##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period from            to
 Commission File Number: 0-27876
 JDA SOFTWARE GROUP, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    86-0787377(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 14400 North 87 th Street  Scottsdale, Arizona 85260
(480) 308-3000
(Address and telephone number of principal executive offices)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
 .




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##### 



FORM 10-Q
 TABLE OF CONTENTS
 Page No.PART I: INTERIM FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)Condensed Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009
    
    
    3Condensed Consolidated Statements of Income for the Three and Nine Months Ended
September 30, 2010 and September 30, 2009
    
    
    4Condensed Consolidated Statements of Comprehensive Income for the Three and
Nine Months Ended September 30, 2010 and September 30, 2009
    
    
    5Condensed Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 2010 and September 30, 2009
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    29Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    48Item 4. Controls and Procedures
    
    
    49PART II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    49Item 1A. Risk Factors
    
    
    50Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    61Item 3. Defaults Upon Senior Securities
    
    
    61Item 4. Reserved
    
    
    61Item 5. Other Information
    
    
    61Item 6. Exhibits
    
    
    61Signature
    
    
    62EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



PART I: FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 JDA SOFTWARE GROUP, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS  (In thousands, except share amounts, unaudited)
 September 30,
    
    
    December 31,2010
    
    
    2009ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    172,370
    
    
    $
    75,974Restricted cash
    
    
    10,321
    
    
    
    287,875Accounts receivable, net
    
    
    98,287
    
    
    
    68,883Deferred tax asset
    
    
    57,836
    
    
    
    19,142Prepaid expenses and other current assets
    
    
    32,643
    
    
    
    15,667Total current assets
    
    
    371,457
    
    
    
    467,541Non-Current Assets:Property and equipment, net
    
    
    48,881
    
    
    
    40,842Goodwill
    
    
    197,031
    
    
    
    135,275Other intangibles, net
    
    
    199,200
    
    
    
    119,661Deferred tax asset
    
    
    269,032
    
    
    
    44,350Other non-current assets
    
    
    17,810
    
    
    
    13,997Total non-current assets
    
    
    731,954
    
    
    
    354,125Total Assets
    
    $
    1,103,411
    
    
    $
    821,666LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    19,017
    
    
    $
    7,192Accrued expenses and other liabilities
    
    
    65,316
    
    
    
    45,523Income taxes payable
    
    
    762
    
    
    
    3,489Deferred revenue
    
    
    105,053
    
    
    
    65,665Total current liabilities
    
    
    190,148
    
    
    
    121,869Non-Current Liabilities:Long-term debt
    
    
    272,572
    
    
    
    272,250Accrued exit and disposal obligations
    
    
    5,836
    
    
    
    7,341Liability for uncertain tax positions
    
    
    10,818
    
    
    
    8,770Deferred revenue
    
    
    11,469
    
    
    
    Total non-current liabilities
    
    
    300,695
    
    
    
    288,361Total Liabilities
    
    
    490,843
    
    
    
    410,230Stockholders Equity:Common stock
    
    
    438
    
    
    
    363Additional paid-in capital
    
    
    545,984
    
    
    
    356,065Retained earnings
    
    
    85,885
    
    
    
    74,014Accumulated other comprehensive income
    
    
    7,000
    
    
    
    3,267Treasury stock
    
    
    (26,739
    )
    
    
    (22,273
    )Total stockholders equity
    
    
    612,568
    
    
    
    411,436Total liabilities and stockholders equity
    
    $
    1,103,411
    
    
    $
    821,666
  3




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##### Table of Contents



JDA SOFTWARE GROUP, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME  (in thousands, except earnings per share data, unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009REVENUES:Software licenses
    
    $
    16,276
    
    
    $
    16,354
    
    
    $
    72,865
    
    
    $
    57,300Subscriptions and other recurring revenues
    
    
    5,758
    
    
    
    896
    
    
    
    15,851
    
    
    
    2,860Maintenance services
    
    
    64,186
    
    
    
    45,010
    
    
    
    181,840
    
    
    
    132,378Product revenues
    
    
    86,220
    
    
    
    62,260
    
    
    
    270,556
    
    
    
    192,538Consulting services
    
    
    65,947
    
    
    
    30,852
    
    
    
    164,204
    
    
    
    78,965Reimbursed expenses
    
    
    6,276
    
    
    
    2,747
    
    
    
    13,687
    
    
    
    7,174Service revenues
    
    
    72,223
    
    
    
    33,599
    
    
    
    177,891
    
    
    
    86,139Total revenues
    
    
    158,443
    
    
    
    95,859
    
    
    
    448,447
    
    
    
    278,677COST OF REVENUES:Cost of software licenses
    
    
    1,103
    
    
    
    580
    
    
    
    3,020
    
    
    
    2,417Amortization of acquired software technology
    
    
    1,833
    
    
    
    966
    
    
    
    5,212
    
    
    
    2,954Cost of maintenance services
    
    
    12,932
    
    
    
    10,883
    
    
    
    39,192
    
    
    
    32,416Cost of product revenues
    
    
    15,868
    
    
    
    12,429
    
    
    
    47,424
    
    
    
    37,787Cost of consulting services
    
    
    48,976
    
    
    
    22,219
    
    
    
    124,987
    
    
    
    61,732Reimbursed expenses
    
    
    6,276
    
    
    
    2,747
    
    
    
    13,687
    
    
    
    7,174Cost of service revenues
    
    
    55,252
    
    
    
    24,966
    
    
    
    138,674
    
    
    
    68,906Total cost of revenues
    
    
    71,120
    
    
    
    37,395
    
    
    
    186,098
    
    
    
    106,693GROSS PROFIT
    
    
    87,323
    
    
    
    58,464
    
    
    
    262,349
    
    
    
    171,984OPERATING EXPENSES:Product development
    
    
    17,373
    
    
    
    12,495
    
    
    
    54,131
    
    
    
    37,732Sales and marketing
    
    
    20,258
    
    
    
    15,888
    
    
    
    65,830
    
    
    
    46,310General and administrative
    
    
    17,546
    
    
    
    12,305
    
    
    
    55,044
    
    
    
    35,001Amortization of intangibles
    
    
    9,966
    
    
    
    5,753
    
    
    
    28,447
    
    
    
    17,880Restructuring charges
    
    
    4,172
    
    
    
    2,543
    
    
    
    16,478
    
    
    
    6,705Acquisition-related costs
    
    
    473
    
    
    
    
    
    
    
    8,081
    
    
    
    Total operating expenses
    
    
    69,788
    
    
    
    48,984
    
    
    
    228,011
    
    
    
    143,628OPERATING INCOME
    
    
    17,535
    
    
    
    9,480
    
    
    
    34,338
    
    
    
    28,356Interest expense and amortization of loan fees
    
    
    (6,169
    )
    
    
    (346
    )
    
    
    (18,437
    )
    
    
    (971
    )Interest income and other, net
    
    
    558
    
    
    
    1,006
    
    
    
    1,039
    
    
    
    886INCOME BEFORE INCOME TAXES
    
    
    11,924
    
    
    
    10,140
    
    
    
    16,940
    
    
    
    28,271Income tax provision
    
    
    3,651
    
    
    
    3,877
    
    
    
    5,069
    
    
    
    10,429NET INCOME
    
    
    8,273
    
    
    
    6,263
    
    
    
    11,871
    
    
    
    17,842Consideration paid in excess of carrying value on the
repurchase of redeemable preferred stock
    
    
    
    
    
    
    (8,593
    )
    
    
    
    
    
    
    (8,593
    )INCOME APPLICABLE TO COMMON SHAREHOLDERS
    
    $
    8,273
    
    
    $
    (2,330
    )
    
    $
    11,871
    
    
    $
    9,249EARNINGS PER SHARE APPLICABLE TO COMMON SHAREHOLDERS:Basic earnings per share
    
    $
    .20
    
    
    $
    (.07
    )
    
    $
    .29
    
    
    $
    .26Diluted earnings per share
    
    $
    .20
    
    
    $
    (.07
    )
    
    $
    .29
    
    
    $
    .26SHARES USED TO COMPUTEBasic earnings per share
    
    
    41,774
    
    
    
    33,505
    
    
    
    40,939
    
    
    
    35,076Diluted earnings per share
    
    
    42,234
    
    
    
    33,505
    
    
    
    41,517
    
    
    
    35,329
  4




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JDA SOFTWARE GROUP, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  (in thousands, unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009NET INCOME
    
    $
    8,273
    
    
    $
    6,263
    
    
    $
    11,871
    
    
    $
    17,842OTHER COMPREHENSIVE INCOME:Foreign currency
translation
adjustment
    
    
    8,014
    
    
    
    2,032
    
    
    
    3,733
    
    
    
    5,606COMPREHENSIVE INCOME
    
    $
    16,287
    
    
    $
    8,295
    
    
    $
    15,604
    
    
    $
    23,448
  5




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##### Table of Contents



JDA SOFTWARE GROUP, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (in thousands, unaudited)
 Nine Months EndedSeptember 30,2010
    
    
    2009OPERATING ACTIVITIES:Net Income
    
    $
    11,871
    
    
    $
    17,842Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation and amortization
    
    
    43,029
    
    
    
    28,043Provision for doubtful accounts
    
    
    999
    
    
    
    900Amortization of loan fees
    
    
    1,412
    
    
    
    Share-based compensation expense
    
    
    8,834
    
    
    
    6,412Net gain on disposal of property and equipment
    
    
    (8
    )
    
    
    (55
    )Deferred income taxes
    
    
    (121
    )
    
    
    8,517Changes in assets and liabilities, net of effects from business acquisitions:Accounts receivable
    
    
    1,281
    
    
    
    19,536Income tax receivable
    
    
    2,225
    
    
    
    (1,838
    )Prepaid expenses and other current assets
    
    
    (12,948
    )
    
    
    (3,976
    )Accounts payable
    
    
    8,810
    
    
    
    5,685Accrued expenses and other liabilities
    
    
    (15,837
    )
    
    
    (11,478
    )Income tax payable
    
    
    (5,427
    )
    
    
    380Deferred revenue
    
    
    (5,127
    )
    
    
    10,560Net cash provided by operating activities
    
    
    38,993
    
    
    
    80,528INVESTING ACTIVITIES:Change in restricted cash
    
    
    277,554
    
    
    
    Purchase of i2 Technologies, Inc.
    
    
    (213,427
    )
    
    
    Payment of direct costs related to acquisitions
    
    
    (2,749
    )
    
    
    (4,431
    )Purchase of property and equipment
    
    
    (14,785
    )
    
    
    (5,541
    )Proceeds from disposal of property and equipment
    
    
    631
    
    
    
    62Net cash provided by (used in) investing activities
    
    
    47,224
    
    
    
    (9,910
    )FINANCING ACTIVITIES:Issuance of common stock under equity plans
    
    
    13,836
    
    
    
    14,524Purchase of treasury stock and other, net
    
    
    (4,645
    )
    
    
    (6,266
    )Redemption of redeemable preferred stock
    
    
    
    
    
    
    (28,068
    )Net cash provided by (used in) financing activities
    
    
    9,191
    
    
    
    (19,810
    )EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS
    
    
    988
    
    
    
    1,973Net increase in cash and cash equivalents
    
    
    96,396
    
    
    
    52,781CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    75,974
    
    
    
    32,696CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    172,370
    
    
    $
    85,477
  6




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##### Table of Contents



JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
 Nine Months EndedSeptember 30,2010
    
    
    2009SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for income taxes
    
    $
    10,403
    
    
    $
    3,262Cash paid for interest
    
    $
    13,681
    
    
    $
    304Cash received for income tax refunds
    
    $
    1,553
    
    
    $
    723SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW
ACTIVITIES:Conversion of redeemable preferred common stock
    
    $
    
    
    
    $
    30,525
  7




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##### Table of Contents



JDA SOFTWARE GROUP, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except percentages, shares, per share amounts, or as otherwise stated)
(unaudited)
 1. Basis of Presentation
    2. Acquisition of i2 Technologies, Inc.
    8




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##### Table of Contents



Weighted AverageUseful Life
    
    
    Amortization PeriodCash
    
    $
    218,348Trade accounts receivable acquired
    
    
    31,621Other current assets acquired
    
    
    48,616Property and equipment acquired
    
    
    3,115Customer-based intangibles
    
    
    74,600
    
    
    
    1 to 7 years
    
    
    6 yearsTechnology-based intangibles
    
    
    24,300
    
    
    7 years
    
    7 yearsMarketing-based intangibles
    
    
    14,300
    
    
    5 years
    
    5 yearsLong-term deferred tax assets acquired
    
    
    221,060Other non-current assets
    
    
    3,925Total assets acquired
    
    
    639,885Goodwill
    
    
    61,756Total assets acquired
    
    
    701,641Deferred revenue assumed
    
    
    (56,265
    )Other current liabilities assumed
    
    
    (44,150
    )Other non-current liabilities assumed
    
    
    (1,472
    )Total liabilities assumed
    
    
    (101,887
    )Net assets acquired from i2 Technologies, Inc
    
    $
    599,754
 9




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Fair value of JDA common stock issued as merger consideration
    
    $
    167,979Cash merger consideration
    
    
    431,775Total merger consideration to acquire i2 Technologies, Inc.
    
