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Annual Shareholder Meeting 2008

Annual Shareholder Meeting 2008.

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Annual Shareholder Meeting 2008

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  1. Annual Shareholder Meeting2008

  2. Forward Looking StatementsThese presentation materials include forward-looking statements. There are a number of factors that could cause our results to differ materially from our expectations. Please see the section entitled “Cautions About Forward-Looking Statements” in the enclosed Appendix for information regarding forward-looking statements and related risks and uncertainties. You can also learn more about these risks in our Form 10-K for fiscal 2008 and our other SEC filings, which are available on the Investor Relations page of Intuit's website at www.intuit.com. We assume no obligation to update any forward-looking statement. Non-GAAP Financial MeasuresThese presentations include certain non-GAAP financial measures. Please see the section entitled “About Non-GAAP Financial Measures” in the enclosed Appendix for an explanation of management’s use of these measures and a reconciliation to the most directly comparable GAAP financial measures. Required Disclosures

  3. Strong FY08 Results FY08 Actual % Growth Revenue$3,071M +15% Non-GAAP Operating Income* $856M +12% Non-GAAP Diluted EPS* $1.60 +12% *These are non-GAAP financial measures. GAAP operating income from continuing operations $638M (+13%). GAAP EPS $1.24 (+7%). See attached reconciliation of non-GAAP measures to GAAP.

  4. Simple Recipe for Success Be in good businesses with strategies to win Then: • Talented and Engaged Employees • Delivering for Customers So: • We Grow Revenues and Profits

  5. Intuit’s Markets and Opportunities Health Care Small Business QuickBooks, Payroll & Payments Tax Global Financial Institutions

  6. Our main growth businesses have large market opportunities… Financial Management Large opportunity to disrupt higher-pricedalternatives High Share within category Large opportunity to convert non-consumption …and we win by converting non-consumption and disrupting higher priced alternatives Source: Intuit estimates

  7. Our main growth businesses have large market opportunities… Tax Prep Methods Large opportunity to disrupt higher-priced alternatives(Tax Stores) High Share within category Large opportunity to convert non-consumption …and we win by converting non-consumption and disrupting higher priced alternatives Source: IRS data and Intuit estimates

  8. Our main growth businesses have large market opportunities… Online Banking Households Online Banking Households All Households Large opportunity to convert non-consumption Online Households Online Banking Households (Forecast) …and we win by converting non-consumption and disrupting higher priced alternatives

  9. Strong Assets for Future Growth • 7M QB & Quicken small business users • 17M TurboTax users… 22M returns • 8M on-line banking customers… 38M potential • 12M Quicken consumer users • 275K accountants An Ecosystemwith Millions of End Users • TurboTax • QuickBooks • Quicken • Intuit • Digital Insight Trusted Brands • 40,000 Accountant Pro Advisors • 5,000 Educational institutions • 1,800 financial institutions • 75,000 certified IDN developers Significant 3rd Party Scale & relationships

  10. Intuit’s Focus We serve these end customers Financial… making & saving money, grow & profit Consumers Small Businesses …and those who serve them Accountants Financial Institutions Health Care Players To be a premierinnovativegrowth companythat empowers individuals and businesses to achieve their dreams Productivity… turning drudgery into time for what matters most Compliance… without even having to think about it Confidence… from the wisdom & experience of others

  11. Four Major Market Trends User Demographic Shifts Value Creation Shifts Emerging companies highlight importance of user contribution and social connectedness Level of User Contribution Gen Years Boomers Mompreneurs Careerpreneurs Immigrants Technology Shifts Geographic Shifts Software Spend by Delivery Channel Software Spend by Geographic Region Growth ~5% ~5% ~15% ~10% ~20% Growth ~5% ~25% ~30% US Desktop Software Western Europe Asia Pacific Software Spend Software Spend Software as a Service Other Americas Mobile ROW ~2000 Today ~2000 Today Source: Intuit estimates

