or more occasions increase commitments under the term loan in an amount not to exceed $500 million in the aggregate. The term loan accrues interest at rates that are equal to, at our election, either Bank of America's alternate base rate plus a margin that ranges from 0.125% to 0.875% or LIBOR plus a margin that ranges from 1.125% to 1.875% . Actual margins under either election will be based on our senior debt credit ratings. The master credit agreement includes customary affirmative and negative covenants. See Note 8, “ Current Liabilities – Unsecured Revolving Credit Facilities,” for more information. The term loan is subject to quarterly principal payments of 2.5% of the loan amount beginning in July 2017, with the balance payable on February 1, 2021. At July 31, 2016 , $500 million was outstanding under the term loan, of which $12 million was classified as short-term debt. Interest on the term loan is payable monthly. We paid $4 million in cash for interest on the term loan during the twelve months ended July 31, 2016 . Other Long-Term Obligations Other long-term obligations were as follows at the dates indicated: July 31, (In millions) 2016 2015 Total deferred rent $ 56 $ 49 Total license fee payable 26 34 Long-term income tax liabilities 54 45 Long-term deferred income tax liabilities 7 50 Other 20 13 Total long-term obligations 163 191 Less current portion (included in other current liabilities) (17 ) (19 ) Long-term obligations due after one year $ 146 $ 172 In May 2009 we entered into an agreement to license certain technology for $20 million in cash and $100 million payable over ten fiscal years. The total present value of the arrangement at inception was approximately $89 million. The total license fee payable in the table above includes imputed interest through the dates indicated. Operating Lease Commitments and Unconditional Purchase Obligations We lease office facilities and equipment under non-cancellable operating lease arrangements. Our facilities leases generally provide for periodic rent increases and many contain escalation clauses and renewal options. The leases for our corporate headquarters campus in Mountain View, California expire in 2024 and 2026, with options to extend the lease terms for an additional ten years at rates to be determined in accordance with the agreements. In the ordinary course of business we enter into certain unconditional purchase obligations with our suppliers. These are agreements to purchase products and services that are enforceable, legally binding, and specify terms that include fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the payments. Annual minimum commitments under purchase obligations and operating leases at July 31, 2016 were as shown in the table below. (In millions) Purchase Obligations Operating Lease Commitments Sublease Income Net Operating Lease Commitments Fiscal year ending July 31, 2017 $ 29 $ 60 $ 21 $ 39 2018 25 58 21 37 2019 7 50 17 33 2020 — 48 16 32 2021 — 46 12 34 Thereafter — 176 4 172 Total commitments $ 61 $ 438 $ 91 $ 347 Rent expense net of sublease income for continuing operations totaled $36 million for the twelve months ended July 31, 2016 , $59 million for the twelve months ended July 31, 2015 , and $54 million for the twelve months ended July 31, 2014 . Rent expense includes base contractual rent and contractual variable expenses such as building maintenance, utilities, property taxes and insurance. Sublease income for continuing operations totaled $10 million for the twelve months ended July 31, 2016 and was not significant for the twelve months ended July 31, 2015 and July 31, 2014 . |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes from continuing operations consisted of the following for the periods indicated: Twelve Months Ended July 31, (In millions) 2016 2015 2014 Current: Federal $ 401 $ 253 $ 358 State 33 20 21 Foreign 13 7 10 Total current 447 280 389 Deferred: Federal (42 ) 14 51 State (7 ) 1 5 Foreign (1 ) 4 2 Total deferred (50 ) 19 58 Total provision for income taxes from continuing operations $ 397 $ 299 $ 447 Excess tax benefits associated with share-based compensation deductions are credited to stockholders’ equity. The reductions of income taxes payable resulting from share-based compensation deductions that were credited to stockholders’ equity were approximately $59 million for the twelve months ended July 31, 2016 , $85 million for the twelve months ended July 31, 2015 , and $82 million for the twelve months ended July 31, 2014 . The sources of income from continuing operations before the provision for income taxes consisted of the following for the periods indicated: Twelve Months Ended July 31, (In millions) 2016 2015 2014 United States $ 1,205 $ 716 $ 1,276 Foreign (2 ) (4 ) 24 Total $ 1,203 $ 712 $ 1,300 Differences between income taxes calculated using the federal statutory income tax rate of 35% and the provision for income taxes from continuing operations were as follows for the periods indicated: Twelve Months Ended July 31, (In millions) 2016 2015 2014 Income from continuing operations before income taxes $ 1,203 $ 712 $ 1,300 Statutory federal income tax $ 421 $ 249 $ 455 State income tax, net of federal benefit 17 15 17 Federal research and experimentation credits (33 ) (19 ) (7 ) Domestic production activities deduction (34 ) (19 ) (25 ) Share-based compensation 16 15 8 Effects of non-U.S. operations 11 12 1 Non-deductible goodwill — 40 — Other, net (1 ) 6 (2 ) Total provision for income taxes from continuing operations $ 397 $ 299 $ 447 In December 2015 the Consolidated Appropriations Act, 2016 was signed into law. The Act includes a permanent reinstatement of the federal research and experimentation credit that was retroactive to January 1, 2015. We recorded a discrete tax benefit of approximately $12 million for the retroactive effect during the twelve months ended July 31 2016. In December 2014 the Tax Increase Prevention Act of 2014 was signed into law. The Act includes a reinstatement of the federal research and experimentation credit through December 31, 2014 that was retroactive to January 1, 2014. We recorded a discrete tax benefit of approximately $11 million for the retroactive effect during the twelve months ended July 31, 2015. As of July 31, 2015, the federal research and experimentation credit had not been extended beyond December 31, 2014. Significant deferred tax assets and liabilities were as follows at the dates indicated: July 31, (In millions) 2016 2015 Deferred tax assets: Accruals and reserves not currently deductible $ 33 $ 24 Deferred revenue 56 12 Deferred rent 14 10 Accrued and deferred compensation 55 52 Loss and tax credit carryforwards 51 44 Share-based compensation 62 52 Net basis difference in investments held for sale — 122 Other, net 11 7 Total deferred tax assets 282 323 Deferred tax liabilities: Intangible assets 86 87 Property and equipment 24 20 Total deferred tax liabilities 110 107 Total net deferred tax assets 172 216 Valuation allowance (40 ) (30 ) Total net deferred tax assets, net of valuation allowance $ 132 $ 186 The components of total net deferred tax assets, net of valuation allowances, as shown on our balance sheets were as follows at the dates indicated: July 31, (In millions) 2016 2015 Current deferred income taxes $ — $ 231 Long-term deferred income taxes 139 5 Long-term deferred income taxes included in other long-term obligations (7 ) (50 ) Total net deferred tax assets, net of valuation allowance $ 132 $ 186 In the second quarter of fiscal 2016, we elected to early adopt ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” on a prospective basis . This new standard requires all deferred tax assets and liabilities, and any related valuation allowance, to be classified as noncurrent on the balance sheet. Prior periods were not adjusted. We have provided a valuation allowance related to state tax credit carryforwards, foreign operating loss carryforwards, and state capital and operating loss carryforwards that we believe are unlikely to be realized. Changes in the valuation allowance during the twelve months ended July 31, 2016 were primarily related to an increase in the valuation allowance for foreign operating loss carryforwards, state tax credit and state capital loss carryforwards. Changes in the valuation allowance during the twelve months ended July 31, 2015 were primarily related to an increase in the valuation allowance for state tax credit and foreign operating loss carryforwards, offset with a reduction in the valuation allowance for state capital loss carryforwards. At July 31, 2016, the income tax expense associated with the net gain from discontinued operations consisted of $179 million related to the sale of Demandforce, QuickBase, and Quicken, and $2 million related to the increase of valuation allowance on state capital loss carryforwards. At July 31, 2015, the deferred tax asset for the net basis difference in the Demandforce investment held for sale was $122 million . We recorded the related tax benefit to the net gain on disposal of Demandforce, QuickBase, and Quicken. See Note 7, “ Discontinued Operations,” for more information. At July 31, 2015, the deferred tax asset for the state capital loss carryforwards on the sale of Intuit Websites and Intuit Financial Services was $4 million , on which there was a valuation allowance of $1 million . During the twelve months ended July 31, 2015 the valuation allowance was reduced by $2 million and the related tax benefit was recorded to tax benefit from discontinued operations. See Note 7, “ Discontinued Operations ,” for more information. At July 31, 2016 , we had total federal net operating loss carryforwards of approximately $19 million that will start to expire in fiscal 2029 . Utilization of the net operating losses is subject to annual limitation. The annual limitation may result in the expiration of net operating losses before utilization. At July 31, 2016 , we had total state net operating loss carryforwards of approximately $156 million for which we have recorded a deferred tax asset of $8 million and a valuation allowance of $5 million . The state net operating losses will start to expire in fiscal 2017 . Utilization of the net operating losses is subject to annual limitation. The annual limitation may result in the expiration of net operating losses before utilization. At July 31, 2016 , we had Singapore operating loss carryforwards of approximately $76 million which have an indefinite carryforward period. We recorded a full valuation allowance on the related deferred tax asset. At July 31, 2016 , we had California research and experimentation credit carryforwards of approximately $52 million . If realized, $11 million of the carryfoward will be recognized as additional paid in capital. We recorded a full valuation on the related deferred tax asset. Unrecognized Tax Benefits The aggregate changes in the balance of our gross unrecognized tax benefits were as follows for the periods indicated: Twelve Months Ended July 31, (In millions) 2016 2015 2014 Gross unrecognized tax benefits, beginning balance $ 56 $ 40 $ 39 Increases related to tax positions from prior fiscal years, including acquisitions 7 15 4 Decreases related to tax positions from prior fiscal years (7 ) (1 ) (8 ) Increases related to tax positions taken during current fiscal year 15 5 5 Settlements with tax authorities (11 ) (3 ) — Gross unrecognized tax benefits, ending balance $ 60 $ 56 $ 40 The total amount of our unrecognized tax benefits at July 31, 2016 was $60 million. Net of related deferred tax assets, unrecognized tax benefits were $40 million at that date. If we were to recognize these net benefits, our income tax expense would reflect a favorable net impact of $40 million. We do not believe that it is reasonably possible that there will be a significant increase or decrease in unrecognized tax benefits over the next 12 months. We file U.S. federal, U.S. state, and foreign tax returns. Our major tax jurisdictions are U.S. federal and the State of California. For U.S. federal tax returns we are no longer subject to tax examinations for years prior to fiscal 2013. For California tax returns we are no longer subject to tax examinations for years prior to fiscal 2009. We recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes. Amounts accrued at July 31, 2016 and July 31, 2015 for the payment of interest and penalties were not significant. The amounts of interest and penalties that we recognized during the twelve months ended July 31, 2016 , 2015 and 2014 were also not significant. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jul. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Stock Repurchase Programs Intuit’s Board of Directors has authorized a series of common stock repurchase programs. Shares of common stock repurchased under these programs become treasury shares. Under these programs, we repurchased 24.8 million shares of our common stock for $2.3 billion during the twelve months ended July 31, 2016 ; 13.8 million shares for $1.2 billion during the twelve months ended July 31, 2015 ; and 22.5 million shares for $1.6 billion during the twelve months ended July 31, 2014 . At July 31, 2016 , we had authorization from our Board of Directors to expend up to an additional $360 million for stock repurchases through May 19, 2019. On August 19, 2016 our Board approved a new stock repurchase program under which we are authorized to repurchase up to an additional $2 billion of our common stock. Future stock repurchases under the current program are at the discretion of management, and authorization of future stock repurchase programs is subject to the final determination of our Board of Directors. To facilitate our stock repurchase program, from time to time we repurchase shares in the open market. On August 23, 2013 we entered into an accelerated share repurchase (ASR) agreement with a large financial institution to repurchase $1.4 billion of Intuit’s common stock on an accelerated basis. On August 23, 2013 we paid $1.4 billion to the financial institution and received an initial delivery of 17.6 million shares of Intuit common stock. On December 23, 2013 we received a final delivery of 2.6 million shares of Intuit common stock. We treated the ASR as a forward contract indexed to our own common stock. The forward contract met all of the applicable criteria for equity classification, so we did not account for it as a derivative instrument. We have reflected the shares delivered to us by the financial institution as treasury shares as of the date they were physically delivered in computing weighted average shares outstanding for both basic and diluted net loss per share. Our treasury shares are repurchased at the market price on the trade date; accordingly, all amounts paid to reacquire these shares have been recorded as treasury stock on our balance sheets. Repurchased shares of our common stock are held as treasury shares until they are reissued or retired. When we reissue treasury stock, if the proceeds from the sale are more than the average price we paid to acquire the shares we record an increase in additional paid-in capital. Conversely, if the proceeds from the sale are less than the average price we paid to acquire the shares, we record a decrease in additional paid-in capital to the extent of increases previously recorded for similar transactions and a decrease in retained earnings for any remaining amount. In the past we have satisfied option exercises and restricted stock unit vesting under our employee equity incentive plans by reissuing treasury shares, and we may do so again in the future. During the second quarter of fiscal 2014 we began issuing new shares of common stock to satisfy option exercises and RSU vesting under our 2005 Equity Incentive Plan. We have not yet determined the ultimate disposition of the shares that we have repurchased in the past, and consequently we continue to hold them as treasury shares. Dividends on Common Stock During fiscal 2016 we declared and paid cash dividends that totaled $1.20 per share of outstanding common stock or approximately $318 million . In August 2016 our Board of Directors declared a quarterly cash dividend of $0.34 per share of outstanding common stock payable on October 18, 2016 to stockholders of records at the close of business on October 10, 2016 . Future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of our Board of Directors. Description of 2005 Equity Incentive Plan Our stockholders initially approved our 2005 Equity Incentive Plan (2005 Plan) on December 9, 2004. On January 23, 2014 our stockholders approved an Amended and Restated 2005 Equity Incentive Plan (Restated 2005 Plan) that expires on October 29, 2023. Under the Restated 2005 Plan, we are permitted to grant incentive and non-qualified stock options, restricted stock awards, restricted stock units (RSUs), stock appreciation rights and stock bonus awards to our employees, non-employee directors, and consultants. The Compensation and Organizational Development Committee of our Board of Directors or its delegates determine who will receive grants, when those grants will be exercisable, their exercise price and other terms. We are permitted to issue up to 115 million shares under the Restated 2005 Plan. The plan provides a fungible share reserve. Each stock option granted on or after November 1, 2010 reduces the share reserve by one share and each restricted stock award or restricted stock unit granted reduces the share reserve by 2.3 shares. Stock options forfeited and returned to the pool of shares available for grant increase the pool by one share for each share forfeited. Restricted stock awards and RSUs forfeited and returned to the pool of shares available for grant increase the pool by 2.3 shares for each share forfeited. At July 31, 2016 , there were approximately 9 million shares available for grant under this plan. Stock options granted under the 2005 Plan and the Restated 2005 Plan typically vest over three years based on continued service and have a seven year term. RSUs granted under those plans typically vest over three years based on continued service. Certain RSUs granted to senior management vest based on the achievement of pre-established performance or market goals. Description of Employee Stock Purchase Plan On November 26, 1996 our stockholders initially adopted our Employee Stock Purchase Plan (ESPP) under Section 423 of the Internal Revenue Code. The ESPP permits our eligible employees to make payroll deductions to purchase our stock on regularly scheduled purchase dates at a discount. Our stockholders have approved amendments to the ESPP to permit the issuance of up to 23.8 million shares under the ESPP, which expires upon the earliest to occur of (a) termination of the ESPP by the Board, or (b) issuance of all the shares of Intuit’s common stock reserved for issuance under the ESPP. Offering periods under the ESPP are six months in duration and composed of two consecutive three -month accrual periods. Shares are purchased at 85% of the lower of the closing price for Intuit common stock on the first day of the offering period or the last day of the accrual period. Under the ESPP, employees purchased 882,206 shares of Intuit common stock during the twelve months ended July 31, 2016 ; 892,632 shares during the twelve months ended July 31, 2015 ; and 1,044,961 shares during the twelve months ended July 31, 2014 . At July 31, 2016 , there were 3,756,567 shares available for issuance under this plan. Share-Based Compensation Expense The following table summarizes the total share-based compensation expense that we recorded in operating income from continuing operations for the periods shown. Twelve Months Ended July 31, (In millions except per share amounts) 2016 2015 2014 Cost of service and other revenue $ 8 $ 6 $ 7 Selling and marketing 77 69 53 Research and development 90 80 59 General and administrative 103 87 67 Total share-based compensation expense from continuing operations 278 242 186 Income tax benefit (86 ) (75 ) (60 ) Decrease in net income from continuing operations $ 192 $ 167 $ 126 Decrease in net income per share from continuing operations: Basic $ 0.73 $ 0.59 $ 0.44 Diluted $ 0.72 $ 0.58 $ 0.43 We capitalized $6 million in share-based compensation related to internal use software projects during the twelve months ended July 31, 2016 . The table above also excludes share-based compensation expense for our discontinued operations, which totaled $3 million during the twelve months ended July 31, 2016 , $15 million during the twelve months ended July 31, 2015 , and $18 million during the twelve months ended July 31, 2014 . Because we have not reclassified our statements of cash flows to segregate discontinued operations, these amounts are included in share-based compensation expense on our statements of cash flows for that period. Determining Fair Value Valuation and Amortization Method. We estimate the fair value of stock options granted using a lattice binomial model and a multiple option award approach. Our stock options have various restrictions, including vesting provisions and restrictions on transfer, and are often exercised prior to their contractual maturity. We believe that lattice binomial models are more capable of incorporating the features of our stock options than closed-form models such as the Black Scholes model. The use of a lattice binomial model requires the use of extensive actual employee exercise behavior and a number of complex assumptions including the expected volatility of our stock price over the term of the options, risk-free interest rates and expected dividends. We amortize the fair value