JDA Software (JDAS) 10-Q 2010 Q3 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

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. Employer
incorporation or organization)	Identification No.)

14400 North 87^th Street
Scottsdale, Arizona 85260
(480) 308-3000
(Address and telephone number of principal executive offices)

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) had been subject to such filing requirements for the past 90 days. Yesþ Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yeso Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Acts. (Check one):

Large accelerated filero	Accelerated filerþ	Non-accelerated filero	Smaller reporting companyo
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso Noþ

The number of shares outstanding of the Registrant’s Common Stock, $0.01 par value, was 43,764,694 as of November 5, 2010.

FORM 10-Q

TABLE OF CONTENTS

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

2

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

See notes to condensed consolidated financial statements.

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JDA SOFTWARE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except earnings per share data, unaudited)

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

See notes to condensed consolidated financial statements.

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JDA SOFTWARE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2010		2009		2010		2009
NET INCOME	$	8,273	$	6,263	$	11,871	$	17,842
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustment		8,014		2,032		3,733		5,606
COMPREHENSIVE INCOME	$	16,287	$	8,295	$	15,604	$	23,448

See notes to condensed consolidated financial statements.

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JDA SOFTWARE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)

	Nine Months Ended
	September 30,
	2010			2009
OPERATING ACTIVITIES:
Net Income	$	11,871		$	17,842
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		43,029			28,043
Provision for doubtful accounts		999			900
Amortization of loan fees		1,412			—
Share-based compensation expense		8,834			6,412
Net gain on disposal of property and equipment		(8	)		(55	)
Deferred income taxes		(121	)		8,517
Changes in assets and liabilities, net of effects from business acquisitions:
Accounts receivable		1,281			19,536
Income tax receivable		2,225			(1,838	)
Prepaid expenses and other current assets		(12,948	)		(3,976	)
Accounts payable		8,810			5,685
Accrued expenses and other liabilities		(15,837	)		(11,478	)
Income tax payable		(5,427	)		380
Deferred revenue		(5,127	)		10,560
Net cash provided by operating activities		38,993			80,528
INVESTING 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			62
Net cash provided by (used in) investing activities		47,224			(9,910	)
FINANCING ACTIVITIES:
Issuance of common stock under equity plans		13,836			14,524
Purchase 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			1,973
Net increase in cash and cash equivalents		96,396			52,781
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		75,974			32,696
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	172,370		$	85,477

See notes to condensed consolidated financial statements.

6

JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)

	Nine Months Ended
	September 30,
	2010		2009
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	10,403	$	3,262
Cash paid for interest	$	13,681	$	304
Cash received for income tax refunds	$	1,553	$	723
SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW ACTIVITIES:
Conversion of redeemable preferred common stock	$	—	$	30,525

See notes to condensed consolidated financial statements.

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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

          The accompanying unaudited condensed consolidated financial statements of JDA Software Group, Inc. (“we” or the “Company”) have been prepared in accordance with the FASB Standard Accounting Codification (“Codification”), which is the authoritative source of generally accepted accounting principles (“GAAP”) for nongovernmental entities in the United States. The interim financial statements do not include all of the information and notes required for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair and comparable presentation have been included and are of a normal recurring nature. Operating results for the three and nine months ended September 30, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

          The preparation of financial statements in conformity with the Codification requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

          Certain reclassifications have been made to the consolidated statements of operations for the three and nine months ended September 30, 2009 to conform to the current presentation. In the consolidated statement of income, we have reported subscription revenues under the caption “Subscriptions and other recurring revenues.” Subscription revenues were previously reported in revenues under the caption “Software licenses” and were not material. In addition we have corrected the presentation of stockholders’ equity accounts, in the consolidated balance sheet as of December 31, 2009, by eliminating the $5.3 million balance of “Deferred compensation” against “Additional paid in capital.”

2. Acquisition of i2 Technologies, Inc.

          On January 28, 2010, we completed the acquisition of i2 Technologies, Inc. (“i2”) for approximately $599.8 million, which included cash consideration of approximately $431.8 million and the issuance of approximately 6.2 million shares of our common stock with an acquisition date fair value of approximately $168.0 million, or $26.88 per share, determined on the basis of the closing market price of our common stock on the date of acquisition (the “Merger”). The combination of JDA and i2 creates a market leader in the supply chain management market. We believe this combination provides JDA with (i) a strong, complementary presence in new markets such as discrete manufacturing; (ii) enhanced scale; (iii) a more diversified, global customer base of over 6,000 customers; (iv) a comprehensive product suite that provides end-to-end supply chain management (“SCM”) solutions; (v) incremental revenue opportunities associated with cross-selling of products and services among our existing customer base; and (vi) an ability to increase profitability through net cost synergies within twelve months after the Merger.

          Under the terms of the Merger Agreement, each issued and outstanding share of i2 common stock was converted into the right to receive $12.70 in cash and 0.2562 of a share of JDA common stock (the “Merger Consideration”). Holders of i2 common stock did not receive any fractional JDA shares in the Merger. Instead, the total number of shares that each holder of i2 common stock received in the Merger was rounded down to the nearest whole number, and JDA paid cash for any resulting fractional share determined by multiplying the fraction by $26.65, which represented the average closing price of JDA common stock on Nasdaq for the five consecutive trading days ending three days prior to the effective date of the Merger.

          Each outstanding option to acquire i2 common stock was canceled and terminated at the effective time of the Merger and converted into the right to receive the Merger Consideration with respect to the number of shares of i2 common stock that would have been issuable upon a net exercise of such option, assuming the market value of the i2 common stock at the time of such exercise was equal to the value of the Merger Consideration as of the close of trading on the day immediately prior to the effective date of the Merger. Any outstanding option with a per share exercise price that was greater than or equal to such amount was cancelled and terminated and no payment was made with respect thereto. In addition, each i2 restricted stock unit award outstanding immediately prior to the effective time of the Merger was fully vested and cancelled, and each holder of such awards became entitled to receive the Merger Consideration for each share of i2 common stock into which the vested portion of the awards would otherwise have been convertible. Each i2 restricted stock award was vested immediately prior to the effective time of the Merger and was entitled to receive the Merger Consideration.

8

          Each outstanding share of i2’s Series B Preferred Stock was converted into the right to receive $1,100 per share in cash, which was equal to the stated change of control liquidation value of each such share plus all accrued and unpaid dividends thereon through the effective date of the Merger.

          At the effective time of the Merger, each outstanding warrant to purchase shares of i2’s common stock ceased to represent a right to acquire i2’s common stock and was assumed by JDA and converted into a warrant with the right to receive, upon exercise, the Merger Consideration that would have been received as a holder of i2 common stock if such i2 warrant had been exercised prior to the effective time of the Merger. In total, approximately 0.4 million warrants to purchase i2 common stock at an exercise price of $15.4675 were assumed and converted into the right to receive the Merger Consideration upon exercise, including approximately 0.1 million shares of JDA common stock.

