• Significant changes since our most recent Annual Report on Form 10-K in the Critical Accounting Policies and Estimates that we believe are important to understanding the assumptions and judgments underlying our financial statements.

• Results of Operations that includes a more detailed discussion of our revenue and expenses.

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

You should note that this MD&A discussion contains forward-looking statements that involve risks and uncertainties. Please see Item 1A in Part II of this Quarterly Report on Form 10-Q 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 Part I, Item 1 of this report and our Annual Report on Form 10-K for the fiscal year ended July 31, 2008. In December 2007 we acquired Homestead Technologies Inc. for total consideration of approximately $170 million and in February 2008 we acquired Electronic Clearing House, Inc. for a total purchase price of approximately $131 million. Accordingly, we have included the results of operations for these two companies in our consolidated results of operations from their respective dates of acquisition. We also sold our Intuit Distribution Management Solutions business in August 2007 for approximately $100 million in cash and recorded a net gain on disposal of $27.5 million. We accounted for this business as a discontinued operation and have accordingly reclassified our statements of operations for all periods prior to the sale. Unless otherwise noted, the following discussion pertains only to our continuing operations.
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 the third quarter and first nine months of fiscal 2009 as well as our future prospects. This summary is not intended to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this Quarterly Report on Form 10-Q.
About Intuit
Intuit is a leading provider of business and financial management solutions for small and medium sized businesses, financial institutions, consumers and accounting professionals. We organize our portfolio of businesses into four principal categories - Small Business, Tax, Financial Institutions and Other Businesses. These categories include six financial reporting segments. Small Business: This category includes two segments - QuickBooks, and Payroll and Payments.
• Our QuickBooks segment includes QuickBooks financial and business management software and services, technical support, financial supplies, and Web site design and hosting services for small businesses.

• Our Payroll and Payments segment includes small business payroll products and services. This segment also includes merchant services provided by our Innovative Merchant Solutions business that include credit and debit card processing, electronic check conversion and automated clearing house services.

Tax: This category also includes two segments - Consumer Tax and Accounting Professionals.
• Our Consumer Tax segment includes TurboTax income tax preparation products and services for consumers and small businesses.

• Our Accounting Professionals segment includes Lacerte and ProSeries professional tax products and services. This segment also includes QuickBooks Premier Accountant Edition and the QuickBooks ProAdvisor Program for accounting professionals.