  12. Intuit’s Game Plan To Win Intuit’s focus is… To be a premierinnovativegrowth companythat empowers individuals and businesses to achieve their dreams By creating and acquiring… Easy-to-use “Connected Services” that create delight by solving important unsolved customer problems & build durable advantage And capitalizing on three significant market trends… • Social… capitalize on our large and growing customer bases to unleash the collective power of user contributions, user behaviors and user data • Mobile… deliver “in the pocket” when that is the preferred solution • Global…employ the world’s talents to find & solve important problems around the globe

  13. Intuit “Connected Services” Revenue Growth 27% FY08 connected services YOY revenue growth was28%,While desktop software sales across Intuit grew 3% ($M) 7% Intuit “SaaS” Revenue Growth 50% CAGR ($M) Not a standing start… CAGR CAGR • We have many market-leading “Connected Services” today • ~50% of our revenue is derived from these “Connected Services” • “Connected Services” are driving the company’s growth at accelerating rates “Connected Services” includes SaaS offerings described below plus elements of Payroll, Payments, QB services, Tax e-filing “SaaS” includes TurboTax Online, Online Banking, QuickBooks Online, QuickBase, Homestead, IRES Netsource

  14. Get Customers Manage Finances Run My Business Small Business Pay Employees Accept Payments Intuit’s Small Business Ecosystem

  15. Small Business Landscape Key Facts Key Facts Key Facts Key Facts 27 Million US Businesses 0.6M businesses $6B total SW spend Delegation: departments QB 29% firms… 2% spend Mid Market 3.3M businesses $3B total SW spend Owner begins to delegate 45% QB/Qkn share Main Street Personal Business 23M businesses $2B total SW spend 25% QB/Qkn share 42% Manual/Spreadsheet Global Opportunity • ~375M small businesses outside US • 60% of SMBs in SE Asia and India • Many US small businesses doing business abroad Source: Intuit estimates

  16. How We Win: A Simple, Proven Recipe + Acquire New Users Maximize LTV

  17. QuickBooks ’09 Highlights Get Productive Get Insights & Info Get Customers Go Global

  18. Double Down on Demand Generation Investing 50% more in demand generation, including off-line and online channels

  19. Winning With FREE FREE Works • 75% had not considered QuickBooks • 1 in 5 upgrade to paid immediately • Many upgrade later or buy additional services Driving Demand • Part of overall marketing campaign • Front and center on web properties Monetize through In-product Discovery • More services … payroll, payments, web sites… • More up-sell … as they “outgrow”

  20. Payroll: Lots of Growth Potential Addressable Small Businesses 1M QB PayrollCustomers 100% = ~9.6M Our Position Today 18% Outsourcers • ~ 50% penetrated in addressable QB base • 11% penetrated in total addressable market 2.3MAddressableQB Employers 23% Accountants Software 26% 7.3M Non-QBSmall BusinessEmployers Manual 33% * # of firms with <50 ee’s

  21. In a Strong Position to Disrupt Market Category NPS Annual Fee $3000 45 $300 47 35 $0 -14 Outsourcers/Accountants 3.9M employers Software2.5M employers 1M employersenter online 1M employersexit desktop Manual3.2M employers Source: Intuit estimates

  22. In a Strong Position to Disrupt Market Category NPS Annual Fee $3000 45 Intuit Assisted Payroll 62 $1000 $300 47 35 $0 -14 Outsourcers/Accountants 3.9M employers Software2.5M employers 1M employersenter online 1M employersexit desktop Manual3.2M employers Source: Intuit estimates

  23. Payments: What We Do Help businesses accept electronic payments… Credit/Gift Cards PIN Debit E-Check Check/Check21 The way that is right for them… Face to Face Back Office Mobile Web …In ways our competitors can’t Human Touch Integrates with Business Solutions Single Experience, Multiple Solutions Leverage & Create Network Effects

  24. Payments market is large and growing Payments Market CAGR (2005-2010F) Payments Market is $225B Cash 3% -36% Check Credit Card 11% Where IMS Competes Today 14% Debit Card 16% Gift Card 20% ACH / Bank Transfer 100% Imaged Check 8% Total Source: Intuit estimates and Nilson report (Dec.2006).