          The Merger is being accounted for using the acquisition method of accounting, with JDA identified as the acquirer, and the operating results of i2 have been included in our consolidated financial statements from the date of acquisition. Under the acquisition method of accounting, all assets acquired and liabilities assumed will be recorded at their respective acquisition-date fair values. We initially recorded $66.0 million of goodwill during the three months ended March 31, 2010 and made subsequent adjustments of $3.5 million during the three months ended June 30, 2010 and $0.7 million during the three months ended September 30, 2010 to reduce the goodwill balance to $61.8 million (see Note 4). We have not re-casted the prior quarter financial statements as these adjustment amounts were not material. None of the goodwill recorded in the i2 acquisition is deductible for tax purposes. In addition, through September 30, 2010 we have recorded $113.2 million in other intangible assets, including $74.6 million for customer-based intangibles (maintenance relationships and future technological enhancements, service relationships and a covenant not-to-compete), $24.3 million for technology-based intangibles consisting of developed technology and $14.3 million for marketing-based intangibles consisting of trademark and trade names. The estimated weighted average amortization period for all intangible assets acquired in this transaction that are subject to amortization is approximately six years.

          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.

          The following table summarizes our preliminary estimate through September 30, 2010 of the fair values of the assets acquired and liabilities assumed at the date of acquisition.

						Weighted Average
				Useful Life		Amortization Period
Cash	$	218,348
Trade accounts receivable acquired		31,621
Other current assets acquired		48,616
Property and equipment acquired		3,115
Customer-based intangibles		74,600			1 to 7 years	6 years
Technology-based intangibles		24,300		7 years		7 years
Marketing-based intangibles		14,300		5 years		5 years
Long-term deferred tax assets acquired		221,060
Other non-current assets		3,925
Total assets acquired		639,885
Goodwill		61,756
Total assets acquired		701,641
Deferred 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

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          The following table summarizes the merger consideration used to acquire i2:

Fair value of JDA common stock issued as merger consideration	$	167,979
Cash merger consideration		431,775
Total merger consideration to acquire i2 Technologies, Inc.	$	599,754
Cash merger consideration	$	431,775
Less cash acquired from i2 Technologies		218,348
Cash expended to acquire i2 Technologies, Inc.	$	213,427

          As of the date of the acquisition, the gross contractual amount of trade accounts receivable acquired was $34.4 million, of which approximately $2.8 million is expected to be uncollectable.

          Contingent liabilities were recorded in purchase accounting for certain assumed customer and labor disputes in the amounts of $7.7 million and $0.3 million, respectively. The potential undiscounted amount of all future payments that we could be required to make to settle the customer and labor disputes is estimated to range between approximately $5.2 million and $237 million and $0.1 million and $1.2 million, respectively. See Note 8 for a discussion of legal proceedings.

          Through September 30, 2010, we have expensed approximately $12.9 million of costs related to the acquisition of i2, including $0.5 million and $8.1 million in the three and nine months ended September 30, 2010, respectively. These costs, which consist primarily of investment banking fees, commitment fees on unused bank financing, legal and accounting fees, are included in the consolidated statements of income under the caption “Acquisition-related costs.”

          The following unaudited pro-forma consolidated results of operations for the nine months ended September 30, 2010 and 2009 assume the i2 acquisition occurred as of January 1 of each year and include acquisition related costs. The pro-forma results are not necessarily indicative of the actual results that would have occurred had the acquisition been completed as of the beginning of each of the periods presented, nor are they necessarily indicative of future consolidated results.

	Nine Months Ended			Nine Months Ended
	September 30, 2010			September 30, 2009
Total revenues	$	463,473		$	446,744
Net (loss) income	$	(2,601	)	$	31,097
Basic and diluted earnings (loss) per share	$	(0.06	)	$	0.75

          The amounts of i2 revenues and earnings (loss) included in our consolidated statements of operations for the nine months ended September 30, 2010, and the revenues and earnings (loss) of the combined entity had the acquisition date been January 1, 2009 or January 1, 2010 are as follows:

	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.

          On December 10, 2009, we issued $275 million of five-year, 8.0% Senior Notes (the “Senior Notes”) at an initial offering price of 98.988% of the principal amount. The net proceeds from the sale of the Senior Notes, which exclude the original issue discount ($2.8 million) and other debt issuance costs ($7.1 million) were placed in escrow and subsequently used, together with cash on hand at JDA and i2, to fund the cash portion of the merger consideration in the acquisition of i2 (see Note 7).

3. 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 currency denominated assets and liabilities.

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We do not enter into derivative financial instruments for trading or speculative purposes. The forward exchange contracts generally have maturities of less than 90 days 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.”

4. Goodwill and Other Intangibles, net

          Goodwill.We initially recorded $66.0 million of goodwill during the three months ended March 31, 2010 in connection with our acquisition of i2 (see Note 2), all of which has been allocated to ourSupply Chainreportable business segmenting unit (see Note 13). Subsequent adjustments of $3.5 million were recorded during the three months ended June 30, 2010 and $0.7 million during the three months ended September 30, 2010 to reduce the goodwill balance to $61.8 million. These adjustments were primarily made to (i) increase the fair value of assumed accounts receivable, (ii) reduce the fair value of customer-based and technology-based intangible assets, (iii) decrease the fair value of deferred revenue, (iv) record long-term deferred tax assets and current income tax payable liabilities, and (v) reduce the liability for uncertain tax positions. 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 acquired tax-related accounts and the residual amount allocated to goodwill. We found no indication of impairment of our goodwill balances during the three months ended September 30, 2010 and, absent future indicators of impairment, the next annual impairment test will be performed in fourth quarter 2010. As of September 30, 2010, the goodwill balance has been allocated to our reporting units as follows: $193.3 million toSupply Chainand $3.7 million toPricing and Revenue Management.

          Identifiable intangibles consist of the following:

			September 30, 2010						December 31, 2009
	Estimated Useful		Gross Carrying			Accumulated			Gross Carrying			Accumulated
	Lives		Amount			Amortization			Amount			Amortization
Goodwill:
Gross goodwill			$	206,744		$	—		$	144,988		$	—
Accumulated impairment losses				(9,713	)					(9,713	)
Goodwill, net of impairment losses			$	197,031					$	135,275
Identifiable 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-basedintangible assets include customer lists, maintenance relationships and future technological enhancements, service relationships and covenants not-to-compete;technology-basedintangible assets include acquired software technology; andmarketing-based intangible assets include trademarks and trade names.Customer-basedandmarketing-basedintangible assets are

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being amortized on a straight-line basis.Technology-basedintangible assets are being 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. Through September 30, 2010, we have recorded $74.6 million, $24.3 million and $14.3 million ofcustomer-based, technology-basedandmarketing-basedintangible assets, respectively, in connection with our acquisition of i2 (see Note 2).

          Amortization expense for the three and nine months ended September 30, 2010 was $11.8 million and $33.7 million, respectively. Amortization expense for the three and nine months ended September 30, 2009 was $6.7 million and $20.8 million, respectively. The increase in amortization in the 2010 periods compared to the 2009 periods is due to amortization on the identifiable intangible assets recorded in the acquisition of i2.