of options on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods. Restricted stock units (RSUs) granted typically vest based on continued service. We value these time-based RSUs at the date of grant using the intrinsic value method, adjusted for estimated forfeitures. We amortize the fair value of time-based RSUs on a straight-line basis adjusted for estimated forfeitures over the service period. Certain RSUs granted to senior management vest based on the achievement of pre-established performance or market goals. We estimate the fair value of performance-based RSUs at the date of grant using the intrinsic value method and the probability that the specified performance criteria will be met, adjusted for estimated forfeitures. Each quarter we update our assessment of the probability that the specified performance criteria will be achieved and adjust our estimate of the fair value of the performance-based RSUs if necessary. We amortize the fair values of performance-based RSUs over the requisite service period adjusted for estimated forfeitures for each separately vesting tranche of the award. We estimate the fair value of market-based RSUs at the date of grant using a Monte Carlo valuation methodology and amortize those fair values over the requisite service period adjusted for estimated forfeitures for each separately vesting tranche of the award. The Monte Carlo methodology that we use to estimate the fair value of market-based RSUs at the date of grant incorporates into the valuation the possibility that the market condition may not be satisfied. Provided that the requisite service is rendered, the total fair value of the market-based RSUs at the date of grant must be recognized as compensation expense even if the market condition is not achieved. However, the number of shares that ultimately vest can vary significantly with the performance of the specified market criteria. All of the RSUs we grant have dividend rights that are subject to the same vesting requirements as the underlying equity awards, so we do not adjust the market price of our stock on the date of grant for dividends. Expected Term . The expected term of options granted represents the period of time that they are expected to be outstanding and is a derived output of the lattice binomial model. The expected term of stock options is impacted by all of the underlying assumptions and calibration of our model. The lattice binomial model assumes that option exercise behavior is a function of the option’s remaining vested life and the extent to which the market price of our common stock exceeds the option exercise price. The lattice binomial model estimates the probability of exercise as a function of these two variables based on the history of exercises and cancellations on all past option grants made by us. Expected Volatility . We estimate the volatility of our common stock at the date of grant based on the implied volatility of one-year and two-year publicly traded options on our common stock. Our decision to use implied volatility was based upon the availability of actively traded options on our common stock and our assessment that implied volatility is more representative of future stock price trends than historical volatility. Risk-Free Interest Rate. We base the risk-free interest rate that we use in our option valuation model on the implied yield in effect at the time of option grant on constant maturity U.S. Treasury issues with equivalent remaining terms. Dividends. We use an annualized expected dividend yield in our option valuation model. We paid quarterly cash dividends during fiscal 2016 , fiscal 2015 , and fiscal 2014 and currently expect to continue to pay cash dividends in the future. Forfeitures. We estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We use historical data to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest. We used the following assumptions to estimate the fair value of stock options granted and shares purchased under our Employee Stock Purchase Plan for the periods indicated: Twelve Months Ended July 31, 2016 2015 2014 Assumptions for stock options: Expected volatility (range) 22% - 26% 22% - 24% 22% - 24% Weighted average expected volatility 22 % 23 % 23 % Risk-free interest rate (range) 0.98% - 1.49% 1.13% - 1.47% 1.01% - 1.40% Expected dividend yield 1.06% - 1.36% 0.93% - 1.05% 0.92% - 1.06% Assumptions for ESPP: Expected volatility (range) 23% - 26% 20% - 23% 19% - 22% Weighted average expected volatility 25 % 21 % 21 % Risk-free interest rate (range) 0.06% - 0.47% 0.01% - 0.15% 0.02% - 0.08% Expected dividend yield 1.13% - 1.34% 0.96% - 1.19% 0.94% - 1.15% Share-Based Awards Available for Grant A summary of share-based awards available for grant under our 2005 Equity Incentive Plan for the fiscal periods indicated was as follows: (Shares in thousands) Shares Available for Grant Balance at July 31, 2013 12,120 Additional shares authorized 19,000 Options granted (2,206 ) Restricted stock units granted (1) (8,959 ) Share-based awards canceled/forfeited/expired (1)(2) 4,248 Balance at July 31, 2014 24,203 Options granted (1,981 ) Restricted stock units granted (1) (8,053 ) Share-based awards canceled/forfeited/expired (1)(2) 3,014 Balance at July 31, 2015 17,183 Options granted (2,553 ) Restricted stock units granted (1) (9,364 ) Share-based awards canceled/forfeited/expired (1)(2) 3,724 Balance at July 31, 2016 8,990 ________________________________ (1) RSUs granted from the pool of shares available for grant under our 2005 Equity Incentive Plan reduce the pool by 2.3 shares for each share granted. RSUs forfeited and returned to the pool of shares available for grant increase the pool by 2.3 shares for each share forfeited. (2) Stock options and restricted stock units canceled, expired or forfeited under our 2005 Equity Incentive Plan are returned to the pool of shares available for grant. Stock options and restricted stock units canceled, expired or forfeited under older expired plans are not returned to the pool of shares available for grant. Stock Option Activity and Related Share-Based Compensation Expense A summary of stock option activity for the periods indicated was as follows: Options Outstanding (Shares in thousands) Number of Shares Weighted Average Exercise Price Per Share Balance at July 31, 2013 14,206 $43.77 Granted 2,206 82.15 Assumed in connection with acquisitions 261 5.16 Exercised (5,041 ) 37.74 Canceled or expired (694 ) 54.77 Balance at July 31, 2014 10,938 52.67 Granted 1,981 106.86 Exercised (3,704 ) 41.65 Canceled or expired (502 ) 62.32 Balance at July 31, 2015 8,713 69.13 Granted 2,553 113.08 Exercised (2,566 ) 48.93 Canceled or expired (354 ) 74.56 Balance at July 31, 2016 8,346 $88.55 Information regarding stock options outstanding as of July 31, 2016 is summarized below: Number of Shares (in thousands) Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price per Share Aggregate Intrinsic Value (in millions) Options outstanding 8,346 6.07 $88.55 $206 Options vested and expected to vest 7,693 5.89 $86.76 $203 Options exercisable 3,757 3.81 $68.38 $168 Options expected to vest are unvested shares net of expected forfeitures. The aggregate intrinsic values at July 31, 2016 are calculated as the difference between the exercise price of the underlying options and the market price of our common stock for shares that were in-the-money at that date. In-the-money options at July 31, 2016 were options that had exercise prices that were lower than the $110.99 market price of our common stock at that date. Additional information regarding our stock options and ESPP shares is shown in the table below. Twelve Months Ended July 31, (In millions except per share amounts) 2016 2015 2014 Weighted average fair value of options granted (per share) $ 20.35 $ 19.39 $ 21.34 Total grant date fair value of options vested $ 32 $ 36 $ 28 Aggregate intrinsic value of options exercised $ 134 $ 191 $ 177 Share-based compensation expense for stock options and ESPP $ 48 $ 48 $ 43 Total tax benefit for stock option and ESPP share-based compensation $ 13 $ 11 $ 11 Cash received from option exercises $ 126 $ 154 $ 190 Cash tax benefits realized related to tax deductions for non-qualified option exercises and disqualifying dispositions under all share-based payment arrangements $ 47 $ 68 $ 63 At July 31, 2016 , there was $75 million of unrecognized compensation cost related to non-vested stock options that we will amortize to expense in the future. Unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We expect to recognize that cost over a weighted average vesting period of 2.4 years. Restricted Stock Unit Activity and Related Share-Based Compensation Expense A summary of restricted stock unit (RSU) activity for the periods indicated was as follows: (Shares in thousands) Number of Shares Weighted Average Grant Date Fair Value Nonvested at July 31, 2013 9,184 $55.23 Granted 3,896 71.37 Assumed or granted in connection with acquisitions 782 71.00 Vested (2,820 ) 53.98 Forfeited (1,587 ) 61.76 Nonvested at July 31, 2014 9,455 62.46 Granted 3,501 89.58 Assumed or granted in connection with acquisitions 292 91.87 Vested (3,155 ) 67.00 Forfeited (1,177 ) 62.32 Nonvested at July 31, 2015 8,916 72.48 Granted 4,072 99.30 Vested (2,392 ) 78.07 Forfeited (1,557 ) 77.03 Nonvested at July 31, 2016 9,039 $82.30 Additional information regarding our RSUs is shown in the table below. Twelve Months Ended July 31, (In millions) 2016 2015 2014 Total fair market value of shares vested $ 288 $ 282 $ 204 Share-based compensation for RSUs $ 230 $ 194 $ 143 Total tax benefit related to RSU share-based compensation expense $ 73 $ 64 $ 49 Cash tax benefits realized for tax deductions for RSUs $ 92 $ 96 $ 134 At July 31, 2016 , there was $510 million of unrecognized compensation cost related to non-vested RSUs that we will amortize to expense in the future. Unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We expect to recognize that cost over a weighted average vesting period of 2.4 years. Accumulated Other Comprehensive Loss Comprehensive income consists of two elements, net income and other comprehensive income (loss). Other comprehensive income (loss) items are recorded in the stockholders’ equity section of our balance sheets and excluded from net income. Our other comprehensive income (loss) consists of unrealized gains and losses on marketable debt securities classified as available-for-sale and foreign currency translation adjustments for subsidiaries with functional currencies other than the U.S. dollar. The following table shows the components of accumulated other comprehensive loss, net of income taxes, in the stockholders’ equity section of our balance sheets at the dates indicated. July 31, (In millions) 2016 2015 Unrealized gains on available-for-sale debt securities $ 1 $ — Foreign currency translation adjustments (33 ) (30 ) Total accumulated other comprehensive loss $ (32 ) $ (30 ) |
Benefit Plans
Benefit Plans | 12 Months Ended |
Jul. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | Benefit Plans Executive Deferred Compensation Plan In December 2004 we initially adopted our 2005 Executive Deferred Compensation Plan, which became effective January 1, 2005. We adopted this plan to meet the requirements for deferred compensation under Section 409A of the Internal Revenue Code. The plan provides that executives who meet minimum compensation requirements are eligible to defer up to 75% of their salaries, bonuses and commissions. We have agreed to credit the participants’ contributions with earnings that reflect the performance of certain independent investment funds. We may also make discretionary employer contributions to participant accounts in certain circumstances. The timing, amounts and vesting schedules of employer contributions are at the sole discretion of the Compensation and Organizational Development Committee of our Board of Directors or its delegate. The benefits under this plan are unsecured. Participants are generally eligible to receive payment of their vested benefit at the end of their elected deferral period or after termination of their employment with Intuit for any reason or at a later date to comply with the restrictions of Section 409A. Discretionary company contributions and the related earnings vest completely upon the participant’s disability, death or a change of control of Intuit. We made no employer contributions to the plan for any period presented. We had liabilities related to this plan of $69 million at July 31, 2016 and $63 million at July 31, 2015 . We have matched the plan liabilities with similar performing assets, which are primarily investments in life insurance contracts. These assets are recorded in other long-term assets while liabilities related to obligations are recorded in other current liabilities on our balance sheets. 401(k) Plan In the United States, employees who participate in the Intuit Inc. 401(k) Plan may currently contribute up to 50% of pre-tax compensation, subject to Internal Revenue Service limitations and the terms and conditions of the plan. We match a portion of employee contributions, currently 125% up to six percent of salary, subject to Internal Revenue Service limitations. Matching contributions were $46 million for the twelve months ended July 31, 2016 ; $44 million for the twelve months ended July 31, 2015 ; and $43 million for the twelve months ended July 31, 2014 . |
Litigation
Litigation | 12 Months Ended |
Jul. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation In fiscal 2015 Intuit was contacted by regulatory authorities, including Congress, the Federal Trade Commission, the SEC, the Department of Justice and certain state Attorneys General, which are conducting inquiries in connection with the increase during the 2015 tax season in attempts by criminals using stolen identity information to file fraudulent tax returns and claim refunds at the state and federal levels. Intuit is cooperating with all such government inquiries, including formal requests for information. In addition, we are the subject of certain actions, including a consolidated putative class action lawsuits by individuals who claim to have suffered damages in connection with the foregoing events. We believe that the allegations contained within these lawsuits are without merit, and we intend to vigorously defend against them. Intuit is subject to certain routine legal proceedings, including class action lawsuits like those described above, as well as demands, claims, government inquiries and threatened litigation, that arise in the normal course of our business, including assertions that we may be infringing patents or other intellectual property rights of others. We currently believe that, in addition to any amounts accrued, the amount of potential losses, if any, for any pending claims of any type (either alone or combined) will not have a material impact on our consolidated financial statements. The ultimate outcome of any litigation is uncertain and, regardless of outcome, litigation can have an adverse impact on Intuit because of defense costs, negative publicity, diversion of management resources and other factors. Our failure to obtain necessary license or other rights, or litigation arising out of intellectual property claims could adversely affect our business. |
Segment Information
Segment Information | 12 Months Ended |
Jul. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We have defined three reportable segments, described below, based on factors such as how we manage our operations and how our chief operating decision maker views results. We define the chief operating decision maker as our Chief Executive Officer and our Chief Financial Officer. Our chief operating decision maker organizes and manages our business primarily on the basis of product and service offerings. Small Business. Our Small Business segment includes the following offerings, which target small businesses and the accounting professionals who serve and advise them. • QuickBooks financial and business management online services and desktop software; QuickBooks technical support; financial supplies; and third-party applications that integrate with our offerings. • QuickBooks Online Accountant, QuickBooks Accountant Desktop, and QuickBooks Desktop Accountant Plus, as well as the QuickBooks ProAdvisor Program, all of which are intended for the accounting professionals who serve small businesses. • Small business payroll products and services, including online payroll offerings such as QuickBooks Online Payroll and Intuit Online Payroll; desktop payroll offerings such as QuickBooks Basic Payroll and QuickBooks Enhanced Payroll; and full-service payroll offerings such as QuickBooks Assisted Payroll and Intuit Full Service Payroll. • Payment processing services for small businesses, including merchant services such as credit and debit card processing; Web-based transaction processing services for online merchants; secure online payments for small businesses and their customers through the Intuit Commerce Network; GoPayment mobile payment processing services; and QuickBooks Point of Sale solutions. Consumer Tax. Our Consumer Tax segment targets consumers and includes TurboTax income tax preparation products and services and electronic tax filing services. ProConnect. Our ProConnect segment targets professional accountants in the U.S. and Canada, who are essential to both small business success and doing the nations’ taxes. Our ProConnect professional tax offerings include Lacerte, ProSeries, ProFile, and ProConnect Tax Online, electronic tax filing services, bank product transmission services, and training services. All of our segments operate primarily in the United States and sell primarily to customers in the United States. International total net revenue was less than 5% of consolidated total net revenue for the twelve months ended July 31, 2016 , 2015 and 2014 . We include expenses such as corporate selling and marketing, product development, and general and administrative expenses and share-based compensation expenses, which are not allocated to specific segments, in unallocated corporate items. Unallocated corporate items also include amortization of acquired technology, amortization of other acquired intangible assets, and goodwill and intangible asset impairment charges. The accounting policies of our reportable segments are the same as those described in the summary of significant accounting policies in Note 1. Except for goodwill and acquired intangible assets, we do not generally track assets by reportable segment and, consequently, we do not disclose total assets by reportable segment. See Note 5, “Goodwill and Acquired Intangible Assets,” for goodwill by reportable segment. The following table shows our financial results by reportable segment for the periods indicated. Results for all periods presented have been adjusted to exclude results for our Demandforce, QuickBase, and Quicken businesses, which we classified as discontinued operations in the fourth quarter of fiscal 2015. Results for all periods presented also exclude results for our Intuit Financial Services and Intuit Health businesses, which we classified as discontinued operations in the fourth quarter of fiscal 2013. See Note 7, “ Discontinued Operations,” for more information. Twelve Months Ended July 31, (In millions) 2016 2015 2014 Net revenue: Small Business $ 2,293 $ 2,108 $ 2,158 Consumer Tax 1,973 1,800 1,663 ProConnect 428 284 422 Total net revenue $ 4,694 $ 4,192 $ 4,243 Operating income from continuing operations: Small Business 874 696 852 Consumer Tax 1,287 1,131 1,075 ProConnect 268 108 268 Total segment operating income 2,429 1,935 2,195 Unallocated corporate items: Share-based compensation expense (278 ) (242 ) (186 ) Other common expenses (875 ) (765 ) (684 ) Amortization of acquired technology (22 ) (30 ) (18 ) Amortization of other acquired intangible assets (12 ) (12 ) (7 ) Goodwill and intangible asset impairment charges — (148 ) — Total unallocated corporate items (1,187 ) (1,197 ) (895 ) Total operating income from continuing operations $ 1,242 $ 738 $ 1,300 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Jul. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following tables contain selected quarterly financial data for the twelve months ended July 31, 2016 and July 31, 2015 . We have classified our Demandforce, QuickBase, and Quicken businesses as discontinued operations and as a result have segregated their operating results from continuing operations in our statements of operations and in these tables. See Note 7, “ Discontinued Operations,” for more information. Fiscal 2016 Quarter Ended (In millions, except per share amounts) October 31 January 31 April 30 July 31 Total net revenue $ 713 $ 923 $ 2,304 $ 754 Cost of revenue 166 199 216 171 All other costs and expenses 576 682 803 639 Operating income (loss) from continuing operations (29 ) 42 1,285 (56 ) Net income (loss) from continuing operations (31 ) 29 848 (40 ) Net income (loss) from discontinued operations — (5 ) 178 — Net income (loss) (31 ) 24 1,026 (40 ) Basic net income (loss) per share from continuing operations $ (0.11 ) $ 0.11 $ 3.30 $ (0.16 ) Basic net income (loss) per share from discontinued operations — (0.02 ) 0.70 — Basic net income (loss) per share $ (0.11 ) $ 0.09 $ 4.00 $ (0.16 ) Diluted net income (loss) per share from continuing operations $ (0.11 ) $ 0.11 $ 3.26 $ (0.16 ) Diluted net income (loss) per share from discontinued operations — (0.02 ) 0.68 — Diluted net income (loss) per share $ (0.11 ) $ 0.09 $ 3.94 $ (0.16 ) Fiscal 2015 Quarter Ended (In millions, except per share amounts) October 31 January 31 April 30 July 31 Total net revenue $ 612 $ 749 $ 2,135 $ 696 Cost of revenue 159 188 202 176 All other costs and expenses 562 650 867 650 Operating income (loss) from continuing operations (109 ) (89 ) 1,066 (130 ) Net income (loss) from continuing operations (81 ) (60 ) 656 (102 ) Net income (loss) from discontinued operations (3 ) (6 ) (155 ) 116 Net income (loss) (84 ) (66 ) 501 14 Basic net income (loss) per share from continuing operations $ (0.28 ) $ (0.21 ) $ 2.37 $ (0.37 ) Basic net income (loss) per share from discontinued operations (0.01 ) (0.02 ) (0.56 ) 0.42 Basic net income (loss) per share $ (0.29 ) $ (0.23 ) $ 1.81 $ 0.05 Diluted net income (loss) per share from continuing operations $ (0.28 ) $ (0.21 ) $ 2.33 $ (0.37 ) Diluted net income (loss) per share from discontinued operations (0.01 ) (0.02 ) (0.55 ) 0.42 Diluted net income (loss) per share $ (0.29 ) $ (0.23 ) $ 1.78 $ 0.05 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts Schedule II | 12 Months Ended |