    $
    599,754Cash merger consideration
    
    $
    431,775Less cash acquired from i2 Technologies
    
    
    218,348Cash expended to acquire i2 Technologies, Inc.
    
    $
    213,427
     Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2010
    
    
    September 30, 2009Total revenues
    
    $
    463,473
    
    
    $
    446,744Net (loss) income
    
    $
    (2,601
    )
    
    $
    31,097Basic and diluted earnings (loss) per share
    
    $
    (0.06
    )
    
    $
    0.75
  Revenues
    
    
    Earnings (Loss)i2 operating results from January 28, 2010 to September 30, 2010
    
    $
    154,117
    
    
    $
    *i2 operating results from January 1, 2010 to September 30, 2010
    
    $
    169,143
    
    
    $
    *i2 operating results from January 1, 2009 to September 30, 2009
    
    $
    168,067
    
    
    $
    21,693
 
 *
    
    We are unable to provide separate disclosure of the earnings (loss) of i2 from January
28, 2010 (date of acquisition) to September 30, 2010 and the pro-forma results from January 1, 2010 to September 30, 2010
as the operating expenses of the combined company were co-mingled at the date of acquisition.  3. Derivative Instruments and Hedging Activities
  10




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4. Goodwill and Other Intangibles, net
 Goodwill. Supply Chain Supply Chain Pricing and Revenue Management.
  September 30, 2010
    
    
    December 31, 2009Estimated Useful
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedLives
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationGoodwill:Gross goodwill
    
    
    
    
    
    $
    206,744
    
    
    $
    
    
    
    $
    144,988
    
    
    $
    Accumulated impairment losses
    
    
    
    
    
    
    (9,713
    )
    
    
    
    
    
    
    (9,713
    )Goodwill, net of impairment losses
    
    
    
    
    
    $
    197,031
    
    
    
    
    
    
    $
    135,275Identifiable intangible assets:Customer-based intangible assets
    
    
    1 to 13 years
    
    
    $
    257,983
    
    
    $
    (110,601
    )
    
    $
    183,383
    
    
    $
    (84,119
    )Technology-based intangible assets
    
    
    7 to 15 years
    
    
    
    90,147
    
    
    
    (50,819
    )
    
    
    65,847
    
    
    
    (45,607
    )Marketing-based intangible assets
    
    5 years
    
    
    19,491
    
    
    
    (7,001
    )
    
    
    5,191
    
    
    
    (5,034
    )$
    367,621
    
    
    $
    (168,421
    )
    
    $
    254,421
    
    
    $
    (134,760
    )
 Customer-based technology-based marketing-based Customer-based marketing-based
 11




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Technology-based customer-based, technology-based marketing-based
   Year
    
    Amortization2010
    
    $
    11,8002011
    
    
    45,5072012
    
    
    44,9212013
    
    
    44,2312014
    
    
    27,370Thereafter
    
    
    25,371Total
    
    $
    199,200
 5. Restructuring Reserves
 2010 Restructuring Charges
  Impact of Changes
    
    
    BalanceDescription of charge
    
    Initial Reserve
    
    
    Cash Payments
    
    
    in Exchange Rates
    
    
    September 30, 2010Termination benefits
    
    $
    12,269
    
    
    $
    (11,627
    )
    
    $
    59
    
    
    $
    701Office closures and other restructuring
    
    
    4,169
    
    
    
    (1,162
    )
    
    
    59
    
    
    
    3,066Total
    
    $
    16,438
    
    
    $
    (12,789
    )
    
    $
    118
    
    
    $
    3,767
  2009 Restructuring Charges
  12




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##### Table of Contents



6. Manugistics Acquisition Reserves
  Impact of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impact ofChanges in
    
    
    Balance
    
    
    
    
    
    
    
    
    
    
    Changes in
    
    
    BalanceInitial
    
    
    Adjustments
    
    
    Cash
    
    
    Exchange
    
    
    December 31,
    
    
    Adjustments
    
    
    Cash
    
    
    Exchange
    
    
    September 30,Description of charge
    
    Reserve
    
    
    to Reserves
    
    
    Payments
    
    
    Rates
    
    
    2009
    
    
    to Reserves
    
    
    Payments
    
    
    Rates
    
    
    2010Restructuring charges:Office closures, lease
terminations and sublease
costs
    
    $
    29,212
    
    
    $
    (949
    )
    
    $
    (16,110
    )
    
    $
    (724
    )
    
    $
    11,429
    
    
    $
    
    
    
    $
    (2,374
    )
    
    $
    (111
    )
    
    $
    8,944Employee severance and
termination benefits
    
    
    3,607
    
    
    
    (767
    )
    
    
    (2,468
    )
    
    
    125
    
    
    
    497
    
    
    
    (73
    )
    
    
    (375
    )
    
    
    (49
    )
    
    
    IT projects, contract
termination penalties,
capital lease buyouts
and other costs to exit
activities of
Manugistics
    
    
    1,450
    
    
    
    222
    
    
    
    (1,672
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,269
    
    
    
    (1,494
    )
    
    
    (20,250
    )
    
    
    (599
    )
    
    
    11,926
    
    
    $
    (73
    )
    
    
    (2,749
    )
    
    
    (160
    )
    
    
    8,944Direct costs
    
    
    13,125
    
    
    
    6
    
    
    
    (13,131
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    47,394
    
    
    $
    (1,488
    )
    
    $
    (33,381
    )
    
    $
    (599
    )
    
    $
    11,926
    
    
    $
    (73
    )
    
    $
    (2,749
    )
    
    $
    (160
    )
    
    $
    8,944
  7. Long-term Debt
   13




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##### Table of Contents



8. Legal Proceedings
 Dillards, Inc. vs. i2 Technologies, Inc.
 st
  14




---



##### Table of Contents



i2 Technologies, Inc. vs. Oracle Corporation
  Shareholder Class Action Litigation
   9. Share-Based Compensation
   15




---



##### Table of Contents



Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Cost of maintenance services
    
    $
    126
    
    
    $
    206
    
    
    $
    403
    
    
    $
    474Cost of consulting services
    
    
    401
    
    
    
    411
    
    
    
    1,179
    
    
    
    882Product development
    
    
    204
    
    
    
    234
    
    
    
    710
    
    
    
    594Sales and marketing
    
    
    542
    
    
    
    667
    
    
    
    2,292
    
    
    
    1,736General and administrative
    
    
    992
    
    
    
    1,327
    
    
    
    4,250
    
    
    
    2,726Total stock-based compensation
    
    $
    2,265
    
    
    $
    2,845
    
    
    $
    8,834
    
    
    $
    6,412
 10. Treasury Stock Repurchases
   11. Income Taxes
   16




---



##### Table of Contents



12. Earnings per Share
    17




---



##### Table of Contents



Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net income
    
    $
    8,273
    
    
    $
    6,263
    
    
    $
    11,871
    
    
    $
    17,842Less dividends paid
    
    
    
    
    
    
    (8,593
    )
    
    
    
    
    
    
    (8,593
    )Undistributed earnings
    
    $
    8,273
    
    
    $
    (2,330
    )
    
    $
    11,871
    
    
    $
    9,249Allocation of undistributed earnings:Common Stock
    
    $
    8,273
    
    
    $
    (2,330
    )
    
    $
    11,871
    
    
    $
    8,463Series B Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    786$
    8,273
    
    
    $
    (2,330
    )
    
    $
    11,871
    
    
    $
    9,249Weighted average shares:Common Stock
    
    
    41,774
    
    
    
    33,505
    
    
    
    40,939
    
    
    
    32,095Series B Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,981Shares  Basic earnings per share
    
    
    41,774
    
    
    
    33,505
    
    
    
    40,939
    
    
    
    35,076Dilutive common stock equivalents
    
    
    460
    
    
    
    
    
    
    
    578
    
    
    
    253Shares  Diluted earnings per share
    
    
    42,234
    
    
    
    33,505
    
    
    
    41,517
    
    
    
    35,329Basic earnings per share applicable to:Common Stock
    
    $
    .20
    
    
    $
    (.07
    )
    
    $
    .29
    
    
    $
    .26Series B Preferred Stock
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    .26Diluted earnings per share applicable to common shareholders
    
    $
    .20
    
    
    $
    (.07
    )
    
    $
    .29
    
    
    $
    .26
 13. Business Segments and Geographic Data
  Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Americas
    
    $
    98,698
    
    
    $
    67,059
    
    
    $
    293,702
    
    
    $
    193,440Europe
    
    
    27,503
    
    
    
    20,601
    
    
    
    79,691
    
    
    
    57,440Asia/Pacific
    
    
    32,242
    
    
    
    8,199
    
    
    
    75,054
    
    
    
    27,797Total revenues
    
    $
    158,443
    
    
    $
    95,859
    
    
    $
    448,447
    
    
    $
    278,677
 September 30,
    
    
    December 31,2010
    
    
    2009Identifiable assets:Americas
    
    $
    882,558
    
    
    $
    695,539Europe
    
    
    121,105
    
    
    
    85,817Asia/Pacific
    
    
    99,748
    
    
    
    40,310Total identifiable assets
    
    $
    1,103,411
    
    
    $
    821,666
 18




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##### Table of Contents



Retail Manufacturing and Distribution
 
    
    Supply Chain.This reportable business segment includes all revenues related to
applications and services sold to customers in the supply chain management market. The
majority of our products are specifically designed to provide customers with one synchronized
view of product demand while managing the flow and allocation of materials, information,
finances and other resources across global supply chains, from manufacturers to distribution
centers and transportation networks to the retail store and consumer (collectively, the
Supply Chain). This segment combines all revenues previously reported by the Company under
the Retailand Manufacturing and Distributionreportable business segments and includes all
revenues related to i2 applications and services.
    
    Pricing and Revenue Management (previously known as Services Industries).This reportable
business segment includes all revenues related to applications and services sold to customers
in service industries such as travel, transportation, hospitality, media and
telecommunications. The Pricing and Revenue Managementsegment is centrally managed by a team
that has global responsibilities for this market.
  Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Supply Chain
    
    $
    153,706
    
    
    $
    88,608
    
    
    $
    431,870
    
    
    $
    254,992Pricing and Revenue Management
    
    
    4,737
    
    
    
    7,251
    
    
    
    16,577
    
    
    
    23,685$
    158,443
    
    
    $
    95,859
    
    
    $
    448,447
    
    
    $
    278,677Operating income (loss):Supply Chain
    
    $
    50,435
    
    
    $
    29,054
    
    
    $
    142,977
    
    
    $
    80,292Pricing and Revenue Management
    
    
    (743
    )
    
    
    1,027
    
    
    
    (589
    )
    
    
    7,650Other (see below)
    
    
    (32,157
    )
    
    
    (20,601
    )
    
    
    (108,050
    )
    
    
    (59,586
    )$
    17,535
    
    
    $
    9,480
    
    
    $
    34,338
    
    
    $
    28,356Depreciation:Supply Chain
    
    $
    2,708
    
    
    $
    1,898
    
    
    $
    7,769
    
    
    $
    5,428Pricing and Revenue Management
    
    
    145
    
    
    
    256
    
    
    
    512
    
    
    
    809$
    2,853
    
    
    $
    2,154
    
    
    $
    8,281
    
    
    $
    6,237Other:General and administrative expenses
    
    $
    17,546
    
    
    $
    12,305
    
    
    $
    55,044
    
    
    $
    35,001Amortization of intangible assets
    
    
    9,966
    
    
    
    5,753
    
    
    
    28,447
    
    
    
    17,880Restructuring charge
    
    
    4,172
    
    
    
    2,543
    
    
    
    16,478
    
    
    
    6,705Acquisition-related costs
    
    
    473
    
    
    
    
    
    
    
    8,081
    
    
    
    $
    32,157
    
    
    $
    20,601
    
    
    $
    108,050
    
    
    $
    59,586
 Supply Chain Pricing and Revenue Management
 19




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14. Condensed Consolidating Financial Information
   20




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##### Table of Contents



Unaudited Condensed Consolidating Balance Sheets
September 30, 2010
(in thousands)
 JDA Software
    
    
    Guarantor
    
    
    Non-GuarantorGroup, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent Assets:Cash and cash equivalents
    
    $
    
    
    
    $
    136,430
    
    
    $
    35,940
    
    
    $
    
    
    
    $
    172,370Restricted cash
    
    
    
    
    
    
    9,462
    
    
    
    859
    
    
    
    
    
    
    
    10,321Accounts receivable
    
    
    
    
    
    
    73,954
    
    
    
    24,333
    
    
    
    
    
    
    
    98,287Income tax receivable
    
    
    6,801
    
    
    
    (8,806
    )
    
    
    2,005
    
    
    
    
    
    
    
    Deferred tax asset
    
    
    
    
    
    
    55,682
    
    
    
    2,154
    
    
    
    
    
    
    
    57,836Prepaid expenses and other current assets
    
    
    
    
    
    
    12,339
    
    
    