          Amortization expense is reported in the consolidated statements of operations within cost of revenues under the caption “Amortization of acquired software technology” and in operating expenses under the caption “Amortization of intangibles.” As of September 30, 2010, we expect amortization expense for the remainder of 2010 and thereafter to be as follows:

Year	Amortization
2010	$	11,800
2011		45,507
2012		44,921
2013		44,231
2014		27,370
Thereafter		25,371
Total	$	199,200

5. Restructuring Reserves

2010 Restructuring Charges

          We recorded restructuring charges of $16.5 million in the nine months ended September 30, 2010, including $7.8 million in first quarter 2010, $4.6 million in second quarter 2010 and $4.1 million in third quarter 2010. These charges are primarily for termination benefits, office closures and contract terminations associated with the acquisition of i2 and the continued transition of additional on-shore activities to our Center of Excellence (“CoE”) facilities. The charges include $12.3 million for termination benefits related to a workforce reduction of approximately 185 associates primarily in product development, sales, information technology and other administrative positions primarily in the Americas. In addition, the charges include $4.1 million for estimated costs to close and integrate redundant office facilities and for the integration of information technology and termination of certain i2 contracts that have no future economic benefit to the Company and are incremental to the other costs that will be incurred by the combined Company. As of September 30, 2010, approximately $12.8 million of the costs associated with these restructuring charges have been paid and the remaining balance of $3.8 million includes $3.0 million of current liabilities under the caption “Accrued expenses and other current liabilities” and $0.8 million of non-current liabilities under the caption “Accrued exit and disposal obligations.” A summary of the restructuring charges in the nine months ended September 30, 2010 is as follows:

						Impact of Changes		Balance
Description of charge	Initial Reserve		Cash Payments			in Exchange Rates		September 30, 2010
Termination benefits	$	12,269	$	(11,627	)	$	59	$	701
Office closures and other restructuring		4,169		(1,162	)		59		3,066
Total	$	16,438	$	(12,789	)	$	118	$	3,767

          The balance in the reserve for office closures is primarily related to redundant office facility leases in Dallas, Texas and the United Kingdom and will be reduced as payments are made over the related lease terms that extend through 2014. The balance in the reserve for termination benefits is primarily related to certain foreign employees that we expect to pay in 2010.

2009 Restructuring Charges

          We recorded restructuring charges of $6.5 million in 2009, including $1.5 million in first quarter 2009 and $2.3 million in second quarter 2009 and $2.6 million in third quarter 2009, primarily associated with the transition of additional on-shore activities to the CoE facilities and certain restructuring activities in the EMEA sales organization. The charges include termination benefits related

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to a workforce reduction of 86 full-time employees in product development, service, support, sales and marketing, information technology and other administrative positions, primarily in the Americas region. In addition, the restructuring charges include approximately $2.0 million in severance and other termination benefits under separation agreements with our former Executive Vice President and Chief Financial Officer and our former Chief Operating Officer. We recorded an adjustment of $0.1 million during the nine months ended September 30, 2010 to reduce previously established reserves related to the 2009 restructuring charge. As of September 30, 2010, approximately $6.4 million of the costs associated with these restructuring charges have been paid and the remaining balance of $0.1 million is included in the condensed consolidated balance sheet under the caption “Accrued expenses and other current liabilities.” We expect substantially all of the remaining costs will be paid in 2010.

6. Manugistics Acquisition Reserves

          We recorded initial acquisition reserves of $47.4 million for restructuring charges and other direct costs associated with the acquisition of Manugistics in 2006. The restructuring charges were primarily related to facility closures, employee severance and termination benefits and other direct costs associated with the acquisition, including investment banker fees, change-in-control payments, and legal and accounting costs. Subsequent adjustments of $2.9 million were made to reduce the reserves in 2007 and 2008 based on our revised estimates of the restructuring costs to exit certain of the activities of Manugistics. The majority these adjustments were made by September 30, 2007 and included in the final purchase price allocation. All adjustments made subsequent to September 30, 2007, including a $1.4 million increase recorded in 2009, have been included in the consolidated statements of income under the caption “Restructuring charges.” Adjustments made in 2009 resulted primarily from our revised estimate of sublease rentals and market adjustments on an unfavorable office facility lease in the United Kingdom. The unused portion of the acquisition reserves at September 30, 2010 includes $3.9 million of current liabilities under the caption “Accrued expenses and other liabilities” and $5.0 million of non-current liabilities under the caption “Accrued exit and disposal obligations.” A summary of the charges and adjustments recorded against the reserves is as follows:

									Impact of											Impact of
									Changes in			Balance								Changes in			Balance
	Initial		Adjustments			Cash			Exchange			December 31,		Adjustments			Cash			Exchange			September 30,
Description of charge	Reserve		to Reserves			Payments			Rates			2009		to Reserves			Payments			Rates			2010
Restructuring charges:
Office closures, lease terminations and sublease costs	$	29,212	$	(949	)	$	(16,110	)	$	(724	)	$	11,429	$	—		$	(2,374	)	$	(111	)	$	8,944
Employee 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	)		8,944
Direct costs		13,125		6			(13,131	)		—			—		—			—			—			—
Total	$	47,394	$	(1,488	)	$	(33,381	)	$	(599	)	$	11,926	$	(73	)	$	(2,749	)	$	(160	)	$	8,944

          The balance in the reserve for office closures, lease termination and sublease costs is primarily related to office facility leases in Rockville, Maryland and the United Kingdom and will be reduced as payments are made over the related lease terms that extend through 2018.

7. Long-term Debt

          On December 10, 2009, we issued $275 million of 8.0% Senior Notes at an initial offering price of 98.988% of the principal amount. The net proceeds from the sale of the Senior Notes, which exclude the original issue discount ($2.8 million) and other debt issuance costs ($7.1 million) were placed in escrow and subsequently used, together with cash on hand at JDA and i2, to fund the cash portion of the Merger Consideration in the acquisition of i2 (see Note 2).

          The Senior Notes have a five-year term and mature on December 15, 2014. Interest is computed on the basis of a 360-day year composed of twelve 30-day months, and is payable semi-annually on September 15 and December 15 of each year, beginning on September 15, 2010. The obligations under the Senior Notes are fully and unconditionally guaranteed on a senior basis by substantially all of our existing and future domestic subsidiaries (including, following the Merger, i2 and its domestic subsidiaries).

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          At any time prior to December 15, 2012, we may redeem up to 35% of the aggregate principal amount of the Senior Notes at a redemption price equal to 108% of the principal amount, plus accrued and unpaid interest, with the cash proceeds of an equity offering of our common stock. At any time prior to December 15, 2012, we may also redeem all or a part of the Senior Notes at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest and a ‘make whole” premium calculated as the greater of (i) 1% of the principal amount of the Senior Notes redeemed or (ii) the excess of the present value of the redemption price of the Senior Notes redeemed at December 15, 2012 over the principal amount the Senior Notes redeemed. In addition, we may redeem the Senior Notes on or after December 15, 2012 at a redemption price of 104% of the principal amount, and on or after December 15, 2013 at a redemption price of 100% of the principal amount, plus accrued and unpaid interest. The Senior Notes rank equally in right of payment with all existing and future senior debt and are senior in right of payment to all subordinated debt.

          The Senior Notes contain certain restrictive covenants including (i) a requirement to repurchase the Senior Notes at price equal to 101% of the principal amount, plus accrued and unpaid interest, in the event of a change in control and (ii) restrictions that limit our ability to pay dividends, make investments, incur additional indebtedness, create liens, issue preferred stock or consolidate, merge, sell or otherwise dispose of all or substantially all of our or their assets. The Senior Notes also provide for customary events of default and in the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding Senior Notes will become due and payable immediately without further action or notice. If any other event of default occurs or is continuing, the trustee or holders of at least 25% in aggregate principal amount of the then outstanding Senior Notes may declare all the Senior Notes to be due and payable immediately.

