INTUIT: MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-K)

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Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) is intended to provide readers of our consolidated financial
statements with the perspectives of management. This should allow the readers of
this report to obtain a comprehensive understanding of our businesses,
strategies, current trends, and future prospects. Our MD&A includes the
following sections:
• Executive Overview: High level discussion of our operating results and some of the
trends that affect our business.


• Critical Accounting Policies and Estimates: Policies and estimates that we believe are
important to understanding the assumptions and judgments underlying our financial
statements.


• Results of Operations: a more detailed discussion of our revenues and expenses.


• Liquidity and Capital Resources: Discussion of key aspects of our consolidated
statements of cash flows, changes in our consolidated balance sheets, and our financial
commitments.


You should note that this MD&A contains forward-looking statements that involve
risks and uncertainties. Please see the section entitled "Forward-Looking
Statements" immediately preceding Part I for important information to consider
when evaluating such statements.
You should read this MD&A in conjunction with the financial statements and
related notes in Item 8 of this Annual Report.
Due to the COVID-19 pandemic we continue to conduct business with substantial
modifications to employee work locations and employee travel, among other
modifications. In June 2021 a small number of employees started returning to
work locations on a limited basis. While we have not experienced significant
disruptions to our operations from the COVID-19 pandemic, we are unable to
predict the full impact that the COVID-19 pandemic will have on our operations
and future financial performance, including demand for our offerings, impact to
our customers and partners, actions that may be taken by governmental
authorities, and other factors identified in "Risk Factors" in Item 1A of Part I
of this Report.
In April 2020, Intuit was approved as a non-bank Small Business Administration
lender for the Paycheck Protection Program (PPP). The PPP was authorized under
the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide
small businesses loans to pay payroll and group health costs, salaries and
commissions, mortgage and rent payments, utilities, and interest on other debt
which is designed to provide assistance to small businesses during the COVID-19
pandemic.
In August 2020, we reorganized certain technology and customer success functions
that support and benefit our overall platform. Additionally, certain legal,
facility and employee service costs are now managed at the corporate level. As a
result, these costs are no longer included in segment operating income and are
now included in other corporate expenses. For the twelve months ended July 31,
2020 and 2019, we reclassified $180 million and $172 million from Small Business
& Self-Employed, $121 million and $78 million from Consumer, and $13 million and
$12 million from ProConnect to other corporate expenses. In August 2020, we also
renamed our Strategic Partner segment as the ProConnect segment. This segment
continues to serve professional accountants.
In fiscal 2021 we acquired Credit Karma. We have included their results of
operations in our consolidated results of operations from the date of
acquisition. Credit Karma operates as a separate reportable segment. Segment
operating income for Credit Karma includes all direct expenses related to
selling and marketing, product development, and general and administrative,
which is different from our other reportable segments. See Note 6 in Item 8 of
this Annual Report for more information.
EXECUTIVE OVERVIEW


This overview provides a high level discussion of our operating results and some
of the trends that affect our business. We believe that an understanding of
these trends is important in order to understand our financial results for
fiscal 2021 as well as our future prospects. This summary is not intended to be
exhaustive, nor is it a substitute for the detailed discussion and analysis
provided elsewhere in this Annual Report on Form 10-K.
Industry Trends and Seasonality


Industry Trends
Artificial Intelligence (AI) is transforming multiple industries, including
financial technology. Disruptive start-ups, emerging ecosystems and
mega-platforms are harnessing new technology to create personalized experiences,
deliver data-driven insights and increase speed of service. These shifts are
creating a more dynamic and highly competitive environment where customer
expectations are shifting around the world as more services become digitized and
the array of choices continues to increase.
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Seasonality
Our Consumer and ProConnect offerings have a significant and distinct seasonal
pattern as sales and revenue from our income tax preparation products and
services are typically concentrated in the period from November through April.
This seasonal pattern typically results in higher net revenues during our second
and third quarters ending January 31 and April 30, respectively.
Due to the COVID-19 pandemic, the timing of tax filing seasons for fiscal 2021
and fiscal 2020 varied significantly. In fiscal 2019, the IRS began accepting
returns on January 28, 2019 and the tax filing deadline was April 15, 2019. In
fiscal 2020, the IRS began accepting returns on January 27, 2020 and the tax
filing deadline was July 15, 2020. In fiscal 2021, the IRS began accepting
returns on February 12, 2021 and the tax filing deadline was May 17, 2021. These
changes to the tax filing seasons impacted our quarterly financial results
during fiscal 2021 and fiscal 2020.
We expect the seasonality of our Consumer and ProConnect businesses to continue
to have a significant impact on our quarterly financial results in the future.
Key Challenges and Risks


Our growth strategy depends upon our ability to initiate and embrace disruptive
technology trends, to enter new markets, and to drive broad adoption of the
products and services we develop and market. Our future growth also increasingly
depends on the strength of our third-party business relationships and our
ability to continue to develop, maintain, and strengthen new and existing
relationships. To remain competitive and continue to grow, we are investing
significant resources in our product development, marketing, and sales
capabilities, and we expect to continue to do so in the future.
As we offer more online services, the ongoing operation and availability of our
platforms and systems and those of our external service providers is becoming
increasingly important. Because we help customers manage their financial lives,
we face risks associated with the hosting, collection, use, and retention of
personal customer information and data. We are investing significant management
attention and resources in our information technology infrastructure and in our
privacy and security capabilities, and we expect to continue to do so in the
future.
For our consumer and professional tax offerings, we have implemented additional
security measures and are continuing to work with state and federal governments
to implement industry-wide security and anti-fraud measures, including sharing
information regarding suspicious filings. We received ISO 27001 certification
for a portion of our systems and we continue to invest in security measures and
to work with the broader industry and government to protect our customers
against this type of fraud. Additionally, Credit Karma's security measures are
regularly reviewed and updated.
For a complete discussion of the most significant risks and uncertainties
affecting our business, please see "Forward-Looking Statements" immediately
preceding Part I and "Risk Factors" in Item 1A of Part I of this Report
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Overview of Financial Results


The most important financial indicators that we use to assess our business are
revenue growth for the company as a whole and for each reportable segment;
operating income growth for the company as a whole; earnings per share; and cash
flow from operations. We also track certain non-financial drivers of revenue
growth and, when material, identify them in the applicable discussions of
segment results below. Service offerings are a significant part of our business.
Our total service and other revenue was $7.9 billion or 82% of our total revenue
in fiscal 2021 and we expect our total service and other revenue to continue to
grow in the future.
Key highlights for fiscal 2021 include the following:
                                                Small Business & 