Financial Institutions: This segment consists primarily of outsourced online banking services for banks and credit unions provided by our Digital Insight business.
Other Businesses: This segment includes Quicken personal finance products and services, Intuit Real Estate Solutions, and our business in Canada. Seasonality and Trends
Our QuickBooks, Consumer Tax and Accounting Professionals businesses are highly seasonal. Some of our other offerings are also seasonal, but to a lesser extent. Revenue from our QuickBooks software products tends to be highest during our second and third fiscal quarters. Sales of income tax preparation products and services are heavily concentrated in the period from November through April. In our Consumer Tax business, a greater proportion of our revenue has been occurring later in this seasonal period due in part to the growth in sales of TurboTax Online, for which revenue is recognized upon printing or electronic filing of a tax return. Delays in the availability of tax forms from taxing agencies or the ability of those agencies to receive submissions can cause Consumer Tax and Accounting Professionals revenue to shift from our second fiscal quarter to our third fiscal quarter. Seasonal patterns mean that our total net revenue is usually highest during our second quarter ending January 31 and third quarter ending April 30. We typically report losses in our first quarter ending October 31 and fourth quarter ending July 31, when revenue from our tax businesses is minimal while operating expenses continue at relatively consistent levels. We believe the seasonality of our revenue is likely to continue in the future. In addition, the timing and composition of new customer offerings that include both product and service elements can materially shift revenue between quarters. In our MD&A we often focus on year-to-date results for our seasonal businesses as they are generally more meaningful than quarterly results.
Overview of Financial Results
Total net revenue for the first nine months of fiscal 2009 was $2.7 billion, an increase of 4% compared with the first nine months of fiscal 2008. QuickBooks segment revenue decreased 2%, Payroll and Payments segment revenue increased 14%, Consumer Tax revenue increased 7%, Accounting Professionals revenue increased 8%, Financial Institutions revenue increased 4% and Other Businesses revenue decreased 11%.
The increase in Consumer Tax revenue was due to growth in TurboTax Online units, which more than offset a decrease in TurboTax desktop units. Payroll and Payments revenue was higher due to price increases and growth in the customer base, and Accounting Professionals revenue was higher due to price increases. We believe that slower small business spending negatively affected sales to new QuickBooks customers and the overall reduction in consumer spending negatively affected credit and debit card transaction processing volume in our Payments business as well as Quicken sales in our Other Businesses segment. We also believe that the generally slow real estate market negatively affected Intuit Real Estate Solutions software license sales in our Other Businesses segment. Operating income from continuing operations of $797.6 million for the first nine months of fiscal 2009 increased $52.7 million or 7% compared with the first nine months of fiscal 2008. Fiscal 2009 revenue grew $114.0 million and total costs and expenses increased $61.3 million. Total costs and expenses for the fiscal 2009 period increased due to our fiscal 2008 acquisitions of Homestead and ECHO, higher advertising and other marketing expenses to support the launch and subsequent promotion of TurboTax and QuickBooks 2009, and higher depreciation expense for investments in our infrastructure. A decrease in costs and expenses due to certain compensation-related items and a decline in the market value of certain liabilities associated with our executive deferred compensation plan partially offset these increases.
Net income from continuing operations of $517.7 million for the first nine months of fiscal 2009 increased $5.1 million or 1% compared with the first nine months of fiscal 2008. Interest and other income decreased in the first nine months of fiscal 2009 due to lower interest income and a decline in the value of assets associated with our executive deferred compensation plan. Declines in the value of assets associated with our executive deferred compensation plan were offset by amounts recorded in operating expenses in connection with declines in the related liabilities. In the first nine months of fiscal 2008 we recorded a pre-tax gain of $51.6 million on the sale of certain outsourced payroll assets; there was no comparable transaction in fiscal 2009.
Due to the foregoing factors, diluted net income per share from continuing operations of $1.57 in the first nine months of fiscal 2009 increased 5% compared with $1.50 in the same period of fiscal 2008.

We ended the third quarter of fiscal 2009 with cash, cash equivalents and investments totaling $1.5 billion, an increase of $644 million from July 31, 2008. At April 30, 2009, we also held $265 million in municipal auction rate securities that we classified as long-term investments on our balance sheet. See Note 8 to the financial statements in Part I, Item 1 of this report and "Liquidity and Capital Resources - Auction Rate Securities"later in this Item 2 for more information. In the first nine months of fiscal 2009 we generated $878 million in cash from operations, $181 million in cash from net sales of investments and $111 million in cash from the issuance of common stock under employee stock plans. During the same period we used $200 million in cash for the repurchase of 7.4 million shares of our common stock under our stock repurchase programs and $148 million in cash for capital expenditures. At April 30, 2009, we had authorization from our Board of Directors to expend up to an additional $400 million for stock repurchases through May 15, 2011. Critical Accounting Policies and Estimates In preparing our financial statements, we 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 balance sheet. We believe that the estimates, assumptions and judgments involved in the accounting policies described in Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2008 have the greatest potential impact on our financial statements, so we consider them to be our critical accounting policies and estimates. Except for the change to our fair value measurement policy that is discussed in "Fair Value Measurements - Adoption of SFAS 157" below, we believe that during the first nine months of fiscal 2009 there were no significant changes in those critical accounting policies and estimates. Senior management has reviewed the development and selection of our critical accounting policies and estimates and their disclosure in this Quarterly Report on Form 10-Q with the Audit Committee of our Board of Directors.
Fair Value Measurements - Adoption of SFAS 157 On August 1, 2008 we adopted Statement of Financial Accounting Standards (SFAS) No.157, "Fair Value Measurements," for financial assets and financial liabilities and for non-financial assets and non-financial liabilities that we recognize or disclose at fair value on a recurring basis. See Note 1 and Note 8 to the financial statements in Part I, Item 1 of this report for more information.
SFAS 157 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS 157 establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. Significant judgment is required to estimate the fair value of assets and liabilities, particularly when observable inputs are not available. For example, we use a discounted cash flow model to estimate the fair value of our municipal auction rate securities because current market data is generally unavailable. See Note 8 to the financial statements in Part I, Item 1 of this report for more information. Changes in our estimates of the fair values of our assets and liabilities could result in material increases or decreases in our net income in the period in which the change occurs.