    20,304
    
    
    
    
    
    
    
    32,643Total current assets
    
    
    6,801
    
    
    
    279,061
    
    
    
    85,595
    
    
    
    
    
    
    
    371,457Non-Current Assets:Property and equipment, net
    
    
    
    
    
    
    41,249
    
    
    
    7,632
    
    
    
    
    
    
    
    48,881Goodwill
    
    
    
    
    
    
    197,031
    
    
    
    
    
    
    
    
    
    
    
    197,031Other intangibles, net
    
    
    
    
    
    
    199,200
    
    
    
    
    
    
    
    
    
    
    
    199,200Deferred tax asset
    
    
    
    
    
    
    256,257
    
    
    
    12,775
    
    
    
    
    
    
    
    269,032Other non-current assets
    
    
    5,994
    
    
    
    5,059
    
    
    
    6,757
    
    
    
    
    
    
    
    17,810Investment in subsidiaries
    
    
    170,770
    
    
    
    74,268
    
    
    
    (24,235
    )
    
    
    (220,803
    )
    
    
    Intercompany accounts
    
    
    708,099
    
    
    
    (743,470
    )
    
    
    35,371
    
    
    
    
    
    
    
    Total non-current assets
    
    
    884,863
    
    
    
    29,594
    
    
    
    38,300
    
    
    
    (220,803
    )
    
    
    731,954Total Assets
    
    $
    891,664
    
    
    $
    308,655
    
    
    $
    123,895
    
    
    $
    (220,803
    )
    
    $
    1,103,411LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts Payable
    
    $
    
    
    
    $
    16,133
    
    
    $
    2,884
    
    
    $
    
    
    
    $
    19,017Accrued expenses and other liabilities
    
    
    6,524
    
    
    
    33,257
    
    
    
    25,535
    
    
    
    
    
    
    
    65,316Income taxes payable
    
    
    
    
    
    
    (10,495
    )
    
    
    11,257
    
    
    
    
    
    
    
    762Deferred revenue
    
    
    
    
    
    
    81,545
    
    
    
    23,508
    
    
    
    
    
    
    
    105,053Total current liabilities
    
    
    6,524
    
    
    
    120,440
    
    
    
    63,184
    
    
    
    
    
    
    
    190,148Non-Current Liabilities:Long-term debt
    
    
    272,572
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    272,572Accrued exit and disposal obligations
    
    
    
    
    
    
    3,429
    
    
    
    2,407
    
    
    
    
    
    
    
    5,836Liability for uncertain tax positions
    
    
    
    
    
    
    9,489
    
    
    
    1,329
    
    
    
    
    
    
    
    10,818Deferred revenues
    
    
    
    
    
    
    6,647
    
    
    
    4,822
    
    
    
    
    
    
    
    11,469Total non-current liabilities
    
    
    272,572
    
    
    
    19,565
    
    
    
    8,558
    
    
    
    
    
    
    
    300,695Total Liabilities
    
    
    279,096
    
    
    
    140,005
    
    
    
    71,742
    
    
    
    
    
    
    
    490,843Stockholders Equity
    
    
    612,568
    
    
    
    168,650
    
    
    
    52,153
    
    
    
    (220,803
    )
    
    
    612,568Total Liabilities and Stockholders Equity
    
    $
    891,664
    
    
    $
    308,655
    
    
    $
    123,895
    
    
    $
    (220,803
    )
    
    $
    1,103,411
 21




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##### Table of Contents



Condensed Consolidating Balance Sheets
December 31, 2009
(in thousands)
 JDA Software
    
    
    Guarantor
    
    
    Non-GuarantorGroup, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent Assets:Cash and cash equivalents
    
    $
    
    
    
    $
    47,170
    
    
    $
    28,804
    
    
    $
    
    
    
    $
    75,974Restricted cash
    
    
    287,875
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    287,875Accounts receivable
    
    
    
    
    
    
    53,535
    
    
    
    15,348
    
    
    
    
    
    
    
    68,883Income tax receivable
    
    
    469
    
    
    
    5,941
    
    
    
    (6,410
    )
    
    
    
    
    
    
    Deferred tax asset
    
    
    
    
    
    
    17,973
    
    
    
    1,169
    
    
    
    
    
    
    
    19,142Prepaid expenses and other current assets
    
    
    
    
    
    
    11,273
    
    
    
    4,394
    
    
    
    
    
    
    
    15,667Total current assets
    
    
    288,344
    
    
    
    135,892
    
    
    
    43,305
    
    
    
    
    
    
    
    467,541Non-Current Assets:Property and equipment, net
    
    
    
    
    
    
    35,343
    
    
    
    5,499
    
    
    
    
    
    
    
    40,842Goodwill
    
    
    
    
    
    
    135,275
    
    
    
    
    
    
    
    
    
    
    
    135,275Other intangibles, net:Customer-based intangibles
    
    
    
    
    
    
    99,264
    
    
    
    
    
    
    
    
    
    
    
    99,264Technology-based intangibles
    
    
    
    
    
    
    20,240
    
    
    
    
    
    
    
    
    
    
    
    20,240Marketing-based intangibles
    
    
    
    
    
    
    157
    
    
    
    
    
    
    
    
    
    
    
    157Deferred tax asset
    
    
    
    
    
    
    37,781
    
    
    
    6,569
    
    
    
    
    
    
    
    44,350Other non-current assets
    
    
    6,697
    
    
    
    124
    
    
    
    7,176
    
    
    
    
    
    
    
    13,997Investment in subsidiaries
    
    
    154,166
    
    
    
    27,575
    
    
    
    
    
    
    
    (181,741
    )
    
    
    Intercompany accounts
    
    
    234,479
    
    
    
    (253,131
    )
    
    
    18,652
    
    
    
    
    
    
    
    Total non-current assets
    
    
    395,342
    
    
    
    102,628
    
    
    
    37,896
    
    
    
    (181,741
    )
    
    
    354,125Total Assets
    
    $
    683,686
    
    
    $
    238,520
    
    
    $
    81,201
    
    
    $
    (181,741
    )
    
    $
    821,666LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts Payable
    
    $
    
    
    
    $
    6,140
    
    
    $
    1,052
    
    
    $
    
    
    
    $
    7,192Accrued expenses and other liabilities
    
    
    
    
    
    
    28,809
    
    
    
    16,714
    
    
    
    
    
    
    
    45,523Income taxes payable
    
    
    
    
    
    
    1,255
    
    
    
    2,234
    
    
    
    
    
    
    
    3,489Deferred revenue
    
    
    
    
    
    
    44,145
    
    
    
    21,520
    
    
    
    
    
    
    
    65,665Total current liabilities
    
    
    
    
    
    
    80,349
    
    
    
    41,520
    
    
    
    
    
    
    
    121,869Non-Current Liabilities:Long-term debt
    
    
    272,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    272,250Accrued exit and disposal obligations
    
    
    
    
    
    
    4,723
    
    
    
    2,618
    
    
    
    
    
    
    
    7,341Liability for uncertain tax positions
    
    
    
    
    
    
    8,770
    
    
    
    
    
    
    
    
    
    
    
    8,770Total non-current liabilities
    
    
    272,250
    
    
    
    13,493
    
    
    
    2,618
    
    
    
    
    
    
    
    288,361Total Liabilities
    
    
    272,250
    
    
    
    93,842
    
    
    
    44,138
    
    
    
    
    
    
    
    410,230Stockholders Equity
    
    
    411,436
    
    
    
    144,678
    
    
    
    37,063
    
    
    
    (181,741
    )
    
    
    411,436Total Liabilities and Stockholders Equity
    
    $
    683,686
    
    
    $
    238,520
    
    
    $
    81,201
    
    
    $
    (181,741
    )
    
    $
    821,666
 22




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##### Table of Contents



Unaudited Condensed Consolidating Statements of Income
Three Months Ended September 30, 2010
(in thousands)
 JDA Software
    
    
    Guarantor
    
    
    Non-GuarantorGroup, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Software licenses
    
    $
    
    
    
    $
    16,276
    
    
    $
    
    
    
    $
    
    
    
    $
    16,276Subscriptions and other recurring revenues
    
    
    
    
    
    
    5,758
    
    
    
    
    
    
    
    
    
    
    
    5,758Maintenance services
    
    
    
    
    
    
    45,980
    
    
    
    18,206
    
    
    
    
    
    
    
    64,186Product revenues
    
    
    
    
    
    
    68,014
    
    
    
    18,206
    
    
    
    
    
    
    
    86,220Consulting services
    
    
    
    
    
    
    45,341
    
    
    
    20,606
    
    
    
    
    
    
    
    65,947Reimbursed expenses
    
    
    
    
    
    
    4,247
    
    
    
    2,029
    
    
    
    
    
    
    
    6,276Service revenues
    
    
    
    
    
    
    49,588
    
    
    
    22,635
    
    
    
    
    
    
    
    72,223Total revenues
    
    
    
    
    
    
    117,602
    
    
    
    40,841
    
    
    
    
    
    
    
    158,443Cost of Revenues:Cost of software licenses
    
    
    
    
    
    
    1,103
    
    
    
    
    
    
    
    
    
    
    
    1,103Amortization of acquired software technology
    
    
    
    
    
    
    1,833
    
    
    
    
    
    
    
    
    
    
    
    1,833Cost of maintenance services
    
    
    
    
    
    
    8,574
    
    
    
    4,358
    
    
    
    
    
    
    
    12,932Cost of product revenues
    
    
    
    
    
    
    11,510
    
    
    
    4,358
    
    
    
    
    
    
    
    15,868Cost of consulting services
    
    
    
    
    
    
    34,722
    
    
    
    14,254
    
    
    
    
    
    
    
    48,976Reimbursed expenses
    
    
    
    
    
    
    4,251
    
    
    
    2,025
    
    
    
    
    
    
    
    6,276Cost of service revenues
    
    
    
    
    
    
    38,973
    
    
    
    16,279
    
    
    
    
    
    
    
    55,252Total cost of revenues
    
    
    
    
    
    
    50,483
    
    
    
    20,637
    
    
    
    
    
    
    
    71,120Gross Profit
    
    
    
    
    
    
    67,119
    
    
    
    20,204
    
    
    
    
    
    
    
    87,323Operating Expenses:Product development
    
    
    
    
    
    
    10,933
    
    
    
    6,440
    
    
    
    
    
    
    
    17,373Sales and marketing
    
    
    
    
    
    
    12,692
    
    
    
    7,566
    
    
    
    
    
    
    
    20,258General and administrative
    
    
    
    
    
    
    13,553
    
    
    
    3,993
    
    
    
    
    
    
    
    17,546Amortization of intangibles
    
    
    
    
    
    
    9,966
    
    
    
    
    
    
    
    
    
    
    
    9,966Restructuring charges
    
    
    
    
    
    
    2,371
    
    
    
    2,274
    
    
    
    
    
    
    
    4,645Acquisition-related costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total operating expenses
    
    
    
    
    
    
    49,515
    
    
    
    20,273
    
    
    
    
    
    
    
    69,788Operating Income (Loss)
    
    
    
    
    
    
    17,604
    
    
    
    (69
    )
    
    
    
    
    
    
    17,535Interest expense and amortization of loan fees
    
    
    (5,975
    )
    
    
    (114
    )
    
    
    (80
    )
    
    
    
    
    
    
    (6,169
    )Interest income and other, net
    
    
    
    
    
    
    (3,238
    )
    
    
    3,796
    
    
    
    
    
    
    
    558Income tax benefit (provision)
    
    
    2,270
    
    
    
    (5,517
    )
    
    
    (404
    )
    
    
    
    
    
    
    (3,651
    )Equity in earnings of subsidiaries, net
    
    
    11,978
    
    
    
    1,525
    
    
    
    
    
    
    
    (13,503
    )
    
    
    Net Income
    
    $
    8,273
    
    
    $
    10,260
    
    
    $
    3,243
    
    
    $
    (13,503
    )
    
    $
    8,273
 23




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##### Table of Contents



Unaudited Condensed Consolidating Statements of Income
Three Months Ended September 30, 2009
(in thousands)
 JDA Software
    
    
    Guarantor
    
    
    Non-GuarantorGroup, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Software licenses
    
    $
    
    
    
    $
    16,354
    
    
    $
    
    
    
    $
    
    
    
    $
    16,354Subscriptions and other recurring revenues
    
    
    
    
    
    
    896
    
    
    
    
    
    
    
    
    
    
    
    896Maintenance services
    
    
    
    
    
    
    27,692
    
    
    
    17,318
    
    
    
    
    
    
    
    45,010Product revenues
    
    
    
    
    
    
    44,942
    
    
    
    17,318
    
    
    
    
    
    
    
    62,260Consulting services
    
    
    
    
    
    
    19,120
    
    
    
    11,732
    
    
    
    
    
    
    
    30,852Reimbursed expenses
    
    
    
    
    
    
    2,039
    
    
    
    708
    
    
    
    
    
    
    
    2,747Service revenues
    
    
    
    
    
    
    21,159
    
    
    
    12,440
    
    
    
    
    