          The Senior Notes and the related guarantees have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements. In connection with the issuance of the Senior Notes, we entered into an exchange and registration rights agreement. Under the terms of the exchange and registration rights agreement, we were required to file, and did initially file on June 9, 2010, an exchange offer registration statement, as amended (the “Exchange Offer Registration Statement”), enabling holders to exchange the Senior Notes for registered notes with terms substantially identical to the terms of the Senior Notes. We were also required to use commercially reasonable efforts to have the Exchange Offer Registration Statement declared effective by the Securities and Exchange Commission (the “SEC”) on or prior to 270 days after the closing of the note offering, or September 8, 2010, (the “Registration Deadline”) and, unless the exchange offer would not be permitted by applicable law or SEC policy, to complete the exchange offer within 30 business days after the Registration Deadline. On November 5, 2010, the Exchange Offer Registration Statement was declared effective by the SEC. Under the terms of the exchange and registration rights agreement, we will incur special interest on the Senior Notes at a per annum rate of 0.25% of the principal amount of the Senior Notes from the Registration Deadline through the completion of the exchange offer. We expect to complete the exchange offer in December 2010.

          The fair value and carrying amount of the Senior Notes were $291.5 million and $272.5 million, respectively at September 30, 2010 and $269.4 million and $272.3 million, respectively at December 31, 2009.

          The $2.8 million original issue discount on the Senior Notes and other debt issuance costs of approximately $7.1 million are being amortized using the effective interest and straight-line methods, respectively over the five-year term and are reflected in the consolidated statements of income under the caption, “Interest expense and amortization of loan fees.” We accrued $16.5 million of interest on the Senior Notes in the nine months ended September 30, 2010 and have amortized approximately $1.4 million of the original issue discount and related loan origination fees.

8. Legal Proceedings

     Dillard’s, Inc. vs. i2 Technologies, Inc.

          In September 2007, Dillard’s, Inc. filed a lawsuit against i2 in the 191^st Judicial District Court of Dallas County, Texas, (the “trial court”) Cause No. 07-10924-J, which alleges that i2 committed fraud and failed to meet certain obligations to Dillard’s regarding the purchase of two i2 products in the year 2000 under a software license agreement and related services agreement. Dillard’s paid i2 approximately $8.1 million under these two agreements.

          As previously reported, on June 15, 2010, a jury in the District Court of the State of Texas, County of Dallas, returned an adverse verdict in the litigation between Dillard’s, Inc. and i2. On September 30, 2010, the trial court signed a judgment awarding Dillard’s $237 million, plus post-judgment interest of 5% per annum. i2 intends to file additional motions with the trial court seeking a new trial and a reduction of the amount of the judgment. i2 also intends to appeal the judgment. On October 4, 2010, i2 posted a $25 million supersedeas bond. By posting the bond, under Texas law, the execution of the judgment is suspended, which means the judgment will not have to be paid during the appeals process. The appeals process is not expected to be resolved prior to the end of

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2011 and the ultimate resolution of the matter could take several years to complete. There can be no assurance that it will be successful or that the litigation will be settled on terms acceptable to JDA.

          The Company will accrue an estimated loss from this matter if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In evaluating the probability of an unfavorable outcome in this litigation we have considered (a) the nature of the litigation and claim, (b) the progress in the case, (c) the opinions of legal counsel and other advisors, (d) the experience of the Company and others in similar cases, and (e) how management intends to respond in the event an unfavorable final judgment is returned by the trial court. We currently estimate the potential loss for this matter to range between zero and $237 million (representing a maximum award for lost profits, punitive damages and pre-judgment interest), plus post-judgment interest. The final trial court judgment or any revised result that may be achieved through an appeals process (which could take several years to complete) could result in multiple potential outcomes within this range. Management has determined that the best estimate of the potential outcome of this matter is $5 million which was recorded on the opening balance sheet of i2 following JDA’s acquisition of i2 in January 2010. We have not accrued any additional estimated contingent losses in this lawsuit as a result of the jury verdict and trial court judgment. Management’s best estimate is based on our evaluation of the case, which included input from i2’s in-house counsel and trial lawyers, and other outside litigation experts who assisted in our due diligence process. This amount was also supported by subsequent analyses and focus group assessments prepared by outside trial consultants prior to the actual trial.

     i2 Technologies, Inc. vs.Oracle Corporation

          On April 29, 2009, i2 filed a lawsuit for patent infringement against Oracle Corporation (NASDAQ: ORCL). The lawsuit, filed in the United States District Court for the Eastern District of Texas, Tyler Division (No. 6:09-cv-194-LED) alleges infringement of 11 patents related to supply chain management, available to promise software and other enterprise software applications. As a result of our acquisition of i2 on January 28, 2010, i2 is now a wholly-owned subsidiary of the Company. On April 22, 2010, Oracle filed counterclaims against i2 and JDA Software Group, Inc. (of which i2 is now a wholly-owned subsidiary) alleging the infringement by i2 of four Oracle patents. In response to i2’s motion to sever the Oracle counterclaim, on June 11, 2010, the trial court split the initial case into two cases, staying the second case (No. 6:10-cv-00284-LED) pending the outcome of the first case. The trial court instructed i2 to select five patents for the first case and Oracle to select one patent for the first case.

     Shareholder Class Action Litigation

          In December, 2009, the Company was sued in a putative shareholder class action against i2 and its board of directors, in the County Court of Law No. 2 of Dallas County (No. CC-09-08476-B). The plaintiffs allege in this lawsuit that the directors of i2 breached their fiduciary duties to shareholders of i2 by selling i2 to the Company via an allegedly unfair process and at an unfair price, and that the Company aided and abetted this alleged breach. On January 26, 2010, the Court denied the plaintiffs’ request for a preliminary injunction that sought to enjoin the merger between JDA and i2. The plaintiffs subsequently filed an amended complaint, alleging unspecified monetary damages in addition to declaratory and injunctive relief and attorneys’ fees. The Company, i2 and i2’s directors have denied all allegations and discovery is ongoing. A settlement agreement in principle has been reached among the parties, which is subject to formal documentation and court approval. The agreement, if it is finalized and then approved by the court, will provide that (i) the pendency and prosecution of the lawsuit and the efforts of plaintiffs’ counsel were a reason and cause for the decision by i2’s then board of directors to provide additional disclosures in the Registration Statement on Form S-4, filed with the Securities and Exchange Commission on or about November 19, 2009, in connection with the Company’s acquisition of i2 and (ii) plaintiffs’ counsel may apply to the court for an award of attorneys’ fees and costs of $450,000 to be paid by i2, which will be funded by its directors and officers’ liability insurer.

          We are involved in other legal proceedings and claims arising in the ordinary course of business. Although there can be no assurance, management does not currently believe the disposition of these matters will have a material adverse effect on our business, financial position, results of operations or cash flows.

9. Share-Based Compensation

          The Company has a stock-based compensation program that provides the Board of Directors broad discretion in creating equity incentives for employees, officers, directors and consultants. This program includes stock purchase rights, stock bonuses, restricted stock, restricted stock units, performance awards, performance units and deferred compensation awards.