Self employed

Revenue of                                      revenue of                                Consumer revenue of
$9.6 B                                          $4.7 B                                    $3.6 B
up 25% from fiscal 2020                         up 16% from fiscal 2020                   up 14% from fiscal 2020

Operating income of                             Net income of                             Diluted net income per share of
$2.5 B                                          $2.1 B                                    $7.56
up 15% from fiscal 2020                         up 13% from fiscal 2020                   up 9% from fiscal 2020


We ended fiscal 2021 with cash, cash equivalents and investments totaling $3.9
billion.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES


In preparing our consolidated financial statements in accordance with U.S.
generally accepted accounting principles (GAAP), we are required to make
estimates, assumptions, and judgments that can have a significant impact on our
net revenue, operating income or loss and net income or loss, as well as on the
value of certain assets and liabilities on our consolidated balance sheets. We
believe that the estimates, assumptions, and judgments involved in the following
accounting policies have the greatest potential impact on our consolidated
financial statements, so we consider these to be our critical accounting
policies:
•Revenue Recognition
•Business Combinations
•Goodwill, Acquired Intangible Assets, and Other Long-Lived Assets - Impairment
Assessments
•Legal Contingencies
•Accounting for Income Taxes - Estimates of Deferred Taxes, Valuation
Allowances, and Uncertain Tax Positions
Our senior management has reviewed the development and selection of these
critical accounting policies and their disclosure in this Annual Report on Form
10-K with the Audit and Risk Committee of our Board of Directors.
Revenue Recognition
We derive our revenue primarily from the sale of online services such as tax,
accounting, payroll, merchant payment processing, delivery of qualified links
and packaged desktop software products and desktop software subscriptions. Our
contracts with customers often include promises to transfer multiple products
and services. In determining how revenue should be recognized, a five-step
process is used, which requires judgment and estimates within the revenue
recognition process. The primary judgments include identifying the performance
obligations in the contract and determining whether the performance obligations
are distinct. If any of these judgments were to change it could cause a material
increase or decrease in the amount
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of revenue we report in a particular period. For additional information, see
"Revenue Recognition" in Note 1 to the financial statements in Item 8 of this
Annual Report.
Business Combinations
As described in "Description of Business and Summary of Significant Accounting
Policies - Business Combinations," in Note 1 to the financial statements in
Item 8 of this Annual Report, under the acquisition method of accounting we
generally recognize the identifiable assets acquired, the liabilities assumed,
and any noncontrolling interests in an acquiree at their fair values as of the
date of acquisition. We measure goodwill as the excess of consideration
transferred, which we also measure at fair value, over the net of the
acquisition date fair values of the identifiable assets acquired and liabilities
assumed. The acquisition method of accounting requires us to exercise judgment
and make significant estimates and assumptions regarding the fair values of the
elements of a business combination as of the date of acquisition, including the
fair values of identifiable intangible assets, deferred tax asset valuation
allowances, liabilities related to uncertain tax positions, and contingencies.
This method also requires us to refine these estimates over a one-year
measurement period 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. If we are
required to retroactively adjust provisional amounts that we have recorded for
the fair values of assets and liabilities in connection with acquisitions, these
adjustments could materially decrease our operating income and net income and
result in lower asset values on our consolidated balance sheet.
Significant estimates and assumptions that we must make in estimating the fair
value of acquired technology, customer lists, and other identifiable intangible
assets include future cash flows that we expect to generate from the acquired
assets. If the subsequent actual results and updated projections of the
underlying business activity change compared with the assumptions and
projections used to develop these values, we could record impairment charges. In
addition, we have estimated the economic lives of certain acquired assets and
these lives are used to calculate depreciation and amortization expense. If our
estimates of the economic lives change, depreciation or amortization expenses
could be accelerated or slowed.
Goodwill, Acquired Intangible Assets and Other Long-Lived Assets - Impairment
Assessments
We estimate the fair value of acquired intangible assets and other long-lived
assets that have finite useful lives whenever an event or change in
circumstances indicates that the carrying value of the asset may not be
recoverable. We test for potential impairment of goodwill and other intangible
assets that have indefinite useful lives annually in our fourth fiscal quarter
or whenever indicators of impairment arise. The timing of the annual test may
result in charges to our consolidated statement of operations in our fourth
fiscal quarter that could not have been reasonably foreseen in prior periods.
As described in "Description of Business and Summary of Significant Accounting
Policies - Goodwill, Acquired Intangible Assets and Other Long-Lived Assets," in
Note 1 to the financial statements in Item 8 of this Annual Report, in order to
estimate the fair value of goodwill we use a weighted combination of a
discounted cash flow model (known as the income approach) and comparisons to
publicly traded companies engaged in similar businesses (known as the market
approach). The income approach requires us to use a number of assumptions,
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. We evaluate cash flows at the reporting unit level. Although the
assumptions we use in our discounted cash flow model are consistent with the
assumptions we use to generate our internal strategic plans and forecasts,
significant judgment is required to estimate the amount and timing of future
cash flows from each reporting unit and the relative risk of achieving those
cash flows. When using the market approach, we make judgments about the
comparability of publicly traded companies engaged in similar businesses. We
base our judgments on factors such as size, growth rates, profitability, risk,
and return on investment. We also make judgments when adjusting market multiples
of revenue, operating income, and earnings for these companies to reflect their
relative similarity to our own businesses. See Note 5 to the financial
statements in Item 8 of this Annual Report for a summary of goodwill by
reportable segment.
We estimate the recoverability of acquired intangible assets and other
long-lived assets that have finite useful lives by comparing the carrying amount
of the asset to the future undiscounted cash flows that we expect the asset to
generate. In order to estimate the fair value of those assets, we estimate the
present value of future cash flows from those assets. The key assumptions that
we use in our discounted cash flow model are the amount and timing of estimated
future cash flows to be generated by the asset over an extended period of time
and a rate of return that considers the relative risk of achieving the cash
flows and the time value of money. Significant judgment is required to estimate
the amount and timing of future cash flows and the relative risk of achieving
those cash flows. We also make judgments about the remaining useful lives of
acquired intangible assets and other long-lived assets that have finite lives.
See Note 5 to the financial statements in Item 8 of this Annual Report for a
summary of cost, accumulated amortization and weighted average life in years for
our acquired intangible assets.
Assumptions and estimates about future values and remaining useful lives are
complex and often subjective. They can be affected by a variety of factors,
including external factors such as industry and economic trends, and internal
factors such as changes in our business strategy and our internal forecasts. For
example, if our future operating results do not meet current forecasts or if we
experience a sustained decline in our market capitalization that is determined
to be indicative of a reduction in fair value of one or more of our reporting
units, we may be required to record future impairment charges for goodwill and
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acquired intangible assets. Impairment charges could materially decrease our
future net income and result in lower asset values on our consolidated balance
sheet.
During the fourth quarters of fiscal 2021, fiscal 2020, and fiscal 2019 we
performed our annual goodwill impairment tests. Using the methodology described
in "Description of Business and Summary of Significant Accounting Policies -
Goodwill, Acquired Intangible Assets and Other Long-Lived Assets," in Note 1 to
the financial statements in Item 8 of this Annual Report, we determined that the
estimated fair values of all of our reporting units exceeded their carrying
values and that they were not impaired. In addition, during this analysis we
concluded that the estimated fair values of all of our reporting units
substantially exceeded their carrying values.
Legal Contingencies
We are subject to certain legal proceedings, as well as demands, claims and
threatened litigation that arise in the normal course of our business. We review
the status of each significant matter quarterly and assess our potential
financial exposure. If the potential loss from any claim or legal proceeding is
considered probable and the amount can be reasonably estimated, we record a
liability and an expense for the estimated loss. If we determine that a loss is
possible and the range of the loss can be reasonably determined, then we
disclose the range of the possible loss. Significant judgment is required in the
determination of whether a potential loss is probable, reasonably possible, or
remote as well as in the determination of whether a potential exposure is
reasonably estimable. Our accruals are based on the best information available
at the time. As additional information becomes available, we reassess the
potential liability related to our pending claims and litigation and may revise
our estimates. Potential legal liabilities and the revision of estimates of
potential legal liabilities could have a material impact on our financial
position and results of operations. See Note 13 to the financial statements in
Item 8 of this Annual Report for more information.
Accounting for Income Taxes - Estimates of Deferred Taxes, Valuation Allowances,
and Uncertain Tax Positions
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. The calculation of our tax liabilities involves dealing with
uncertainties in the application of complex tax rules and the potential for
future adjustment of our uncertain tax positions by the United States Internal
Revenue Service or other taxing jurisdictions. 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 consolidated 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 tax expense in our
consolidated statement of operations.
We record a valuation allowance to reflect uncertainties about whether we will
be able to utilize our deferred tax assets before they expire. We assess the
need for an adjustment to the valuation allowance on a quarterly basis. The
assessment is based on our estimates of future sources of taxable income in 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
in the future be required to increase the valuation allowance to take into
account additional deferred tax assets that we may be unable to realize. An
increase in the valuation allowance could have an adverse impact on our income
tax provision and net income in the period in which we record the change.
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. See Note
10 to the financial statements in Item 8 of this Annual Report for more
information.