Results of Operations
Financial Overview

(Dollars in millions,                                                                       YTD              YTD
except per                    Q3               Q3               $             %             Q3               Q3               $            %
share amounts)               FY09             FY08           Change        Change          FY09             FY08           Change        Change

Total net revenue        $  1,434.4       $  1,313.0       $  121.4            9 %     $  2,706.8       $  2,592.8       $  114.0           4 %
Operating income from
continuing operations         764.1            674.5           89.6           13 %          797.6            744.9           52.7           7 %
Net income from
continuing operations         484.8            444.2           40.6            9 %          517.7            512.6            5.1           1 %
Diluted net income
per share from
continuing operations    $     1.47       $     1.33       $   0.14           11 %     $     1.57       $     1.50       $   0.07           5 %

Current Fiscal Quarter
Total net revenue increased 9% in the third quarter of fiscal 2009 compared with the third quarter of fiscal 2008. QuickBooks segment revenue decreased 8%, Payroll and Payments segment revenue increased 11%, Consumer Tax revenue increased 18%, Accounting Professionals revenue increased 4%, Financial Institutions revenue increased 3% and Other Businesses revenue decreased 9% in the third quarter of fiscal 2009.
Nearly all of the revenue increase for the third quarter of fiscal 2009 compared with the third quarter of fiscal 2008 was due to higher revenue in our Consumer Tax segment that was driven by growth in TurboTax Online units. In addition, we deferred approximately $70 million in Consumer Tax revenue from the second quarter of fiscal 2009 to the third quarter of fiscal 2009 as a result of our decision to include federal electronic filing services with our TurboTax desktop software for the 2008 tax year. We recognized substantially all of this revenue in the third quarter of fiscal 2009. In our Accounting Professionals segment, about $12 million in revenue shifted from the third quarter of fiscal 2009 to the second quarter of fiscal 2009 because we began offering certain services separately from our professional tax software in fiscal 2009. We generally offered these services in combination with our professional tax software in fiscal 2008. Excluding the $58 million net impact of these revenue shifts, total net revenue for the third quarter of fiscal 2009 increased 5% compared with the same quarter of fiscal 2008. See "Total Net Revenue by Business Segment" later in this Item 2 for more information.
Operating income from continuing operations increased $89.6 million or 13% in the third quarter of fiscal 2009 compared with the same quarter of fiscal 2008. The increase in operating income was due to $121.4 million in higher revenue partially offset by $31.8 million in higher costs and expenses. In the third quarter of fiscal 2009, total costs and expenses increased about $20 million due to higher advertising and other marketing expenses to promote TurboTax 2008 and about $11 million due to a charge for historical use of technology licensing rights. A $20 million decrease in costs and expenses due to a reduction in expected employee bonus payment levels for fiscal 2009 partially offset these increases. See "Cost of Revenue" and "Operating Expenses" later in this Item 2 for more information.
Net income from continuing operations increased $40.6 million or 9% in the third quarter of fiscal 2009 compared with the same quarter of fiscal 2008. We recorded a pre-tax gain of $13.6 million on the sale of certain outsourced payroll assets to ADP in the third quarter of fiscal 2008; there was no comparable transaction in the third quarter of fiscal 2009. See "Dispositions and Discontinued Operations" later in this Item 2 for more information. Our effective tax rates were comparable at 36% for the third quarter of fiscal 2009 and 35% for the third quarter of 2008.
Due to the foregoing factors, diluted net income per share from continuing operations of $1.47 in the third quarter of fiscal 2009 increased 11% compared with $1.33 in the same quarter of fiscal 2008.