    
    
    33,599Total revenues
    
    
    
    
    
    
    66,101
    
    
    
    29,758
    
    
    
    
    
    
    
    95,859Cost of Revenues:Cost of software licenses
    
    
    
    
    
    
    580
    
    
    
    
    
    
    
    
    
    
    
    580Amortization of acquired software technology
    
    
    
    
    
    
    966
    
    
    
    
    
    
    
    
    
    
    
    966Cost of maintenance services
    
    
    
    
    
    
    7,780
    
    
    
    3,103
    
    
    
    
    
    
    
    10,883Cost of product revenues
    
    
    
    
    
    
    9,326
    
    
    
    3,103
    
    
    
    
    
    
    
    12,429Cost of consulting services
    
    
    
    
    
    
    14,757
    
    
    
    7,462
    
    
    
    
    
    
    
    22,219Reimbursed expenses
    
    
    
    
    
    
    2,039
    
    
    
    708
    
    
    
    
    
    
    
    2,747Cost of service revenues
    
    
    
    
    
    
    16,796
    
    
    
    8,170
    
    
    
    
    
    
    
    24,966Total cost of revenues
    
    
    
    
    
    
    26,122
    
    
    
    11,273
    
    
    
    
    
    
    
    37,395Gross Profit
    
    
    
    
    
    
    39,979
    
    
    
    18,485
    
    
    
    
    
    
    
    58,464Operating Expenses:Product development
    
    
    
    
    
    
    9,771
    
    
    
    2,724
    
    
    
    
    
    
    
    12,495Sales and marketing
    
    
    
    
    
    
    10,010
    
    
    
    5,878
    
    
    
    
    
    
    
    15,888General and administrative
    
    
    
    
    
    
    10,063
    
    
    
    2,242
    
    
    
    
    
    
    
    12,305Amortization of intangibles
    
    
    
    
    
    
    5,753
    
    
    
    
    
    
    
    
    
    
    
    5,753Restructuring charges
    
    
    
    
    
    
    1,464
    
    
    
    1,079
    
    
    
    
    
    
    
    2,543Total operating expenses
    
    
    
    
    
    
    37,061
    
    
    
    11,923
    
    
    
    
    
    
    
    48,984Operating Income
    
    
    
    
    
    
    2,918
    
    
    
    6,562
    
    
    
    
    
    
    
    9,480Interest expense and amortization of loan fees
    
    
    (136
    )
    
    
    (164
    )
    
    
    (46
    )
    
    
    
    
    
    
    (346
    )Interest income and other, net
    
    
    
    
    
    
    2,313
    
    
    
    (1,307
    )
    
    
    
    
    
    
    1,006Income tax benefit (provision)
    
    
    52
    
    
    
    (2,137
    )
    
    
    (1,792
    )
    
    
    
    
    
    
    (3,877
    )Equity in earnings of subsidiaries, net
    
    
    6,347
    
    
    
    4,117
    
    
    
    
    
    
    
    (10,464
    )
    
    
    Net Income
    
    $
    6,263
    
    
    $
    7,047
    
    
    $
    3,417
    
    
    $
    (10,464
    )
    
    $
    6,263
 24




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##### Table of Contents



Unaudited Condensed Consolidating Statements of Income
Nine Months Ended September 30, 2010
(in thousands)
 JDA Software
    
    
    Guarantor
    
    
    Non-GuarantorGroup, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Software licenses
    
    $
    
    
    
    $
    72,865
    
    
    $
    
    
    
    $
    
    
    
    $
    72,865Subscriptions and other recurring revenues
    
    
    
    
    
    
    15,851
    
    
    
    
    
    
    
    
    
    
    
    15,851Maintenance services
    
    
    
    
    
    
    126,747
    
    
    
    55,093
    
    
    
    
    
    
    
    181,840Product revenues
    
    
    
    
    
    
    215,463
    
    
    
    55,093
    
    
    
    
    
    
    
    270,556Consulting services
    
    
    
    
    
    
    113,561
    
    
    
    50,643
    
    
    
    
    
    
    
    164,204Reimbursed expenses
    
    
    
    
    
    
    9,430
    
    
    
    4,257
    
    
    
    
    
    
    
    13,687Service revenues
    
    
    
    
    
    
    122,991
    
    
    
    54,900
    
    
    
    
    
    
    
    177,891Total revenues
    
    
    
    
    
    
    338,454
    
    
    
    109,993
    
    
    
    
    
    
    
    448,447Cost of Revenues:Cost of software licenses
    
    
    
    
    
    
    3,020
    
    
    
    
    
    
    
    
    
    
    
    3,020Amortization of acquired software technology
    
    
    
    
    
    
    5,212
    
    
    
    
    
    
    
    
    
    
    
    5,212Cost of maintenance services
    
    
    
    
    
    
    26,422
    
    
    
    12,770
    
    
    
    
    
    
    
    39,192Cost of product revenues
    
    
    
    
    
    
    34,654
    
    
    
    12,770
    
    
    
    
    
    
    
    47,424Cost of consulting services
    
    
    
    
    
    
    88,296
    
    
    
    36,691
    
    
    
    
    
    
    
    124,987Reimbursed expenses
    
    
    
    
    
    
    9,430
    
    
    
    4,257
    
    
    
    
    
    
    
    13,687Cost of service revenues
    
    
    
    
    
    
    97,726
    
    
    
    40,948
    
    
    
    
    
    
    
    138,674Total cost of revenues
    
    
    
    
    
    
    132,380
    
    
    
    53,718
    
    
    
    
    
    
    
    186,098Gross Profit
    
    
    
    
    
    
    206,074
    
    
    
    56,275
    
    
    
    
    
    
    
    262,349Operating Expenses:Product development
    
    
    
    
    
    
    35,292
    
    
    
    18,839
    
    
    
    
    
    
    
    54,131Sales and marketing
    
    
    
    
    
    
    41,052
    
    
    
    24,778
    
    
    
    
    
    
    
    65,830General and administrative
    
    
    
    
    
    
    43,962
    
    
    
    11,082
    
    
    
    
    
    
    
    55,044Amortization of intangibles
    
    
    
    
    
    
    28,447
    
    
    
    
    
    
    
    
    
    
    
    28,447Restructuring charges
    
    
    
    
    
    
    18,894
    
    
    
    5,665
    
    
    
    
    
    
    
    24,559Acquisition-related costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total operating expenses
    
    
    
    
    
    
    167,647
    
    
    
    60,364
    
    
    
    
    
    
    
    228,011Operating Income (Loss)
    
    
    
    
    
    
    38,427
    
    
    
    (4,089
    )
    
    
    
    
    
    
    34,338Interest expense and amortization of loan fees
    
    
    (17,897
    )
    
    
    (363
    )
    
    
    (177
    )
    
    
    
    
    
    
    (18,437
    )Interest income and other, net
    
    
    
    
    
    
    (17,512
    )
    
    
    18,551
    
    
    
    
    
    
    
    1,039Income tax benefit (provision)
    
    
    6,801
    
    
    
    (7,805
    )
    
    
    (4,065
    )
    
    
    
    
    
    
    (5,069
    )Equity in earnings of subsidiaries, net
    
    
    22,967
    
    
    
    8,363
    
    
    
    
    
    
    
    (31,330
    )
    
    
    Net Income
    
    $
    11,871
    
    
    $
    21,110
    
    
    $
    10,220
    
    
    $
    (31,330
    )
    
    $
    11,871
 25




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##### Table of Contents



Unaudited Condensed Consolidating Statements of Income
Nine Months Ended September 30, 2009
(in thousands)
 JDA Software
    
    
    Guarantor
    
    
    Non-GuarantorGroup, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Software licenses
    
    $
    
    
    
    $
    57,300
    
    
    $
    
    
    
    $
    
    
    
    $
    57,300Subscriptions and other recurring revenues
    
    
    
    
    
    
    2,860
    
    
    
    
    
    
    
    
    
    
    
    2,860Maintenance services
    
    
    
    
    
    
    84,088
    
    
    
    48,290
    
    
    
    
    
    
    
    132,379Product revenues
    
    
    
    
    
    
    144,248
    
    
    
    48,290
    
    
    
    
    
    
    
    192,538Consulting services
    
    
    
    
    
    
    50,809
    
    
    
    28,156
    
    
    
    
    
    
    
    78,965Reimbursed expenses
    
    
    
    
    
    
    5,069
    
    
    
    2,105
    
    
    
    
    
    
    
    7,175Service revenues
    
    
    
    
    
    
    55,878
    
    
    
    30,261
    
    
    
    
    
    
    
    86,139Total revenues
    
    
    
    
    
    
    200,126
    
    
    
    78,551
    
    
    
    
    
    
    
    278,677Cost of Revenues:Cost of software licenses
    
    
    
    
    
    
    2,417
    
    
    
    
    
    
    
    
    
    
    
    2,417Amortization of acquired software technology
    
    
    
    
    
    
    2,954
    
    
    
    
    
    
    
    
    
    
    
    2,954Cost of maintenance services
    
    
    
    
    
    
    23,854
    
    
    
    8,562
    
    
    
    
    
    
    
    32,416Cost of product revenues
    
    
    
    
    
    
    29,225
    
    
    
    8,562
    
    
    
    
    
    
    
    37,787Cost of consulting services
    
    
    
    
    
    
    40,354
    
    
    
    21,378
    
    
    
    
    
    
    
    61,732Reimbursed expenses
    
    
    
    
    
    
    5,069
    
    
    
    2,105
    
    
    
    
    
    
    
    7,174Cost of service revenues
    
    
    
    
    
    
    45,423
    
    
    
    23,483
    
    
    
    
    
    
    
    68,906Total cost of revenues
    
    
    
    
    
    
    74,648
    
    
    
    32,045
    
    
    
    
    
    
    
    106,693Gross Profit
    
    
    
    
    
    
    125,478
    
    
    
    46,506
    
    
    
    
    
    
    
    171,984Operating Expenses:Product development
    
    
    
    
    
    
    30,265
    
    
    
    7,467
    
    
    
    
    
    
    
    37,732Sales and marketing
    
    
    
    
    
    
    29,215
    
    
    
    17,095
    
    
    
    
    
    
    
    46,310General and administrative
    
    
    
    
    
    
    28,514
    
    
    
    6,487
    
    
    
    
    
    
    
    35,001Amortization of intangibles
    
    
    
    
    
    
    17,880
    
    
    
    
    
    
    
    
    
    
    
    17,880Restructuring charges
    
    
    
    
    
    
    4,348
    
    
    
    2,357
    
    
    
    
    
    
    
    6,705Total operating expenses
    
    
    
    
    
    
    110,222
    
    
    
    33,406
    
    
    
    
    
    
    
    143,628Operating Income
    
    
    
    
    
    
    15,256
    
    
    
    13,100
    
    
    
    
    
    
    
    28,356Interest expense and amortization of loan fees
    
    
    (388
    )
    
    
    (459
    )
    
    
    (124
    )
    
    
    
    
    
    
    (971
    )Interest income and other, net
    
    
    
    
    
    
    8,644
    
    
    
    (7,758
    )
    
    
    
    
    
    
    886Income tax benefit (provision)
    
    
    147
    
    
    
    (9,083
    )
    
    
    (1,493
    )
    
    
    
    
    
    
    (10,429
    )Equity in earnings of subsidiaries, net
    
    
    18,083
    
    
    
    2,064
    
    
    
    
    
    
    
    (20,147
    )
    
    
    Net Income
    
    $
    17,842
    
    
    $
    16,422
    
    
    $
    3,725
    
    
    $
    (20,147
    )
    
    $
    17,842
 26




---



##### Table of Contents



Unaudited Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2010
(in thousands)
 JDA Software
    
    
    Guarantor
    
    
    Non-GuarantorGroup, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet Cash Provided by (Used in) Operating Activities
    
    $
    145,030
    
    
    $
    (128,978
    )
    
    $
    22,941
    
    
    $
    
    
    
    $
    38,993Investing Activities:Change in restricted cash
    
    
    277,554
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    277,554Purchase of i2 Technologies, Inc.
    