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RESULTS OF OPERATIONS


A discussion regarding our financial condition and results of operations for
fiscal 2021 compared to fiscal 2020 is presented below. A discussion regarding
our financial condition and results of operations for fiscal 2020 compared to
fiscal 2019 can be found under Item 7 of Part II in our Annual Report on Form
10-K for the fiscal year ended July 31, 2020, filed with the SEC on August 31,
2020, which is available free of charge on the SEC's website at www.sec.gov and
on the Investor Relations section of our corporate website at
investors.intuit.com.
Financial Overview

(Dollars in millions, except per         Fiscal               Fiscal               Fiscal               2021-2020               2020-2019
share amounts)                            2021                 2020                 2019                % Change                % Change
Total net revenue                        $9,633               $7,679               $6,784                       25  %                   13  %
Operating income                          2,500                2,176                1,854                       15  %                   17  %
Net income                                2,062                1,826                1,557                       13  %                   17  %
Diluted net income per share              $7.56                $6.92                $5.89                        9  %                   17  %


Total net revenue increased $2.0 billion or 25% in fiscal 2021 compared with
fiscal 2020. The acquisition of Credit Karma contributed $865 million to total
revenue in fiscal 2021. Our Small Business & Self-Employed segment revenue
increased 16% primarily due to growth in our Online Ecosystem revenue. Our
Consumer segment revenue increased 14% primarily due to a shift in mix to our
higher priced offerings including TurboTax Live and growth in TurboTax federal
units. See "Segment Results" later in this Item 7 for more information.
Operating income increased $324 million or 15% in fiscal 2021 compared with
fiscal 2020. The increase was due to the higher revenue described above
partially offset by an increase in expenses primarily for staffing, marketing,
share-based compensation, and amortization of other acquired intangible assets.
See "Operating Expenses" later in this Item 7 for more information.
Net income increased $236 million or 13% in fiscal 2021 compared with fiscal
2020 due to the increase in operating income described above, a $30 million gain
from the sale of a note receivable that was previously written off, and a $17
million gain on other long-term investments. These increases were partially
offset by a higher tax expense for the period. Diluted net income per share
increased 9% to $7.56 for fiscal 2021 due to the increase in net income, which
was partially offset by an increase in the weighted average shares outstanding
due to the shares issued as part of the acquisition of Credit Karma in the
second quarter of fiscal 2021.
Segment Results