          Annual stock-based incentive programs (“Performance 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.

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          In February 2010, the Board approved a stock-based incentive program for 2010 (“2010 Performance Program”). The 2010 Performance Program provides for the issuance of contingently issuable performance share awards under the 2005 Incentive Plan to executive officers and certain other members of our management team if we are able to achieve a defined adjusted EBITDA performance threshold goal in 2010. A partial pro-rata issuance of performance share awards will be made if we achieve a minimum adjusted EBITDA performance threshold. The 2010 Performance Program initially provides for the issuance of up to approximately 555,000 of targeted contingently issuable performance share awards. The performance share awards, if any, will be issued after the approval of our 2010 financial results in January 2011 and will vest 50% upon the date of issuance with the remaining 50% vesting ratably over a 24-month period. Our performance against the defined performance threshold goal will be evaluated on a quarterly basis throughout 2010 and share-based compensation will be recognized over the requisite service period that runs from February 3, 2010 (the date of board approval) through January 2013. Although all necessary service and performance conditions have not been met through September 30, 2010, based on the nine months ended September 30, 2010 results and the outlook for the remainder of 2010, management has determined that it is probable the Company will achieve its minimum adjusted EBITDA performance threshold. We have recorded $6.0 million in stock-based compensation expense related to these awards in the nine months ended September 30, 2010, including $1.4 million in third quarter 2010.

          The Company has recognized stock-based compensation as follows (in thousands):

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

10. Treasury Stock Repurchases

          On March 5, 2009, the Board adopted a program to repurchase up to $30 million of our common stock in the open market or in private transactions at prevailing market prices during the 12-month period ended March 10, 2010. During 2009, we repurchased approximately 0.3 million shares of our common stock under this program for $2.9 million at prices ranging from $10.34 to $11.00 per share. There have been no shares of common stock repurchased under this program in 2010.

          During the nine months ended September 30, 2010 and 2009, we repurchased 0.2 million and 0.1 million shares, respectively, tendered by employees for the payment of applicable statutory withholding taxes on the issuance of restricted shares under the 2005 Performance Incentive Plan. These shares were repurchased for $4.5 million at prices ranging from $22.47 to $30.06 in the nine months ended September 30, 2010 and for $1.4 million at prices ranging from $9.75 to $22.37 in the nine months ended September 30, 2009.

11. Income Taxes

          For the nine months ended September 30, 2010, income taxes were calculated using the liability method. The provision for income taxes reflects the Company’s estimate of the effective rate expected to be applicable for the full fiscal year, adjusted by any discrete events, which are reported in the period in which they occur. This estimate is re-evaluated each quarter based on our estimated tax expense for the year. Prior to January 1, 2010, the Company’s tax provisions were calculated using the discrete method which calculates the year-to-date effective tax rate and records discrete tax adjustments in the reporting period in which they occur. The discrete method was used by the Company due to its inability to forecast net income by the numerous jurisdictions from which it derives income and was therefore unable to reliably estimate an overall annual effective tax rate. The change in the method in 2010 is due to the Company’s ability to forecast income by jurisdiction and reliably estimate an overall annual effective tax rate.

          We recorded income tax provisions of approximately $3.7 million and $3.9 million for the three months ended September 30, 2010 and 2009, respectively, representing effective income tax rates of 31% and 38%, for the corresponding periods. We recorded income tax provisions of approximately $5.1 million and $10.4 million for the nine months ended September 30, 2010 and 2009, respectively, representing effective income tax rates of 30% and 37%, for the corresponding periods. Various factors affect our effective income tax rate including, among others, changes in our FIN 48 liability, state income taxes (net of federal benefit), the effect of foreign operations and permanent items, including those related to certain costs the Company incurred in connection with the acquisition of i2 Technologies, Inc. during the first quarter of 2010. Our effective income tax rate during the three and nine months ended September 30, 2010 differ from the same periods in 2009 primarily due to the mix of revenue by jurisdiction, the 2010 benefit from the Domestic Production Activities Deduction for US manufacturers and expense related to our FIN 48 liability.

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          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 approximately $11.9 million of unrecognized tax benefits 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. We have accrued interest and penalties related to uncertain tax positions of $0.2 million and $0.4 million in the nine months ended September 30, 2010 and 2009, respectively. As of September 30, 2010 and December 31, 2009 there are approximately $3.2 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.

          We conduct business globally and, as a result, JDA Software Group, Inc. or one or more of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business we are subjected to examination by taxing authorities throughout the world, including the United States, the United Kingdom, and India. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2004 due to the expiration of the statute of limitations. We are currently under audit by the Internal Revenue Service for the 2009 tax year and various other years in India. The examination phase of these audits has not yet been completed; however, we do not anticipate any material adjustments.

          We currently have on-going tax examinations in India and the U.S. We do not believe there will be any material adjustments from these audits.

          We have participated in the Internal Revenue Service’s Compliance Assurance Program (“CAP”) since 2007. The CAP program was developed by the Internal Revenue Service to allow for transparency and to remove uncertainties in tax compliance. The CAP program is offered by invitation only to those companies with both a history of immaterial audit adjustments and a high level of tax complexity and will involve a review of each quarterly tax provision. The Internal Revenue Service has completed their review of our tax returns prior to 2009 and no material adjustments have been made as a result of these examinations.

12. Earnings per Share

          From July 2006 through September 2009, the Company had two classes of outstanding capital stock, common stock and Series B preferred stock. The Series B preferred stock, which was issued in connection with the acquisition of Manugistics, was a participating security such that in the event a dividend was declared or paid on the common stock, the Company would be required to simultaneously declare and pay a dividend on the Series B preferred stock as if the Series B preferred stock had been converted into common stock. Companies that have participating securities are required to apply the two-class method to compute basic earnings per share. Under the two-class computation method, basic earnings per share is calculated for each class of stock and participating security considering both dividends declared and participation rights in undistributed earnings as if all such earnings had been distributed during the period.

          During third quarter 2009, all shares of the Series B preferred stock were either converted into shares of common stock or repurchased for cash. The calculation of diluted earnings per share applicable to common shareholders for the three and nine months ended September 30, 2009 includes the assumed conversion of the Series B preferred stock into common stock as of the beginning of the period.

          The dilutive effect of outstanding stock options is included in the diluted earnings per share calculations for 2010 and 2009 using the treasury stock method. Diluted earnings per share for the three months ended September 30, 2010 and 2009 exclude less

17

than 0.1 million and approximately 0.5 million, respectively of vested options for the purchase of common stock that have grant prices in excess of the average market price, or which are otherwise anti-dilutive. Diluted earnings per share for the nine months ended September 30, 2010 and 2009 exclude less than 0.1 million and approximately 1.1 million, respectively of vested options for the purchase of common stock that have grant prices in excess of the average market price, or which are otherwise anti-dilutive. In addition, diluted earnings per share also exclude approximately 0.6 million and 0.8 million of contingently issuable performance share awards, respectively for which all necessary conditions had not been met (see Note 8).