Jul. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts Schedule II | Schedule II INTUIT INC. VALUATION AND QUALIFYING ACCOUNTS (In millions) Beginning Balance Additions Charged to Expense/ Revenue Deductions Ending Balance Year ended July 31, 2016 Allowance for doubtful accounts $ 45 $ 49 $ (43 ) $ 51 Reserve for product returns 12 70 (75 ) 7 Reserve for rebates 12 103 (101 ) 14 Year ended July 31, 2015 Allowance for doubtful accounts $ 40 $ 57 $ (52 ) $ 45 Reserve for product returns 15 79 (82 ) 12 Reserve for rebates 21 97 (106 ) 12 Year ended July 31, 2014 Allowance for doubtful accounts $ 38 $ 50 $ (48 ) $ 40 Reserve for product returns 14 87 (86 ) 15 Reserve for rebates 14 103 (96 ) 21 Notes: The table above excludes balances and activity for our discontinued operations for all periods presented. |
Description of Business and S25
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jul. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These consolidated financial statements include the financial statements of Intuit and its wholly owned subsidiaries. We have eliminated all significant intercompany balances and transactions in consolidation. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation, including amounts related to discontinued operations and reportable segments. See Note 7, “Discontinued Operations,” and Note 14, “Segment Information,” for more information. In fiscal 2014 we acquired Check Inc. (now known as Mint Bills). We have included the results of operations for this company in our consolidated results of operations from the date of acquisition. See Note 6, “Business Combinations,” for more information. As discussed in Note 7, in fiscal 2013 we sold our Intuit Financial Services (IFS) business and our Intuit Health business. In fiscal 2016 we sold our Demandforce, QuickBase, and Quicken businesses. We have reclassified our statements of operations for all periods presented to reflect all of these businesses as discontinued operations. We have also segregated the net assets of our Demandforce, QuickBase, and Quicken businesses from continuing operations on our balance sheet at July 31, 2015. Because the cash flows of all of these businesses were not material for any period presented, we have not segregated them on our statements of cash flows. Unless noted otherwise, discussions in these notes pertain to our continuing operations. |
Seasonality | Seasonality Our Consumer Tax offerings have significant seasonal patterns and revenue from those income tax preparation products and services is heavily concentrated in our third fiscal quarter ending April 30. |
Use of Estimates | Use of Estimates In preparing our consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP), we make certain estimates and assumptions that affect the amounts reported in our financial statements and the disclosures made in the accompanying notes. For example, we use estimates in determining the appropriate levels of reserves for product returns and rebates, the collectibility of accounts receivable, the appropriate levels of various accruals including accruals for litigation contingencies, the amount of our worldwide tax provision, and the realizability of deferred tax assets. We also use estimates in determining the remaining economic lives and fair values of acquired intangible assets, property and equipment, and other long-lived assets. In addition, we use assumptions to estimate the fair value of reporting units and share-based compensation. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates. |
Revenue Recognition | Revenue Recognition We derive revenue from the sale of software subscriptions, hosted services, packaged software products, financial supplies, technical support plans, transaction fees, merchant services hardware, and multiple element arrangements that may include a combination of these items. We recognize revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists, we have delivered the product or performed the service, the fee is fixed or determinable, and collectibility is probable. Determining whether and when these criteria have been satisfied involves exercising judgment and using estimates and assumptions that can have a significant impact on the timing and amount of revenue that we recognize. In some situations, we receive advance payments from our customers. We defer revenue associated with these advance payments and the relative fair value of undelivered elements under multiple element arrangements until we ship the products or perform the services. We account for cash consideration (such as sales incentives) that we give to our customers or resellers as a reduction of revenue rather than as an operating expense unless we receive a benefit that we can identify and for which we can reasonably estimate the fair value. Product Revenue Prior to fiscal 2015, we recognized revenue from the sale of our packaged software products when legal title transferred. This generally occurred when our customers electronically downloaded products from the Internet, when we shipped the products or, in the case of certain agreements, when products were delivered to retailers. In the first quarter of fiscal 2015 we began delivering ongoing enhancements and certain connected services for QuickBooks and ProConnect desktop solutions that we sold from that time forward. As a result, we recognize revenue for these QuickBooks desktop solutions over the period that the enhancements and connected services are provided, which is approximately three years. We recognize revenue for these ProConnect desktop solutions as services are provided over the calendar year, once tax forms are available from taxing agencies and the agencies are able to receive electronic tax return submissions. We recognize revenue from the sale of our financial supplies such as printed check stock and merchant services hardware such as retail point-of-sale equipment and credit card readers for mobile phones when legal title transfers. This is generally when we ship the products. We record product revenue net of our sales tax obligations. We sell some of our QuickBooks and TurboTax desktop software products on consignment to certain retailers. We begin recognizing revenue for these consignment transactions only when the end-user sale has occurred. For software products that are sold on a subscription basis and include periodic updates, we recognize revenue ratably over the period that we provide services to the customer. We reduce product revenue from distributors and retailers for estimated returns that are based on historical returns experience and other factors, such as the volume and price mix of products in the retail channel, return rates for prior releases of the product, trends in retailer inventory, and economic trends that might impact customer demand for our products (including the competitive environment and the timing of new releases of our product). We also reduce product revenue for the estimated redemption of rebates on certain current product sales. Our estimated reserves for distributor and retailer sales incentive rebates are based on distributors’ and retailers’ actual performance against the terms and conditions of rebate programs. Our reserves for end user rebates are estimated based on the terms and conditions of the specific promotional rebate program, actual sales during the promotion, and historical redemption trends by product and by type of promotional program. Service and Other Revenue Our service revenue consists primarily of hosted services such as QuickBooks Online, QuickBooks desktop software term licenses, TurboTax Online, payroll services, electronic merchant payment processing services, and electronic tax filing and advice services. Our service revenue also includes QuickBooks technical support plans in our Small Business segment. We recognize revenue from hosted services as the services are performed, provided we have no other remaining obligations to these customers. We generally require customers to remit payroll tax funds to us in advance of the payroll date via electronic funds transfer. We include in total net revenue the interest that we earn on these funds between the time that we collect them from customers and the time that we remit them to outside parties. Service revenue for electronic payment processing services that we provide to merchants is recorded net of interchange fees charged by credit card associations. We offer several QuickBooks technical support plans and recognize support revenue over the life of the plans. Other revenue consists primarily of revenue from revenue-sharing and royalty arrangements with third-party partners. We typically recognize this revenue as earned based upon reporting provided to us by our partners. Multiple Element Arrangements We enter into multiple element revenue arrangements in which a customer may purchase a combination of software, upgrades, hosted services, technical support, and hardware. Multiple Element Arrangements That Contain Software and Software-Related Elements For multiple element arrangements that contain only software and software-related elements, such as QuickBooks desktop software and paid technical support plans, we allocate and defer revenue for the undelivered elements based on their vendor-specific objective evidence of fair value (VSOE). VSOE is the price charged when that element is sold separately. In situations where VSOE exists for all elements (delivered and undelivered), we allocate the total revenue to be earned under the arrangement among the various elements, based on their relative fair value. For arrangements where VSOE exists only for the undelivered elements, we defer the full fair value of the undelivered elements and recognize the difference between the total arrangement fee and the amount deferred for the undelivered items as revenue. If VSOE does not exist for an undelivered service element, we recognize the revenue from the entire arrangement as the services are delivered. If VSOE does not exist for undelivered elements that are specified products or features, we defer revenue until the earlier of the delivery of all elements or the point at which we determine VSOE for these undelivered elements. We recognize revenue related to the delivered products or services only if: (1) the above revenue recognition criteria are met; (2) any undelivered products or services are not essential to the functionality of the delivered products and services; (3) payment for the delivered products or services is not contingent upon delivery of the remaining products or services; and (4) we have an enforceable claim to receive the amount due in the event that we do not deliver the undelivered products or services. Multiple Element Arrangements That Contain Non-Software Elements For multiple element arrangements that contain non-software elements such as hosted services or credit card readers for mobile phones, we: (1) determine whether and when each element has been delivered; (2) determine the fair value of each element using the selling price hierarchy of vendor-specific evidence of fair value (VSOE) if available, third-party evidence (TPE) if VSOE is not available, and estimated selling price (ESP) if neither VSOE nor TPE is available; and (3) allocate the total price among the various elements using the relative selling price method. Once we have allocated the total price among the various elements, we recognize revenue when the revenue recognition criteria described above are met for each element. VSOE generally exists when we sell the deliverable separately and we are normally able to establish VSOE for all deliverables in these multiple element arrangements; however, in certain limited instances VSOE cannot be established. This may be because we do not sell the element separately, do not price products or services within a narrow range, or have a limited sales history. When VSOE cannot be established, we attempt to establish selling price for each element based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. When we are unable to establish selling price using VSOE or TPE, we use ESP in our allocation of arrangement consideration. ESP is the estimated price at which we would sell a product or service if it were sold on a stand-alone basis. We determine ESP for a product or service by considering multiple factors including, but not limited to, pricing practices, market conditions, competitive landscape, type of customer, geographies, stage of product lifecycle, internal costs, and gross margin objectives. Significant pricing practices that we take into consideration include historic contractually stated prices, volume discounts where applicable, and our price lists. The determination of ESP is made through consultation with and formal approval by management, taking into consideration our overall go-to-market strategy. |
Shipping and Handling | Shipping and Handling We record the amounts we charge our customers for the shipping and handling of our software products as product revenue and we record the related costs as cost of product revenue in our statements of operations. |
Customer Service and Technical Support | Customer Service and Technical Support We include the costs of providing customer service under paid technical support contracts and as included in certain software subscriptions on the cost of service and other revenue line in our statements of operations. We also include the costs of customer service and technical support associated with our online or hosted offerings in cost of service and other revenue. We include the costs of customer service and free technical support related to desktop offerings in selling and marketing expense in our statements of operations. Customer service and technical support costs include costs associated with performing order processing, answering customer inquiries by telephone and through websites, e-mail and other electronic means, and providing free technical support assistance to customers. We expense the cost of providing this free support as incurred. |
Software Development Costs | Software Development Costs We expense software development costs as we incur them until technological feasibility has been established, at which time those costs are capitalized until the product is available for general release to customers. To date, our software has been available for general release concurrent with the establishment of technological feasibility and, accordingly, we have not capitalized any development costs. Costs we incur to enhance our existing products or after the general release of the service using the product are expensed in the period they are incurred and included in research and development expense in our statements of operations. |
Internal Use Software | Internal Use Software We capitalize costs related to development of hosted services that we provide to our customers and internal use of enterprise-level business and finance software in support of our operational needs. Costs incurred in the application development phase are capitalized and amortized on a straight-line basis over their useful lives, which are generally three to five years. Costs related to planning and other preliminary project activities and to post-implementation activities are expensed as incurred. We test these assets for impairment whenever events or changes in circumstances occur that could impact their recoverability. |
Advertising | Advertising We expense all advertising costs as we incur them to selling and marketing expense in our statements of operations. |
Leases | Leases We review all leases for capital or operating classification at their inception. We use our incremental borrowing rate in the assessment of lease classification and define the initial lease term to include the construction build-out period but to exclude lease extension periods. We conduct our operations primarily under operating leases. For leases that contain rent escalations, we record the total rent payable during the lease term, as defined above, on a straight-line basis over the term of the lease. We record the difference between the rent paid and the straight-line rent in a deferred rent account in other current liabilities or other long-term obligations, as appropriate, on our balance sheets. We record landlord allowances as deferred rent liabilities in other current liabilities or other long-term obligations, as appropriate, on our balance sheets. We record landlord cash incentives as operating activity on our statements of cash flows. We record other landlord allowances as non-cash investing and financing activities on our statements of cash flows. We classify the amortization of landlord allowances as a reduction of occupancy expense in our statements of operations. |
Capitalization of Interest Expense | Capitalization of Interest Expense We capitalize interest on capital projects, including facilities build-out projects and internal use computer software projects. Capitalization commences with the first expenditure for the project and continues until the project is substantially complete and ready for its intended use. We amortize capitalized interest to depreciation expense using the straight-line method over the same lives as the related assets. Capitalized interest was not significant for any period presented. |
Foreign Currency | Foreign Currency The functional currencies of our international operating subsidiaries are generally the local currencies. We translate the assets and liabilities of our foreign subsidiaries at the exchange rates in effect on the balance sheet date. We translate their revenue, costs and expenses at the average rates of exchange in effect during the period. We include translation gains and losses in the stockholders’ equity section of our balance sheets. We include net gains and losses resulting from foreign exchange transactions in interest and other income in our statements of operations. Translation gains and losses and transaction gains and losses were not significant for any period presented. |
Income Taxes | Income Taxes We estimate our income taxes based on the various jurisdictions where we conduct business. Significant judgment is required in determining our worldwide income tax provision. We estimate our current tax liability and assess temporary differences that result from differing treatments of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which we show on our balance sheet. We must then assess the likelihood that our deferred tax assets will be realized. To the extent we believe that realization is not likely, we establish a valuation allowance. When we establish a valuation allowance or increase this allowance in an accounting period, we record a corresponding income tax expense in our statement of operations. We review the need for a valuation allowance to reflect uncertainties about whether we will be able to utilize some of our deferred tax assets before they expire. The valuation allowance analysis is based on our estimates of taxable income for the jurisdictions in which we operate and the periods over which our deferred tax assets will be realizable. While we have considered future taxable income in assessing the need for a valuation allowance for the periods presented, we could be required to record a valuation allowance to take into account additional deferred tax assets that we may be unable to realize. An increase in the valuation allowance would have an adverse impact, which could be material, on our income tax provision and net income in the period in which we record the increase. We recognize and measure benefits for uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained upon audit, including resolution of any related appeals or litigation processes. For tax positions that are more likely than not of being sustained upon audit, the second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Significant judgment is required to evaluate uncertain tax positions. We evaluate our uncertain tax positions on a quarterly basis. Our evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which we make the change, which could have a material impact on our effective tax rate and operating results. A description of our accounting policies associated with tax-related contingencies and valuation allowances assumed as part of a business combination is provided under “Business Combinations” below. |