The information below is organized in accordance with our four reportable
segments. All of our segments operate and sell to customers primarily in the
United States. Total international net revenue was less than 5% of consolidated
total net revenue for the twelve months ended July 31, 2021, 2020 and 2019.
In August 2020, we reorganized certain technology and customer success functions
that support and benefit our overall platform. Additionally, certain legal,
facility and employee service costs are now managed at the corporate level. As a
result, these costs are no longer included in segment operating income and are
now included in other corporate expenses. For the twelve months ended July 31,
2020 and 2019, we reclassified $180 million and $172 million from Small Business
& Self-Employed, $121 million and $78 million from Consumer, and $13 million and
$12 million from ProConnect to other corporate expenses. In August 2020, we also
renamed our Strategic Partner segment as the ProConnect segment. This segment
continues to serve professional accountants.
In December 2020 we acquired Credit Karma in a business combination and it
operates as a separate reportable segment. We have included the results of
operations of Credit Karma in our consolidated statements of operations from the
date of acquisition. See Note 6 to the financial statements in Item 8 of this
Annual Report for more information. Segment operating income for Credit Karma
includes all direct expenses, which is different from our other reportable
segments where we do not fully allocate corporate expenses.
Segment operating income is segment net revenue less segment cost of revenue and
operating expenses. For our Small Business & Self-Employed, Consumer, and
ProConnect reportable segments, we include expenses such as corporate selling
and marketing, product development, and general and administrative, which are
not allocated to specific segments, in unallocated corporate items as part of
other corporate expenses. For Credit Karma, segment expenses include all direct
expenses related to selling and marketing, product development, and general and
administrative. Unallocated corporate items for all segments include share-based
compensation, amortization of acquired technology, amortization of other
acquired intangible assets, and goodwill and intangible asset impairment
charges. These unallocated costs for all segments totaled $2.9 billion in fiscal
2021, $2.3 billion in fiscal 2020, and $2.0 billion in fiscal 2019. Unallocated
costs increased in fiscal 2021
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compared with fiscal 2020 due to increased corporate product development,
selling and marketing, and general and administrative expenses in support of the
growth of our businesses, higher share-based compensation expenses, higher
amortization of acquired technology, and higher amortization of other acquired
intangible assets. See Note 14 to the financial statements in Item 8 of this
Annual Report for reconciliations of total segment operating income to
consolidated operating income for each fiscal year presented.
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Small business and self-employed [[Image Removed: intu-20210731_g3.jpg]]


[[Image Removed: intu-20210731_g4.jpg]]
Small Business & Self-Employed segment revenue includes both Online Ecosystem
and Desktop Ecosystem revenue.
Our Online Ecosystem includes revenue from QuickBooks Online, QuickBooks Live,
QuickBooks Online Advanced and QuickBooks Self-Employed financial and business
management offerings; small business payroll services, including QuickBooks
Online Payroll, Intuit Online Payroll, Intuit Full Service Payroll; merchant
payment processing services for small businesses who use online offerings;
QuickBooks Commerce, QuickBooks Cash, and financing for small businesses.
Our Desktop Ecosystem includes revenue from our QuickBooks Desktop packaged
software products (Desktop Pro, Desktop for Mac, Desktop Premier, and QuickBooks
Point of Sale); QuickBooks Desktop software subscriptions (QuickBooks Desktop
Pro Plus, QuickBooks Desktop Premier Plus, and QuickBooks Enterprise, and
ProAdvisor Program memberships for the accounting professionals who serve small
businesses); desktop payroll products (QuickBooks Basic Payroll, QuickBooks
Assisted Payroll and QuickBooks Enhanced Payroll); merchant payment processing
services for small businesses who use desktop offerings; financial supplies; and
financing for small businesses.


Segment product revenue is derived from revenue related to software license and
version protection for our QuickBooks Desktop products and subscriptions,
license and related updates for our desktop payroll products and financial
supplies, which are all part of our Desktop Ecosystem. Segment service and other
revenue is derived from our Online Ecosystem revenue; and Desktop Ecosystem
revenue related to support and connected services for our QuickBooks Desktop and
desktop payroll products and subscriptions and merchant payment processing
services.
                              Fiscal        Fiscal        Fiscal       2021-2020      2020-2019
(Dollars in millions)          2021          2020          2019        % Change       % Change
Product revenue             $ 1,085       $ 1,032       $ 1,036
Service and other revenue     3,603         3,018         2,497
Total segment revenue       $ 4,688       $ 4,050       $ 3,533             16  %          15  %
% of total revenue               49  %         53  %         52  %

Segment operating income    $ 2,590       $ 2,091       $ 1,722             24  %          21  %
% of related revenue             55  %         52  %         49  %


Revenues classified by significant product and service offering were as follows:

                                          Fiscal       Fiscal       Fiscal       2021-2020      2020-2019
  (Dollars in millions)                    2021         2020         2019        % Change       % Change
  Net revenue:
  QuickBooks Online Accounting           $ 1,699      $ 1,354      $   980            25  %         38  %
  Online Services                          1,051          828          683            27  %         21  %
  Total Online Ecosystem                   2,750        2,182        1,663            26  %         31  %
  QuickBooks Desktop Accounting              789          755          732             5  %          3  %
  Desktop Services and Supplies            1,149        1,113        1,138             3  %         (2  %)
  Total Desktop Ecosystem                  1,938        1,868        1,870             4  %          -  %
  Total Small Business & Self-Employed   $ 4,688      $ 4,050      $ 3,533            16  %         15  %


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Revenue for our Small Business & Self-Employed segment increased $638 million or
16% in fiscal 2021 compared with fiscal 2020. The increase was primarily due to
growth in Online Ecosystem revenue. Fiscal 2021 and 2020 revenue includes $20
million and $30 million, respectively, of nonrecurring revenue related to the
Payroll Protection Program, of which $12 million and $16 million, respectively,
related to our Online Ecosystem and $8 million and $14 million, respectively,
related to our Desktop Ecosystem.
Online Ecosystem
Online Ecosystem revenue increased $568 million or 26% in fiscal 2021 compared
with fiscal 2020. QuickBooks Online Accounting revenue increased 25% in fiscal
2021 compared with fiscal 2020 primarily due to an increase in customers, a
shift in mix to our higher priced offerings and higher effective prices. Online
Services revenue increased 27% in fiscal 2021 compared with fiscal 2020
primarily due to an increase in revenue from our payments and payroll offerings.
Online payments revenue increased due to an increase in customers and an
increase in charge volume per customer. Online payroll revenue increased due to
an increase in customers and a shift in mix to our full service offering.
Desktop Ecosystem
Desktop Ecosystem revenue increased $70 million in fiscal 2021 compared with
fiscal 2020 primarily due to growth in our QuickBooks Desktop Enterprise
subscription offering due to an increase in customers and higher revenue for our
desktop payments offering due to higher charge volume. Also, during fiscal 2021
there was an increase in revenue from license updates as a result of price
increases that occurred during fiscal 2020. These increases were partially
offset by a decline in desktop unit revenue.
Small Business & Self-Employed segment operating income increased $499 million
or 24% in fiscal 2021 compared with fiscal 2020 primarily due to the increase in
revenue described above, partially offset by higher expenses. We incurred higher
expenses for marketing, outside services, and sales related expenses, which were
partially offset by a decrease in depreciation.
In August 2020, we reorganized certain technology and customer success functions
that support and benefit our overall platform. Additionally, certain legal,
facility and employee service costs are now managed at the corporate level. As a
result, these costs are no longer included in segment operating income and are
now included in other corporate expenses. For the twelve months ended July 31,
2020 and 2019, we reclassified $180 million and $172 million from Small Business
& Self-Employed to other corporate expenses.
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Consumer [[Image Removed: intu-20210731_g5.jpg]]

[[Image Removed: intu-20210731_g6.jpg]]

Consumer segment product revenue is derived primarily from TurboTax desktop tax
return preparation software and related form updates.
Consumer segment service and other revenue is derived primarily from TurboTax
Online and TurboTax Live offerings, electronic tax filing services and connected
services, and also from our Mint offering.