          Earnings per share for three and nine months ended September 30, 2010 and 2009 are calculated as follows:

	Three Months					Nine Months
	Ended September 30,					Ended September 30,
	2010		2009			2010		2009
Net income	$	8,273	$	6,263		$	11,871	$	17,842
Less dividends paid		—		(8,593	)		—		(8,593	)
Undistributed earnings	$	8,273	$	(2,330	)	$	11,871	$	9,249
Allocation of undistributed earnings:
Common Stock	$	8,273	$	(2,330	)	$	11,871	$	8,463
Series B Preferred Stock		—		—			—		786
	$	8,273	$	(2,330	)	$	11,871	$	9,249
Weighted average shares:
Common Stock		41,774		33,505			40,939		32,095
Series B Preferred Stock		—		—			—		2,981
Shares — Basic earnings per share		41,774		33,505			40,939		35,076
Dilutive common stock equivalents		460		—			578		253
Shares — Diluted earnings per share		42,234		33,505			41,517		35,329
Basic earnings per share applicable to:
Common Stock	$	.20	$	(.07	)	$	.29	$	.26
Series B Preferred Stock	$	—	$	—		$	—	$	.26
Diluted earnings per share applicable to common shareholders	$	.20	$	(.07	)	$	.29	$	.26

13. Business Segments and Geographic Data

          We are a leading global provider of sophisticated enterprise software solutions designed specifically to address the supply chain, merchandising and pricing requirements of manufacturers, wholesale/distributors and retailers, as well as government and aerospace defense contractors and travel, transportation, hospitality and media organizations. We have licensed our software to more than 6,000 customers worldwide. We generate sales in three geographic regions that have separate management teams and reporting structures: the Americas (United States, Canada, and Latin America), Europe (Europe, Middle East and Africa), and Asia/Pacific. Similar products and services are offered in each geographic region. Identifiable assets are also attributed to a geographical region. The geographic distribution of our revenues and identifiable assets is as follows:

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2010		2009		2010		2009
Revenues:
Americas	$	98,698	$	67,059	$	293,702	$	193,440
Europe		27,503		20,601		79,691		57,440
Asia/Pacific		32,242		8,199		75,054		27,797
Total revenues	$	158,443	$	95,859	$	448,447	$	278,677

	September 30,		December 31,
	2010		2009
Identifiable assets:
Americas	$	882,558	$	695,539
Europe		121,105		85,817
Asia/Pacific		99,748		40,310
Total identifiable assets	$	1,103,411	$	821,666

18

          Revenues in the Americas for three months ended September 30, 2010 and 2009 include $84.6 million and $58.2 million from the United States, respectively and $252.8 million and $169.0 million from the United States in the nine months ended September 30, 2010 and 2009, respectively. Identifiable assets for the Americas include $845.8 million and $666.0 million in the United States as of September 30, 2010 and December 31, 2009, respectively. The increase in identifiable assets at September 30, 2010 compared to December 31, 2009 resulted primarily from net assets recorded in the acquisition of i2 (see Note 2).

          In connection with the acquisition of i2, management approved a realignment of our reportable business segments to better reflect the core business in which we operate, the supply chain management market, and how our chief operating decision maker views, evaluates and makes decisions about resource allocations within our business. As a result of this realignment, we eliminatedRetailandManufacturing and Distributionas reportable business segments and beginning with first quarter 2010 have reported our operations within the following segments:

• 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 theRetailandManufacturing 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. ThePricing and Revenue Managementsegment is centrally managed by a team that has global responsibilities for this market.

          A summary of the revenues, operating income and depreciation attributable to each of these reportable business segments for the three and nine months ended September 30, 2010 and 2009 is as follows:

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2010			2009			2010			2009
Revenues:
Supply Chain	$	153,706		$	88,608		$	431,870		$	254,992
Pricing and Revenue Management		4,737			7,251			16,577			23,685
	$	158,443		$	95,859		$	448,447		$	278,677
Operating income (loss):
Supply Chain	$	50,435		$	29,054		$	142,977		$	80,292
Pricing and Revenue Management		(743	)		1,027			(589	)		7,650
Other (see below)		(32,157	)		(20,601	)		(108,050	)		(59,586	)
	$	17,535		$	9,480		$	34,338		$	28,356
Depreciation:
Supply Chain	$	2,708		$	1,898		$	7,769		$	5,428
Pricing and Revenue Management		145			256			512			809
	$	2,853		$	2,154		$	8,281		$	6,237
Other:
General and administrative expenses	$	17,546		$	12,305		$	55,044		$	35,001
Amortization of intangible assets		9,966			5,753			28,447			17,880
Restructuring charge		4,172			2,543			16,478			6,705
Acquisition-related costs		473			—			8,081			—
	$	32,157		$	20,601		$	108,050		$	59,586

          Operating income in theSupply ChainandPricing and Revenue Managementreportable business segments includes direct expenses for software licenses, maintenance services, service revenues, and product development expenses, as well as allocations for sales and marketing expenses, occupancy costs, depreciation expense and amortization of acquired software technology. The “Other” caption includes general and administrative expenses and other charges that are not directly identified with a particular reportable business segment and which management does not consider in evaluating the operating income (loss) of the reportable business segment.

19

14. Condensed Consolidating Financial Information

          Pursuant to the indenture governing the Senior Notes (see Note 7) our obligations under the Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis by substantially all of our existing and future domestic subsidiaries (including, following the Merger, i2 and its domestic subsidiaries). Pursuant to Regulation S-X, Section 210.3-10(f), we are required to present condensed consolidating financial information for subsidiaries that have guaranteed the debt of a registrant issued in a public offering, where the guarantee is full and unconditional, joint and several, and where the voting interest of the subsidiary is 100% owned by the registrant.

          The following tables present condensed consolidating balance sheets as of September 30, 2010 and December 31, 2009, and condensed consolidating statements of income for the three and nine months ended September 30, 2010 and 2009, and condensed consolidating statements of cash flow for the nine months ended September 30 2010 and 2009 for (i) JDA Software Group, Inc. — the parent company and issuer of the Senior Notes, (ii) the guarantor subsidiaries on a combined basis, (iii) the non-guarantor subsidiaries on a combined basis, (iv) elimination adjustments, and (v) total consolidating amounts. The condensed consolidating financial information should be read in conjunction with the consolidated financial statements herein.

20

Unaudited Condensed Consolidating Balance Sheets
September 30, 2010
(in thousands)

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

21

Condensed Consolidating Balance Sheets
December 31, 2009
(in thousands)

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

22

Unaudited Condensed Consolidating Statements of Income
Three Months Ended September 30, 2010
(in thousands)

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

Unaudited Condensed Consolidating Statements of Income
Three Months Ended September 30, 2009
(in thousands)

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

Unaudited Condensed Consolidating Statements of Income
Nine Months Ended September 30, 2010
(in thousands)

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

Unaudited Condensed Consolidating Statements of Income
Nine Months Ended September 30, 2009
(in thousands)

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

Unaudited Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2010
(in thousands)

	JDA Software			Guarantor			Non-Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net Cash Provided by (Used in) Operating Activities	$	145,030		$	(128,978	)	$	22,941		$	—	$	38,993
Investing Activities:
Change in restricted cash		277,554			—			—			—		277,554
Purchase 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			—		631
Net cash (used in) provided by investing activities		(154,221	)		207,171			(5,726	)		—		47,224
Financing Activities:
Issuance of common stock — equity plans		13,836			—			—			—		13,836
Purchase 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	)		—		9,191
Effect of Exchange Rates on Cash and Cash Equivalents		—			(8,461	)		9,449			—		988
Net increase (decrease) in cash and equivalents		—			89,260			7,136			—		96,396
Cash and Cash Equivalents, Beginning of Period		—			47,170			28,804			—		75,974
Cash and Cash Equivalents, End of Period	$	—		$	136,430		$	35,940		$	—	$	172,370

27

Unaudited Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2009
(in thousands)

	JDA Software			Guarantor			Non-Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net Cash Provided by (Used in) Operating Activities	$	19,810		$	57,939		$	2,779		$	—	$	80,528
Investing 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			—		62
Net cash used in investing activities		—			(5,801	)		(4,109	)		—		(9,910	)
Financing Activities:
Issuance of common stock — equity plans		14,524			—			—			—		14,524
Purchase 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			—		1,973
Net decrease (increase) in cash and equivalents		—			49,858			2,923			—		52,781
Cash and Cash Equivalents, Beginning of Period		—			10,841			21,855			—		32,696
Cash and Cash Equivalents, End of Period	$	—		$	60,699		$	24,778		$	—	$	85,477

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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations.