Computation of Net Income (Loss) Per Share | Computation of Net Income (Loss) Per Share We compute basic net income or loss per share using the weighted average number of common shares outstanding during the period. We compute diluted net income per share using the weighted average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of the shares issuable upon the exercise of stock options and upon the vesting of restricted stock units (RSUs) under the treasury stock method. We include stock options with combined exercise prices, unrecognized compensation expense and tax benefits that are less than the average market price for our common stock, and RSUs with combined unrecognized compensation expense and tax benefits that are less than the average market price for our common stock, in the calculation of diluted net income per share. We exclude stock options with combined exercise prices, unrecognized compensation expense and tax benefits that are greater than the average market price for our common stock, and RSUs with combined unrecognized compensation expense and tax benefits that are greater than the average market price for our common stock, from the calculation of diluted net income per share because their effect is anti-dilutive. Under the treasury stock method, the amount that must be paid to exercise stock options, the amount of compensation expense for future service that we have not yet recognized for stock options and RSUs, and the amount of tax benefits that will be recorded in additional paid-in capital when the awards become deductible are assumed to be used to repurchase shares. All of the RSUs we grant have dividend rights. Dividend rights are accumulated and paid when the underlying RSUs vest. Since the dividend rights are subject to the same vesting requirements as the underlying equity awards they are considered a contingent transfer of value. Consequently, the RSUs are not considered participating securities and we do not present them separately in earnings per share. |
Cash Equivalents and Investments | Cash Equivalents and Investments We consider highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist primarily of AAA-rated money market funds in all periods presented. Investments consist of available-for-sale investment-grade debt securities that we carry at fair value. Except for direct obligations of the United States government, securities issued by agencies of the United States government, and money market funds, we diversify our investments by limiting our holdings with any individual issuer. We use the specific identification method to compute gains and losses on investments. We record unrealized gains and losses on investments, net of tax, in accumulated other comprehensive income in the stockholders’ equity section of our balance sheets and reflect unrealized gain and loss activity in other comprehensive income on our statement of comprehensive income. We generally classify available-for-sale debt securities as current assets based upon our ability and intent 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 nature of our businesses. Because of our significant business seasonality, stock repurchase programs, and acquisition opportunities, cash flow requirements may fluctuate dramatically from quarter to quarter and require us to use a significant amount of the investments we hold as available-for-sale securities. |
Accounts Receivable and Allowances for Doubtful Accounts | Accounts Receivable and Allowances for Doubtful Accounts Accounts receivable are recorded at the invoiced amount and are not interest bearing. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review our accounts receivable by aging category to identify significant customers or invoices with known disputes or collectibility issues. For those invoices not specifically identified as uncollectible, we provide an allowance based on the age of the receivable. In determining the amount of the allowance, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. We also consider our historical level of credit losses and current economic trends that might impact the level of future credit losses. When we determine that amounts are uncollectible we write them off against the allowance. |
Funds Held for Customers and Customer Fund Deposits | Funds Held for Customers and Customer Fund Deposits Funds held for customers represent cash held on behalf of our customers that is invested in cash and cash equivalents and investment grade available-for-sale debt securities. Customer fund deposits consist of amounts we owe on behalf of our customers, such as direct deposit payroll funds and payroll taxes. |
Property and Equipment | Property and Equipment Property and equipment is stated at the lower of cost or realizable value, net of accumulated depreciation. We calculate depreciation using the straight-line method over the estimated useful lives of the assets, which range from two to 30 years. We amortize leasehold improvements using the straight-line method over the lesser of their estimated useful lives or remaining lease terms. We include the amortization of assets that are recorded under capital leases in depreciation expense. |
Business Combinations | Business Combinations The acquisition method of accounting for business combinations requires us to use significant estimates and assumptions, including fair value estimates, as of the business combination date and to refine those estimates as necessary during the measurement period (defined as the period, not to exceed one year, in which we may adjust the provisional amounts recognized for a business combination). Under the acquisition method of accounting we recognize separately from goodwill the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquiree, generally at the acquisition date fair value. We measure goodwill as of the acquisition date as the excess of consideration transferred, which we also measure at fair value, over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed. Costs that we incur to complete the business combination such as investment banking, legal and other professional fees are not considered part of consideration and we charge them to general and administrative expense as they are incurred. Under the acquisition method we also account for acquired company restructuring activities that we initiate separately from the business combination. Should the initial accounting for a business combination be incomplete by the end of a reporting period that falls within the measurement period, we report provisional amounts in our financial statements. During the measurement period, we adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date and we record those adjustments to our financial statements. We apply those measurement period adjustments that we determine to be significant retrospectively to comparative information in our financial statements, including adjustments to depreciation and amortization expense. Under the acquisition method of accounting for business combinations, if we identify changes to acquired deferred tax asset valuation allowances or liabilities related to uncertain tax positions during the measurement period and they relate to new information obtained about facts and circumstances that existed as of the acquisition date, those changes are considered a measurement period adjustment and we record the offset to goodwill. We record all other changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions in current period income tax expense. This accounting applies to all of our acquisitions regardless of acquisition date. |
Goodwill, Acquired Intangible Assets and Other Long-Lived Assets | Goodwill, Acquired Intangible Assets and Other Long-Lived Assets Goodwill We record goodwill when the fair value of consideration transferred in a business combination exceeds the fair value of the identifiable assets acquired and liabilities assumed. Goodwill and other intangible assets that have indefinite useful lives are not amortized, but we test them for impairment annually during our fourth fiscal quarter and whenever an event or change in circumstances indicates that the carrying value of the asset may not be recoverable. For goodwill, we perform a two-step impairment test. In the first step, we compare the fair value of each reporting unit to its carrying value. In accordance with authoritative guidance, we define fair value as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We consider and use all valuation methods that are appropriate in estimating the fair value of our reporting units and generally use a weighted combination of income and market approaches. Under the income approach, we estimate the fair value of each reporting unit based on the present value of future cash flows. We use a number of assumptions in our discounted cash flow model, including market factors specific to the business, the amount and timing of estimated future cash flows to be generated by the business over an extended period of time, long-term growth rates for the business, and a rate of return that considers the relative risk of achieving the cash flows and the time value of money. Under the market approach, we estimate the fair value of each reporting unit based on market multiples of revenue, operating income, and earnings for comparable publicly traded companies engaged in similar businesses. If the estimated fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and no further analysis is required. If the carrying value of the net assets assigned to a reporting unit exceeds the estimated fair value of the unit, we perform the second step of the impairment test. In this step we allocate the fair value of the reporting unit calculated in step one to all of the assets and liabilities of that unit, as if we had just acquired the reporting unit in a business combination. The excess of the fair value of the reporting unit over the total amount allocated to the assets and liabilities represents the implied fair value of goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, we would record an impairment loss equal to the difference. See Note 2, “Fair Value Measurements – Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis,” for a discussion of the goodwill impairment charge that we recorded for the twelve months ended July 31, 2015. Acquired Intangible Assets and Other Long-Lived Assets We generally record acquired intangible assets that have finite useful lives, such as acquired technology, in connection with business combinations. We amortize the cost of acquired intangible assets on a straight-line basis over their estimated useful lives, which range from three to nine years. We review intangible assets that have finite useful lives and other long-lived assets whenever an event or change in circumstances indicates that the carrying value of the asset may not be recoverable. We estimate the recoverability of these assets by comparing the carrying amount of the asset to the future undiscounted cash flows that we expect the asset to generate. We estimate the fair value of assets that have finite useful lives based on the present value of future cash flows for those assets. If the carrying value of an asset with a finite life exceeds its estimated fair value, we would record an impairment loss equal to the difference. |
Share-Based Compensation Plans | Share-Based Compensation Plans We estimate the fair value of stock options granted using a lattice binomial model and a multiple option award approach. We use historical data to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest. We amortize the fair value of stock options on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods. Restricted stock units (RSUs) granted typically vest based on continued service. We value these time-based RSUs at the date of grant using the intrinsic value method, adjusted for estimated forfeitures. We amortize the fair value of time-based RSUs on a straight-line basis adjusted for estimated forfeitures over the service period. Certain RSUs granted to senior management vest based on the achievement of pre-established performance or market goals. We estimate the fair value of performance-based RSUs at the date of grant using the intrinsic value method and the probability that the specified performance criteria would be met, adjusted for estimated forfeitures. Each quarter we update our assessment of the probability that the specified performance criteria will be achieved and adjust our estimate of the fair value of the performance-based RSUs if necessary. We amortize the fair values of performance-based RSUs over the requisite service period adjusted for estimated forfeitures for each separately vesting tranche of the award. We estimate the fair value of market-based RSUs at the date of grant using a Monte Carlo valuation methodology and amortize those fair values over the requisite service period adjusted for estimated forfeitures for each separately vesting tranche of the award. The Monte Carlo methodology that we use to estimate the fair value of market-based RSUs at the date of grant incorporates into the valuation the possibility that the market condition may not be satisfied. Provided that the requisite service is rendered, the total fair value of the market-based RSUs at the date of grant must be recognized as compensation expense even if the market condition is not achieved. However, the number of shares that ultimately vest can vary significantly with the performance of the specified market criteria. All of the RSUs we grant have dividend rights that are subject to the same vesting requirements as the underlying equity awards, so we do not adjust the intrinsic (market) value of our RSUs for dividends. See Note 11, “Stockholders’ Equity,” for a description of our share-based compensation plans and more information on the assumptions we use to calculate the fair value of share-based compensation. |
Concentration of Credit Risk and Significant Customers and Suppliers | Concentration of Credit Risk and Significant Customers and Suppliers We operate in markets that are highly competitive and rapidly changing. Significant technological changes, shifting customer needs, 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 value of our significant balance of investments. Our portfolio of investments consists of investment-grade securities. Except for direct obligations of the United States government, securities issued by agencies of the United States government and money market funds, we diversify our investments by limiting our holdings with any individual issuer. We sell a significant portion of our products through third-party retailers and distributors. As a result, we face risks related to the collectibility of our accounts receivable. To appropriately manage this risk, we perform ongoing evaluations of customer credit and limit the amount of credit extended as we deem appropriate, but generally do not require collateral. We maintain reserves for estimated credit losses and these losses have historically been within our expectations. 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. No customer accounted for 10% or more of total net revenue for the twelve months ended July 31, 2016 , 2015 or 2014 , nor did any customer account for 10% or more of total accounts receivable at July 31, 2016 or July 31, 2015 . We rely primarily on one third-party vendor to perform the manufacturing and distribution functions for our retail desktop software products. We also have a key single-source vendor that prints and fulfills orders for most of our financial supplies business. While we believe that relying on key vendors improves the efficiency and reliability of our business operations, relying on any one vendor for a significant aspect of our business can have a significant negative impact on our revenue and profitability if that vendor fails to perform at acceptable service levels for any reason, including financial difficulties of the vendor. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ASU 2016-15 , “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” In August 2016 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This new standard will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2017, which means that it will be effective for us in the first quarter of our fiscal year beginning August 1, 2018. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case we would be required to apply the amendments prospectively as of the earliest date practicable. We are currently evaluating the impact of our pending adoption of ASU 2016-15 on our consolidated financial statements. ASU 2016-13 , “Financial Instruments—Credit Losses (Topic 326)” In June 2016 the FASB issued ASU 2016-13, “ Financial Instruments—Credit Losses (Topic 326). ” This new standard requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, which means that it will be effective for us in the first quarter of our fiscal year beginning August 1, 2020. Earlier adoption is permitted in the first quarter of our fiscal year beginning August 1, 2019. We are currently evaluating the impact of our pending adoption of ASU 2016-13 on our consolidated financial statements. ASU 2016-09 , “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” In March 2016 the FASB issued ASU 2016-09, “ Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ” This new standard is designed to simplify several aspects of accounting for share-based payment award transactions, which include the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The new standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, which means that it will be effective for us in the first quarter of our fiscal year beginning August 1, 2017. Early adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2016-09 on our consolidated financial statements. ASU 2016-02 , “Leases (Topic 842)” In February 2016 the FASB issued ASU 2016-02, “ Leases (Topic 842). ” This new standard amends a number of aspects of lease accounting, including requiring lessees to recognize operating leases with a term greater than one year on their balance sheet as a right-of-use asset and corresponding lease liability, measured at the present value of the lease payments. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, which means that it will be effective for us in the first quarter of our fiscal year beginning August 1, 2019. Early adoption is permitted. The new standard is required to be adopted using a modified retrospective approach. We are currently evaluating the impact of our pending adoption of ASU 2016-02 on our consolidated financial statements. ASU 2015-16 , “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments” In September 2015 the FASB issued ASU 2015-16, “ Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. ” This new standard eliminates the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected measurement or recognition of amounts initially recognized. As an alternative, the amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The new standard is effective prospectively for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, which means that it will be effective for us in the first quarter of our fiscal year beginning August 1, 2016. Early adoption is permitted. We do not believe that adoption of ASU 2015-16 will have a significant impact on our consolidated financial statements. ASU 2014-09 , “Revenue from Contracts with Customers (Topic 606)” In May 2014 the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606) ,” and in August 2015 the FASB issued ASU 2015-14, “ Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ,” which defers the effective date of ASU 2014-09 by one year. This new standard supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of the new standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible that more judgment and estimates may be required within the revenue recognition process than is required under present U.S. GAAP. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each separate performance obligation. The new standard also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The new standard is effective for reporting periods beginning after December 15, 2017, which means that it will be effective for us in the first quarter of our fiscal year beginning August 1, 2018. Early adoption of one year prior to the required effective date is permitted. The new standard allows adoption using either of two methods: (i) retrospective to each prior reporting period presented, with the option to elect certain practical expedients; or (ii) retrospective with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements. We do not expect that any other recently issued accounting pronouncements will have a significant effect on our financial statements. |
Description of Business and S26
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Accounting Policies [Abstract] | |