    
    (431,775
    )
    
    
    218,348
    
    
    
    
    
    
    
    
    
    
    
    (213,427
    )Payment of direct costs related to prior acquisitions
    
    
    
    
    
    
    (1,669
    )
    
    
    (1,080
    )
    
    
    
    
    
    
    (2,749
    )Purchase of property and equipment
    
    
    
    
    
    
    (10,110
    )
    
    
    (4,675
    )
    
    
    
    
    
    
    (14,785
    )Proceeds from disposal of property and equipment
    
    
    
    
    
    
    602
    
    
    
    29
    
    
    
    
    
    
    
    631Net cash (used in) provided by investing activities
    
    
    (154,221
    )
    
    
    207,171
    
    
    
    (5,726
    )
    
    
    
    
    
    
    47,224Financing Activities:Issuance of common stock  equity plans
    
    
    13,836
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,836Purchase of treasury stock and other , net
    
    
    (4,645
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,645
    )Change in intercompany receivable/payable
    
    
    
    
    
    
    19,528
    
    
    
    (19,528
    )
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    9,191
    
    
    
    19,528
    
    
    
    (19,528
    )
    
    
    
    
    
    
    9,191Effect of Exchange Rates on Cash and Cash Equivalents
    
    
    
    
    
    
    (8,461
    )
    
    
    9,449
    
    
    
    
    
    
    
    988Net increase (decrease) in cash and equivalents
    
    
    
    
    
    
    89,260
    
    
    
    7,136
    
    
    
    
    
    
    
    96,396Cash and Cash Equivalents, Beginning of Period
    
    
    
    
    
    
    47,170
    
    
    
    28,804
    
    
    
    
    
    
    
    75,974Cash and Cash Equivalents, End of Period
    
    $
    
    
    
    $
    136,430
    
    
    $
    35,940
    
    
    $
    
    
    
    $
    172,370
 27




---



##### Table of Contents



Unaudited Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2009
(in thousands)
 JDA Software
    
    
    Guarantor
    
    
    Non-GuarantorGroup, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet Cash Provided by (Used in) Operating Activities
    
    $
    19,810
    
    
    $
    57,939
    
    
    $
    2,779
    
    
    $
    
    
    
    $
    80,528Investing Activities:Payment of direct costs related to prior acquisitions
    
    
    
    
    
    
    (2,249
    )
    
    
    (2,182
    )
    
    
    
    
    
    
    (4,431
    )Purchase of property and equipment
    
    
    
    
    
    
    (3,559
    )
    
    
    (1,982
    )
    
    
    
    
    
    
    (5,541
    )Proceeds from disposal of property and equipment
    
    
    
    
    
    
    7
    
    
    
    55
    
    
    
    
    
    
    
    62Net cash used in investing activities
    
    
    
    
    
    
    (5,801
    )
    
    
    (4,109
    )
    
    
    
    
    
    
    (9,910
    )Financing Activities:Issuance of common stock  equity plans
    
    
    14,524
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,524Purchase of treasury stock and other, net
    
    
    (6,266
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,266
    )Redemption of redeemable preferred stock
    
    
    (28,068
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,068
    )Change in intercompany receivable/payable
    
    
    
    
    
    
    (507
    )
    
    
    507
    
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    (19,810
    )
    
    
    (507
    )
    
    
    507
    
    
    
    
    
    
    
    (19,810
    )Effect of Exchange Rates on Cash and Cash Equivalents
    
    
    
    
    
    
    (1,773
    )
    
    
    3,746
    
    
    
    
    
    
    
    1,973Net decrease (increase) in cash and equivalents
    
    
    
    
    
    
    49,858
    
    
    
    2,923
    
    
    
    
    
    
    
    52,781Cash and Cash Equivalents, Beginning of Period
    
    
    
    
    
    
    10,841
    
    
    
    21,855
    
    
    
    
    
    
    
    32,696Cash and Cash Equivalents, End of Period
    
    $
    
    
    
    $
    60,699
    
    
    $
    24,778
    
    
    $
    
    
    
    $
    85,477
 28




---



##### Table of Contents



Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Significant Trends and Developments in Our Business
 Acquisition of i2 Technologies, Inc.
      29




---



##### Table of Contents



Third Quarter 2010
 Revenues:
    
    JDA
    
    
    
    
    
    
    i2
    
    
    
    
    
    
    CombinedSoftware licenses and subscriptions
    
    $
    9,629
    
    
    
    44
    %
    
    $
    12,405
    
    
    
    56
    %
    
    $
    22,034Maintenance services
    
    
    46,518
    
    
    
    72
    %
    
    
    17,668
    
    
    
    28
    %
    
    
    64,186Product revenues
    
    
    56,147
    
    
    
    65
    %
    
    
    30,073
    
    
    
    35
    %
    
    
    86,220Service revenues
    
    
    38,374
    
    
    
    53
    %
    
    
    33,849
    
    
    
    47
    %
    
    
    72,223Total revenues
    
    $
    94,521
    
    
    
    60
    %
    
    $
    63,922
    
    
    
    40
    %
    
    $
    158,443
 First Nine Months of 2010
 Revenues:
    
    JDA
    
    
    
    
    
    
    i2
    
    
    
    
    
    
    CombinedSoftware licenses and subscriptions
    
    $
    47,235
    
    
    
    53
    %
    
    $
    41,481
    
    
    
    47
    %
    
    $
    88,716Maintenance services
    
    
    138,426
    
    
    
    76
    %
    
    
    43,414
    
    
    
    24
    %
    
    
    181,840Product revenues
    
    
    185,661
    
    
    
    69
    %
    
    
    84,895
    
    
    
    31
    %
    
    
    270,556Service revenues
    
    
    108,669
    
    
    
    61
    %
    
    
    69,222
    
    
    
    39
    %
    
    
    177,891Total revenues
    
    $
    294,330
    
    
    
    66
    %
    
    $
    154,117
    
    
    
    34
    %
    
    $
    448,447
 Outlook for 2010.
 Outlook for 2010Low End
    
    
    High EndSoftware and subscription revenues
    
    $
    125 million
    
    
    $
    135 millionTotal revenues
    
    $
    590 million
    
    
    $
    625 millionAdjusted EBITDA
    
    $
    160 million
    
    
    $
    170 millionAdjusted earnings per share
    
    $
    1.85
    
    
    $
    2.00
    30




---



##### Table of Contents



We Have Incurred Significant Unplanned Legal Expenses
 We Have Realized Cost Synergies as We Integrate and Combine i2 and JDA.
 Share-Based Compensation Expense.
   We May Make Additional Strategic Acquisitions.
 Financial Position and Cash Flow Provided by Operations. Contractual
Obligations
 31




---



##### Table of Contents



Future Tax Benefits From the i2 Acquisition
 32




---



##### Table of Contents



Results of Operations
 Significant Trends and Developments in Our Business
 Three Months endedSeptember 30,
    
    
    2009 to 20102010
    
    
    %
    
    
    2009
    
    
    %
    
    
    $ Change
    
    
    % ChangeRevenues:Software licenses
    
    $
    16,276
    
    
    
    10
    %
    
    $
    16,354
    
    
    
    17
    %
    
    $
    (78
    )
    
    
    (1
    %)Subscriptions and other recurring revenue
    
    
    5,758
    
    
    
    4
    
    
    
    896
    
    
    
    1
    
    
    
    4,862
    
    
    
    543
    %Maintenance
    
    
    64,186
    
    
    
    40
    
    
    
    45,010
    
    
    
    47
    
    
    
    19,176
    
    
    
    43
    %Product revenues
    
    
    86,220
    
    
    
    54
    
    
    
    62,260
    
    
    
    65
    
    
    
    23,960
    
    
    
    37
    %Service revenues
    
    
    72,223
    
    
    
    46
    
    
    
    33,599
    
    
    
    35
    
    
    
    38,624
    
    
    
    115
    %Total revenues
    
    
    158,443
    
    
    
    100
    %
    
    
    95,859
    
    
    
    100
    %
    
    
    62,584
    
    
    
    65
    %Cost of Revenues:Software licenses
    
    
    1,103
    
    
    
    1
    %
    
    
    580
    
    
    
    1
    %
    
    
    523
    
    
    
    90
    %Amortization of acquired software technology
    
    
    1,833
    
    
    
    1
    
    
    
    966
    
    
    
    1
    
    
    
    867
    
    
    
    90
    %Maintenance services
    
    
    12,932
    
    
    
    8
    
    
    
    10,883
    
    
    
    11
    
    
    
    2,049
    
    
    
    19
    %Product revenues
    
    
    15,868
    
    
    
    10
    %
    
    
    12,429
    
    
    
    13
    %
    
    
    3,439
    
    
    
    28
    %Service revenues
    
    
    55,252
    
    
    
    35
    
    
    
    24,966
    
    
    
    26
    
    
    
    30,286
    
    
    
    121
    %Total cost of revenues
    
    
    71,120
    
    
    
    45
    %
    
    
    37,395
    
    
    
    39
    %
    
    
    33,725
    
    
    
    90
    %Gross Profit
    
    
    87,323
    
    
    
    55
    %
    
    
    58,464
    
    
    
    61
    %
    
    
    28,859
    
    
    
    49
    %Operating Expenses:Product development
    
    
    17,373
    
    
    
    11
    %
    
    
    12,495
    
    
    
    13
    %
    
    
    4,878
    
    
    
    39
    %Sales and marketing
    
    
    20,258
    
    
    
    13
    
    
    
    15,888
    
    
    
    17
    
    
    
    4,370
    
    
    
    28
    %General and administrative
    
    
    17,546
    
    
    
    11
    
    
    
    12,305
    
    
    
    13
    
    
    
    5,241
    
    
    
    43
    %55,177
    
    
    
    35
    %
    
    
    40,688
    
    
    
    43
    %
    
    
    14,489
    
    
    
    36
    %Amortization of intangibles
    
    
    9,966
    
    
    
    6
    %
    
    
    5,753
    
    
    
    6
    %
    
    
    4,213
    
    
    
    73
    %Restructuring charge
    
    
    4,172
    
    
    
    3
    %
    
    
    2,543
    
    
    
    2
    %
    
    
    1,629
    
    
    
    64
    %Acquisition-related costs
    
    
    473
    
    
    
    1
    %
    
    
    
    
    
    
    
    %
    
    
    473
    
    
    
    100
    %Operating income
    
    $
    17,535
    
    
    
    11
    %
    
    $
    9,480
    
    
    
    10
    %
    
    
    8,055
    
    
    
    85
    %Gross margins:Software licenses and subscription revenues
    
    
    
    
    
    
    95
    %
    
    
    
    
    
    
    97
    %Maintenance
    
    
    
    
    
    
    80
    %
    
    
    
    
    
    
    76
    %Product revenues
    
    
    
    
    
    
    82
    %
    
    
    
    
    
    
    80
    %Services revenues
    
    
    
    
    
    
    23
    %
    
    
    
    
    
    
    26
    %
 33




---



##### Table of Contents



Nine Months endedSeptember 30,
    
    
    2009 to 20102010
    
    
    %
    
    
    2009
    
    
    %
    
    
    $ Change
    
    
    % ChangeRevenues:Software licenses
    
    $
    72,865
    
    
    
    16
    %
    
    $
    57,300
    
    
    
    20
    %
    
    $
    15,565
    
    
    
    27
    %Subscriptions and other recurring revenue
    
    
    15,851
    
    
    
    3
    
    
    
    2,860
    
    
    
    1
    
    
    
    12,991
    
    
    
    454
    %Maintenance
    
    
    181,840
    
    
    
    41
    
    
    
    132,378
    
    
    
    48
    
    
    
    49,462
    
    
    
    37
    %Product revenues
    
    
    270,556
    
    
    
    61
    %
    
    
    192,538
    
    
    
    69
    %
    
    
    78,018
    
    
    
    41
    %Service revenues
    
    
    177,891
    
    
    
    39
    
    
    
    86,139
    
    
    
    31
    
    
    
    91,752
    
    
    
    107
    %Total revenues
    
    
    448,447
    
    
    
    100
    %
    
    
    278,677
    
    
    
    100
    %
    
    
    169,770
    
    
    
    61
    %Cost of Revenues:Software licenses
    
    
    3,020
    
    
    
    1
    %
    
    
    2,417
    
    
    
    1
    %
    
    
    603
    
    
    
    25
    %Amortization of acquired software technology
    
    
    5,212
    
    
    
    1
    
    
    
    2,954
    
    
    
    1
    
    
    
    2,258
    
    
    
    76
    %Maintenance services
    
    
    39,192
    
    
    
    9
    
    
    
    32,416
    
    
    
    11
    
    
    
    6,776
    
    
    
    21
    %Product revenues
    
    
    47,424
    
    
    
    11
    %
    
    
    37,787
    
    
    
    13
    %
    
    
    9,637
    
    
    
    26
    %Service revenues
    
    
    138,674
    
    
    
    31
    
    
    
    68,906
    
    
    
    25
    
    
    
    69,768
    
    
    
    101
    %Total cost of revenues
    
    
    186,098
    
    
    
    42
    %
    
    
    106,693
    
    
    
    38
    %
    
    
    79,405
    
    
    
    74
    %Gross Profit
    
    
    262,349
    
    
    
    58
    %
    
    
    171,984
    
    
    
    62
    %
    
    
    90,365
    
    
    
    53
    %Operating Expenses:Product development
    
    
    54,131
    
    
    
    12
    %
    
    
    37,732
    
    
    
    13
    %
    
    
    16,399
    
    
    
    43
    %Sales and marketing
    
    
    65,830
    
    
    
    15
    
    
    
    46,310
    
    
    
    17
    
    
    
    19,520
    
    
    
    42
    %General and administrative
    
    
    55,044
    
    
    
    12
    
    
    
    35,001
    
    
    
    13
    
    
    
    20,043
    
    
    
    57
    %175,005
    
    
    
    39
    %
    
    
    119,043
    
    
    
    43
    %
    
    
    55,962
    
    
    
    47
    %Amortization of intangibles
    
    
    28,447
    
    
    
    6
    %
    
    
    17,880
    
    
    
    6
    %
    
    
    10,567
    
    
    
    59
    %Restructuring charge
    
    
    16,478
    
    
    
    4
    %
    
    
    6,705
    
    
    
    2
    %
    
    
    9,773
    
    
    
    146
    %Acquisition-related costs
    
    
    8,081
    
    
    
    2
    %
    
    
    
    
    
    
    
    %
    
    
    8,081
    
    
    
    100
    %Operating income
    
    $
    34,338
    
    
    
    8
    %
    
    $
    28,356
    
    
    
    10
    %
    
    
    5,982
    
    
    
    21
    %Gross margins:Software licenses and subscription revenues
    
    
    
    
    
    
    97
    %
    
    
    
    
    
    
    96
    %Maintenance
    
    
    
    
    
    
    78
    %
    
    
    
    
    
    
    76
    %Product revenues
    
    
    
    
    
    
    83
    %
    
    
    
    
    
    
    80
    %Services revenues
    
    
    
    
    
    
    21
    %
    
    
    
    
    
    
    20
    %
 34




---



##### Table of Contents



Retail Manufacturing and Distribution
 
    
    Supply Chain.This reportable business segment includes all revenues related to
applications and services sold to customers in the supply chain management market. The
majority of our products are specifically designed to provide customers with one synchronized
view of product demand while managing the flow and allocation of materials, information,
finances and other resources across global supply chains, from manufacturers to distribution
centers and transportation networks to the retail store and consumer (collectively, the
Supply Chain). This segment combines all revenues previously reported by the Company under
the Retailand Manufacturing and Distributionreportable business segments and includes all
revenues related to i2 applications and services.
    