  25. Payments market is large and growing What ECHO Brought Payments Market CAGR (2005-2010F) Payments Market is $225B Cash 3% -36% Check Credit Card 11% Where IMS Competes Today 14% Debit Card 16% Gift Card 20% ACH / Bank Transfer 100% Imaged Check 8% Total Source: Intuit estimates and Nilson report (Dec.2006).

  26. Consistently Strong Results $ 1 , 2 0 0 M 1 , 0 0 0 8 6 1 8 0 0 7 5 1 6 4 3 6 0 0 5 2 1 4 5 4 3 9 4 4 0 0 2 9 5 2 0 8 2 0 0 0 F Y 9 8 F Y 9 9 F Y 0 0 F Y 0 1 F Y 0 2 F Y 0 3 F Y 0 4 F Y 0 5 Total Small Business Revenue ($Millions) CAGR 19% 1 , 1 8 3 1 , 1 0 3 s t n e 9 8 8 m y 42% a P & l l o r y a P s k o 13% o B k c i u Q F Y 0 6 F Y 0 7 F Y 0 8

  27. Lots of Room to Grow 139M Returns $20B Revenue Estimated TY07 Individual Federal Returns TurboTax just 17% of Returns, 5% of Revenue Source: Intuit estimates

  28. Consumer Tax Prep Trends… We’re in the Sweet Spot Pro / CPA Franchise/ Tax Store Software 5M filers enter 3.5M filers exit Manual Source: Intuit estimates, IRS reports and public filings from tax stores.

  29. Ease…Faster Return Completion

  30. Ease…Entire Customer Experience Product Support TV Print Retail PR Website

  31. Ease…LeveragingIntuit’s Ecosystem Intuit Payroll – W2 Wages Welcome to Intuit, makers of TurboTax & QuickBooks Payroll. We’ll help you file your taxes in no time. Please enter your company EIN First Name Last Name Social Security Number $0 $0

  32. Ease…Innovation Dynamic Planning Mobile Tracking Easy Navigation More Graphics

  33. CTG Revenue Growth FY09 Revenue Guidance $1-1.04 Billion Projected Growth 8%-12% CAGR 19%

  34. + Acquire additional Financial Institutions + Expand services…grow the category's spend Drives Revenue Growth Sources Of Growth Convert more customers of existing FI’s to online banking… non-consumption

  35. Assuming Performance Matches DI’s Leading FIs 60% IB 55% BP 22.8M IB Users 10.3M BP Users Opportunity #1: Convert More Customers Of Existing FI’s To Online Banking 38m Total existing FI customers 19.2M Without Checking Accounts Current Penetration: 23% IB 13% BP Users Millions 18.8M With Checking Accounts With Checking Account 8.7M IB Users 2.5M BP Users • If overall penetration reached the level of DI’s leading FI’s, revenue opportunity ~ $700M

  36. Opportunity #2: Acquire More FI’s # of FIs Assets 7 $200B 50 $20B DI Penetration 13% 200 $3B 8% 16,000 • Opportunity For Deeper Penetration • Increasing sales headcount with focus on “up-market” • Potential expansion of core processor relationships • Expanding our services

  37. Opportunity #3: Expand Services • Expansion of services expected to drive faster growth • This is where Personal and Small Business FinanceWorks are focused 80 Small Business Online Banking Penetration 60 PFW and SBFW Focus Small Business Finance MgmtPenetration Consumer Online BankingPenetration Percent of US Households / Small Businesses 40 Consumer Personal Finance MgmtPenetration 20 Consumer Online Bill PayPenetration 0 2002 2004 2006 2007 2008F 2010F Base: US online households (111M in 2007); US business (26.5M in 2007) Source: Forrester, March 2007; The Online Banking Report, 2008; Aite Group’s “Mistakes Banks Make when serving SBs,” May 2008; Internal Analysis based on date from Intuit OLB study 2007 Source: Forrester US Online Banking Forecast, 03/07