Composition of shares used in the computation of basic and diluted net income per share | The following table presents the composition of shares used in the computation of basic and diluted net income per share for the periods indicated. Twelve Months Ended July 31, (In millions, except per share amounts) 2016 2015 2014 Numerator: Net income from continuing operations $ 806 $ 413 $ 853 Net income (loss) from discontinued operations 173 (48 ) 54 Net income $ 979 $ 365 $ 907 Denominator: Shares used in basic per share amounts: Weighted average common shares outstanding 262 281 285 Shares used in diluted per share amounts: Weighted average common shares outstanding 262 281 285 Dilutive common equivalent shares from stock options and restricted stock awards 3 5 6 Dilutive weighted average common shares outstanding 265 286 291 Basic and diluted net income per share: Basic net income per share from continuing operations $ 3.08 $ 1.47 $ 2.99 Basic net income (loss) per share from discontinued operations 0.65 (0.17 ) 0.19 Basic net income per share $ 3.73 $ 1.30 $ 3.18 Diluted net income per share from continuing operations $ 3.04 $ 1.45 $ 2.94 Diluted net income (loss) per share from discontinued operations 0.65 (0.17 ) 0.18 Diluted net income per share $ 3.69 $ 1.28 $ 3.12 Weighted average stock options and restricted stock units excluded from calculation due to anti-dilutive effect 2 2 — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities measured at fair value on recurring basis | The following table summarizes financial assets and financial liabilities that we measured at fair value on a recurring basis at the dates indicated, classified in accordance with the fair value hierarchy described above. At July 31, 2016 At July 31, 2015 (In millions) Level 1 Level 2 Level 3 Total Fair Value Level 1 Level 2 Level 3 Total Fair Value Assets: Cash equivalents, primarily money market funds $ 416 $ — $ — $ 416 $ 695 $ — $ — $ 695 Available-for-sale debt securities: Municipal bonds — 186 — 186 — 506 — 506 Municipal auction rate securities — — 15 15 — — 15 15 Corporate notes — 420 — 420 — 546 — 546 U.S. agency securities — 36 — 36 — 12 — 12 Total available-for-sale securities — 642 15 657 — 1,064 15 1,079 Total assets measured at fair value on a recurring basis $ 416 $ 642 $ 15 $ 1,073 $ 695 $ 1,064 $ 15 $ 1,774 Liabilities: Senior notes (1) $ — $ 515 $ — $ 515 $ — $ 531 $ — $ 531 ______________________ (1) Carrying value on our balance sheets at July 31, 2016 was $500 million and at July 31, 2015 was $500 million. |
Cash equivalents and available-for-sale debt and equity securities by balance sheet classification and level in the fair value hierarchy | The following table summarizes our cash equivalents and available-for-sale debt securities by balance sheet classification and level in the fair value hierarchy at the dates shown: At July 31, 2016 At July 31, 2015 (In millions) Level 1 Level 2 Level 3 Total Fair Value Level 1 Level 2 Level 3 Total Fair Value Cash equivalents: In cash and cash equivalents $ 312 $ — $ — $ 312 $ 533 $ — $ — $ 533 In funds held for customers 104 — — 104 162 — — 162 Total cash and cash equivalents $ 416 $ — $ — $ 416 $ 695 $ — $ — $ 695 Available-for-sale securities: In investments $ — $ 442 $ — $ 442 $ — $ 889 $ — $ 889 In funds held for customers — 200 — 200 — 175 — 175 In long-term investments — — 15 15 — — 15 15 Total available-for-sale securities $ — $ 642 $ 15 $ 657 $ — $ 1,064 $ 15 $ 1,079 |
Cash and Cash Equivalents, In28
Cash and Cash Equivalents, Investments and Funds Held for Customers (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Cash and Cash Equivalents, Investments and Funds Held for Customers [Abstract] | |
Cash and cash equivalents, investments and funds held for customers by balance sheet classification | The following table summarizes our cash and cash equivalents, investments and funds held for customers by balance sheet classification at the dates indicated. July 31, 2016 July 31, 2015 (In millions) Amortized Cost Fair Value Amortized Cost Fair Value Classification on balance sheets: Cash and cash equivalents $ 638 $ 638 $ 808 $ 808 Investments 441 442 890 889 Funds held for customers 304 304 337 337 Long-term investments 28 28 27 27 Total cash and cash equivalents, investments and funds held for customers $ 1,411 $ 1,412 $ 2,062 $ 2,061 |
Cash and cash equivalents, investments and funds held for customers by investment category | The following table summarizes our cash and cash equivalents, investments and funds held for customers by investment category at the dates indicated. See Note 2 for more information on our municipal auction rate securities. July 31, 2016 July 31, 2015 (In millions) Amortized Cost Fair Value Amortized Cost Fair Value Type of issue: Total cash and cash equivalents $ 742 $ 742 $ 970 $ 970 Available-for-sale debt securities: Municipal bonds 186 186 507 506 Municipal auction rate securities 15 15 15 15 Corporate notes 419 420 546 546 U.S. agency securities 36 36 12 12 Total available-for-sale debt securities 656 657 1,080 1,079 Other long-term investments 13 13 12 12 Total cash and cash equivalents, investments and funds held for customers $ 1,411 $ 1,412 $ 2,062 $ 2,061 |
Available-for-sale debt securities classified by the stated maturity date of the security | The following table summarizes our available-for-sale debt securities classified by the stated maturity date of the security at the dates indicated. July 31, 2016 July 31, 2015 (In millions) Amortized Cost Fair Value Amortized Cost Fair Value Due within one year $ 285 $ 285 $ 434 $ 435 Due within two years 209 210 443 442 Due within three years 143 143 156 156 Due after three years 19 19 47 46 Total available-for-sale debt securities $ 656 $ 657 $ 1,080 $ 1,079 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Property and equipment consisted of the following at the dates indicated: Life in July 31, (Dollars in millions) Years 2016 2015 Equipment 3-5 $ 533 $ 447 Computer software 3-6 619 552 Furniture and fixtures 5 73 71 Leasehold improvements 2-16 296 286 Land NA 60 7 Buildings 5-30 403 192 Capital in progress NA 256 188 2,240 1,743 Less accumulated depreciation and amortization (1,209 ) (1,061 ) Total property and equipment, net $ 1,031 $ 682 __________________________ NA = Not Applicable |
Goodwill and Acquired Intangi30
Goodwill and Acquired Intangible Assets (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in the carrying value of goodwill by reportable segment during the twelve months ended July 31, 2016 and July 31, 2015 were as shown in the following table. Our reportable segments are described in Note 14, “Segment Information.” (In millions) Balance July 31, 2014 Goodwill Acquired/ Adjusted Goodwill Impairment Charges Balance July 31, 2015 Goodwill Acquired/ Adjusted Balance July 31, 2016 Small Business $ 1,213 $ 58 $ (114 ) $ 1,157 $ 16 $ 1,173 Consumer Tax 17 1 — 18 — 18 ProConnect 93 (2 ) — 91 — 91 Totals $ 1,323 $ 57 $ (114 ) $ 1,266 $ 16 $ 1,282 |
Schedule of acquired finite-lived intangible assets by major class | The following table shows the cost, accumulated amortization and weighted average life in years for our acquired intangible assets at the dates indicated. The weighted average lives are calculated for assets that are not fully amortized. (Dollars in millions) Customer Lists Purchased Technology Trade Names and Logos Covenants Not to Compete or Sue Total At July 31, 2016: Cost $ 241 $ 369 $ 23 $ 32 $ 665 Accumulated amortization (240 ) (329 ) (23 ) (29 ) (621 ) Acquired intangible assets, net $ 1 $ 40 $ — $ 3 $ 44 Weighted average life in years 5 6 NA 9 6 At July 31, 2015: Cost $ 243 $ 371 $ 24 $ 32 $ 670 Accumulated amortization (239 ) (294 ) (23 ) (27 ) (583 ) Acquired intangible assets, net $ 4 $ 77 $ 1 $ 5 $ 87 Weighted average life in years 5 5 4 9 5 |
Schedule of finite-lived intangible assets, future amortization expense | The following table shows the expected future amortization expense for our acquired intangible assets at July 31, 2016 . Amortization of purchased technology is charged to cost of service and other revenue and to amortization of acquired technology in our statements of operations. Amortization of other acquired intangible assets such as customer lists is charged to amortization of other acquired intangible assets in our statements of operations. If impairment events occur, they could accelerate the timing of acquired intangible asset charges. (In millions) Expected Future Amortization Expense Twelve months ending July 31, 2017 $ 21 2018 14 2019 6 2020 3 2021 — Thereafter — Total expected future amortization expense $ 44 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of disposal groups, including discontinued operations, income statement, balance sheet and additional disclosures | Net revenue from discontinued operations, income or loss from discontinued operations before income taxes, and the components of net income (loss) from discontinued operations were as follows for the periods indicated: Twelve Months Ended July 31, (In millions) 2016 2015 2014 Net revenue from discontinued operations: Intuit Financial Services $ — $ — $ — Intuit Health — — 1 Demandforce 49 115 107 QuickBase 54 70 57 Quicken 34 51 98 Total net revenue from discontinued operations $ 137 $ 236 $ 263 Income (loss) from discontinued operations before income taxes: Intuit Financial Services $ — $ — $ — Intuit Health — — (1 ) Demandforce (10 ) (63 ) (51 ) QuickBase 10 11 7 Quicken (2 ) (136 ) 57 Total income (loss) from discontinued operations before income taxes $ (2 ) $ (188 ) $ 12 Net income (loss) from discontinued operations: Net income from Intuit Financial Services operations $ — $ — $ — Net gain on disposal of Intuit Financial Services discontinued operations — — 36 Net loss from Intuit Health operations — — — Net gain on disposal of Intuit Health discontinued operations — — 10 Net loss from Demandforce operations (6 ) (39 ) (30 ) Net income from QuickBase operations 6 7 4 Net income (loss) from Quicken operations — (140 ) 34 Net gain on disposal of Demandforce, QuickBase, and Quicken 173 124 — Total net income (loss) from discontinued operations $ 173 $ (48 ) $ 54 The carrying amounts of the major classes of assets and liabilities of Demandforce, QuickBase, and Quicken at July 31, 2015 are shown in the following table. July 31, (In millions) 2015 Accounts receivable $ 19 Deferred income taxes 5 Prepaid and other current assets 2 Property and equipment, net 25 Goodwill 165 Purchased intangible assets, net 43 Other assets 2 Total assets 261 Accounts payable 7 Accrued compensation 21 Deferred revenue 48 Other current liabilities 17 Long-term deferred revenue 39 Long-term obligations 29 Total liabilities 161 Net assets $ 100 |
Current Liabilities (Tables)
Current Liabilities (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other current liabilities | Other current liabilities were as follows at the dates indicated: July 31, (In millions) 2016 2015 Reserve for product returns $ 7 $ 12 Reserve for rebates 14 12 Current portion of license fee payable 10 10 Current portion of deferred rent 6 8 Interest payable 11 10 Executive deferred compensation plan liabilities 69 63 Other 44 35 Total other current liabilities $ 161 $ 150 |
Long-Term Obligations and Com33
Long-Term Obligations and Commitments (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Long-Term Obligations and Commitments [Abstract] | |
Other long-term obligations | Other long-term obligations were as follows at the dates indicated: July 31, (In millions) 2016 2015 Total deferred rent $ 56 $ 49 Total license fee payable 26 34 Long-term income tax liabilities 54 45 Long-term deferred income tax liabilities 7 50 Other 20 13 Total long-term obligations 163 191 Less current portion (included in other current liabilities) (17 ) (19 ) Long-term obligations due after one year $ 146 $ 172 |
Operating leases of lessee and purchase obligations disclosure | Annual minimum commitments under purchase obligations and operating leases at July 31, 2016 were as shown in the table below. (In millions) Purchase Obligations Operating Lease Commitments Sublease Income Net Operating Lease Commitments Fiscal year ending July 31, 2017 $ 29 $ 60 $ 21 $ 39 2018 25 58 21 37 2019 7 50 17 33 2020 — 48 16 32 2021 — 46 12 34 Thereafter — 176 4 172 Total commitments $ 61 $ 438 $ 91 $ 347 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes from continuing operations | The provision for income taxes from continuing operations consisted of the following for the periods indicated: Twelve Months Ended July 31, (In millions) 2016 2015 2014 Current: Federal $ 401 $ 253 $ 358 State 33 20 21 Foreign 13 7 10 Total current 447 280 389 Deferred: Federal (42 ) 14 51 State (7 ) 1 5 Foreign (1 ) 4 2 Total deferred (50 ) 19 58 Total provision for income taxes from continuing operations $ 397 $ 299 $ 447 |
Sources of income from continuing operations before the provision for income taxes | The sources of income from continuing operations before the provision for income taxes consisted of the following for the periods indicated: Twelve Months Ended July 31, (In millions) 2016 2015 2014 United States $ 1,205 $ 716 $ 1,276 Foreign (2 ) (4 ) 24 Total $ 1,203 $ 712 $ 1,300 |
Differences between income taxes calculated using the federal statutory income tax rate and the provision for income taxes from continuing operations | Differences between income taxes calculated using the federal statutory income tax rate of 35% and the provision for income taxes from continuing operations were as follows for the periods indicated: Twelve Months Ended July 31, (In millions) 2016 2015 2014 Income from continuing operations before income taxes $ 1,203 $ 712 $ 1,300 Statutory federal income tax $ 421 $ 249 $ 455 State income tax, net of federal benefit 17 15 17 Federal research and experimentation credits (33 ) (19 ) (7 ) Domestic production activities deduction (34 ) (19 ) (25 ) Share-based compensation 16 15 8 Effects of non-U.S. operations 11 12 1 Non-deductible goodwill — 40 — Other, net (1 ) 6 (2 ) Total provision for income taxes from continuing operations $ 397 $ 299 $ 447 |
Components of deferred tax assets and liabilities | Significant deferred tax assets and liabilities were as follows at the dates indicated: July 31, (In millions) 2016 2015 Deferred tax assets: Accruals and reserves not currently deductible $ 33 $ 24 Deferred revenue 56 12 Deferred rent 14 10 Accrued and deferred compensation 55 52 Loss and tax credit carryforwards 51 44 Share-based compensation 62 52 Net basis difference in investments held for sale — 122 Other, net 11 7 Total deferred tax assets 282 323 Deferred tax liabilities: Intangible assets 86 87 Property and equipment 24 20 Total deferred tax liabilities 110 107 Total net deferred tax assets 172 216 Valuation allowance (40 ) (30 ) Total net deferred tax assets, net of valuation allowance $ 132 $ 186 |
Components of net deferred tax assets and liabilities | The components of total net deferred tax assets, net of valuation allowances, as shown on our balance sheets were as follows at the dates indicated: July 31, (In millions) 2016 2015 Current deferred income taxes $ — $ 231 Long-term deferred income taxes 139 5 Long-term deferred income taxes included in other long-term obligations (7 ) (50 ) Total net deferred tax assets, net of valuation allowance $ 132 $ 186 |
Aggregate changes in the balance of gross unrecognized tax benefits | The aggregate changes in the balance of our gross unrecognized tax benefits were as follows for the periods indicated: Twelve Months Ended July 31, (In millions) 2016 2015 2014 Gross unrecognized tax benefits, beginning balance $ 56 $ 40 $ 39 Increases related to tax positions from prior fiscal years, including acquisitions 7 15 4 Decreases related to tax positions from prior fiscal years (7 ) (1 ) (8 ) Increases related to tax positions taken during current fiscal year 15 5 5 Settlements with tax authorities (11 ) (3 ) — Gross unrecognized tax benefits, ending balance $ 60 $ 56 $ 40 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Equity [Abstract] | |
Total share-based compensation expense | The following table summarizes the total share-based compensation expense that we recorded in operating income from continuing operations for the periods shown. Twelve Months Ended July 31, (In millions except per share amounts) 2016 2015 2014 Cost of service and other revenue $ 8 $ 6 $ 7 Selling and marketing 77 69 53 Research and development 90 80 59 General and administrative 103 87 67 Total share-based compensation expense from continuing operations 278 242 186 Income tax benefit (86 ) (75 ) (60 ) Decrease in net income from continuing operations $ 192 $ 167 $ 126 Decrease in net income per share from continuing operations: Basic $ 0.73 $ 0.59 $ 0.44 Diluted $ 0.72 $ 0.58 $ 0.43 |
Assumptions used to estimate the fair value of stock options granted and shares purchased under Employee Stock Purchase Plan | We used the following assumptions to estimate the fair value of stock options granted and shares purchased under our Employee Stock Purchase Plan for the periods indicated: Twelve Months Ended July 31, 2016 2015 2014 Assumptions for stock options: Expected volatility (range) 22% - 26% 22% - 24% 22% - 24% Weighted average expected volatility 22 % 23 % 23 % Risk-free interest rate (range) 0.98% - 1.49% 1.13% - 1.47% 1.01% - 1.40% Expected dividend yield 1.06% - 1.36% 0.93% - 1.05% 0.92% - 1.06% Assumptions for ESPP: Expected volatility (range) 23% - 26% 20% - 23% 19% - 22% Weighted average expected volatility 25 % 21 % 21 % Risk-free interest rate (range) 0.06% - 0.47% 0.01% - 0.15% 0.02% - 0.08% Expected dividend yield 1.13% - 1.34% 0.96% - 1.19% 0.94% - 1.15% |
Share-based awards available for grant | A summary of share-based awards available for grant under our 2005 Equity Incentive Plan for the fiscal periods indicated was as follows: (Shares in thousands) Shares Available for Grant Balance at July 31, 2013 12,120 Additional shares authorized 19,000 Options granted (2,206 ) Restricted stock units granted (1) (8,959 ) Share-based awards canceled/forfeited/expired (1)(2) 4,248 Balance at July 31, 2014 24,203 Options granted (1,981 ) Restricted stock units granted (1) (8,053 ) Share-based awards canceled/forfeited/expired (1)(2) 3,014 Balance at July 31, 2015 17,183 Options granted (2,553 ) Restricted stock units granted (1) (9,364 ) Share-based awards canceled/forfeited/expired (1)(2) 3,724 Balance at July 31, 2016 8,990 ________________________________ (1) RSUs granted from the pool of shares available for grant under our 2005 Equity Incentive Plan reduce the pool by 2.3 shares for each share granted. RSUs forfeited and returned to the pool of shares available for grant increase the pool by 2.3 shares for each share forfeited. (2) Stock options and restricted stock units canceled, expired or forfeited under our 2005 Equity Incentive Plan are returned to the pool of shares available for grant. Stock options and restricted stock units canceled, expired or forfeited under older expired plans are not returned to the pool of shares available for grant. |
Activity under all share based compensation plans | A summary of stock option activity for the periods indicated was as follows: Options Outstanding (Shares in thousands) Number of Shares Weighted Average Exercise Price Per Share Balance at July 31, 2013 14,206 $43.77 Granted 2,206 82.15 Assumed in connection with acquisitions 261 5.16 Exercised (5,041 ) 37.74 Canceled or expired (694 ) 54.77 Balance at July 31, 2014 10,938 52.67 Granted 1,981 106.86 Exercised (3,704 ) 41.65 Canceled or expired (502 ) 62.32 Balance at July 31, 2015 8,713 69.13 Granted 2,553 113.08 Exercised (2,566 ) 48.93 Canceled or expired (354 ) 74.56 Balance at July 31, 2016 8,346 $88.55 |
Options outstanding, exercisable and expected to vest, and exercisable | Information regarding stock options outstanding as of July 31, 2016 is summarized below: Number of Shares (in thousands) Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price per Share Aggregate Intrinsic Value (in millions) Options outstanding 8,346 6.07 $88.55 $206 Options vested and expected to vest 7,693 5.89 $86.76 $203 Options exercisable 3,757 3.81 $68.38 $168 |
Additional information regarding stock options restricted stock and ESPP | Additional information regarding our stock options and ESPP shares is shown in the table below. Twelve Months Ended July 31, (In millions except per share amounts) 2016 2015 2014 Weighted average fair value of options granted (per share) $ 20.35 $ 19.39 $ 21.34 Total grant date fair value of options vested $ 32 $ 36 $ 28 Aggregate intrinsic value of options exercised $ 134 $ 191 $ 177 Share-based compensation expense for stock options and ESPP $ 48 $ 48 $ 43 Total tax benefit for stock option and ESPP share-based compensation $ 13 $ 11 $ 11 Cash received from option exercises $ 126 $ 154 $ 190 Cash tax benefits realized related to tax deductions for non-qualified option exercises and disqualifying dispositions under all share-based payment arrangements $ 47 $ 68 $ 63 |
Summary of restricted stock unit activity | A summary of restricted stock unit (RSU) activity for the periods indicated was as follows: (Shares in thousands) Number of Shares Weighted Average Grant Date Fair Value Nonvested at July 31, 2013 9,184 $55.23 Granted 3,896 71.37 Assumed or granted in connection with acquisitions 782 71.00 Vested (2,820 ) 53.98 Forfeited (1,587 ) 61.76 Nonvested at July 31, 2014 9,455 62.46 Granted 3,501 89.58 Assumed or granted in connection with acquisitions 292 91.87 Vested (3,155 ) 67.00 Forfeited (1,177 ) 62.32 Nonvested at July 31, 2015 8,916 72.48 Granted 4,072 99.30 Vested (2,392 ) 78.07 Forfeited (1,557 ) 77.03 Nonvested at July 31, 2016 9,039 $82.30 |
Additional information regarding restricted stock units | Additional information regarding our RSUs is shown in the table below. Twelve Months Ended July 31, (In millions) 2016 2015 2014 Total fair market value of shares vested $ 288 $ 282 $ 204 Share-based compensation for RSUs $ 230 $ 194 $ 143 Total tax benefit related to RSU share-based compensation expense $ 73 $ 64 $ 49 Cash tax benefits realized for tax deductions for RSUs $ 92 $ 96 $ 134 |
Schedule of accumulated other comprehensive income (loss) | The following table shows the components of accumulated other comprehensive loss, net of income taxes, in the stockholders’ equity section of our balance sheets at the dates indicated. July 31, (In millions) 2016 2015 Unrealized gains on available-for-sale debt securities $ 1 $ — Foreign currency translation adjustments (33 ) (30 ) Total accumulated other comprehensive loss $ (32 ) $ (30 ) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Segment Reporting [Abstract] | |