          Management’s Discussion and Analysis of Financial Condition and Results of Operations contains certain forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements, among other things, concerning our business strategy, including anticipated trends and developments in and management plans for our business and the markets in which we operate; future financial results, operating results, revenues, gross margin, operating expenses, products, projected costs and capital expenditures; research and development programs; sales and marketing initiatives; and competition. Forward-looking statements are generally accompanied by words such as “will” or “expect” and other words with forward-looking connotations. All forward-looking statements included in this Form 10-Q are based upon information available to us as of the filing date of this Form 10-Q. We undertake no obligation to update any of these forward-looking statements for any reason. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by these statements. These factors include the matters discussed in the section entitled “Risk Factors” elsewhere in this Form 10-Q. You should carefully consider the risks and uncertainties described under this section.

Significant Trends and Developments in Our Business

          Acquisition of i2 Technologies, Inc.On January 28, 2010, we completed the acquisition of i2 Technologies, Inc. (“i2”) for approximately $599.8 million, which included cash consideration of approximately $431.8 million and the issuance of approximately 6.2 million shares of our common stock with an acquisition date fair value of approximately $168.0 million, or $26.88 per share, determined on the basis of the closing market price of our common stock on the date of acquisition (the “Merger”). The combination of JDA and i2 creates a market leader in the supply chain management market. We believe this combination provides JDA with (i) a strong, complementary presence in new markets such as discrete manufacturing; (ii) enhanced scale; (iii) a more diversified, global customer base of over 6,000 customers; (iv) a comprehensive product suite that provides end-to-end supply chain management (“SCM”) solutions; (v) incremental revenue opportunities associated with cross-selling of products and services among our existing customer base; and (vi) an ability to increase profitability through net cost synergies within twelve months after the Merger.

          The Merger is being accounted for using the acquisition method of accounting, with JDA identified as the acquirer, and the operating results of i2 have been included in our consolidated financial statements from the date of acquisition. Under the acquisition method of accounting, all assets acquired and liabilities assumed will be recorded at their respective acquisition-date fair values. We initially recorded $66.0 million of goodwill during the three months ended March 31, 2010 and made subsequent adjustments of $3.5 million during the three months ended June 30, 2010 and $0.7 million during the three months ended September 30, 2010 to reduce the goodwill balance to $61.8 million. In addition, through September 30, 2010 we have recorded $113.2 million in other intangible assets, including $74.6 million for customer-based intangibles (maintenance relationships and future technological enhancements, service relationships and a covenant not-to-compete), $24.3 million for technology-based intangibles consisting of developed technology and $14.3 million for marketing-based intangibles consisting of trademark and trade names.

          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. See Note 2 to the Condensed Consolidated Financial Statements for a complete description of this transaction and the initial purchase price allocation.

          Through September 30, 2010, we have expensed approximately $12.9 million of costs related to the acquisition of i2, including $0.5 million and $8.1 million in the three and nine months ended September 30, 2010, respectively. These costs, which consist primarily of investment banking fees, commitment fees on unused bank financing, legal and accounting fees, are included in the consolidated statements of income under the caption “Acquisition-related costs.”

          On December 10, 2009, we issued $275 million of five-year, 8.0% Senior Notes (the “Senior Notes”) at an initial offering price of 98.988% of the principal amount. The net proceeds from the sale of the Senior Notes, which exclude the original issue discount ($2.8 million) and other debt issuance costs ($7.1 million) were placed in escrow and subsequently used, together with cash on hand at JDA and i2, to fund the cash portion of the merger consideration in the acquisition of i2. See Note 7 to the Condensed

          Consolidated Financial Statements for a complete description of the Senior Notes. In connection with the issuance of the Senior Notes, we entered into an exchange and registration rights agreement. Under the terms of the exchange and registration rights agreement, we were required to file, and did initially file on June 9, 2010, an exchange offer registration statement, as amended (the “Exchange Offer Registration Statement”), enabling holders to exchange the Senior Notes for registered notes with terms substantially identical to the terms of the Senior Notes. On November 5, 2010, the Exchange Offer Registration Statement was declared effective

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by the SEC. We expect to complete the exchange offer in December 2010. See Note 7 to the Condensed Consolidated Financial Statements for a complete description of the Senior Notes.

          The following tables summarize the impact of the i2 acquisition on our product and service revenues:

          Third Quarter 2010

Revenues:	JDA					i2				Combined
Software licenses and subscriptions	$	9,629		44	%	$	12,405	56	%	$	22,034
Maintenance services		46,518		72	%		17,668	28	%		64,186
Product revenues		56,147		65	%		30,073	35	%		86,220
Service revenues		38,374	��	53	%		33,849	47	%		72,223
Total revenues	$	94,521		60	%	$	63,922	40	%	$	158,443

          First Nine Months of 2010

Revenues:	JDA				i2				Combined
Software licenses and subscriptions	$	47,235	53	%	$	41,481	47	%	$	88,716
Maintenance services		138,426	76	%		43,414	24	%		181,840
Product revenues		185,661	69	%		84,895	31	%		270,556
Service revenues		108,669	61	%		69,222	39	%		177,891
Total revenues	$	294,330	66	%	$	154,117	34	%	$	448,447

          Outlook for 2010.Based on our nine months ended September 30, 2010 performance and the outlook for the remainder of the year, we believe we’ll be able to achieve results toward the high end of our original range for software revenue and total revenue. We also believe that we’ll be able to achieve the low end of the range of Adjusted EBITDA and Adjusted earnings per share even with the incremental litigation costs incurred this year. For operating cash flow, we expect 2010 to exceed $100 million after adjusting for specific one-time items related to the i2 acquisition. This information considers a full year of JDA revenues and operating results and eleven months of i2 revenues and operating results as the acquisition of i2 was completed on January, 28, 2010.

	Outlook for 2010
	Low End		High End
Software and subscription revenues	$	125 million	$	135 million
Total revenues	$	590 million	$	625 million
Adjusted EBITDA	$	160 million	$	170 million
Adjusted earnings per share	$	1.85	$	2.00

          We define “EBITDA” as GAAP net income (loss) before interest expense, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is defined as EBITDA for the relevant period as adjusted by adding back additional amounts consisting of (i) restructuring charges, (ii) share-based compensation, (iii) acquisition-related costs, (iv) interest income and other non-operating income (expense), (v) non-recurring transition costs to integrate the i2 acquisition and (vi) other significant non-routine operating income and expense items that may be incurred from time-to-time.