Fiscal Year to Date
Total net revenue increased 4% in the first nine months of fiscal 2009 compared with the same period of fiscal 2008. QuickBooks segment revenue decreased 2%, Payroll and Payments segment revenue increased 14%, Consumer Tax revenue increased 7%, Accounting Professionals revenue increased 8%, Financial Institutions revenue increased 4% and Other Businesses revenue decreased 11%. The increase in Consumer Tax revenue was due to 36% growth in TurboTax Online units, which more than offset an 11% decrease in TurboTax desktop units. Payroll and Payments revenue was higher due to price increases and growth in the customer base, and Accounting Professionals revenue was higher due to price increases. See "Total Net Revenue by Business Segment" later in this Item 2 for more information.
Operating income from continuing operations for the first nine months of fiscal 2009 increased $52.7 million or 7% compared with the same period of fiscal 2008. The increase in operating income was due to $114.0 million in higher revenue partially offset by $61.3 million in higher costs and expenses. In the fiscal 2009 period total costs and expenses increased about $49 million due to our fiscal 2008 acquisitions of Homestead and ECHO; about $31 million due to higher advertising and other marketing expenses to support the launch and subsequent promotion of TurboTax 2008 and QuickBooks 2009; and about $20 million due to higher depreciation expense for investments in our infrastructure. A $37 million decrease in costs and expenses due to certain compensation-related items and a decline in the market value of certain liabilities associated with our executive deferred compensation plan partially offset these increases. See "Cost of Revenue" and "Operating Expenses" later in this Item 2 for more information. Net income from continuing operations increased $5.1 million or 1% in the first nine months of fiscal 2009 compared with the same period of fiscal 2008. Interest and other income decreased $22.2 million due to lower interest rates and lower invested balances that resulted in $13.5 million lower interest income and to an $8.8 million decline in the value of assets associated with our executive deferred compensation plan. Declines in the value of assets associated with our executive deferred compensation plan were offset by amounts recorded in operating expenses in connection with declines in the related liabilities. In the first nine months of fiscal 2008 we recorded a pre-tax gain of $51.6 million on the sale of certain outsourced payroll assets; there was no comparable transaction in fiscal 2009. See "Dispositions and Discontinued Operations" later in this Item 2 for more information. Due to certain discrete tax items, our effective tax rate for the first nine months of fiscal 2009 was 33%. Our effective tax rate for the first nine months of 2008 was 35%. See "Income Taxes" later in this Item 2 for more information about our effective tax rates for these periods.
Due to the foregoing factors, diluted net income per share from continuing operations of $1.57 in the first nine months of fiscal 2009 increased 5% compared with $1.50 in the same period of fiscal 2008.

Total Net Revenue by Business Segment
The table below and the discussion of net revenue by business segment that
follows it are organized in accordance with our six reportable business
segments. See Note 5 to the financial statements in Part I, Item 1 of this
report for descriptions of product revenue and service and other revenue for
each segment.

                                                 % of                             % of                                            % of                             % of
                                                 Total                            Total                           YTD             Total            YTD             Total
                                  Q3              Net              Q3              Net             %               Q3              Net              Q3              Net             %
(Dollars in millions)            FY09           Revenue           FY08           Revenue        Change            FY09           Revenue           FY08           Revenue         Change

QuickBooks
Product revenue               $     98.9                       $    121.3                                      $    317.6                       $    367.4
Service and other revenue           50.3                             41.0                                           147.6                            105.6

Subtotal                           149.2              10 %          162.3              12 %          (8 %)          465.2              17 %          473.0              18 %           (2 %)


Payroll and Payments
Product revenue                     62.5                             55.0                                           180.0                            162.5
Service and other revenue           94.8                             87.1                                           287.3                            248.9