  38. Lots Of Room For Growth Grow penetration of existing end users Potential End-Users 38M ~ 9M Grow number of Financial Institutions Total Financial Institutions 16K ~ 1800 Expand services FinanceWorks, Payroll Payments… ??? • FY09 Revenue Guidance $313M - $325M • Expect to exit FY09 with double digit growth run rate

  39. Free to consumer web based tool Helps consumers understand & manage their medical expenses Consolidates critical health care financial info in one place Enables electronic payment to their doctors Our Healthcare Efforts… The Front End Application

  40. Quicken HealthExpense Tracker Our Healthcare Efforts… • Big 5 Health Plans: • WellPoint • United • Aetna • HCSC • CIGNA • . • 28. Medical Mutual of Ohio . . . . All Plans in Beta by Jan Each Launching Broadly in 2009

  41. Multi-Currency Our Global Efforts… • Our Goal: To be a premier global provider of connected services to SMBs • Focusing on 10 countries with 60% of world’s 400M SMBs (India + SE Asia) • Developing globally-relevant SMB offerings • Building world-class innovation capabilities in India • Introducing first beta offerings into the Emerging Markets in late FY’09

  42. Intuit Financial Principles Double digit annual organic revenue growth supplemented by acquisitions Revenue growth greater than expenses Generate operating income leverage…expanded OM% Generate strong cash flow…in line with op income While investing for future growth in: Longer term business opportunities and infrastructure And returning excess cash to shareholders Normally in the form of share repurchase 44

  43. Consistently Delivering Results EPS ($)** (CAGR 21%) Revenue ($B) (CAGR 15%) Fiscal Years Ending July Fiscal Years Ending July ** EPS shown is non-GAAP; reconciliation to comparable GAAP figures later in this presentation

  44. …And Operating Cash Flow Growth Cash Flow ($B) (CAGR 23%) Cash Flow* CAGR = 31% Fiscal Years Ending July *Cash Flow from Continuing Operations

  45. …and $4.7B of Excess Cash Returned to Shareholders since FY02 • Authorization as of 8/1/08: $600M Note: Stock repurchase program began in FY02.

  46. Summary • Focused on accelerating organic growth & op leverage • Great businesses with lots of headroom for continued growth… and a pipeline of new ideas in process • A clear game plan to win - delighting customers with easy-to-use connected services that solve important customer problems & help them achieve their dreams • Key areas of focus in the coming year: • Ease of Use… in a connected services world • Win new users... “new front doors”, “Free”, etc… and monetize over time • Allocate resources against highest value opportunities

  47. Cautions About Forward-Looking Statements This presentation includes "forward-looking statements" which are subject to safe harbors created under the U.S. federal securities laws. All statements included in this presentation that address activities, events or developments that Intuit expects, believes or anticipates will or may occur in the future are forward looking statements, including: our expected market and growth opportunities and strategies to grow our business; our expected revenue growth, operating income leverage and cash flow; and future market trends. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from the expectations expressed in the forward-looking statements. These factors include, without limitation, the following: product introductions and price competition from our competitors can have unpredictable negative effects on our revenue, profitability and market position; governmental encroachment in our tax businesses or other governmental activities or public policy affecting the preparation and filing of tax returns could negatively affect our operating results and market position; if economic and market conditions in the U.S. and worldwide continue to decline, our customers may delay or reduce technology purchases which may harm our business, results of operations and financial condition; we may not be able to successfully introduce new products and services to meet our growth and profitability objectives, and current and future products and services may not adequately address customer needs and may not achieve broad market acceptance, which could harm our operating results and financial condition; any failure to maintain reliable and responsive service levels for our offerings could cause us to lose customers and negatively impact our revenues and profitability; any significant product quality problems or delays in our products could harm our revenue, earnings and reputation; our participation in the Free File Alliance may result in lost revenue opportunities and cannibalization of our traditional paid franchise; any failure to properly use and protect personal customer information could harm our revenue, earnings and reputation; our acquisition activities may be disruptive to Intuit and may not result in expected benefits; our use of significant amounts of debt to finance acquisitions or other activities could harm our financial condition and results of operations; our revenue and earnings are highly seasonal and the timing of our revenue between quarters is difficult to predict, which may cause significant quarterly fluctuations in our financial results; predicting tax-related revenues is challenging due to the heavy concentration of activity in a short time period; we have implemented, and are continuing to upgrade, new information systems and any problems with these new systems could interfere with our ability to deliver products and services and gather information to effectively manage our business; our financial position may not make repurchasing shares advisable or we may issue additional shares in an acquisition causing our number of outstanding shares to grow; and litigation involving intellectual property, antitrust, shareholder and other matters may increase our costs. More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2008 and in our other SEC filings, available through our website at www.intuit.com. Fiscal 2009 guidance speaks only as of the date it was publicly issued by Intuit. Other forward-looking statements represent the judgment of the management of Intuit as of the date of this presentation. We do not undertake any duty to update any forward-looking statement or other information in this presentation.