Financial results by reportable segment | The following table shows our financial results by reportable segment for the periods indicated. Results for all periods presented have been adjusted to exclude results for our Demandforce, QuickBase, and Quicken businesses, which we classified as discontinued operations in the fourth quarter of fiscal 2015. Results for all periods presented also exclude results for our Intuit Financial Services and Intuit Health businesses, which we classified as discontinued operations in the fourth quarter of fiscal 2013. See Note 7, “ Discontinued Operations,” for more information. Twelve Months Ended July 31, (In millions) 2016 2015 2014 Net revenue: Small Business $ 2,293 $ 2,108 $ 2,158 Consumer Tax 1,973 1,800 1,663 ProConnect 428 284 422 Total net revenue $ 4,694 $ 4,192 $ 4,243 Operating income from continuing operations: Small Business 874 696 852 Consumer Tax 1,287 1,131 1,075 ProConnect 268 108 268 Total segment operating income 2,429 1,935 2,195 Unallocated corporate items: Share-based compensation expense (278 ) (242 ) (186 ) Other common expenses (875 ) (765 ) (684 ) Amortization of acquired technology (22 ) (30 ) (18 ) Amortization of other acquired intangible assets (12 ) (12 ) (7 ) Goodwill and intangible asset impairment charges — (148 ) — Total unallocated corporate items (1,187 ) (1,197 ) (895 ) Total operating income from continuing operations $ 1,242 $ 738 $ 1,300 |
Selected Quarterly Financial 37
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Jul. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | The following tables contain selected quarterly financial data for the twelve months ended July 31, 2016 and July 31, 2015 . We have classified our Demandforce, QuickBase, and Quicken businesses as discontinued operations and as a result have segregated their operating results from continuing operations in our statements of operations and in these tables. See Note 7, “ Discontinued Operations,” for more information. Fiscal 2016 Quarter Ended (In millions, except per share amounts) October 31 January 31 April 30 July 31 Total net revenue $ 713 $ 923 $ 2,304 $ 754 Cost of revenue 166 199 216 171 All other costs and expenses 576 682 803 639 Operating income (loss) from continuing operations (29 ) 42 1,285 (56 ) Net income (loss) from continuing operations (31 ) 29 848 (40 ) Net income (loss) from discontinued operations — (5 ) 178 — Net income (loss) (31 ) 24 1,026 (40 ) Basic net income (loss) per share from continuing operations $ (0.11 ) $ 0.11 $ 3.30 $ (0.16 ) Basic net income (loss) per share from discontinued operations — (0.02 ) 0.70 — Basic net income (loss) per share $ (0.11 ) $ 0.09 $ 4.00 $ (0.16 ) Diluted net income (loss) per share from continuing operations $ (0.11 ) $ 0.11 $ 3.26 $ (0.16 ) Diluted net income (loss) per share from discontinued operations — (0.02 ) 0.68 — Diluted net income (loss) per share $ (0.11 ) $ 0.09 $ 3.94 $ (0.16 ) Fiscal 2015 Quarter Ended (In millions, except per share amounts) October 31 January 31 April 30 July 31 Total net revenue $ 612 $ 749 $ 2,135 $ 696 Cost of revenue 159 188 202 176 All other costs and expenses 562 650 867 650 Operating income (loss) from continuing operations (109 ) (89 ) 1,066 (130 ) Net income (loss) from continuing operations (81 ) (60 ) 656 (102 ) Net income (loss) from discontinued operations (3 ) (6 ) (155 ) 116 Net income (loss) (84 ) (66 ) 501 14 Basic net income (loss) per share from continuing operations $ (0.28 ) $ (0.21 ) $ 2.37 $ (0.37 ) Basic net income (loss) per share from discontinued operations (0.01 ) (0.02 ) (0.56 ) 0.42 Basic net income (loss) per share $ (0.29 ) $ (0.23 ) $ 1.81 $ 0.05 Diluted net income (loss) per share from continuing operations $ (0.28 ) $ (0.21 ) $ 2.33 $ (0.37 ) Diluted net income (loss) per share from discontinued operations (0.01 ) (0.02 ) (0.55 ) 0.42 Diluted net income (loss) per share $ (0.29 ) $ (0.23 ) $ 1.78 $ 0.05 |
Description of Business and S38
Description of Business and Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | |
Numerator: | |||||||||||
Net income from continuing operations | $ (40) | $ 848 | $ 29 | $ (31) | $ (102) | $ 656 | $ (60) | $ (81) | $ 806 | $ 413 | $ 853 |
Net income (loss) from discontinued operations | 0 | 178 | (5) | 0 | 116 | (155) | (6) | (3) | 173 | (48) | 54 |
Net income | $ (40) | $ 1,026 | $ 24 | $ (31) | $ 14 | $ 501 | $ (66) | $ (84) | $ 979 | $ 365 | $ 907 |
Shares used in basic per share amounts: | |||||||||||
Weighted average common shares outstanding | 262 | 281 | 285 | ||||||||
Shares used in diluted per share amounts: | |||||||||||
Weighted average common shares outstanding | 262 | 281 | 285 | ||||||||
Dilutive common equivalent shares from stock options and restricted stock awards | 3 | 5 | 6 | ||||||||
Dilutive weighted average common shares outstanding | 265 | 286 | 291 | ||||||||
Basic and diluted net income per share: | |||||||||||
Basic net income per share from continuing operations | $ (0.16) | $ 3.30 | $ 0.11 | $ (0.11) | $ (0.37) | $ 2.37 | $ (0.21) | $ (0.28) | $ 3.08 | $ 1.47 | $ 2.99 |
Basic net income (loss) per share from discontinued operations | 0 | 0.70 | (0.02) | 0 | 0.42 | (0.56) | (0.02) | (0.01) | 0.65 | (0.17) | 0.19 |
Basic net income per share | (0.16) | 4 | 0.09 | (0.11) | 0.05 | 1.81 | (0.23) | (0.29) | 3.73 | 1.30 | 3.18 |
Diluted net income per share from continuing operations | (0.16) | 3.26 | 0.11 | (0.11) | (0.37) | 2.33 | (0.21) | (0.28) | 3.04 | 1.45 | 2.94 |
Diluted net income (loss) per share from discontinued operations | 0 | 0.68 | (0.02) | 0 | 0.42 | (0.55) | (0.02) | (0.01) | 0.65 | (0.17) | 0.18 |
Diluted net income per share | $ (0.16) | $ 3.94 | $ 0.09 | $ (0.11) | $ 0.05 | $ 1.78 | $ (0.23) | $ (0.29) | $ 3.69 | $ 1.28 | $ 3.12 |
Weighted average stock options and restricted stock units excluded from calculation due to anti-dilutive effect | 2 | 2 | 0 | ||||||||
Description of Business and Summary of Significant Accounting Policies (Textuals) | |||||||||||
Period of revenue recognition for software product enhancements and connected services | 3 years | ||||||||||
Advertising expense | $ 229 | $ 229 | $ 171 | ||||||||
Business combination, measurement period | 1 year | ||||||||||
Finite-lived intangible asset, useful life (in years) | 6 years | 5 years | |||||||||
Sales Revenue, Net | |||||||||||
Description of Business and Summary of Significant Accounting Policies (Textuals) | |||||||||||
Concentration risk, percentage | 0.00% | 0.00% | 0.00% | ||||||||
Accounts Receivable | |||||||||||
Description of Business and Summary of Significant Accounting Policies (Textuals) | |||||||||||
Concentration risk, percentage | 0.00% | 0.00% | |||||||||
Minimum | |||||||||||
Description of Business and Summary of Significant Accounting Policies (Textuals) | |||||||||||
Property, plant and equipment, useful life (in years) | 2 years | ||||||||||
Finite-lived intangible asset, useful life (in years) | 3 years | ||||||||||
Maximum | |||||||||||
Description of Business and Summary of Significant Accounting Policies (Textuals) | |||||||||||
Property, plant and equipment, useful life (in years) | 30 years | ||||||||||
Finite-lived intangible asset, useful life (in years) | 9 years | ||||||||||
Software Development | Minimum | |||||||||||
Description of Business and Summary of Significant Accounting Policies (Textuals) | |||||||||||
Property, plant and equipment, useful life (in years) | 3 years | ||||||||||
Software Development | Maximum | |||||||||||
Description of Business and Summary of Significant Accounting Policies (Textuals) | |||||||||||
Property, plant and equipment, useful life (in years) | 5 years |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jul. 31, 2016 | Jul. 31, 2015 | |
Available-for-sale securities: | |||
Total available-for-sale securities | $ 1,412 | $ 2,061 | |
Liabilities: | |||
Senior Notes | 500 | 500 | |
Municipal bonds | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 186 | 506 | |
Municipal auction rate securities | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 15 | 15 | |
Corporate notes | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 420 | 546 | |
U.S. agency securities | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 36 | 12 | |
Fair Value, Measurements, Recurring | |||
Assets: | |||
Cash equivalents, primarily money market funds | 416 | 695 | |
Available-for-sale securities: | |||
Total available-for-sale securities | 657 | 1,079 | |
Total assets measured at fair value on a recurring basis | 1,073 | 1,774 | |
Liabilities: | |||
Senior notes | [1] | 515 | 531 |
Fair Value, Measurements, Recurring | Municipal bonds | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 186 | 506 | |
Fair Value, Measurements, Recurring | Municipal auction rate securities | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 15 | 15 | |
Fair Value, Measurements, Recurring | Corporate notes | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 420 | 546 | |
Fair Value, Measurements, Recurring | U.S. agency securities | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 36 | 12 | |
Fair Value, Measurements, Recurring | Level 1 | |||
Assets: | |||
Cash equivalents, primarily money market funds | 416 | 695 | |
Available-for-sale securities: | |||
Total available-for-sale securities | 0 | 0 | |
Total assets measured at fair value on a recurring basis | 416 | 695 | |
Liabilities: | |||
Senior notes | [1] | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Municipal bonds | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Municipal auction rate securities | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Corporate notes | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | U.S. agency securities | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | |||
Assets: | |||
Cash equivalents, primarily money market funds | 0 | 0 | |
Available-for-sale securities: | |||
Total available-for-sale securities | 642 | 1,064 | |
Total assets measured at fair value on a recurring basis | 642 | 1,064 | |
Liabilities: | |||
Senior notes | [1] | 515 | 531 |
Fair Value, Measurements, Recurring | Level 2 | Municipal bonds | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 186 | 506 | |
Fair Value, Measurements, Recurring | Level 2 | Municipal auction rate securities | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Corporate notes | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 420 | 546 | |
Fair Value, Measurements, Recurring | Level 2 | U.S. agency securities | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 36 | 12 | |
Fair Value, Measurements, Recurring | Level 3 | |||
Assets: | |||
Cash equivalents, primarily money market funds | 0 | 0 | |
Available-for-sale securities: | |||
Total available-for-sale securities | 15 | 15 | |
Total assets measured at fair value on a recurring basis | 15 | 15 | |
Liabilities: | |||
Senior notes | [1] | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Municipal bonds | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Municipal auction rate securities | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 15 | 15 | |
Fair Value, Measurements, Recurring | Level 3 | Corporate notes | |||
Available-for-sale securities: | |||
Total available-for-sale securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | U.S. agency securities | |||
Available-for-sale securities: | |||
Total available-for-sale securities | $ 0 | $ 0 | |
[1] | Carrying value on our balance sheets at July 31, 2016 was $500 million and at July 31, 2015 was $500 million. |
Fair Value Measurements (Deta40
Fair Value Measurements (Details 2) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Jul. 31, 2016 | Jul. 31, 2015 |
Cash equivalents: | ||
Cash equivalents | $ 416 | $ 695 |
Available-for-sale securities: | ||
Investments | 657 | 1,079 |
Level 1 | ||
Cash equivalents: | ||
Cash equivalents | 416 | 695 |
Available-for-sale securities: | ||
Investments | 0 | 0 |
Level 2 | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Available-for-sale securities: | ||
Investments | 642 | 1,064 |
Level 3 | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Available-for-sale securities: | ||
Investments | 15 | 15 |
Cash and cash equivalents | ||
Cash equivalents: | ||
Cash equivalents | 312 | 533 |
Cash and cash equivalents | Level 1 | ||
Cash equivalents: | ||
Cash equivalents | 312 | 533 |
Cash and cash equivalents | Level 2 | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Cash and cash equivalents | Level 3 | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Cash equivalents in funds held for customers | ||
Cash equivalents: | ||
Cash equivalents | 104 | 162 |
Cash equivalents in funds held for customers | Level 1 | ||
Cash equivalents: | ||
Cash equivalents | 104 | 162 |
Cash equivalents in funds held for customers | Level 2 | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Cash equivalents in funds held for customers | Level 3 | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Available for sale debt securities in investments | ||
Available-for-sale securities: | ||
Investments | 442 | 889 |
Available for sale debt securities in investments | Level 1 | ||
Available-for-sale securities: | ||
Investments | 0 | 0 |
Available for sale debt securities in investments | Level 2 | ||
Available-for-sale securities: | ||
Investments | 442 | 889 |
Available for sale debt securities in investments | Level 3 | ||
Available-for-sale securities: | ||
Investments | 0 | 0 |
Available for sale debt securities in funds held for customers | ||
Available-for-sale securities: | ||
Investments | 200 | 175 |
Available for sale debt securities in funds held for customers | Level 1 | ||
Available-for-sale securities: | ||
Investments | 0 | 0 |
Available for sale debt securities in funds held for customers | Level 2 | ||
Available-for-sale securities: | ||
Investments | 200 | 175 |
Available for sale debt securities in funds held for customers | Level 3 | ||
Available-for-sale securities: | ||
Investments | 0 | 0 |
Available for sale securities in long term investments | ||
Available-for-sale securities: | ||
Investments | 15 | 15 |
Available for sale securities in long term investments | Level 1 | ||
Available-for-sale securities: | ||
Investments | 0 | 0 |
Available for sale securities in long term investments | Level 2 | ||
Available-for-sale securities: | ||
Investments | 0 | 0 |
Available for sale securities in long term investments | Level 3 | ||
Available-for-sale securities: | ||
Investments | $ 15 | $ 15 |
Fair Value Measurements (Deta41
Fair Value Measurements (Details 3) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2015 | Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2016 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Goodwill, impairment loss | $ 114,000,000 | $ 0 | ||
Goodwill | 1,266,000,000 | 1,323,000,000 | $ 1,282,000,000 | |
Fair Value, Measurements, Recurring | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Investments | 1,079,000,000 | 657,000,000 | ||
Consumer Tax | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Goodwill, impairment loss | 0 | |||
Goodwill | 18,000,000 | $ 17,000,000 | 18,000,000 | |
Consumer Ecosystem | Consumer Tax | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Goodwill, impairment loss | $ 263,000,000 | |||
Goodwill | $ 211,000,000 | |||
Level 3 | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Investments | $ 15,000,000 | $ 15,000,000 |
Cash and Cash Equivalents, In42
Cash and Cash Equivalents, Investments and Funds Held for Customers (Details) - USD ($) $ in Millions | Jul. 31, 2016 | Jul. 31, 2015 |
Classification on balance sheets: | ||
Available-for-sale securities, amortized cost basis | $ 1,411 | $ 2,062 |
Available-for-sale securities, fair value disclosure | 1,412 | 2,061 |
Total cash and cash equivalents investments and funds held for customers | 1,411 | 2,062 |
Available-for-sale debt securities classified by the stated maturity date of the security | ||
Due within one year, amortized cost | 285 | 434 |
Due within one year, fair value | 285 | 435 |
Due within two years, amortized cost | 209 | 443 |
Due within two years, fair value | 210 | 442 |
Due within three years, amortized cost | 143 | 156 |
Due within three years, fair value | 143 | 156 |
Due after three years, amortized cost | 19 | 47 |
Due after three years, fair value | 19 | 46 |
Total available-for-sale debt securities, amortized cost | 656 | 1,080 |
Total available-for-sale debt securities, fair value | 657 | 1,079 |
Cash and cash equivalents including funds held for customers | ||
Classification on balance sheets: | ||
Available-for-sale securities, amortized cost basis | 742 | 970 |
Available-for-sale securities, fair value disclosure | 742 | 970 |
Municipal bonds | ||
Classification on balance sheets: | ||
Available-for-sale securities, amortized cost basis | 186 | 507 |
Available-for-sale securities, fair value disclosure | 186 | 506 |
Municipal auction rate securities | ||
Classification on balance sheets: | ||
Available-for-sale securities, amortized cost basis | 15 | 15 |
Available-for-sale securities, fair value disclosure | 15 | 15 |
Corporate notes | ||
Classification on balance sheets: | ||
Available-for-sale securities, amortized cost basis | 419 | 546 |
Available-for-sale securities, fair value disclosure | 420 | 546 |
U.S. agency securities | ||
Classification on balance sheets: | ||
Available-for-sale securities, amortized cost basis | 36 | 12 |
Available-for-sale securities, fair value disclosure | 36 | 12 |
Available-for-sale debt securities | ||
Classification on balance sheets: | ||
Available-for-sale securities, amortized cost basis | 656 | 1,080 |
Available-for-sale securities, fair value disclosure | 657 | 1,079 |
Other long-term investments | ||
Available-for-sale securities: | ||
Other long-term investments | 13 | 12 |
Cash and cash equivalents | ||
Classification on balance sheets: | ||
Available-for-sale securities, amortized cost basis | 638 | 808 |
Available-for-sale securities, fair value disclosure | 638 | 808 |
Short-term investments | ||
Classification on balance sheets: | ||
Available-for-sale securities, amortized cost basis | 441 | 890 |
Available-for-sale securities, fair value disclosure | 442 | 889 |
Funds held for customers | ||
Classification on balance sheets: | ||
Available-for-sale securities, amortized cost basis | 304 | 337 |
Available-for-sale securities, fair value disclosure | 304 | 337 |
Long-term investment | ||
Classification on balance sheets: | ||
Available-for-sale securities, amortized cost basis | 28 | 27 |
Available-for-sale securities, fair value disclosure | 28 | 27 |
Fair value measurement | Other long-term investments | ||
Available-for-sale securities: | ||
Other long-term investments | $ 13 | $ 12 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2016 | Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||||
Equipment | $ 533 | $ 447 | ||
Computer software | 619 | 552 | ||
Furniture and fixtures | 73 | 71 | ||
Leasehold improvements | 296 | 286 | ||
Land | 60 | 7 | ||
Buildings | 403 | 192 | ||
Capital in progress | 256 | 188 | ||
Total property plant and equipment, gross | 2,240 | 1,743 | ||
Less accumulated depreciation and amortization | (1,209) | (1,061) | ||
Total property and equipment, net | 1,031 | 682 | ||
Capitalized computer software, additions | 103 | 116 | $ 80 | |
Capitalized labor costs | $ 80 | 89 | $ 46 | |
Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 2 years | |||
Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 30 years | |||
Equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 3 years | |||
Equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 5 years | |||
Computer software | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 3 years | |||
Computer software | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 6 years | |||
Furniture and fixtures | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 5 years | |||
Furniture and fixtures | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 5 years | |||
Leasehold improvements | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 2 years | |||
Leasehold improvements | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 16 years | |||
Buildings | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 5 years | |||
Buildings | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 30 years | |||
Land and Buildings | ||||
Property, Plant and Equipment [Line Items] | ||||
Capital in progress | $ 172 | $ 100 | ||
Building and Building Improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, additions | $ 262 |
Goodwill and Acquired Intangi44
Goodwill and Acquired Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning | $ 1,266,000,000 | $ 1,323,000,000 | |
Goodwill Acquired/ Adjusted | 16,000,000 | 57,000,000 | |
Goodwill Impairment Charges | (114,000,000) | $ 0 | |
Goodwill, ending | 1,282,000,000 | 1,266,000,000 | 1,323,000,000 |
Small Business | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning | 1,157,000,000 | 1,213,000,000 | |
Goodwill Acquired/ Adjusted | 16,000,000 | 58,000,000 | |
Goodwill Impairment Charges | (114,000,000) | ||
Goodwill, ending | 1,173,000,000 | 1,157,000,000 | 1,213,000,000 |
Consumer Tax | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning | 18,000,000 | 17,000,000 | |
Goodwill Acquired/ Adjusted | 0 | 1,000,000 | |
Goodwill Impairment Charges | 0 | ||
Goodwill, ending | 18,000,000 | 18,000,000 | 17,000,000 |
ProConnect | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning | 91,000,000 | 93,000,000 | |
Goodwill Acquired/ Adjusted | 0 | (2,000,000) | |
Goodwill Impairment Charges | 0 | ||
Goodwill, ending | $ 91,000,000 | $ 91,000,000 | $ 93,000,000 |