                              Fiscal        Fiscal        Fiscal       2021-2020      2020-2019
(Dollars in millions)          2021          2020          2019        % Change       % Change
Product revenue             $   201       $   203       $   201
Service and other revenue     3,362         2,933         2,574
Total segment revenue       $ 3,563       $ 3,136       $ 2,775             14  %          13  %
% of total revenue               37  %         41  %         41  %

Segment operating income    $ 2,237       $ 2,063       $ 1,820              8  %          13  %
% of related revenue             63  %         66  %         66  %


Revenue for our Consumer segment increased $427 million or 14% in fiscal 2021
compared with fiscal 2020 primarily due to a shift in mix to our higher priced
product offerings including TurboTax Live and a 6% growth in TurboTax federal
units.
Consumer segment operating income increased $174 million or 8% in fiscal 2021
compared with fiscal 2020 due to the higher revenue described above, which was
partially offset by higher expenses for staffing, marketing, and outside
services.
In August 2020, we reorganized certain technology and customer success functions
that support and benefit our overall platform. Additionally, certain legal,
facility and employee service costs are now managed at the corporate level. As a
result, these costs are no longer included in segment operating income and are
now included in other corporate expenses. For the twelve months ended July 31,
2020 and 2019, we reclassified $121 million and $78 million from Consumer to
other corporate expenses.

                            Intuit Fiscal 2021 Form 10-K      43

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Credit Karma    [[Image Removed: intu-20210731_g7.jpg]]


                    [[Image Removed: intu-20210731_g8.jpg]]







Credit Karma revenue is derived from cost-per-action transactions, which include
the delivery of qualified links that result in completed actions such as credit
card issuances and personal loan funding; and cost-per-click and cost-per-lead
transactions, which include user clicks on advertisements or advertisements that
allow for the generation of leads, and primarily relate to mortgage and
insurance businesses.




                             Fiscal      Fiscal      Fiscal      2021-2020      2020-2019
(Dollars in millions)         2021        2020        2019       % Change       % Change
Product revenue             $   -       $   -       $   -
Service and other revenue     865           -           -
Total segment revenue       $ 865       $   -       $   -               N/A            N/A
% of total revenue              9  %        -  %        -  %

Segment operating income    $ 182       $   -       $   -               N/A            N/A
% of related revenue           21  %         N/A         N/A


On December 3, 2020 we acquired Credit Karma. Our results of operations include
the operations of Credit Karma beginning on the date of acquisition.
Credit Karma contributed $865 million in revenue in fiscal 2021. Revenue is
primarily generated from cost-per-action transactions which are related to
credit card issuances and personal loan funding.
Segment operating income was $182 million in fiscal 2021. Expenses were
primarily related to staffing and marketing.

                            Intuit Fiscal 2021 Form 10-K      44


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ProConnect      [[Image Removed: intu-20210731_g9.jpg]]


[[Image Removed: intu-20210731_g10.jpg]]

ProConnect segment product revenue is derived primarily from Lacerte, ProSeries,
and ProFile desktop tax preparation software products and related form updates.
ProConnect segment service and other revenue is derived primarily from
ProConnect Tax Online tax products, electronic tax filing service, connected
services, and bank products.
                             Fiscal      Fiscal      Fiscal      2021-2020      2020-2019
(Dollars in millions)         2021        2020        2019       % Change       % Change
Product revenue             $ 412       $ 400       $ 386

Services and other revenues 105 93 90 Total segment revenues $ 517 $ 493 $ 476

              5  %           4  %
% of total revenue              5  %        6  %        7  %

Segment operating income    $ 372       $ 346       $ 330              8  %           5  %
% of related revenue           72  %       70  %       69  %


In August 2020, we renamed our Strategic Partner segment as the ProConnect
segment. This segment continues to serve professional accountants.
Revenue for our ProConnect segment increased $24 million or 5% in fiscal 2021
compared with fiscal 2020 primarily due to a higher average revenue per customer
and customer growth.
ProConnect segment operating income increased $26 million or 8% in fiscal 2021
compared with fiscal 2020 primarily due to the higher revenue described above
and slightly lower spending.
In August 2020, we reorganized certain technology and customer success functions
that support and benefit our overall platform. Additionally, certain legal,
facility and employee service costs are now managed at the corporate level. As a
result, these costs are no longer included in segment operating income and are
now included in other corporate expenses. For the twelve months ended July 31,
2020 and 2019, we reclassified $13 million and $12 million from ProConnect to
other corporate expense















                            Intuit Fiscal 2021 Form 10-K      45

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Cost of Revenue

                                                     % of                      % of                      % of
                                       Fiscal       Related      Fiscal       Related      Fiscal       Related
(Dollars in millions)                   2021        Revenue       2020        Revenue       2019        Revenue
Cost of product revenue               $    69           4  %    $    72           4  %    $    77           5  %

Cost of service and other income 1,564 20% 1,284

      21  %      1,070          21  %
Amortization of acquired technology        50            n/a         22            n/a         20            n/a
Total cost of revenue                 $ 1,683          17  %    $ 1,378          18  %    $ 1,167          17  %


Our cost of revenue has three components: (1) cost of product revenue, which
includes the direct costs of manufacturing and shipping or electronically
downloading our desktop software products; (2) cost of service and other
revenue, which includes the direct costs associated with our online and service
offerings, such as costs for data processing and storage capabilities from cloud
providers, customer support costs, and costs for the tax and bookkeeping experts
that support our TurboTax Live and QuickBooks Live offerings, costs related to
credit score providers, and depreciation expense for developed technology; and
(3) amortization of acquired technology, which represents the cost of amortizing
developed technologies that we have obtained through acquisitions over their
useful lives.
Cost of product revenue as a percentage of product revenue was relatively
consistent in fiscal 2021 compared with fiscal 2020. We expense costs of product
revenue as they are incurred for delivered software and we do not defer any of
these costs when product revenue is deferred.
Cost of service and other revenue as a percentage of service and other revenue
decreased slightly in fiscal 2021 compared with fiscal 2020. The acquisition of
Credit Karma contributed $209 million to cost of service and other revenue for
fiscal 2021. The decrease in cost of service and other revenue as a percentage
of service and other revenue is primarily due to the increase in revenue
described above. Additionally, during fiscal 2021 we experienced an increase in
customer success costs for TurboTax Live due to customer growth, partially
offset by a decrease in depreciation expense.
Operating Expenses

