896878--9/15/2006--INTUIT

related topics

{system, service, information}

{product, market, service}

{property, intellectual, protect}

{tax, income, asset}

{customer, product, revenue}

{regulation, change, law}

{personnel, key, retain}

{control, financial, internal}

{stock, price, operating}

{acquisition, growth, future}

{loss, insurance, financial}

{competitive, industry, competition}

We face intense competitive pressures in all of our businesses that may negatively impact our revenue, profitability and market position. QuickBooks and Payroll and Payments. Future revenue growth for our core products depends upon our successful introduction of new and enhanced products and services. If we fail to maintain reliable and responsive service levels for our electronic tax offerings, or if the IRS or other governmental agencies experience difficulties in receiving customer submissions, we could lose customers and our revenue and earnings could decrease. The nature of our products necessitates timely product launches and if we experience significant product quality problems or delays, it will harm our revenue, earnings and reputation. Possession and use of personal customer information by our businesses presents risks and expenses that could harm our business. Our revenue and earnings are highly seasonal and our quarterly results fluctuate significantly. The growth of our business depends on our ability to adapt to rapid technological change. Failure to maintain the availability and security of the systems, networks, databases and software required to operate and deliver our Internet-based products and services could adversely affect our operating results. Our reliance on a limited number of manufacturing and distribution suppliers could harm our business. As our product and service offerings become more complex our revenue streams may become less predictable We face a number of risks in our merchant card processing business that could result in a reduction in our revenue and earnings. Our dependence on a small number of larger retailers and distributors could harm our results of operations. Failure of our information technology systems or those of our service providers could adversely affect our future operating results. Increased government regulation of tax preparation services could harm our business. If we do not respond promptly and effectively to customer service and technical support inquiries we will lose customers and our revenue and earnings will decline. If we encounter problems with our third-party customer service and technical support providers our business will be harmed and our margins will decline. We are exposed to risks associated with credit card and payment fraud and with credit card processing. If we fail to adequately protect our intellectual property rights, competitors may exploit our innovations, which could weaken our competitive position and reduce our revenue and earnings. Third parties claiming that we infringe their proprietary rights could cause us to incur significant legal expenses and prevent us from selling our products. We expect copying and misuse of our intellectual property to be a persistent problem causing lost revenue and increased expenses. We do not own all of the software, other technologies and content used in our products and services. Our acquisition activity could disrupt our ongoing business and may present risks not contemplated at the time of the transactions. If actual product returns exceed returns reserves our financial results would be harmed. Acquisition-related costs and impairment charges can cause significant fluctuation in our net income. If we fail to operate our payroll business effectively our revenue and earnings will be harmed. Interest income attributable to payroll customer deposits may fluctuate or be eliminated, causing our revenue and earnings to decline. We may be unable to attract and retain key personnel. We are frequently a party to litigation that is costly to defend and consumes the time of our management. Unanticipated changes in our tax rates could affect our future financial results. If we fail to maintain an effective system of internal controls, we may not be able to detect fraud or report our financial results accurately, which could harm our business and the trading price of our common stock. Business interruptions could adversely affect our future operating results.

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896878--9/15/2006--INTUIT_INC