    Pricing and Revenue Management (previously known as Services Industries).This reportable
business segment includes all revenues related to applications and services sold to customers
in service industries such as travel, transportation, hospitality, media and
telecommunications. The Pricing and Revenue Managementsegment is centrally managed by a team
that has global responsibilities for this market.
 Business Segments
  Supply Chain
    
    
    Pricing and Revenue ManagementSeptember 30, 2010 vs. 2009
    
    
    September 30, 2010 vs. 2009Three Months
    
    
    Nine Months
    
    
    Three Months
    
    
    Nine MonthsSoftware licenses and subscriptions
    
    
    34
    %
    
    
    74
    %
    
    
    (68
    %)
    
    
    (80
    %)Maintenance services
    
    
    44
    %
    
    
    38
    %
    
    
    14
    %
    
    
    27
    %Product revenues
    
    
    41
    %
    
    
    48
    %
    
    
    (18
    %)
    
    
    (51
    %)Service revenues
    
    
    141
    %
    
    
    119
    %
    
    
    (44
    %)
    
    
    3
    %Total revenues
    
    
    73
    %
    
    
    69
    %
    
    
    (35
    %)
    
    
    (30
    %)Product development
    
    
    40
    %
    
    
    44
    %
    
    
    28
    %
    
    
    34
    %Sales and marketing
    
    
    30
    %
    
    
    46
    %
    
    
    4
    %
    
    
    13
    %Operating income
    
    
    74
    %
    
    
    78
    %
    
    
    (172
    %)
    
    
    (108
    %)
 Contribution to Total RevenuesSeptember 30, 2010 vs. 2009Three Months
    
    
    Nine Months2010
    
    
    2009
    
    
    2010
    
    
    2009Supply Chain
    
    
    97
    %
    
    
    92
    %
    
    
    96
    %
    
    
    91
    %Pricing and Revenue Management
    
    
    3
    %
    
    
    8
    %
    
    
    4
    %
    
    
    9
    %100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 35




---



##### Table of Contents



Geographical Regions
 The Americas
    
    
    Europe
    
    
    Asia/PacificSeptember 30, 2010 vs. 2009
    
    
    September 30, 2010 vs. 2009
    
    
    September 30, 2010 vs. 2009Three Months
    
    
    Nine Months
    
    
    Three Months
    
    
    Nine Months
    
    
    Three Months
    
    
    Nine MonthsSoftware licenses and subscriptions
    
    
    31
    %
    
    
    64
    %
    
    
    (17
    %)
    
    
    11
    %
    
    
    276
    %
    
    
    11
    %Maintenance services
    
    
    40
    %
    
    
    33
    %
    
    
    20
    %
    
    
    27
    %
    
    
    133
    %
    
    
    27
    %Product revenues
    
    
    38
    %
    
    
    42
    %
    
    
    11
    %
    
    
    22
    %
    
    
    152
    %
    
    
    22
    %Service revenues
    
    
    64
    %
    
    
    70
    %
    
    
    107
    %
    
    
    96
    %
    
    
    445
    %
    
    
    96
    %Total revenues
    
    
    47
    %
    
    
    52
    %
    
    
    34
    %
    
    
    39
    %
    
    
    293
    %
    
    
    39
    %
 Contribution to Total RevenuesSeptember 30, 2010 vs. 2009Three Months
    
    
    Nine Months2010
    
    
    2009
    
    
    2010
    
    
    2009The Americas
    
    
    62
    %
    
    
    70
    %
    
    
    65
    %
    
    
    69
    %Europe
    
    
    18
    %
    
    
    21
    %
    
    
    18
    %
    
    
    21
    %Asia/Pacific
    
    
    20
    %
    
    
    9
    %
    
    
    17
    %
    
    
    10
    %100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 Three Months Ended September 30, 2010 Compared to Three Months Ended September 30, 2009
 Software License and Subscription Results by Region
  Three Months Ended September 30,Region
    
    2010
    
    
    2009
    
    
    $ Change
    
    
    % ChangeAmericas
    
    $
    16,590
    
    
    $
    12,624
    
    
    $
    3,966
    
    
    
    31
    %Europe
    
    
    3,405
    
    
    
    4,084
    
    
    
    (679
    )
    
    
    (17
    %)Asia/Pacific
    
    
    2,039
    
    
    
    542
    
    
    
    1,497
    
    
    
    276
    %Total
    
    $
    22,034
    
    
    $
    17,250
    
    
    $
    4,784
    
    
    
    28
    %
   Software License and Subscription Results by Reportable Business Segment.
 Supply Chain.
 36




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##### Table of Contents



Pricing and Revenue Management.
 Maintenance Services
  Service Revenues
  Cost of Product Revenues
 Cost of Software Licenses.
 Amortization of Acquired Software Technology
 Cost of Maintenance Services.
 Cost of Service Revenues
  Operating Expenses
  Product Development.
 37




---



##### Table of Contents



Sales and Marketing.
 General and Administrative.
 Amortization of Intangibles.
 Restructuring Charges.
  Acquisition-Related Costs.
 Other Income (Expense)
 Interest Expense and Amortization of Loan Fees.
 Interest Income and Other, Net.
 Income Tax Provision
   38




---



##### Table of Contents



Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2009
 Software License and Subscription Results by Region
  Nine Months Ended September 30,Region
    
    2010
    
    
    2009
    
    
    $ Change
    
    
    % ChangeAmericas
    
    $
    62,587
    
    
    $
    38,086
    
    
    $
    24,502
    
    
    
    64
    %Europe
    
    
    13,581
    
    
    
    12,266
    
    
    
    1,315
    
    
    
    11
    %Asia/Pacific
    
    
    12,548
    
    
    
    9,808
    
    
    
    2,740
    
    
    
    28
    %Total
    
    $
    88,716
    
    
    $
    60,160
    
    
    $
    28,557
    
    
    
    47
    %
   # of Large TransactionsNine Months Ended September 30,Region
    
    2010
    
    
    2009JDA
    
    
    i2
    
    
    TotalAmericas
    
    
    7
    
    
    
    2
    
    
    
    9
    
    
    
    6Europe
    
    
    
    
    
    
    2
    
    
    
    2
    
    
    
    2Asia/Pacific
    
    
    1
    
    
    
    3
    
    
    
    4
    
    
    
    1Total
    
    
    8
    
    
    
    7
    
    
    
    15
    
    
    
    9
 Software License and Subscription Results by Reportable Business Segment.
 Supply Chain.
 Pricing and Revenue Management.
 Maintenance Services
  39




---



##### Table of Contents



Service Revenues
  Cost of Product Revenues
 Cost of Software Licenses.
 Amortization of Acquired Software Technology
 Cost of Maintenance Services.
 Cost of Service Revenues
  Operating Expenses
  Product Development.
 Sales and Marketing.
 40




---



##### Table of Contents



General and Administrative.
 Amortization of Intangibles.
 Restructuring Charges.
  Acquisition-Related Costs.
 Other Income (Expense)
 Interest Expense and Amortization of Loan Fees.
 Interest Income and Other, Net.
 Income Tax Provision
  41




---



##### Table of Contents



Liquidity and Capital Resources
 Contractual Obligations
  Operating activities
 Investing activities
 Financing activities
 Changes in the currency exchange rates of our foreign operations
 42




---



##### Table of Contents



Treasury Stock Repurchases.
  Contractual Obligations
   Critical Accounting Policies
  
    
    Revenue recognition. Our revenue recognition policy is significant because our revenue
is a key component of our results of operations. In addition, our revenue recognition
determines the timing of certain expenses such as commissions and royalties. We follow
specific and detailed guidelines in measuring revenue; however, certain judgments affect
the application of our revenue policy.We license software primarily under non-cancelable agreements and provide related services,
including consulting, training and customer support. Software license revenue is generally
recognized using the residual method when:
 Ø
    
    Persuasive evidence of an arrangement exists and a license agreement has been signed;Ø
    
    Delivery, which is typically FOB shipping point, is complete;Ø
    
    Fees are fixed and determinable and there are no uncertainties surrounding product acceptance;Ø
    
    Collection is considered probable; and
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Ø
    
    Vendor-specific evidence of fair value (VSOE) exists for all undelivered elements.
 Our customer arrangements typically contain multiple elements that include software, options
for future purchases of software products not previously licensed to the customer,
maintenance, managed services, consulting and training services. The fees from these
arrangements are allocated to the various elements based on VSOE. Under the residual method,
if an arrangement contains an undelivered element, the VSOE of the undelivered element is
deferred and the revenue recognized once the element is delivered. If we are unable to
determine VSOE for any undelivered element included in an arrangement, we will defer revenue
recognition until all elements have been delivered. In addition, if a software license
contains milestones, customer acceptance criteria or a cancellation right, the software
revenue is recognized upon the achievement of the milestone or upon the earlier of customer
acceptance or the expiration of the acceptance period or cancellation right. For arrangements
that provide for significant services or custom development that are essential to the
softwares functionality, the software license revenue and contracted services are recognized
under the percentage of completion method. We measure progress-to-completion on arrangements
involving significant services or custom development that are essential to the softwares
functionality using input measures, primarily labor hours, which relate hours incurred to
date to total estimated hours at completion. We continually update and revise our estimates
of input measures. If our estimates indicate that a loss will be incurred, the entire loss
is recognized in that period.
 Subscription and other recurring revenues include fees for access rights to software
solutions that are offered under a subscription-based delivery model where the users do not
take possession of the software. Under this model, the software applications are hosted by
the Company or by a third party and the customer accesses and uses the software on an
as-needed basis over the internet or via a dedicated line. The underlying arrangements
typically include (i) a single fee for the service that is billed monthly, quarterly or
annually, (ii) cover a period from 36 to 60 months and (iii) do not provide the customer with
an option to take delivery of the software at any time during or after the subscription term.
Subscription revenues are recognized ratably over the subscription term beginning on the
commencement dates of each contract.
 Maintenance services are separately priced and stated in our arrangements. Maintenance
services typically include on-line support, access to our Solution Centers via telephone and
web interfaces, comprehensive error diagnosis and correction, and the right to receive
unspecified upgrades and enhancements, when and if we make them generally available.
Maintenance services are generally billed on a monthly basis and recorded as revenue in the
applicable month, or billed on an annual basis with the revenue initially deferred and
recognized ratably over the maintenance period. VSOE for maintenance services is the price
customers will be required to pay when it is sold separately, which is typically the renewal
rate.
 Consulting and training services are separately priced and stated in our arrangements, are
generally available from a number of suppliers, and are generally not essential to the
functionality of our software products. Consulting services include project management,
system planning, design and implementation, customer configurations, and training. These
services are generally billed bi-weekly on an hourly basis or pursuant to the terms of a
fixed price contract. Consulting services revenue billed on an hourly basis is recognized as
the work is performed. Under fixed price service contracts and milestone-based arrangements
that include services that are not essential to the functionality of our software products,
consulting services revenue is recognized using the proportional performance method. We
measure progress-to-completion under the proportional performance method by using input
measures, primarily labor hours, which relate hours incurred to date to total estimated hours
at completion. We continually update and revise our estimates of input measures. If our
estimates indicate that a loss will be incurred, the entire loss is recognized in that
period. Training revenues are included in consulting revenues in the Companys consolidated
statements of income and are recognized once the training services are provided. VSOE for
consulting and training services is based upon the hourly or per class rates charged when
those services are sold separately.
 Consulting and training services, when sold with subscription offerings, are accounted for
separately if they have standalone value to the customer and there is objective and reliable
evidence of fair value for the undelivered elements. In these situations, the consulting and
training revenues are recognized as the services are rendered for time and material contracts
or when milestones are achieved and accepted by the customer under fixed price service
contracts. If the consulting and training services sold with the subscription offerings do
not quality for separate accounting, all fees from the arrangement are treated as a single
unit of accounting and recognized ratably over the subscription term.
 Managed service offerings are separately price and stated in our arrangements with the
related revenues included in consulting revenues. Managed services typically include
implementation lab services, advance customer support and software and hardware
administration services, and are billed monthly, quarterly or annually with the revenue
recognized ratably over the term of the contract. Revenues from our hardware reseller
business are also included in consulting revenues, reported net (i.e., the amount billed to a
customer less the amount paid to the supplier) and recognized upon shipment of the hardware.
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Customers are reviewed for creditworthiness before we enter into a new arrangement that
provides for software and/or a service element. We do not sell or ship our software, nor
recognize any license revenue, unless we believe that collection is probable. Payments for
our software licenses are typically due within twelve months from the date of delivery.
Although infrequent, where software license agreements call for payment terms of twelve
months or more from the date of delivery, revenue is recognized as payments become due and
all other conditions for revenue recognition have been satisfied.
 