                                                             % of                                  % of                                  % of
                                                            Total                                 Total                                 Total
                                         Fiscal              Net               Fiscal              Net               Fiscal              Net
(Dollars in millions)                     2021             Revenue              2020             Revenue              2019             Revenue
Selling and marketing                  $ 2,644                   28  %       $ 2,048                   27  %       $ 1,927                   28  %
Research and development                 1,678                   17  %         1,392                   18  %         1,233                   18  %
General and administrative                 982                   10  %           679                    9  %           597                    9  %
Amortization of other acquired
intangible assets                          146                    2  %             6                    -  %             6                    -  %

Total operating expenses               $ 5,450                   57  %       $ 4,125                   54  %       $ 3,763                   55  %


Total operating expenses as a percentage of total net revenue increased in
fiscal 2021 compared to fiscal 2020. Total net revenue increased $2.0 billion or
25% and total operating expenses increased $1.3 billion or 32%, which includes
$616 million of operating expenses related to Credit Karma. Total share-based
compensation expense increased $309 million; total staffing increased $396
million, including $246 million related to Credit Karma; total marketing
increased $383 million, including $197 million related to Credit Karma; and
total amortization of other acquired intangible assets increased $140 million,
which was primarily related to Credit Karma.
Non-Operating Income and Expenses


Interest Expense
Interest expense of $29 million in fiscal 2021 consisted primarily of interest
on our senior unsecured notes, secured revolving credit facility, unsecured term
loan, and unsecured revolving credit facility. Interest expense of $14 million
in fiscal 2020 consisted primarily of interest on our unsecured term loan,
unsecured revolving credit facility, secured revolving credit facility, and
senior unsecured notes. See Note 7 and Note 8 to the financial statements in
Item 8 of this Annual Report for more information.
                            Intuit Fiscal 2021 Form 10-K      46


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Interest and Other Income, Net
(In millions)                                                   Fiscal 2021           Fiscal 2020           Fiscal 2019
Interest income (1)                                           $         11          $         39          $         46
Net gain on executive deferred compensation plan assets (2)             28                     5                     3

Other (3)                                                               46                    (8)                   (7)
Total interest and other income, net                          $         85          $         36          $         42


(1)  Interest income decreased in fiscal 2021 compared to fiscal 2020 due to
lower average invested balances and lower average interest rates.
(2)  In accordance with authoritative guidance, we record gains and losses
associated with executive deferred compensation plan assets in interest and
other income and gains and losses associated with the related liabilities in
operating expenses. The total amounts recorded in operating expenses for each
period are approximately equal to the total amounts recorded in interest and
other income in those periods.
(3)  In fiscal 2021 we recorded a $30 million gain from the sale of a note
receivable that was previously written off and gains on other long-term
investments of $17 million.
Income Taxes
Our effective tax rates for fiscal 2021 and fiscal 2020 were approximately 19%
and 17%, respectively. Excluding the tax benefits related to share-based
compensation, our effective tax rate for fiscal 2021 was approximately 24%. This
rate differed from the federal statutory rate of 21% primarily due to state
income taxes and non-deductible share-based compensation, which were partially
offset by the benefit we received from the federal research and experimentation
credit. Excluding the tax benefits related to share-based compensation, our
effective tax rate for fiscal 2020 was approximately 21%. This rate did not
differ significantly from the federal statutory rate of 21% as state income
taxes and non-deductible share-based compensation were substantially offset by
the benefit we received from the federal research and experimentation credit.
See Note 10 to the financial statements in Item 8 of this Annual Report for more
information about our effective tax rates.
At July 31, 2021, we had net deferred tax liabilities of $517 million which
included a valuation allowance for state research and experimentation tax credit
carryforwards, foreign loss carryforwards, foreign intangible deferred tax
assets and state operating and capital loss carryforwards. See "Critical
Accounting Policies and Estimates" earlier in this Item 7 and Note 10 to the
financial statements in Item 8 of this Annual Report for more information.
In the current global tax policy environment, the U.S. and other domestic and
foreign governments continue to consider, and in some cases enact, changes in
corporate tax laws. As changes occur, we account for finalized legislation in
the period of enactment.
                            Intuit Fiscal 2021 Form 10-K      47

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LIQUIDITY AND CAPITAL RESOURCES


Overview


At July 31, 2021, our cash, cash equivalents and investments totaled $3.9
billion, a decrease of $3.2 billion from July 31, 2020 due to the factors
described in "Statements of Cash Flows" below. Our primary sources of liquidity
have been cash from operations, which includes the collection of accounts
receivable for products and services, the issuance of senior unsecured notes,
and borrowings under our credit facilities. Our primary uses of cash have been
for research and development programs, selling and marketing activities,
repurchases of our common stock under our stock repurchase programs, the payment
of cash dividends, debt service costs and debt repayment, acquisitions of
businesses, and capital projects. As discussed in "Executive Overview - Industry
Trends and Seasonality" earlier in this Item 7, our business is subject to
significant seasonality. The balance of our cash, cash equivalents and
investments generally fluctuates with that seasonal pattern. We believe the
seasonality of our business is likely to continue in the future.
The following table summarizes selected measures of our liquidity and capital
resources at the dates indicated:
                                                    July 31,      July 31,         $            %
(Dollars in millions)                                 2021          2020         Change       Change
Cash, cash equivalents and investments             $  3,870      $  7,050      $ (3,180)       (45) %
Long-term investments                                    43            19            24        126  %
Short-term debt                                           -         1,338        (1,338)      (100) %
Long-term debt                                        2,034         2,031             3          -  %
Working capital                                       2,502         4,451        (1,949)       (44) %
Ratio of current assets to current liabilities        1.9 : 1       2.3 : 1