Goodwill and Acquired Intangi45
Goodwill and Acquired Intangible Assets Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Finite-Lived Intangible Assets [Abstract] | ||
Cost | $ 665 | $ 670 |
Accumulated amortization | (621) | (583) |
Acquired intangible assets, net | $ 44 | $ 87 |
Weighted average life in years | 6 years | 5 years |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2,016 | $ 21 | |
2,017 | 14 | |
2,018 | 6 | |
2,019 | 3 | |
2,020 | 0 | |
Thereafter | 0 | |
Acquired intangible assets, net | 44 | $ 87 |
Customer Lists | ||
Finite-Lived Intangible Assets [Abstract] | ||
Cost | 241 | 243 |
Accumulated amortization | (240) | (239) |
Acquired intangible assets, net | $ 1 | $ 4 |
Weighted average life in years | 5 years | 5 years |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Acquired intangible assets, net | $ 1 | $ 4 |
Purchased Technology | ||
Finite-Lived Intangible Assets [Abstract] | ||
Cost | 369 | 371 |
Accumulated amortization | (329) | (294) |
Acquired intangible assets, net | $ 40 | $ 77 |
Weighted average life in years | 6 years | 5 years |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Acquired intangible assets, net | $ 40 | $ 77 |
Trade Names and Logos | ||
Finite-Lived Intangible Assets [Abstract] | ||
Cost | 23 | 24 |
Accumulated amortization | (23) | (23) |
Acquired intangible assets, net | 0 | $ 1 |
Weighted average life in years | 4 years | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Acquired intangible assets, net | 0 | $ 1 |
Covenants Not to Compete or Sue | ||
Finite-Lived Intangible Assets [Abstract] | ||
Cost | 32 | 32 |
Accumulated amortization | (29) | (27) |
Acquired intangible assets, net | $ 3 | $ 5 |
Weighted average life in years | 9 years | 9 years |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Acquired intangible assets, net | $ 3 | $ 5 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Millions | Jun. 16, 2014 | Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 |
Business Combinations (Textuals) | ||||
Goodwill | $ 1,282 | $ 1,266 | $ 1,323 | |
Check Inc. | ||||
Business Combinations (Textuals) | ||||
Cost of acquired entity | $ 369 | |||
Purchase consideration | 342 | |||
Fair value of assumed equity awards | 27 | |||
Fair value of assumed equity awards, expected service period, in years | 4 years | |||
Net tangible assets acquired | 14 | |||
Intangible assets acquired | 35 | |||
Goodwill | $ 293 |
Discontinued Operations (Detail
Discontinued Operations (Details) | Aug. 01, 2013USD ($) | Oct. 31, 2013USD ($) | Jul. 31, 2013USD ($) | Jul. 31, 2016USD ($)business | Jul. 31, 2015USD ($) | Jul. 31, 2014USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from divestiture of businesses | $ 463,000,000 | $ 0 | $ 1,025,000,000 | ||||
Discontinued Operations (Textuals) | |||||||
Pre-tax gain (loss) on sale of discontinued operations | [1] | 354,000,000 | 0 | 40,000,000 | |||
Demandforce, QuickBase, and Quicken | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from divestiture of businesses | 463,000,000 | ||||||
Discontinued Operations (Textuals) | |||||||
Pre-tax gain (loss) on sale of discontinued operations | [1] | $ 354,000,000 | |||||
Number of businesses disposed | business | 3 | ||||||
Income tax expense (benefit) from discontinued operations | $ 179,000,000 | ||||||
Net gain (loss) on disposal of business | (173,000,000) | (124,000,000) | 0 | ||||
Intuit Financial Services | |||||||
Discontinued Operations (Textuals) | |||||||
Gross proceeds from sale of business | $ 1,025,000,000 | ||||||
Pre-tax gain (loss) on sale of discontinued operations | $ 44,000,000 | ||||||
Income tax expense (benefit) from discontinued operations | 8,000,000 | ||||||
Net gain (loss) on disposal of business | 36,000,000 | 0 | 0 | 36,000,000 | |||
Impairment of long-lived assets to be disposed of | $ 0 | ||||||
Intuit Health | |||||||
Discontinued Operations (Textuals) | |||||||
Pre-tax gain (loss) on sale of discontinued operations | (4,000,000) | ||||||
Income tax expense (benefit) from discontinued operations | (14,000,000) | ||||||
Net gain (loss) on disposal of business | $ 10,000,000 | $ 0 | $ 0 | $ 10,000,000 | |||
Impairment of long-lived assets to be disposed of | $ 0 | ||||||
[1] | Because the cash flows of our discontinued operations were not material for any period presented, we have not segregated the cash flows of those businesses on these statements of cash flows. We have presented the effect of the pre-tax gains on the disposals on these statements of cash flows. See Note 7, “Discontinued Operations,” for more information. |
Discontinued Operations Balance
Discontinued Operations Balance Sheet (Details) - USD ($) $ in Millions | Jul. 31, 2016 | Jul. 31, 2015 |
Disposal Group, Including Discontinued Operation, Liabilities [Abstract] | ||
Total assets | $ 4,250 | $ 4,968 |
Demandforce, QuickBase, and Quicken | ||
Disposal Group, Including Discontinued Operation, Assets [Abstract] | ||
Accounts receivable | 19 | |
Deferred income taxes | 5 | |
Prepaid and other current assets | 2 | |
Property and equipment, net | 25 | |
Goodwill | 165 | |
Purchased intangible assets, net | 43 | |
Other assets | 2 | |
Total assets | 261 | |
Disposal Group, Including Discontinued Operation, Liabilities [Abstract] | ||
Accounts payable | 7 | |
Accrued compensation | 21 | |
Deferred revenue | 48 | |
Other current liabilities | 17 | |
Long-term deferred revenue | 39 | |
Long-term obligations | 29 | |
Total liabilities | 161 | |
Total assets | $ 100 |
Discontinued Operations Net Inc
Discontinued Operations Net Income (loss) from Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2013 | Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net revenue from discontinued operations | $ 137 | $ 236 | $ 263 | |
Income (loss) from discontinued operations before income taxes | (2) | (188) | 12 | |
Net income (loss) from discontinued operations | 173 | (48) | 54 | |
Intuit Financial Services | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net revenue from discontinued operations | 0 | 0 | 0 | |
Income (loss) from discontinued operations before income taxes | 0 | 0 | 0 | |
Net income (loss) from discontinued operations | 0 | 0 | 0 | |
Net gain (loss) on disposal of business | $ 36 | 0 | 0 | 36 |
Intuit Health | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net revenue from discontinued operations | 0 | 0 | 1 | |
Income (loss) from discontinued operations before income taxes | 0 | 0 | (1) | |
Net income (loss) from discontinued operations | 0 | 0 | 0 | |
Net gain (loss) on disposal of business | $ 10 | 0 | 0 | 10 |
Demandforce | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net revenue from discontinued operations | 49 | 115 | 107 | |
Income (loss) from discontinued operations before income taxes | (10) | (63) | (51) | |
Net income (loss) from discontinued operations | (6) | (39) | (30) | |
QuickBase | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net revenue from discontinued operations | 54 | 70 | 57 | |
Income (loss) from discontinued operations before income taxes | 10 | 11 | 7 | |
Net income (loss) from discontinued operations | 6 | 7 | 4 | |
Quicken | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net revenue from discontinued operations | 34 | 51 | 98 | |
Income (loss) from discontinued operations before income taxes | (2) | (136) | 57 | |
Net income (loss) from discontinued operations | 0 | (140) | 34 | |
Demandforce, QuickBase, and Quicken | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net gain (loss) on disposal of business | $ (173) | $ (124) | $ 0 |
Current Liabilities (Details)
Current Liabilities (Details) | Feb. 01, 2016USD ($) | Jul. 31, 2016USD ($) | Jul. 31, 2015USD ($) | Jul. 31, 2014USD ($) | Mar. 12, 2007USD ($) |
Other Current Liabilities | |||||
Reserve for product returns | $ 7,000,000 | $ 12,000,000 | |||
Reserve for rebates | 14,000,000 | 12,000,000 | |||
Current portion of license fee payable | 10,000,000 | 10,000,000 | |||
Current portion of deferred rent | 6,000,000 | 8,000,000 | |||
Interest payable | 11,000,000 | 10,000,000 | |||
Executive deferred compensation plan liabilities | 69,000,000 | 63,000,000 | |||
Other | 44,000,000 | 35,000,000 | |||
Total other current liabilities | 161,000,000 | 150,000,000 | |||
Interest paid | 37,000,000 | 32,000,000 | $ 32,000,000 | ||
Proceeds from borrowings under revolving credit facilities | 995,000,000 | 0 | 0 | ||
Repayments on borrowings under revolving credit facilities | (995,000,000) | 0 | 0 | ||
5.75 percent fixed-rate notes due 2017 | |||||
Current Liabilities (Textuals) | |||||
Senior notes | $ 500,000,000 | ||||
Other Current Liabilities | |||||
Senior notes, rate | 5.75% | ||||
Interest paid | 29,000,000 | $ 29,000,000 | $ 29,000,000 | ||
Term loan | $ 500,000,000 | ||||
February 1, 2016 Credit Agreement | |||||
Other Current Liabilities | |||||
Debt instrument, term | 5 years | ||||
Master credit agreement amount | $ 1,500,000,000 | ||||
Term Loan | |||||
Other Current Liabilities | |||||
Interest paid | 4,000,000 | ||||
Unsecured Debt | Revolving Credit Facility | |||||
Other Current Liabilities | |||||
Long-term Line of Credit | $ 745,000,000 | ||||
Line of Credit | February 1, 2016 Credit Agreement | |||||
Other Current Liabilities | |||||
Debt Instrument, Covenant, Debt To EBITDA Ratio, Maximum | 3.25 | ||||
Debt Instrument, Covenant, EBITDA To Annual Interest Expense Ratio, Minimum | 3 | ||||
Line of Credit | Revolving Credit Facility | February 1, 2016 Credit Agreement | |||||
Other Current Liabilities | |||||
Line of credit facility, face amount | $ 1,000,000,000 | ||||
Line Of Credit Facility, Increase Limit | $ 250,000,000 | ||||
Debt Instrument, Maturity Date Extension | 2 | ||||
Proceeds from borrowings under revolving credit facilities | 250,000,000 | ||||
Repayments on borrowings under revolving credit facilities | (250,000,000) | ||||
Fair value of amount outstanding | $ 0 | ||||
Line of Credit | Term Loan | February 1, 2016 Credit Agreement | |||||
Current Liabilities (Textuals) | |||||
Senior notes | $ 500,000,000 | ||||
Other Current Liabilities | |||||
Term loan | $ 500,000,000 | ||||
Base Rate | Line of Credit | Revolving Credit Facility | February 1, 2016 Credit Agreement | Minimum | |||||
Current Liabilities (Textuals) | |||||
Libor plus variable interest rate on advances under credit facilities | 0.00% | ||||
Base Rate | Line of Credit | Revolving Credit Facility | February 1, 2016 Credit Agreement | Maximum | |||||
Current Liabilities (Textuals) | |||||
Libor plus variable interest rate on advances under credit facilities | 0.50% | ||||
Base Rate | Line of Credit | Term Loan | February 1, 2016 Credit Agreement | Minimum | |||||
Current Liabilities (Textuals) | |||||
Libor plus variable interest rate on advances under credit facilities | 0.125% | ||||
Base Rate | Line of Credit | Term Loan | February 1, 2016 Credit Agreement | Maximum | |||||
Current Liabilities (Textuals) | |||||
Libor plus variable interest rate on advances under credit facilities | 0.875% | ||||
London Interbank Offered Rate (LIBOR) | Line of Credit | Revolving Credit Facility | February 1, 2016 Credit Agreement | Minimum | |||||
Current Liabilities (Textuals) | |||||
Libor plus variable interest rate on advances under credit facilities | 0.90% | ||||
London Interbank Offered Rate (LIBOR) | Line of Credit | Revolving Credit Facility | February 1, 2016 Credit Agreement | Maximum | |||||
Current Liabilities (Textuals) | |||||
Libor plus variable interest rate on advances under credit facilities | 1.50% | ||||
London Interbank Offered Rate (LIBOR) | Line of Credit | Term Loan | February 1, 2016 Credit Agreement | Minimum | |||||
Current Liabilities (Textuals) | |||||
Libor plus variable interest rate on advances under credit facilities | 1.125% | ||||
London Interbank Offered Rate (LIBOR) | Line of Credit | Term Loan | February 1, 2016 Credit Agreement | Maximum | |||||
Current Liabilities (Textuals) | |||||
Libor plus variable interest rate on advances under credit facilities | 1.875% |
Long-Term Obligations and Com51
Long-Term Obligations and Commitments (Details) - USD ($) | Feb. 01, 2016 | May 31, 2009 | Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | Mar. 12, 2007 |
Long Term Obligations And Commitments (Textuals) | ||||||
Cash paid to license technology | $ 20,000,000 | |||||
Amount payable over next ten fiscal years for agreement to license technology | $ 100,000,000 | |||||
Operating lease, term | 10 years | |||||
Present value of license technology agreement | $ 89,000,000 | |||||
Years lease term can be extended under lease option | 10 years | |||||
Operating leases, rent expense | $ 36,000,000 | $ 59,000,000 | $ 54,000,000 | |||
Operating leases, sublease revenue | 10,000,000 | 0 | $ 0 | |||
Other long-term obligations | ||||||
Total deferred rent | 56,000,000 | 49,000,000 | ||||
Total license fee payable | 26,000,000 | 34,000,000 | ||||
Long-term income tax liabilities | 54,000,000 | 45,000,000 | ||||
Long-term deferred income tax liabilities | 7,000,000 | 50,000,000 | ||||
Other | 20,000,000 | 13,000,000 | ||||
Total long-term obligations | 163,000,000 | 191,000,000 | ||||
Less current portion (included in other current liabilities) | (17,000,000) | (19,000,000) | ||||
Long-term obligations due after one year | 146,000,000 | $ 172,000,000 | ||||
Purchase Obligation, Fiscal Year Maturity [Abstract] | ||||||
Purchase obligation due 2017 | 29,000,000 | |||||
Purchase obligation due 2018 | 25,000,000 | |||||
Purchase obligation due 2019 | 7,000,000 | |||||
Purchase obligation due 2020 | 0 | |||||
Purchase obligation due 2021 | 0 | |||||
Purchase obligation due thereafter | 0 | |||||
Total purchase obligations | 61,000,000 | |||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||||
Operating lease commitments due 2017 | 60,000,000 | |||||
Operating lease commitments due 2018 | 58,000,000 | |||||
Operating lease commitments due 2019 | 50,000,000 | |||||
Operating lease commitments due 2020 | 48,000,000 | |||||
Operating lease commitments due 2021 | 46,000,000 | |||||
Operating lease commitments due thereafter | 176,000,000 | |||||
Total operating lease commitments | 438,000,000 | |||||
Sublease Income, Fiscal Year Maturity [Abstract] | ||||||
Sublease income in 2017 | 21,000,000 | |||||
Sublease income in 2018 | 21,000,000 | |||||
Sublease income 2019 | 17,000,000 | |||||
Sublease income 2020 | 16,000,000 | |||||
Sublease income 2021 | 12,000,000 | |||||
Sublease income thereafter | 4,000,000 | |||||
Total sublease income | 91,000,000 | |||||
Operating Leases, Rent Expense, Net [Abstract] | ||||||
Net operating lease commitments 2017 | 39,000,000 | |||||
Net operating lease commitments 2018 | 37,000,000 | |||||
Net operating lease commitments 2019 | 33,000,000 | |||||
Net operating lease commitments 2020 | 32,000,000 | |||||
Net operating lease commitments due 2021 | 34,000,000 | |||||
Net operating lease commitments due thereafter | 172,000,000 | |||||
Total net operating lease commitments | 347,000,000 | |||||
February 1, 2016 Credit Agreement | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Debt instrument, term | 5 years | |||||
Master credit agreement amount | $ 1,500,000,000 | |||||
February 1, 2016 Credit Agreement | Line of Credit | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Periodic payment, principal, percent | 2.50% | |||||
5.75 percent fixed-rate notes due 2017 | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Term loan | $ 500,000,000 | |||||
Term Loan | February 1, 2016 Credit Agreement | Line of Credit | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Term loan, increase limit | $ 500,000,000 | |||||
Term loan amount outstanding | 500,000,000 | |||||
Long-term debt, current maturities | $ 12,000,000 | |||||
Term loan | $ 500,000,000 | |||||
Minimum | Base Rate | Term Loan | February 1, 2016 Credit Agreement | Line of Credit | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Basis spread on variable rate | 0.125% | |||||
Minimum | Base Rate | Revolving Credit Facility | February 1, 2016 Credit Agreement | Line of Credit | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Basis spread on variable rate | 0.00% | |||||
Minimum | London Interbank Offered Rate (LIBOR) | Term Loan | February 1, 2016 Credit Agreement | Line of Credit | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Basis spread on variable rate | 1.125% | |||||
Minimum | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | February 1, 2016 Credit Agreement | Line of Credit | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Basis spread on variable rate | 0.90% | |||||
Maximum | Base Rate | Term Loan | February 1, 2016 Credit Agreement | Line of Credit | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Basis spread on variable rate | 0.875% | |||||
Maximum | Base Rate | Revolving Credit Facility | February 1, 2016 Credit Agreement | Line of Credit | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Basis spread on variable rate | 0.50% | |||||
Maximum | London Interbank Offered Rate (LIBOR) | Term Loan | February 1, 2016 Credit Agreement | Line of Credit | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Basis spread on variable rate | 1.875% | |||||
Maximum | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | February 1, 2016 Credit Agreement | Line of Credit | ||||||
Long Term Obligations And Commitments (Textuals) | ||||||
Basis spread on variable rate | 1.50% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | |
Current: | |||
Federal | $ 401 | $ 253 | $ 358 |
State | 33 | 20 | 21 |
Foreign | 13 | 7 | 10 |
Total current | 447 | 280 | 389 |
Deferred: | |||
Federal | (42) | 14 | 51 |
State | (7) | 1 | 5 |
Foreign | (1) | 4 | 2 |
Total deferred | (50) | 19 | 58 |
Total provision for income taxes from continuing operations | 397 | 299 | 447 |
Income Statement [Abstract] | |||
United States | 1,205 | 716 | 1,276 |
Foreign | (2) | (4) | 24 |
Income from continuing operations before income taxes | 1,203 | 712 | 1,300 |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Income from continuing operations before income taxes | 1,203 | 712 | 1,300 |
Statutory federal income tax | 421 | 249 | 455 |
State income tax, net of federal benefit | 17 | 15 | 17 |
Federal research and experimentation credits | (33) | (19) | (7) |
Domestic production activities deduction | (34) | (19) | (25) |
Share-based compensation | 16 | 15 | 8 |
Effects of non-U.S. operations | 11 | 12 | 1 |
Non-deductible goodwill | 0 | 40 | 0 |
Other, net | (1) | 6 | (2) |
Total provision for income taxes from continuing operations | 397 | 299 | 447 |
Deferred tax assets: | |||
Accruals and reserves not currently deductible | 33 | 24 | |
Deferred revenue | 56 | 12 | |
Deferred rent | 14 | 10 | |
Accrued and deferred compensation | 55 | 52 | |
Loss and tax credit carryforwards | 51 | 44 | |
Share-based compensation | 62 | 52 | |
Net basis difference in investments held for sale | 0 | 122 | |
Other, net | 11 | 7 | |
Total deferred tax assets | 282 | 323 | |
Deferred tax liabilities: | |||
Intangible assets | 86 | 87 | |
Property and equipment | 24 | 20 | |
Total deferred tax liabilities | 110 | 107 | |
Total net deferred tax assets | 172 | 216 | |
Valuation allowance | (40) | (30) | |
Total net deferred tax assets, net of valuation allowance | 132 | 186 | |
Deferred Tax Assets, Net [Abstract] | |||
Current deferred income taxes | 0 | 231 | |
Long-term deferred income taxes | 139 | 5 | |
Long-term deferred income taxes included in other long-term obligations | (7) | (50) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefits, beginning balance | 56 | 40 | 39 |
Increases related to tax positions from prior fiscal years, including acquisitions | 7 | 15 | 4 |
Decreases related to tax positions from prior fiscal years | (7) | (1) | (8) |
Increases related to tax positions taken during current fiscal year | 15 | 5 | 5 |
Settlements with tax authorities | (11) | (3) | 0 |
Gross unrecognized tax benefits, ending balance | 60 | 56 | 40 |
Income Taxes (Textuals) | |||
Income tax effects allocated directly to equity, employee stock options | $ 59 | 85 | $ 82 |
Federal statutory income tax rate | 35.00% | ||
Discrete tax benefit due to changes in federal tax law | $ 12 | 11 | |
Total net deferred tax assets, net of valuation allowance | 132 | 186 | |
Unrecognized tax benefits net of related deferred tax assets | 40 | ||
Favorable net impact to income tax expense due to recognition of tax benefits | 40 | ||
Domestic Country | |||
Income Taxes (Textuals) | |||
Operating loss carryforwards | 19 | ||
State and Local Jurisdiction | |||
Deferred tax liabilities: | |||
Valuation allowance | (5) | ||
Total net deferred tax assets, net of valuation allowance | 8 | ||
Income Taxes (Textuals) | |||
Operating loss carryforwards | 156 | ||
Total net deferred tax assets, net of valuation allowance | 8 | ||
Foreign Tax Authority | Inland Revenue, Singapore (IRAS) | |||
Income Taxes (Textuals) | |||
Operating loss carryforwards | 76 | ||
Capital Loss Carryforward | State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards, valuation allowance | 2 | ||
Research Tax Credit Carryforward | State and Local Jurisdiction | |||
Income Taxes (Textuals) | |||
Deferred tax assets, tax credit carryforwards | 52 | ||
Amount of carryforward, if realized, to be recognized as additional paid in capital | 11 | ||
Financial Services | |||
Deferred tax assets: | |||
Net basis difference in investments held for sale | 122 | ||
Intuit Websites and Intuit Financial Services | |||
Income Taxes (Textuals) | |||
Deferred tax assets, capital loss carryforwards | 4 | ||
Intuit Websites and Intuit Financial Services | Capital Loss Carryforward | |||
Deferred tax liabilities: | |||
Valuation allowance | (1) | ||
