Stockholders' Equity

6 Months Ended

Jan. 31, 2013

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. We repurchased 3.4 million shares for $200 million under these programs during the six months ended January 31, 2013 and 11.4 million shares for $586 million under these programs during the six months ended January 31, 2012. At January 31, 2013, we had authorization from our Board of Directors to expend up to an additional $1.5 billion for stock repurchases through August 15, 2014. 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.

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.

Dividends on Common Stock

During the six months ended January 31, 2013 we declared and paid quarterly cash dividends of $0.34 per share of outstanding common stock that totaled approximately $101 million. In February 2013 our Board of Directors declared a quarterly cash dividend of $0.17 per share of outstanding common stock payable on April 18, 2013 to stockholders of record at the close of business on April 10, 2013. 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.

Share-Based Compensation Expense

The following table summarizes the total share-based compensation expense that we recorded for the periods shown.

	Three Months Ended						Six Months Ended
(In millions, except per share amounts)	January 31, 2013			January 31, 2012			January 31, 2013			January 31, 2012
Cost of revenue	$	2		$	2		$	4		$	3
Selling and marketing	17			15			35			29
Research and development	14			14			28			26
General and administrative	14			12			29			25
Total share-based compensation expense	47			43			96			83
Income tax benefit	(16		)	(14		)	(32		)	(27		)
Decrease in net income	$	31		$	29		$	64		$	56
Decrease in net income per share:
Basic	$	0.10		$	0.10		$	0.22		$	0.19
Diluted	$	0.10		$	0.09		$	0.21		$	0.18

Share-Based Awards Available for Grant

A summary of share-based awards available for grant under our 2005 Equity Incentive Plan for the six months ended January 31, 2013 was as follows:

(Shares in thousands)	Shares Available for Grant
Balance at July 31, 2012	21,760
Options granted	(106	)
Restricted stock units granted (1)	(901	)
Share-based awards canceled/forfeited/expired (1)(2)	1,399
Balance at January 31, 2013	22,152

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(1) Under the terms of our Amended and Restated 2005 Equity Incentive Plan, as amended through July 24, 2012 (2005 Equity Incentive Plan), RSUs granted from the pool of shares available for grant on or after November 1, 2010 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 six months ended January 31, 2013 was as follows:

	Options Outstanding
(Shares in thousands)	Number of Shares		Weighted Average Exercise Price Per Share
Balance at July 31, 2012	18,061		$	37.49
Options granted	106		60.30
Options exercised	(3,880	)	32.37
Options canceled or expired	(336	)	40.67
Balance at January 31, 2013	13,951		$	39.02
Exercisable at January 31, 2013	8,620		$	32.68

At January 31, 2013, there was approximately $53 million of unrecognized compensation cost related to non-vested stock options that we expect to recognize as expense in the future. We will adjust unrecognized compensation cost for future changes in estimated forfeitures. We expect to recognize that cost over a weighted average vesting period of 2.0 years.

Restricted Stock Unit Activity and Related Share-Based Compensation Expense

A summary of restricted stock unit activity for the six months ended January 31, 2013 was as follows:

	Restricted Stock Units
(Shares in thousands)	Number of Shares		Weighted Average Grant Date Fair Value
Nonvested at July 31, 2012	9,607		$	46.79
Granted	392		60.30
Vested	(875	)	34.80
Forfeited	(511	)	47.08
Nonvested at January 31, 2013	8,613		$	48.61

At January 31, 2013, there was approximately $216 million of unrecognized compensation cost related to non-vested RSUs and restricted stock that we expect to recognize as expense in the future. We will adjust unrecognized compensation cost for future changes in estimated forfeitures. We expect to recognize that cost over a weighted average vesting period of 2.1 years.