  48. About Non-GAAP Financial Measures The accompanying presentation dated September 24, 2008 contains non-GAAP financial measures. The following slide reconciles the non-GAAP financial measures in that presentation to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP net income (loss) per share. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding Intuit’s operating results primarily because they exclude amounts that we do not consider part of ongoing operating results when assessing the performance of the organization, our operating segments or our senior management. Segment managers are not held accountable for share-based compensation expenses, acquisition-related costs, or the other excluded items that may impact their business units’ operating income (loss) and, accordingly, we exclude these amounts from our measures of segment performance. We also exclude these amounts from our budget and planning process. We believe that our non-GAAP financial measures also facilitate the comparison of results for current periods and guidance for future periods with results for past periods. We exclude the following items from our non-GAAP financial measures: • Share-based compensation expenses. Our non-GAAP financial measures exclude share-based compensation expenses, which consist of expenses for stock options, restricted stock, restricted stock units and purchases of common stock under our Employee Stock Purchase Plan. Segment managers are not held accountable for share-based compensation expenses impacting their business units’ operating income (loss) and, accordingly, we exclude share-based compensation expenses from our measures of segment performance. While share-based compensation is a significant expense affecting our results of operations, management excludes share-based compensation from our budget and planning process. We exclude share-based compensation expenses from our non-GAAP financial measures for these reasons and the other reasons stated above. We compute weighted average dilutive shares using the method required by SFAS 123(R) for both GAAP and non-GAAP diluted net income per share. • Amortization of purchased intangible assets and acquisition-related charges. In accordance with GAAP, amortization of purchased intangible assets in cost of revenue includes amortization of software and other technology assets related to acquisitions. Acquisition-related charges in operating expenses include amortization of other purchased intangible assets such as customer lists, covenants not to compete and trade names. Acquisition activities are managed on a corporate-wide basis and segment managers are not held accountable for the acquisition-related costs impacting their business units’ operating income (loss). We exclude these amounts from our measures of segment performance and from our budget and planning process. We exclude these items from our non-GAAP financial measures for these reasons, the other reasons stated above and because we believe that excluding these items facilitates comparisons to the results of other companies in our industry, which have their own unique acquisition histories. • Gains and losses on disposals of businesses and assets. We exclude these amounts from our non-GAAP financial measures for the reasons stated above and because they are unrelated to our ongoing business operating results. • Gains and losses on marketable equity securities and other investments. We exclude these amounts from our non-GAAP financial measures for the reasons stated above and because they are unrelated to our ongoing business operating results. • Income tax effects of excluded items. Our non-GAAP financial measures exclude the income tax effects of the adjustments described above that relate to the current period as well as adjustments for similar items that relate to prior periods. We exclude the impact of these tax items for the reasons stated above and because management believes that they are not indicative of our ongoing business operations. • Operating results and gains and losses on the sale of discontinued operations. From time to time, we sell or otherwise dispose of selected operations as we adjust our portfolio of businesses to meet our strategic goals. In accordance with GAAP, we segregate the operating results of discontinued operations as well as gains and losses on the sale of these discontinued operations from continuing operations on our GAAP statements of operations but continue to include them in GAAP net income or loss and net income or loss per share. We exclude these amounts from our non-GAAP financial measures for the reasons stated above and because they are unrelated to our ongoing business operations.

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