We have historically generated significant cash from operations and we expect to
continue to do so during fiscal 2022. Our cash, cash equivalents, and
investments totaled $3.9 billion at July 31, 2021, none of those funds were
restricted, and approximately 92% of those funds were located in the U.S.
On December 3, 2020 we acquired Credit Karma. The fair value of the purchase
consideration totaled $7.2 billion and included $3.4 billion in cash, 10.6
million shares of Intuit common stock with a fair value of $3.8 billion and
assumed equity awards for services rendered through the acquisition date of $47
million. See "Business Combinations" below for more information.
In the fourth quarter of fiscal 2020, we borrowed the full $1 billion under our
unsecured revolving credit facility which we repaid In August 2020. The
unsecured revolving credit facility is available to us for general corporate
purposes. In the fourth quarter of fiscal 2020, we also issued $2 billion in
senior unsecured notes for general corporate purposes, which was used to fund a
portion of the acquisition of Credit Karma. See "Commitments for Senior
Unsecured Notes" later in this Item 7 for more information.
Based on past performance and current expectations, we believe that our cash and
cash equivalents, investments, and cash generated from operations will be
sufficient to meet anticipated seasonal working capital needs, capital
expenditure requirements, contractual obligations, commitments, debt service
requirements, and other liquidity requirements associated with our operations
for at least the next 12 months. We believe that our financial resources will
allow us to manage any impact of COVID-19 on our business operations for the
foreseeable future, which could include potential reductions in revenue and
delays in payments from customers and partners.
We expect to return excess cash generated by operations to our stockholders
through payment of cash dividends, after taking into account our operating and
strategic cash needs.
Our secured revolving credit facility is available to fund a portion of our
loans to qualified small businesses. At July 31, 2021, $48 million was
outstanding under the secured revolving credit facility. See "Credit Facilities"
later in this Item 7 for more information.
We evaluate, on an ongoing basis, the merits of acquiring technology or
businesses, or establishing strategic relationships with and investing in other
companies. Our strong liquidity profile enables us to quickly respond to these
kinds of opportunities.
                            Intuit Fiscal 2021 Form 10-K      48

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Statements of Cash Flows


The following table summarizes selected items from our consolidated statements
of cash flows for fiscal 2021, fiscal 2020, and fiscal 2019. See the financial
statements in Item 8 of this Annual Report for complete consolidated statements
of cash flows for those periods.
                                                               Fiscal            Fiscal           Fiscal
(Dollars in millions)                                           2021              2020             2019
Net cash provided by (used in):
Operating activities                                         $  3,250          $ 2,414          $ 2,324
Investing activities                                           (3,965)             (97)            (635)
Financing activities                                           (3,176)           2,034             (965)

Effect of exchange rates on cash, cash equivalents, restricted cash and restricted cash equivalents

                   13               (6)              (3)

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents

             $ (3,878)      

$ 4,345 $ 721


During fiscal 2021 we generated $3.3 billion in cash from operations and $196
million from the issuance of common stock under employee stock plans. During the
same period we used $3.1 billion for the acquisitions of businesses, $1.3
billion for the repayment of debt, $1.0 billion for the repurchase of shares of
our common stock under our stock repurchase programs, $710 million for the net
purchases of investments, $646 million for the payment of cash dividends, $383
million for payments for employee taxes withheld upon vesting of restricted
stock units, $125 million for capital expenditures, and $96 million for net
originations of term loans.
During fiscal 2020 we generated $2.4 billion in cash from operations. We also
received $2 billion from the issuance of senior unsecured notes, $1 billion from
borrowings under our unsecured revolving credit facility, $44 million for net
principal repayments of term loans, and $25 million from the net sales and
maturities of investments. During the same period we used $561 million for the
payment of cash dividends, $323 million for the repurchase of shares of our
common stock under our stock repurchase programs, $137 million for capital
expenditures, $50 million for the repayment of debt, and $33 million from the
issuance of common stock under employee stock plans, net of payments for
employee taxes withheld upon vesting of restricted stock units.
Stock Repurchase Programs and Dividends on Common Stock


As described in Note 11 to the financial statements in Item 8 of this Annual
Report, during fiscal 2021 and fiscal 2020 we continued to repurchase shares of
our common stock under a series of repurchase programs that our Board of
Directors has authorized. At July 31, 2021, we had authorization from our Board
of Directors to expend up to an additional $1.3 billion for stock repurchases.
On August 20, 2021 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. We currently expect to continue repurchasing our common stock on a
quarterly basis; however, 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.
We have continued to pay quarterly cash dividends on shares of our outstanding
common stock. During fiscal 2021 we declared cash dividends that totaled $2.36
per share of outstanding common stock or approximately $651 million. In August
2021 our Board of Directors declared a quarterly cash dividend of $0.68 per
share of outstanding common stock payable on October 18, 2021 to stockholders of
records at the close of business on October 11, 2021. We currently expect to
continue paying comparable cash dividends on a quarterly basis; however, 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.
Business Combinations


On December 3, 2020 we acquired Credit Karma for total consideration of
$8.1 billion which included assumed equity awards and restricted shares subject
to a revest provision.
The fair value of the purchase consideration totaled $7.2 billion and included
$3.4 billion in cash, 10.6 million shares of Intuit common stock with a fair
value of $3.8 billion and assumed equity awards for services rendered through
the acquisition date of $47 million.
We also issued shares of common stock with a fair value of $275 million which
are restricted due to a revest provision, and will be expensed over a service
period of three years. The share-based compensation expense related to these
restricted shares is non-deductible for income tax purposes. Additionally, we
assumed equity awards for future services with a fair value of $663 million that
are being charged to expense over the remaining service periods, which average
approximately three years.
The fair value of the stock consideration is based on the December 2, 2020
closing price of Intuit common stock of $355.49.
As part of the merger agreement, following the close of the transaction, we
issued approximately $300 million of restricted stock units to the employees of
Credit Karma, which will be charged to expense over a service period of four
years.
                            Intuit Fiscal 2021 Form 10-K      49

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Credit Karma operates as a separate reportable segment. We have included the
financial results of Credit Karma in the consolidated financial statements from
the date of acquisition. See Note 6 to the financial statements in Item 8 of
this Annual Report for more information.
Commitments for Senior Unsecured Notes