Subtotal                           157.3              11 %          142.1              11 %          11 %           467.3              17 %          411.4              16 %           14 %


Consumer Tax
Product revenue                    157.8                            123.6                                           251.9                            307.5
Service and other revenue          619.3                            533.3                                           726.8                            611.0

Subtotal                           777.1              54 %          656.9              50 %          18 %           978.7              36 %          918.5              35 %            7 %


Accounting Professionals
Product revenue                    154.9                            153.2                                           304.8                            284.4
Service and other revenue           23.9                             19.5                                            28.5                             23.4

Subtotal                           178.8              13 %          172.7              13 %           4 %           333.3              12 %          307.8              12 %            8 %


Financial Institutions
Product revenue                        -                              0.2                                             0.2                              0.5
Service and other revenue           78.3                             76.1                                           228.7                            220.3

Subtotal                            78.3               5 %           76.3               6 %           3 %           228.9               9 %          220.8               9 %            4 %


Other Businesses
Product revenue                     61.6                             64.4                                           136.7                            154.8
Service and other revenue           32.1                             38.3                                            96.7                            106.5

Subtotal                            93.7               7 %          102.7               8 %          (9 %)          233.4               9 %          261.3              10 %          (11 %)


Total Company
Product revenue                    535.7                            517.7                                         1,191.2                          1,277.1
Service and other revenue          898.7                            795.3                                         1,515.6                          1,315.7

Total net revenue             $  1,434.4             100 %     $  1,313.0             100 %           9 %      $  2,706.8             100 %     $  2,592.8             100 %            4 %

QuickBooks
QuickBooks segment total net revenue decreased $13.1 million or 8% in the third quarter of fiscal 2009 and decreased $7.8 million or 2% in the first nine months of fiscal 2009 compared with the same periods of fiscal 2008. Excluding revenue from Homestead, which we acquired in December 2007, QuickBooks segment total net revenue decreased 5% in the first nine months of fiscal 2009 compared with the same period of fiscal 2008. Total QuickBooks software unit sales, including activations of our free Simple Start offering, were up 7% in the third quarter of fiscal 2009 and increased 4% in the first nine months of fiscal 2009 compared with the same periods of fiscal 2008. Revenue per QuickBooks unit was lower in those periods due to price promotion programs in some of our sales channels. In the first nine months of fiscal 2009, QuickBooks Online subscriptions grew 8% and active Enterprise Solutions customers were up 20% compared with the same period of fiscal 2008.

Payroll and Payments
Payroll and Payments total net revenue increased $15.2 million or 11% in the third quarter of fiscal 2009 and $55.9 million or 14% in the first nine months of fiscal 2009 compared with the same periods of fiscal 2008. In our Payroll business, revenue in the first nine months of fiscal 2009 increased compared with the same period of fiscal 2008 due to price increases and, to a lesser extent, 2% growth in the customer base. In our Payments business, revenue in the first nine months of fiscal 2009 increased due to 12% growth in our core merchant services customer base and revenue from ECHO, which we acquired in February 2008. Transaction volume per customer was down about 6% in the first nine months of fiscal 2009 compared with the same period of fiscal 2008, reflecting an overall reduction in consumer spending associated with the current economic environment. Excluding revenue from ECHO, Payroll and Payments segment revenue increased approximately 9% in the first nine months of fiscal 2009 compared with the same periods of fiscal 2008. Consumer Tax
Consumer Tax total net revenue increased $60.2 million or 7% in the first nine months of fiscal 2009 compared with the same period of fiscal 2008 due to 36% growth in TurboTax Online units that more than offset an 11% decrease in TurboTax desktop units.
Accounting Professionals
Accounting Professionals total net revenue increased $25.5 million or 8% in the first nine months of fiscal 2009 compared with the same period of fiscal 2008 due to price increases.
Financial Institutions
Financial Institutions total net revenue increased $8.1 million or 4% in the . . .