Income Taxes (Textuals) | |||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ 2 | ||
Demandforce, QuickBase, and Quicken | |||
Operating Loss Carryforwards [Line Items] | |||
Income tax expense (benefit) from discontinued operations | $ 179 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | Dec. 23, 2013shares | Aug. 23, 2013USD ($)shares | Jul. 31, 2016USD ($)Period_of_time$ / sharesshares | Jul. 31, 2015USD ($)$ / sharesshares | Jul. 31, 2014USD ($)$ / sharesshares | Aug. 31, 2016$ / shares | Aug. 19, 2016USD ($) | Jul. 31, 2016USD ($)$ / sharesshares | Jul. 31, 2015USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation expense | $ 281,000,000 | $ 257,000,000 | $ 204,000,000 | |||||||
Stockholders' Equity (Textuals) | ||||||||||
Stock repurchases under stock repurchase programs | $ (2,264,000,000) | (1,245,000,000) | (1,577,000,000) | |||||||
Common stock dividends, cash paid (per share) | $ / shares | $ 1.20 | |||||||||
Dividends and dividend rights paid | $ (318,000,000) | $ (283,000,000) | $ (220,000,000) | |||||||
Common stock, shares authorized (in shares) | shares | 750,000,000 | 750,000,000 | ||||||||
Pool shares reduced for each share granted | shares | 2.3 | |||||||||
Pool shares increased for each share forfeited | shares | 2.3 | |||||||||
Stock offering period, months, employee stock purchase plans | 6 months | |||||||||
Stock accrual period, employee stock purchase plans, number of accrual periods | Period_of_time | 2 | |||||||||
Stock offering period, number of months in accrual period | 3 months | |||||||||
Percentage of lower of the closing price for stock on the first day last day of the offering period | 85.00% | |||||||||
Shares issued during period for Employee Stock Purchase Plans | shares | 882,206 | 892,632 | 1,044,961 | |||||||
Shares available for issuance under Employee Stock Purchase Plan | shares | 3,756,567 | |||||||||
Share-based Compensation [Abstract] | ||||||||||
Income tax benefit | $ (86,000,000) | $ (75,000,000) | $ (60,000,000) | |||||||
Decrease in net income from continuing operations | $ 192,000,000 | $ 167,000,000 | $ 126,000,000 | |||||||
Share-Based Awards Available for Grant [Roll Forward] | ||||||||||
Shares available for Grant, Beginning | shares | 17,183,000 | 24,203,000 | 12,120,000 | |||||||
Additional shares authorized | shares | 19,000,000 | |||||||||
Options granted | shares | (2,553,000) | (1,981,000) | (2,206,000) | |||||||
Restricted stock units granted | shares | [1] | (9,364,000) | (8,053,000) | (8,959,000) | ||||||
Share-based awards canceled/forfeited/expired | shares | [1],[2] | 3,724,000 | 3,014,000 | 4,248,000 | ||||||
Shares available for Grant, Ending | shares | 8,990,000 | 17,183,000 | 24,203,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||||||||
Number of shares, Beginning Balance | shares | 8,713,000 | 10,938,000 | 14,206,000 | |||||||
Number of shares, Granted | shares | 2,553,000 | 1,981,000 | 2,206,000 | |||||||
Number of shares, Assumed in connection with acquisitions | shares | 261,000 | |||||||||
Number of shares, Exercised | shares | (2,566,000) | (3,704,000) | (5,041,000) | |||||||
Number of shares, Canceled or expired | shares | (354,000) | (502,000) | (694,000) | |||||||
Number of shares, Ending Balance | shares | 8,346,000 | 8,713,000 | 10,938,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||||||||
Weighted average exercise price per share, Beginning Balance | $ / shares | $ 69.13 | $ 52.67 | $ 43.77 | |||||||
Granted (in usd per share) | $ / shares | 113.08 | 106.86 | 82.15 | |||||||
Assumed in connection with acquisitions (in usd per share) | $ / shares | 5.16 | |||||||||
Exercised (in usd per share) | $ / shares | 48.93 | 41.65 | 37.74 | |||||||
Canceled or expired (in usd per share) | $ / shares | 74.56 | 62.32 | 54.77 | |||||||
Weighted average exercise price per share, Ending Balance | $ / shares | $ 88.55 | $ 69.13 | $ 52.67 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||||||||
Number of shares (in thousands), options outstanding | shares | 8,713,000 | 10,938,000 | 14,206,000 | 8,346,000 | 8,713,000 | |||||
Weighted average remaining contractual life (in years), options outstanding | 6 years 25 days | |||||||||
Weighted average exercise price per share, options outstanding | $ / shares | $ 69.13 | $ 52.67 | $ 43.77 | $ 88.55 | $ 69.13 | |||||
Aggregate intrinsic value (in millions), options outstanding | $ 206,000,000 | |||||||||
Number of shares (in thousands), options exercisable and expected to vest | shares | 7,693,000 | |||||||||
Weighted average remaining contractual life (in years), options exercisable and expected to vest | 5 years 10 months 20 days | |||||||||
Weighted Average Exercise Price per Share. options exercisable and expected to vest | $ / shares | $ 86.76 | |||||||||
Aggregate Intrinsic Value (in millions), options exercisable and expected to vest | $ 203,000,000 | |||||||||
Number of Shares (in thousands), options exercisable | shares | 3,757,000 | |||||||||
Weighted Average Remaining Contractual Life (in Years), options exercisable | 3 years 9 months 22 days | |||||||||
Weighted Average Exercise Price per Share, options exercisable | $ / shares | $ 68.38 | |||||||||
Aggregate Intrinsic Value (in millions), options exercisable | $ 168,000,000 | |||||||||
Additional information regarding stock options, restricted stock and ESPP | ||||||||||
Weighted average fair value of options granted (per share) | $ / shares | $ 20.35 | $ 19.39 | $ 21.34 | |||||||
Total grant date fair value of options vested | $ 32,000,000 | $ 36,000,000 | $ 28,000,000 | |||||||
Aggregate intrinsic value of options exercised | 134,000,000 | 191,000,000 | 177,000,000 | |||||||
Total tax benefit for stock option and ESPP share-based compensation | 86,000,000 | 75,000,000 | 60,000,000 | |||||||
Cash received from option exercises | 126,000,000 | 154,000,000 | 190,000,000 | |||||||
Cash tax benefits realized related to tax deductions for non-qualified option exercises and disqualifying dispositions under all share-based payment arrangements | $ 47,000,000 | $ 68,000,000 | $ 63,000,000 | |||||||
Summary of restricted stock unit activity | ||||||||||
Nonvested, Number of shares, Beginning Balance | shares | 8,916,000 | 9,455,000 | 9,184,000 | |||||||
Number of shares, Granted | shares | 4,072,000 | 3,501,000 | 3,896,000 | |||||||
Number of shares, Assumed in connection with acquisitions | shares | 292,000 | 782,000 | ||||||||
Number of shares, Vested | shares | (2,392,000) | (3,155,000) | (2,820,000) | |||||||
Number of shares, Forfeited | shares | (1,557,000) | (1,177,000) | (1,587,000) | |||||||
Nonvested, Number of shares, Ending Balance | shares | 9,039,000 | 8,916,000 | 9,455,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||||||||
Nonvested, Weighted Average Grant Date Fair Value per share, Beginning Balance | $ / shares | $ 72.48 | $ 62.46 | $ 55.23 | |||||||
Granted (in usd per share) | $ / shares | 99.30 | 89.58 | 71.37 | |||||||
Assumed or granted in connection with acquisitions (in usd per share) | $ / shares | 91.87 | 71 | ||||||||
Vested (in usd per share) | $ / shares | 78.07 | 67 | 53.98 | |||||||
Forfeited (in usd per share) | $ / shares | 77.03 | 62.32 | 61.76 | |||||||
Nonvested, Weighted Average Grant Date Fair Value per share, Ending Balance | $ / shares | $ 82.30 | $ 72.48 | $ 62.46 | |||||||
Additional information regarding RSUs | ||||||||||
Total tax benefit related to RSU share-based compensation expense | $ 86,000,000 | $ 75,000,000 | $ 60,000,000 | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||
Accumulated other comprehensive income (loss), net of tax | (32,000,000) | $ (30,000,000) | ||||||||
Computer software | ||||||||||
Share-based Compensation [Abstract] | ||||||||||
Share-based compensation expense | 6,000,000 | |||||||||
Subsequent Event | ||||||||||
Stockholders' Equity (Textuals) | ||||||||||
Stock repurchase program, authorized amount | $ 2,000,000,000 | |||||||||
Dividend per share payable (in usd per share) | $ / shares | $ 0.34 | |||||||||
Discontinued Operations, Disposed of by Sale | ||||||||||
Additional information regarding stock options, restricted stock and ESPP | ||||||||||
Share-based compensation expense for stock options and ESPP | 3,000,000 | 15,000,000 | 18,000,000 | |||||||
Additional information regarding RSUs | ||||||||||
Share-based compensation for RSUs | 3,000,000 | 15,000,000 | 18,000,000 | |||||||
Cost of service and other revenue | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation expense | 8,000,000 | 6,000,000 | 7,000,000 | |||||||
Selling and marketing | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation expense | 77,000,000 | 69,000,000 | 53,000,000 | |||||||
Research and development | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation expense | 90,000,000 | 80,000,000 | 59,000,000 | |||||||
General and administrative | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation expense | 103,000,000 | 87,000,000 | 67,000,000 | |||||||
Segment, Continuing Operations | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation expense | $ 278,000,000 | $ 242,000,000 | $ 186,000,000 | |||||||
Stock Options | ||||||||||
Stockholders' Equity (Textuals) | ||||||||||
Award vesting period (in years) | 3 years | |||||||||
Number of years until options vest | 7 years | |||||||||
Unrecognized compensation cost related to non-vested share based compensation expense | 75,000,000 | |||||||||
Expected weighted average vesting period to recognize compensation cost related to share based compensation expense, in years | 2 years 5 months | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||||||||
Weighted average expected volatility | 22.00% | 23.00% | 23.00% | |||||||
Share-Based Awards Available for Grant [Roll Forward] | ||||||||||
Shares available for Grant, Ending | shares | 9,000,000 | |||||||||
Restricted Stock Units (RSUs) | ||||||||||
Stockholders' Equity (Textuals) | ||||||||||
Award vesting period (in years) | 3 years | |||||||||
Unrecognized compensation cost related to non-vested share based compensation expense | $ 510,000,000 | |||||||||
Expected weighted average vesting period to recognize compensation cost related to share based compensation expense, in years | 2 years 5 months | |||||||||
Share-based Compensation [Abstract] | ||||||||||
Income tax benefit | $ (73,000,000) | $ (64,000,000) | $ (49,000,000) | |||||||
Additional information regarding stock options, restricted stock and ESPP | ||||||||||
Share-based compensation expense for stock options and ESPP | 230,000,000 | 194,000,000 | 143,000,000 | |||||||
Total tax benefit for stock option and ESPP share-based compensation | 73,000,000 | 64,000,000 | 49,000,000 | |||||||
Additional information regarding RSUs | ||||||||||
Total fair market value of shares vested | 288,000,000 | 282,000,000 | 204,000,000 | |||||||
Share-based compensation for RSUs | 230,000,000 | 194,000,000 | 143,000,000 | |||||||
Total tax benefit related to RSU share-based compensation expense | 73,000,000 | 64,000,000 | 49,000,000 | |||||||
Cash tax benefits realized for tax deductions for RSUs | $ 92,000,000 | $ 96,000,000 | $ 134,000,000 | |||||||
Employee Stock | ||||||||||
Stockholders' Equity (Textuals) | ||||||||||
Common stock, shares authorized (in shares) | shares | 23,800,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||||||||
Weighted average expected volatility | 25.00% | 21.00% | 21.00% | |||||||
Share Based Compensation Expense | ||||||||||
Decrease in net income per share from continuing operations: | ||||||||||
Basic (in usd per share) | $ / shares | $ 0.73 | $ 0.59 | $ 0.44 | |||||||
Diluted (in usd per share) | $ / shares | $ 0.72 | $ 0.58 | $ 0.43 | |||||||
Stock Options And Espp | ||||||||||
Share-based Compensation [Abstract] | ||||||||||
Income tax benefit | $ (13,000,000) | $ (11,000,000) | $ (11,000,000) | |||||||
Additional information regarding stock options, restricted stock and ESPP | ||||||||||
Share-based compensation expense for stock options and ESPP | 48,000,000 | 48,000,000 | 43,000,000 | |||||||
Total tax benefit for stock option and ESPP share-based compensation | 13,000,000 | 11,000,000 | 11,000,000 | |||||||
Additional information regarding RSUs | ||||||||||
Share-based compensation for RSUs | 48,000,000 | 48,000,000 | 43,000,000 | |||||||
Total tax benefit related to RSU share-based compensation expense | $ 13,000,000 | $ 11,000,000 | $ 11,000,000 | |||||||
Common Stock | ||||||||||
Stockholders' Equity (Textuals) | ||||||||||
Common stock repurchased (in shares) | shares | 24,816,000 | 13,809,000 | 22,467,000 | |||||||
Accumulated Net Unrealized Investment Gain (Loss) | Debt Securities | ||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||
Accumulated other comprehensive income (loss), net of tax | $ 1,000,000 | 0 | ||||||||
Accumulated Translation Adjustment | ||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||
Accumulated other comprehensive income (loss), net of tax | $ (33,000,000) | $ (30,000,000) | ||||||||
Minimum | Stock Options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||||||||
Expected volatility (range) | 22.00% | 22.00% | 22.00% | |||||||
Risk-free interest rate (range) | 0.98% | 1.13% | 1.01% | |||||||
Expected dividend yield | 1.06% | 0.93% | 0.92% | |||||||
Minimum | Employee Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||||||||
Expected volatility (range) | 23.00% | 20.00% | 19.00% | |||||||
Risk-free interest rate (range) | 0.06% | 0.01% | 0.02% | |||||||
Expected dividend yield | 1.13% | 0.96% | 0.94% | |||||||
Maximum | ||||||||||
Stockholders' Equity (Textuals) | ||||||||||
Market price of common stock used to define in money options exercise price | $ / shares | $ 110.99 | |||||||||
Maximum | Stock Options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||||||||
Expected volatility (range) | 26.00% | 24.00% | 24.00% | |||||||
Risk-free interest rate (range) | 1.49% | 1.47% | 1.40% | |||||||
Expected dividend yield | 1.36% | 1.05% | 1.06% | |||||||
Maximum | Employee Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||||||||
Expected volatility (range) | 26.00% | 23.00% | 22.00% | |||||||
Risk-free interest rate (range) | 0.47% | 0.15% | 0.08% | |||||||
Expected dividend yield | 1.34% | 1.19% | 1.15% | |||||||
Restated 2005 Plan | Stock Options | ||||||||||
Stockholders' Equity (Textuals) | ||||||||||
Pool shares reduced for each share granted | shares | 1 | |||||||||
Number of shares added back to plan when grants are forfeited | shares | 1 | |||||||||
Current Program | ||||||||||
Stockholders' Equity (Textuals) | ||||||||||
Stock repurchase program remaining authorized repurchase amount | $ 360,000,000 | |||||||||
Restated 2005 Plan | ||||||||||
Stockholders' Equity (Textuals) | ||||||||||
Common stock, shares authorized (in shares) | shares | 115,000,000 | |||||||||
Common Stock | Accelerated Stock Repurchase Agreement | ||||||||||
Stockholders' Equity (Textuals) | ||||||||||
Common stock repurchased (in shares) | shares | 2,600,000 | 17,600,000 | ||||||||
Stock repurchase program, authorized amount | $ 1,400,000,000 | |||||||||
Accelerated share repurchases, settlement (payment) or receipt | $ 1,400,000,000 | |||||||||
[1] | RSUs granted from the pool of shares available for grant under our 2005 Equity Incentive Plan reduce the pool by 2.3 shares for each share granted. RSUs forfeited and returned to the pool of shares available for grant increase the pool by 2.3 shares for each share forfeited. | |||||||||
[2] | Stock options and restricted stock units canceled, expired or forfeited under our 2005 Equity Incentive Plan are returned to the pool of shares available for grant. Stock options and restricted stock units canceled, expired or forfeited under older expired plans are not returned to the pool of shares available for grant. |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Maximum percent of salary bonus and commission eligible for executive deferred compensation plan | 75.00% | ||
Executive deferred compensation plan liabilities | $ 69 | $ 63 | |
Maximum percent of pre tax salary eligible for contribution to employee plan | 50.00% | ||
Additional employer contribution for next six percent of salary in percent | 125.00% | ||
Additional salary contributed by the employee, in percent | 6.00% | ||
Matching contributions | $ 46 | $ 44 | $ 43 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2016USD ($) | Apr. 30, 2016USD ($) | Jan. 31, 2016USD ($) | Oct. 31, 2015USD ($) | Jul. 31, 2015USD ($) | Apr. 30, 2015USD ($) | Jan. 31, 2015USD ($) | Oct. 31, 2014USD ($) | Jul. 31, 2016USD ($)segment | Jul. 31, 2015USD ($) | Jul. 31, 2014USD ($) | |
Net revenue: | |||||||||||
Total net revenue | $ 754 | $ 2,304 | $ 923 | $ 713 | $ 696 | $ 2,135 | $ 749 | $ 612 | $ 4,694 | $ 4,192 | $ 4,243 |
Operating income from continuing operations: | |||||||||||
Total operating income from continuing operations | $ (56) | $ 1,285 | $ 42 | $ (29) | $ (130) | $ 1,066 | $ (89) | $ (109) | 1,242 | 738 | 1,300 |
Unallocated corporate items: | |||||||||||
Amortization of acquired technology | (22) | (30) | (18) | ||||||||
Amortization of other acquired intangible assets | (12) | (12) | (7) | ||||||||
Goodwill and intangible asset impairment charges | $ 0 | (148) | 0 | ||||||||
Segment Information (Textuals) | |||||||||||
Number of Reportable Segments | segment | 3 | ||||||||||
Small Business | |||||||||||
Net revenue: | |||||||||||
Total net revenue | $ 2,293 | 2,108 | 2,158 | ||||||||
Operating income from continuing operations: | |||||||||||
Total operating income from continuing operations | 874 | 696 | 852 | ||||||||
Consumer Tax | |||||||||||
Net revenue: | |||||||||||
Total net revenue | 1,973 | 1,800 | 1,663 | ||||||||
Operating income from continuing operations: | |||||||||||
Total operating income from continuing operations | 1,287 | 1,131 | 1,075 | ||||||||
ProConnect | |||||||||||
Net revenue: | |||||||||||
Total net revenue | 428 | 284 | 422 | ||||||||
Operating income from continuing operations: | |||||||||||
Total operating income from continuing operations | 268 | 108 | 268 | ||||||||
Operating Segments | |||||||||||
Operating income from continuing operations: | |||||||||||
Total operating income from continuing operations | 2,429 | 1,935 | 2,195 | ||||||||
Segment Reconciling Items | |||||||||||
Unallocated corporate items: | |||||||||||
Share-based compensation expense | (278) | (242) | (186) | ||||||||
Other common expenses | (875) | (765) | (684) | ||||||||
Amortization of acquired technology | (22) | (30) | (18) | ||||||||
Amortization of other acquired intangible assets | (12) | (12) | (7) | ||||||||
Goodwill and intangible asset impairment charges | 0 | (148) | 0 | ||||||||
Total unallocated corporate items | $ (1,187) | $ (1,197) | $ (895) | ||||||||
International | Maximum | |||||||||||
Segment Information (Textuals) | |||||||||||
International Total Net Revenue As A Percentage Of Total | 5.00% | 5.00% | 5.00% |
Selected Quarterly Financial 56
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total net revenue | $ 754 | $ 2,304 | $ 923 | $ 713 | $ 696 | $ 2,135 | $ 749 | $ 612 | $ 4,694 | $ 4,192 | $ 4,243 |
Cost of revenue | 171 | 216 | 199 | 166 | 176 | 202 | 188 | 159 | |||
All other costs and expenses | 639 | 803 | 682 | 576 | 650 | 867 | 650 | 562 | |||
Operating income from continuing operations | (56) | 1,285 | 42 | (29) | (130) | 1,066 | (89) | (109) | 1,242 | 738 | 1,300 |
Net income from continuing operations | (40) | 848 | 29 | (31) | (102) | 656 | (60) | (81) | 806 | 413 | 853 |
Net income (loss) from discontinued operations | 0 | 178 | (5) | 0 | 116 | (155) | (6) | (3) | 173 | (48) | 54 |
Net income | $ (40) | $ 1,026 | $ 24 | $ (31) | $ 14 | $ 501 | $ (66) | $ (84) | $ 979 | $ 365 | $ 907 |
Basic net income (loss) per share from continuing operations | $ (0.16) | $ 3.30 | $ 0.11 | $ (0.11) | $ (0.37) | $ 2.37 | $ (0.21) | $ (0.28) | $ 3.08 | $ 1.47 | $ 2.99 |
Basic net income (loss) per share from discontinued operations | 0 | 0.70 | (0.02) | 0 | 0.42 | (0.56) | (0.02) | (0.01) | 0.65 | (0.17) | 0.19 |
Basic net income per share | (0.16) | 4 | 0.09 | (0.11) | 0.05 | 1.81 | (0.23) | (0.29) | 3.73 | 1.30 | 3.18 |
Diluted net income (loss) per share from continuing operations | (0.16) | 3.26 | 0.11 | (0.11) | (0.37) | 2.33 | (0.21) | (0.28) | 3.04 | 1.45 | 2.94 |
Diluted net income (loss) per share from discontinued operations | 0 | 0.68 | (0.02) | 0 | 0.42 | (0.55) | (0.02) | (0.01) | 0.65 | (0.17) | 0.18 |
Diluted net income per share | $ (0.16) | $ 3.94 | $ 0.09 | $ (0.11) | $ 0.05 | $ 1.78 | $ (0.23) | $ (0.29) | $ 3.69 | $ 1.28 | $ 3.12 |
Valuation and Qualifying Acco57
Valuation and Qualifying Accounts Schedule II (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 | |
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves, beginning balance | $ 45 | $ 40 | $ 38 |
Valuation allowances and reserves, additions charged to expense/revenue | 49 | 57 | 50 |
Valuation allowances and reserves, deductions | (43) | (52) | (48) |
Valuation allowances and reserves, ending balance | 51 | 45 | 40 |
Reserve for product returns | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves, beginning balance | 12 | 15 | 14 |
Valuation allowances and reserves, additions charged to expense/revenue | 70 | 79 | 87 |
Valuation allowances and reserves, deductions | (75) | (82) | (86) |
Valuation allowances and reserves, ending balance | 7 | 12 | 15 |
Reserve for rebates | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves, beginning balance | 12 | 21 | 14 |
Valuation allowances and reserves, additions charged to expense/revenue | 103 | 97 | 103 |
Valuation allowances and reserves, deductions | (101) | (106) | (96) |
Valuation allowances and reserves, ending balance | $ 14 | $ 12 | $ 21 |