    
    Accounts Receivable.Consistent with industry practice and to be competitive in the
software marketplace, we typically provide payment terms on most software license sales.
Software licenses are generally due within twelve months from the date of delivery.
Customers are reviewed for creditworthiness before we enter into a new arrangement that
provides for software and/or a service element. We do not sell or ship our software, nor
recognize any revenue unless we believe that collection is probable. For those customers
who are not credit worthy, we require prepayment of the software license fee or a letter of
credit before we will ship our software. We have a history of collecting software payments
when they come due without providing refunds or concessions. Consulting services are
generally billed bi-weekly and maintenance services are billed annually or monthly. For
those customers who are significantly delinquent or whose credit deteriorates, we typically
put the account on hold and do not recognize any further services revenue, and may as
appropriate withdraw support and/or our implementation staff until the situation has been
resolved.We do not have significant billing or collection problems. We review each past due account
and provide specific reserves based upon the information we gather from various sources
including our customers, subsequent cash receipts, consulting services project teams, members
of each regions management, and credit rating services such as Dun and Bradstreet. Although
infrequent and unpredictable, from time to time certain of our customers have filed
bankruptcy, and we have been required to refund the pre-petition amounts collected and settle
for less than the face value of their remaining receivable pursuant to a bankruptcy court
order. In these situations, as soon as it becomes probable that the net realizable value of
the receivable is impaired, we provide reserves on the receivable. In addition, we monitor
economic conditions in the various geographic regions in which we operate to determine if
general reserves or adjustments to our credit policy in a region are appropriate for
deteriorating conditions that may impact the net realizable value of our receivables.
 
    
    Business Combinations. The acquisition of i2 on January 28, 2010 is being accounted for
at fair value under the acquisition method of accounting. The purchase price allocation has
not been finalized. The preliminary allocation of the purchase price as of September 30,
2010 is based on the best estimates of management and is subject to revision as the final
fair values of, and allocated purchase price to, the acquired assets and assumed
liabilities in the acquisition of i2 are completed over the remainder of 2010. We
currently anticipate that additional adjustments may still be made to the fair value of
tax-related accounts and the residual amount allocated to goodwill. Under the acquisition
method of accounting, (i) acquisition-related costs, except for those costs incurred to
issue debt or equity securities, are expensed in the period incurred; (ii) non-controlling
interests are valued at fair value at the acquisition date; (iii) in-process research and
development is recorded at fair value as an indefinite-lived intangible asset at the
acquisition date; (iv) restructuring costs associated with a business combination are
expensed subsequent to the acquisition date; and (v) changes in deferred tax asset
valuation allowances and income tax uncertainties after the acquisition date are recognized
through income tax expense.
    
    Goodwill and Other Identifiable Intangible Assets. Our business combinations have
typically resulted in goodwill and other identifiable intangible assets. These intangible
assets affect the amount of future period amortization expense and potential impairment
charges we may incur. The determination of the value of such intangible assets and the
annual impairment tests that we perform require management to make estimates of future
revenues, customer retention rates and other assumptions that affect our consolidated
financial statements.Goodwill is tested annually for impairment, or more frequently if events or changes in
business circumstances indicate the asset might be impaired, by comparing a weighted average
of the fair value of future cash flows under the Discounted Cash Flow Method of the Income
Approach and the Guideline Company Method to the carrying value of the goodwill allocated
to our reporting units. We found no indication of impairment of our goodwill balances during
second quarter 2010 with respect to the goodwill allocated to our Supply Chainand Services
Industriesreportable business segments. Absent future indications of impairment, the next
annual impairment test will be performed in fourth quarter 2010.Customer-basedintangible assets include customer lists, maintenance relationships and future
technological enhancements, service relationships and covenants not-to-compete.
Customer-basedintangible assets are amortized on a straight-line basis over estimated useful
lives ranging from one to 13 years. The values allocated to customer list intangibles are
based on the projected economic life of each acquired customer base, using historical
turnover rates and discussions with the management of the acquired companies. We estimate
the economic lives of these assets using the historical life experiences of the
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acquired companies as well as our historical experience with similar customer accounts for
products that we have developed internally. We review customer attrition rates for each
significant acquired customer group on annual basis, or more frequently if events or
circumstances change, to ensure the rate of attrition is not increasing and if revisions to
the estimated economic lives are required. We have initially recorded $74.6 million of
customer-based intangible assets in connection with the acquisition of i2.
 Technology-basedintangible assets include acquired software technology. Acquired software
technology is capitalized if the related software product under development has reached
technological feasibility or if there are alternative future uses for the purchased software.
Amortization of software technology is reported in the consolidated statements of operations
in cost of revenues under the caption Amortization of acquired software technology.
Software technology is amortized on a product-by-product basis with the amortization recorded
for each product being the greater of the amount computed using (a) the ratio that current
gross revenues for a product bear to the total of current and anticipated future revenue for
that product, or (b) the straight-line method over the remaining estimated economic life of
the product including the period being reported on. The estimated economic lives of our
acquired software technology range from 5 years to 15 years. We have initially recorded
$24.3 million of Technology-basedintangible assets in connection with the acquisition of i2.
 Marketing-basedintangible assets include trademarks and trade names. Trademarks are being
amortized on a straight-line basis over estimated useful lives of five years. We have
initially recorded $14.3 million of Marketing-basedintangible assets in connection with the
acquisition of i2.
 
    
    Product Development.The costs to develop new software products and enhancements to
existing software products are expensed as incurred until technological feasibility has
been established. We consider technological feasibility to have occurred when all planning,
designing, coding and testing have been completed according to design specifications. Once
technological feasibility is established, any additional costs would be capitalized. We
believe our current process for developing software is essentially completed concurrent
with the establishment of technological feasibility, and accordingly, no costs have been
capitalized.
    
    Income Taxes. Deferred tax assets and liabilities are recorded for the estimated future
tax effects of temporary differences between the tax basis of assets and liabilities and
amounts reported in the consolidated balance sheets, as well as operating loss and tax
credit carry-forwards. We follow specific and detailed guidelines regarding the
recoverability of any tax assets recorded on the balance sheet and provide valuation
allowances when recovery of deferred tax assets is not considered likely.We exercise significant judgment in determining our income tax provision due to transactions,
credits and calculations where the ultimate tax determination is uncertain. Uncertainties
arise as a consequence of the actual source of taxable income between domestic and foreign
locations, the outcome of tax audits and the ultimate utilization of tax credits. Although
we believe our estimates are reasonable, the final tax determination could differ from our
recorded income tax provision and accruals. In such case, we would adjust the income tax
provision in the period in which the facts that give rise to the revision become known.
These adjustments could have a material impact on our income tax provision and our net income
for that period.As of September 30, 2010 we have approximately $11.9 million of unrecognized tax benefits
that would impact our effective tax rate if recognized, some of which relate to uncertain tax
positions associated with the acquisition of Manugistics and i2. Future recognition of
uncertain tax positions resulting from the acquisition of Manugistics will be treated as a
component of income tax expense rather than as a reduction of goodwill. It is reasonably
possible that approximately $5.6 million of unrecognized tax benefits will be recognized
within the next twelve months. We have placed a valuation allowance against the Arizona
research and development credit as we do not expect to be able to utilize it prior to its
expiration.We treat interest and penalties related to uncertain tax positions as a component of income
tax expense including a $0.2 million benefit in the nine months ended September 30, 2010 and
an accrual of $0.4 million for the nine months ended September 30, 2009. As of September 30,
2010 and December 31, 2009 there are approximately $2.8 million and $2.3 million,
respectively of interest and penalty accruals related to uncertain tax positions which are
reflected in the consolidated balance sheet under the caption Liability for uncertain tax
positions. To the extent interest and penalties are not assessed with respect to the
uncertain tax positions, the accrued amounts for interest and penalties will be reduced and
reflected as a reduction of the overall tax provision.
 
    
    Share-Based Compensation. Annual stock-based incentive programs have been approved for
executive officers and certain other members of our management team for years 2007 through
2010 that provide for contingently issuable performance share awards or restricted stock
units upon achievement of defined performance threshold goals. The defined performance
threshold
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goal for each year has been an adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization) targets, which excludes certain non-routine items. The
awards vest 50% upon the date the Board approves the achievement of the annual performance
threshold goal with the remaining 50% vesting ratably over the subsequent 24-month period.
    
    Derivative Instruments and Hedging Activities. We use derivative financial
instruments, primarily forward exchange contracts, to manage a majority of the foreign
currency exchange exposure associated with net short-term foreign currency denominated
assets and liabilities that exist as part of our ongoing business operations that are
denominated in a currency other than the functional currency of the subsidiary. The
exposures relate primarily to the gain or loss recognized in earnings from the settlement
of current foreign denominated assets and liabilities. We do not enter into derivative
financial instruments for trading or speculative purposes. The forward exchange contracts
generally have maturities of 90 days or less and are not designated as hedging instruments.
Forward exchange contracts are marked-to-market at the end of each reporting period, using
quoted prices for similar assets or liabilities in active markets, with gains and losses
recognized in other income offset by the gains or losses resulting from the settlement of
the underlying foreign currency denominated assets and liabilities.At September 30, 2010, we had forward exchange contracts with a notional value of $77.3
million and an associated net forward contract receivable of $2.9 million determined on the
basis of Level 2 inputs. At December 31, 2009, we had forward exchange contracts with a
notional value of $37.9 million and an associated net forward contract liability of $0.4
million determined on the basis of Level 2 inputs. These derivatives are not designated as
hedging instruments. The forward contract receivables or liabilities are included in the
condensed consolidated balance sheet under the captions, Prepaid expenses and other current
assets or Accrued expenses and other liabilities as appropriate. The notional value
represents the amount of foreign currencies to be purchased or sold at maturity and does not
represent our exposure on these contracts. We recorded a net foreign currency exchange gain
of $0.4 million in the three months ended September 30, 2010 and a net foreign currency
exchange gain of $0.8 million in the three months ended September 30, 2009. In the nine
months ended September 30, 2010 we recorded a net foreign currency exchange contract gain of
$0.4 million compared to a net foreign currency exchange contract gain of $0.6 million in the
nine months ended September 30, 2009. Net foreign currency exchange gains (losses) are
included in the condensed consolidated statements of operations under the caption Interest
Income and other, net.Legal and Other Contingencies.
As discussed in Note 8 Legal Proceedings to our Condensed consolidated Financial Statements elsewhere in
this Quarterly Report on Form 10-Q, we are subject to various legal proceedings and claims that arise
in the ordinary course of business. In accordance with GAAP, we record a liability when it is probable
that a loss has been incurred and the amount is
reasonably estimable. There is significant judgment required in both the probability determination and as to whether
an exposure can be reasonably estimated.
In managements opinion, we do not have a potential liability related to any current legal
proceedings and claims that would individually or in the aggregate materially adversely affect our
financial condition or operating results. However, the outcomes of legal proceedings and claims brought
against us are subject to significant uncertainty.
Should we fail to prevail in any of these legal matters, the operating results of a
particular reporting period could be materially adversely affected.
 Other Recent Accounting Pronouncements
 Revenue Recognition
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Item 3: Quantitative and Qualitative Disclosures about Market Risk
  Foreign currency exchange rates
    Interest rates
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Item 4: Controls and Procedures
 Disclosure Controls and Procedures
 Changes in Internal Control Over Financial Reporting.
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
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Item 1A. Risk Factors
  Risks Related To Our Business
 We may not be able to sustain profitability in the future.
  
    
    attract and retain an adequate client base;
    
    manage effectively a larger and more global business with larger, complex tier one
projects;
    
    react to changes, including technological changes, in the markets we target or operate
in;
    
    deploy our services in additional markets or industry segments;
    
    respond to competitive developments and challenges;
    
    attract and retain experienced and talented personnel; and
    
    establish strategic business relationships.
  We have a substantial amount of debt, which could impact our ability to obtain future financing or
pursue our growth strategy.
  