In June 2020, we issued $2 billion of senior unsecured notes comprised of the
following:
•$500 million of 0.650% notes due July 2023;
•$500 million of 0.950% notes due July 2025;
•$500 million of 1.350% notes due July 2027; and
•$500 million of 1.650% notes due July 2030 (together, the Notes).
Interest is payable semiannually on January 15 and July 15 of each year. At
July 31, 2021, our maximum commitment for interest payments under the Notes was
$140 million through the maturity dates.
The Notes are senior unsecured obligations of Intuit and rank equally with all
existing and future unsecured and unsubordinated indebtedness of Intuit and are
redeemable by us at any time, subject to a make-whole premium. Upon the
occurrence of change of control transactions that are accompanied by certain
downgrades in the credit ratings of the Notes, we will be required to repurchase
the Notes at a repurchase price equal to 101% of the aggregate outstanding
principal plus any accrued and unpaid interest to but not including the date of
repurchase. The indenture governing the Notes requires us to comply with certain
covenants. For example, the Notes limit our ability to create certain liens and
enter into sale and leaseback transactions. As of July 31, 2021 we were
compliant with all covenants governing the Notes. See Note 8 to the financial
statements in Item 8 of this Annual Report for more information.
Credit Facilities


Unsecured Revolving Credit Facility and Term Loan
On May 2, 2019 we entered into an amended and restated credit agreement with
certain institutional lenders for a credit facility with an aggregate principal
amount of $1.4 billion, including a $1 billion unsecured revolving credit
facility that matures on May 2, 2024 and a $400 million unsecured term loan that
matured on February 1, 2021.
Under the amended and restated credit agreement we may, subject to certain
customary conditions including lender approval, on one or more occasions
increase commitments under the unsecured 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 unsecured 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 0.1% or the London
Interbank Offered Rate (LIBOR) plus a margin that ranges from 0.69% to 1.1%.
Actual margins under either election will be based on our senior debt credit
ratings. In May 2020, we borrowed the full $1 billion under the unsecured
revolving credit facility and during the first quarter of fiscal 2021 we repaid
the outstanding balance. At July 31, 2021, no amounts were outstanding under the
unsecured revolving credit facility. We currently believe that the credit
facility will be available to us should we choose to borrow under it. We monitor
counterparty risk associated with the institutional lenders that are providing
the credit facility.
On February 1, 2021, we paid the $325 million remaining balance of the term loan
upon maturity and at July 31, 2021, no amount was outstanding.The term loan
accrued 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 0.125% or
LIBOR plus a margin that ranges from 0.625% to 1.125%. Under this agreement we
may, subject to certain customary conditions including lender approval, on one
or more occasions increase commitments under the term loan in an amount not to
exceed $400 million in the aggregate. This option continues to be available to
us through the maturity of the amended and restated credit agreement.
The amended and restated credit agreement includes customary affirmative and
negative covenants, including financial covenants that require us to maintain a
ratio of total gross 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. As of July 31, 2021
we were compliant with all required covenants.
Secured Revolving Credit Facility
On February 19, 2019 a subsidiary of Intuit entered into a $300 million secured
revolving credit facility with a lender to fund a portion of our loans to
qualified small businesses. The revolving credit facility is secured by cash and
receivables of the subsidiary and is non-recourse to Intuit Inc. We have entered
into several amendments to the secured revolving credit facility, most recently
on July 16, 2021, primarily to extend the commitment term and maturity date.
Under the amended agreement, $150 million of the facility is committed and $150
million is uncommitted. Advances accrue interest at LIBOR plus 1.5%. Unused
portions of the committed credit facility accrue interest at a rate ranging from
0.25% to 0.75%, depending on the total unused committed balance. The commitment
term is through July 17, 2023 and the final maturity date is January 17, 2024.
The amended agreement allows for the transition of the benchmark interest rate
used to calculate finance charges from
                            Intuit Fiscal 2021 Form 10-K      50


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LIBOR to the Secured Overnight Finance Rate (SOFR) plus related benchmark
adjustments that represent the prevailing market convention for
dollar-denominated syndicated credit facilities. The agreement includes certain
affirmative and negative covenants, including financial covenants that require
the subsidiary to maintain specified financial ratios. As of July 31, 2021 we
were compliant with all required covenants. At July 31, 2021, $48 million was
outstanding under this facility and the weighted-average interest rate was
3.21%, which includes the interest on the unused committed portion. The
outstanding balance is secured by cash and receivables of the subsidiary
totaling $199 million.
Cash Held by Foreign Subsidiaries


Our cash, cash equivalents and investments totaled $3.9 billion at July 31,
2021. Approximately 8% of those funds were held by our foreign subsidiaries and
subject to repatriation tax considerations. These foreign funds were located
primarily in Canada, the United Kingdom, and India. As a result of the 2017 Tax
Act we do not expect to pay incremental U.S. taxes on repatriation. We have
recorded income tax expense for Canada and India withholding taxes on earnings
that are not permanently reinvested. In the event that funds from foreign
operations are repatriated to the United States, we would pay withholding taxes
at that time.
CONTRACTUAL OBLIGATIONS


The following table summarizes our known contractual obligations to make future
payments at July 31, 2021:
                                                                                 Payments Due by Period
                                                     Less than            1-3             3-5            More than
(In millions)                                         1 year             years           years            5 years            Total
Amounts due under executive deferred compensation
plan                                               $      153          $    -          $    -          $        -          $   153
Senior unsecured notes                                      -             500             500               1,000            2,000

Secured revolving credit facility                           -              48               -                   -               48
Interest and fees due on debt                              25              48              35                  40              148
Operating leases (1)                                       76             159             107                 139              481
Purchase obligations (2)                                  205             215             111                   -              531
Total contractual obligations (3)                  $      459          $  

970 $ 753 $ 1,179 $ 3,361



(1)Includes operating leases for facilities and equipment. Amounts do not
include $41 million of future sublease income or $43 million in minimum lease
payments for leases signed but not yet commenced. We had no significant finance
leases at July 31, 2021. See Note 9 to the financial statements in Item 8 of
this Annual Report for more information.
(2)Represents agreements to purchase products and services that are enforceable,
legally binding and specify terms, including: fixed or minimum quantities to be
purchased; fixed, minimum or variable price provisions; and the approximate
timing of the payments.
(3)Other long-term obligations on our consolidated balance sheet at July 31,
2021 included long-term income tax liabilities of $24 million which related
primarily to unrecognized tax benefits. We have not included this amount in the
table above because we cannot make a reasonably reliable estimate regarding the
timing of settlements with taxing authorities, if any.

RECENT ACCOUNTING POSITION PAPERS


For a description of recent accounting pronouncements and the potential impact
of these pronouncements on our consolidated financial statements, see Note 1 to
the financial statements in Item 8 of this Annual Report.
                            Intuit Fiscal 2021 Form 10-K      51


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