    
    we must use a substantial portion of our cash flow from operations to pay interest on our
indebtedness, which will reduce the funds available to us for operations and other purposes;
    
    our ability to obtain additional financing for working capital, capital expenditures,
acquisitions or general corporate purposes may be impaired;
    
    our high level of indebtedness could place us at a competitive disadvantage compared to
our competitors that may have proportionately less debt;
    
    our flexibility in planning for, or reacting to, changes in our business and the industry
in which we operate may be limited;
    
    our high level of indebtedness may make us more vulnerable to economic downturns and
adverse developments in our business; and
    
    our ability to fund a change of control offer may be limited.
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Payments on our indebtedness will require a significant amount of cash.
  We may incur substantial additional indebtedness that could further exacerbate the risks associated
with our indebtedness.
  We may not receive significant revenues from our current research and development efforts, which
may limit our business from developing in ways that we currently anticipate.
  We may misjudge when software sales will be realized, which may materially reduce our revenue and
cash flow and adversely affect our business.
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We may face liability if our products are defective or if we make errors implementing our products.
   We may have difficulty implementing our software products, which would harm our business and
relations with customers.
  
    
    involve more significant integration efforts in order to complete implementation;
    
    require the execution of implementation procedures in multiple layers of software;
    
    offer a customer more deployment options and other configuration choices;
    
    require more training; and
    
    may involve third party integrators to change business processes concurrent with the
implementation of the software.
  Our operating results may be adversely affected as a result of our failure to meet contractual
obligations under fixed-price contracts within our estimated cost structure.
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Litigation could harm our business.
  We may have difficulty developing our new managed services offering, which could reduce future
revenue growth opportunities.
  The enforcement and protection of our intellectual property rights may be expensive and could
divert our valuable resources.
   Third parties may claim we infringe their intellectual property rights, which would result in an
increase in litigation and other related costs.
  
    
    be time-consuming, costly and/or result in litigation;
    
    divert managements time and attention from developing our business;
    
    require us to pay monetary damages or involve settlement payments, either of which could
be significant;
    
    require us to enter into royalty and licensing agreements that we would not normally find
acceptable;
    
    require us to stop selling or to redesign certain of our products; or
    
    require us to satisfy indemnification obligations to our customers.
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If we lose access to critical third-party software or technology, our costs could increase and the
introduction of new products and product enhancements could be delayed, potentially hurting our
competitive position.
  We may face difficulties in our highly competitive markets, which may make it difficult to attract
and retain clients and grow revenues.
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There are many risks associated with international operations, which may negatively impact our
overall business and profitability.
   
    
    currency fluctuations, the impact of which could significantly increase as a result of:
 Ø
    
    our continuing expansion of the CoE in India; andØ
    
    the acquisition of i2, as the majority of i2s international expenses, including
the compensation expense of over 65% of its employees, is denominated in currencies
other than the U.S. Dollar;
 
    
    higher operating costs due to the need to comply with local laws or regulations;
    
    lower margins on consulting services;
    
    competing against low-cost service providers;
    
    unexpected changes in employment and other regulatory requirements;
    
    tariffs and other trade barriers;
    
    costs and risks of adapting our products for use in foreign countries;
    
    longer payment cycles in certain countries;
    
    potentially negative tax consequences;
    
    difficulties in staffing and managing geographically disparate operations;
    
    greater difficulty in safeguarding intellectual property, licensing and other trade
restrictions;
    
    ability to negotiate and have enforced favorable contract provisions;
    
    repatriation of earnings;
    
    the challenges of finding qualified management for our international operations;
    
    general economic conditions in international markets; and
    
    developing and deploying the skills required to service our broad set of product
offerings across the markets we serve.
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If we experience expansion delays or difficulties with our Center of Excellence in India, our costs
may increase and our margins may decrease.
 ,
 
    
    the slower-than-expected rate of internal adoption of our planned mix of
on-shore/off-shore services;
    
    potential negative impact on customer satisfaction and retention with moving more customer support cases off-shore;
    
    significant expected increases in labor costs in India;
    
    increased risk of associate attrition due to the improvement of the Indian economy and
job market;
    
    terrorist activities in the region;
    
    inability to hire or retain sufficient personnel with the necessary skill sets to meet
our needs;
    
    economic, security and political conditions in India;
    
    inadequate facilities or communications infrastructure; and
    
    local law or regulatory issues.
  Economic, political and market conditions can adversely affect our revenue and profitability.
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We may be unable to retain key personnel, which could materially impact our ability to further
develop our business.
   We may have difficulty integrating future acquisitions, which would reduce the anticipated benefits
of those transactions.
  
    
    if we incur significant debt to finance a future acquisition and our combined business
does not perform as expected, we may have difficulty complying with debt covenants;
    
    if we use our stock to make a future acquisition, it will dilute existing shareholders;
    
    we may have difficulty assimilating the operations and personnel of any acquired company;
    
    the challenge and additional investment involved to integrate new products and
technologies into our sales and marketing process;
    
    we may have difficulty effectively integrating any acquired technologies or products with
our current products and technologies, particularly where such products reside on different
technology platforms, or overlap with our products;
    
    our ongoing business may be disrupted by transition and integration issues;
    
    customer purchases and projects may become delayed until we publish a combined product
roadmap, and once we do publish the roadmap it may disrupt additional purchases and
projects;
    
    the costs and complexity of integrating the internal information technology
infrastructure of each acquired business with ours may be greater than expected and require
capital investments;
    
    we may not be able to retain key technical and managerial personnel from an acquired
business;
    
    we may be unable to achieve the financial and strategic goals for any acquired and
combined businesses;
    
    we may have difficulty in maintaining controls, procedures and policies during the
transition and integration period following a future acquisition;
    
    our relationships with partner companies or third-party providers of technology or
products could be adversely affected;
    
    our relationships with employees and customers could be impaired;
    
    our due diligence process may fail to identify significant issues with product quality,
product architecture, legal or tax contingencies, customer obligations and product
development, among other things;
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
    
    as successor we may be subject to certain liabilities of our acquisition targets;
    
    we may be required to sustain significant exit or impairment charges if products
acquired in business combinations are unsuccessful; and
    
    adverse outcomes in legal proceedings.
  Government contracts are subject to unique costs, terms, regulations, claims and penalties that
could reduce their profitability to us.
  
    
    early termination of contracts by the government;
    
    costly and complex competitive bidding process;
    
    required extensive use of subcontractors, whose work may be deficient or not performed in
a timely manner;
    
    significant penalties associated with employee misconduct in the highly regulated
government marketplace;
    
    changes or delays in government funding that could negatively impact contracts; and
    
    onerous contractual provisions unique to the government such as most favored customer
provisions.
  If we do not identify, adopt and develop product architecture that is compatible with merging
industry standards, our products will be less attractive to customers.
   We may be impacted by shifts in consumer preferences affecting the supply chain that could reduce
our revenues.
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Risks Related to the Acquisition of i2
 We may not realize the anticipated benefits of our acquisition of i2, including potential
synergies, due to challenges associated with integrating the companies or other factors.
   
    
    integrating the two companies operations, processes, people, technologies, products and
services;
    
    coordinating and integrating sales and marketing and research and development functions;
    
    demonstrating to our clients that the acquisition will not result in adverse changes in
business focus, products and service deliverables (including customer satisfaction);
    
    assimilating and retaining the personnel of both companies and integrating the business
cultures, operations, systems and clients of both companies; and
    
    consolidating corporate and administrative infrastructures and eliminating duplicative
operations and administrative functions.
  If we are unable to successfully execute on any of our identified business opportunities or other
business opportunities that we determines to pursue, we may not achieve the benefits of the
acquisition and our business may be harmed.
  
    
    the ability of our technology and hardware, suppliers and service providers to perform as
we expect;
    
    our ability to execute our strategy and continue to operate a larger, more diverse
business efficiently on a global basis;
    
    our ability to effectively manage our third party relationships;
    
    our ability to attract and retain qualified personnel;
    
    our ability to effectively manage our employee costs and other expenses;
    
    our ability to retain and grow revenues and profits from our clients and the current
portfolio of business with each client;
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
    
    technology and application failures and outages, security breaches or interruption of
service, which could adversely affect our reputation and our relations with our clients;
    
    our ability to accurately predict and respond to the rapid technological changes in our
industry and the evolving service and pricing demands of the markets we serve; and
    
    our ability to raise additional capital to fund our long-term growth plans.
  i2 has been, and we may be, subject to product quality and performance claims, which could
seriously harm our business.
  Risks Related To Our Stock
 Our quarterly operating results may fluctuate significantly, which could adversely affect the price
of our stock.
  
    
    The difficulty of predicting demand for our software products and services, including the size and timing of
individual contracts and our ability to recognize revenue with respect to contracts signed in a given quarter,
particularly with respect to our larger customers;
    
    Changes in the length and complexity of our sales cycle, including changes in the contract approval process at our
customers and potential customers that now require a formal proposal process, a longer decision making period and
additional layers of customer approval, often including authorization of the transaction by senior executives,
boards of directors and significant equity investors;
    
    Competitive pricing pressures and competitive success or failure on significant transactions;
    
    Customer order deferrals resulting from the anticipation of new products, economic uncertainty, disappointing
operating results by the customer, management changes, corporate reorganizations or otherwise;
    
    The timing of new software product and technology introductions and enhancements to our software products or those
of our competitors, and market acceptance of our new software products and technology;
    
    Lack of desired features and functionality in our individual products or our suite of products;
    
    Changes in the number, size or timing of new and renewal maintenance contracts or cancellations;
    
    Unplanned changes in our operating expenses;
    
    Changes in the mix of domestic and international revenues, or expansion or contraction of international operations;
    
    Our ability to complete fixed price consulting contracts within budget;
    
    Foreign currency exchange rate fluctuations;
    
    Lower-than-anticipated utilization in our consulting services group as a result of increased competition, reduced
levels of software sales, reduced implementation times for our products, changes in the mix of demand for our
software products,
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mergers and consolidations within our customer base, or other reasons; and
    
    Our limited ability to reduce costs in the short term to compensate for any unanticipated shortfall in product or
services revenue.
  
    
    Loss on impairment of goodwill and/or other intangible assets due to economic
conditions or an extended decline in the market price of our stock below book
value;
    
    Changes in the useful lives or the amortization of identifiable intangible assets;
    
    Accrual of newly identified pre-merger contingent liabilities, in which case the
related charges could be required to be included in earnings in the period in
which the accrual is determined to the extent it is identified subsequent to the
finalization of the purchase price allocation;
    
    Charges to income to eliminate certain JDA pre-merger activities that duplicate
those of the acquired company or to reduce our cost structure; and
    
    Changes in deferred tax assets and valuation allowances.
  Anti-takeover provisions in our organizational documents and Delaware law could prevent or delay a
change in control.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 
 
 Item 3. Defaults Upon Senior Securities
 
 Item 4.
 
 Item 5. Other Information
 
 Item 6. Exhibits
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JDA SOFTWARE GROUP, INC.
 
 SIGNATURE
  JDA SOFTWARE GROUP, INC.Dated: November  9, 2010
    By:
    /s/ Hamish N. BrewerHamish N. BrewerPresident and Chief Executive Officer
(Principal Executive Officer)By:
    /s/ Peter S. HathawayPeter S. HathawayExecutive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer) 62




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EXHIBIT INDEX
 Exhibit #
    
    Description of Document3.1
    
    Third Restated Certificate of Incorporation of the Company as amended through July 14,
2010 (Incorporated by reference to Exhibit 3.1 to the Companys Quarterly Report on Form
10Q for the quarterly period ended June 30, 2010, as filed on August 9, 2010).3.2
    
    Amended and Restated Bylaws of JDA Software Group, Inc. (as amended through April 22,
2010) (Incorporated by reference to Exhibit 3.1 to the Companys Current Report on Form
8-K dated April 22, 2010, as filed on April 28, 2010).4.1
    
    Specimen Common Stock Certificate of JDA Software Group, Inc. (Incorporated by
reference the Companys Registration Statement on Form S-1 (File No. 333-748), declared
effective on March 14, 1996).4.2
    
    8% Senior Notes due 2014 Indenture dated as of December 10, 2009 among JDA Software
Group, Inc., the Guarantors, and U.S. Bank National Association, as trustee
((Incorporated
by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K dated
December 10, 2009, as filed on December 11, 2009).4.3
    
    Supplemental Indenture dated as of January 28, 2010 among JDA Software Group, Inc., i2
Technologies, Inc., i2 Technologies US, Inc., the Guarantors and U.S. Bank National
Association, as trustee (Incorporation by reference to Exhibit 4.3 to the Companys
Registration Statement on Form S-4 (File No. 333-167429), as filed on September 9, 2010).31.1
    
    Rule 13a-14(a) Certification of Chief Executive Officer. (Filed herewith).31.2
    
    Rule 13a-14(a) Certification of Chief Financial Officer. (Filed herewith).32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(Filed herewith).
 63