          Earnings per share is defined as net income divided by the weighted average shares outstanding during the period. Adjusted earnings per share excludes (i) amortization, (ii) restructuring charges, (iii) share-based compensation, (iv) acquisition-related costs and (v) non-recurring transition costs to integrate the i2 acquisition and (vi) other significant non-routine operating income and expense items that may be incurred from time-to-time.

          We have not provided an outlook for 2010 GAAP net income or GAAP earnings per share, nor a reconciliation between the non-GAAP measurements presented herein (i.e., Adjusted EBITDA and Adjusted earnings per share) and the most directly comparable GAAP measurements as the purchase price allocation for our acquisition of i2 was not finalized when we provided our

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original guidance and has not been finalized during the nine months ended September 30, 2010. 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 acquired tax-related accounts and the residual amount allocated to goodwill.

          We Have Incurred Significant Unplanned Legal Expenses. We have incurred significant unplanned legal expenses in the nine months ended September 30, 2010 due to the ongoing litigation between Dillard’s and i2 and the patent infringement litigation i2 filed against Oracle Corporation (see Note 8 to the Condensed Consolidated Financial Statements). Total legal expenses in the nine months ended September 30, 2010 were $9.4 million, including approximately $3.6 million in third quarter 2010, compared to $1.7 million in the nine months ended September 30, 2009. We expect our quarterly legal expenses to be higher than normal until we resolve these matters.

          We Have Realized Cost Synergies as We Integrate and Combine i2 and JDA.We achieved approximately $15.7 million, or approximately 80% of our total targeted net cost synergies in the nine months ended September 30, 2010, which included only eight months of combined post-merger activity.

          Share-Based Compensation Expense.We recorded share-based compensation expense of $8.8 million and $6.4 million in nine months ended September 30, 2010 and 2009, respectively.

          In February 2010, the Board approved a stock-based incentive program for 2010 (“2010 Performance Program”). The 2010 Performance Program provides for the issuance of contingently issuable performance share awards under the 2005 Incentive Plan to executive officers and certain other members of our management team if we are able to achieve a defined adjusted EBITDA performance threshold goal in 2010. A partial pro-rata issuance of performance share awards will be made if we achieve a minimum adjusted EBITDA performance threshold. The 2010 Performance Program initially provides for the issuance of up to approximately 555,000 of targeted contingently issuable performance share awards. The performance share awards, if any, will be issued after the approval of our 2010 financial results in January 2011 and will vest 50% upon the date of issuance with the remaining 50% vesting ratably over a 24-month period. Our performance against the defined performance threshold goal will be evaluated on a quarterly basis throughout 2010 and share-based compensation will be recognized over the requisite service period that runs from February 3, 2010 (the date of board approval) through January 2013. Although all necessary service and performance conditions have not been met through September 30, 2010, based on the nine months ended September 30, 2010 results and the outlook for the remainder of 2010, management has determined that it is probable the Company will achieve its minimum adjusted EBITDA performance threshold. We have recorded $6.0 million in stock-based compensation expense related to these awards in the nine months ended September 30, 2010, including $2.0 million in third quarter 2010.

          In February 2010, the Board also approved a 2010 cash incentive bonus plan (“Incentive Plan”) for our executive officers, including those new executives joining the Company through the acquisition of i2. The Incentive Plan provides for approximately $4.1 million in targeted cash bonuses if we are able to achieve a defined adjusted EBITDA performance threshold goal in 2010 and at the Compensation Committee’s discretion, amounts are payable quarterly under the plan on the basis of the actual adjusted EBITDA achieved by the Company for the applicable quarter of 2010 when compared to the annual target and the outlook for the remainder of the year. A partial pro-rata cash bonus will be paid if we achieve a minimum adjusted EBITDA performance threshold. There is no cap on the maximum amount the executives can receive if the Company exceeds the defined adjusted EBITDA performance threshold goal.

          We May Make Additional Strategic Acquisitions.Acquisitions have been, and we expect they will continue to be, an integral part of our overall growth plan. We believe strategic acquisition opportunities will allow JDA to continue to strengthen its position as a leading supply chain management software and services provider. Our intent is to seek acquisition opportunities that complement the Company’s current software and services offerings. We may make future acquisitions that are significant in relation to the current size of JDA or smaller acquisitions that add specific functionality to enhance our existing product suite. If the Dillard’s litigation continues for an extended period of time it may delay us in making acquisitions, though we do not currently expect any delay to be significant.

          Financial Position and Cash Flow Provided by Operations.We had working capital of $181.3 million at September 30, 2010 compared to $345.7 million at December 31, 2009. The working capital balances include cash of $182.7 million and $363.8 million, respectively, which includes restricted cash of $10.3 million and $287.9 million, respectively. The restricted cash balance at December 31, 2009 consisted primarily of net proceeds from the issuance of the Senior Notes (seeContractual Obligations) of approximately $265 million, which together with cash on hand at JDA and i2, was used to fund the cash portion of the merger consideration in the acquisition of i2 on January 28, 2010.

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          Net accounts receivable were $98.3 million or 56 days sales outstanding (“DSO”) at September 30, 2010 compared to $68.9 million or 58 days DSO at December 31, 2009. DSO results can fluctuate significantly on a quarterly basis due to a number of factors including the percentage of total revenues that comes from software license sales which may have installment payment terms, seasonality, shifts in customer buying patterns, the timing of customer payments, annual maintenance renewals, lengthened contractual payment terms in response to competitive pressures, the underlying mix of products and services, and the geographic concentration of revenues.

          We generated $39.0 million in cash from operating activities in the nine months ended September 30, 2010 compared to $80.5 million in the nine months ended September 30, 2009. The decrease in cash flow is due primarily to a $6.0 million decrease in the current period net income, which includes $8.1 million of acquisition-related costs, $16.5 million of restructuring charges, $9.4 million in legal expenses primarily related to inherited i2 litigation and $1.6 million of non-recurring, transition-related costs for salaries and retention bonuses for i2 employees. In addition, changes in working capital utilized approximately $27.0 million of cash in the nine months ended September 30, 2010 and provided approximately $18.9 million of cash in the nine months ended September 30, 2009, due primarily to the timing and payment of accounts receivable, a decrease in deferred revenue and an increase in prepaid expenses and other current assets. Accounts receivable decreased $1.3 million in the nine months ended September 30, 2010 due primarily to improved cash collection efforts and decreased $19.5 million in the nine months ended September 30, 2009 due primarily to the collection of an unusually large receivable. In addition, operating cash flows for the nine months ended September 30, 2010 were negatively impacted by decreases in deferred revenue balances from maintenance and other recurring revenue contracts assumed in the i2 acquisition that were renewed in the months just prior to the acquisition and for which the related cash was collected by i2 prior to the acquisition close date.

          Future Tax Benefits From the i2 Acquisition. Since the acquisition of i2 we have initiated a process to determine the value of acquired net operating loss carry forwards and other favorable tax attributes such as amortization of intangibles and capitalized research and development costs. Based on our review, we now estimate future income tax benefits from the i2 acquisition to approximate $110 million over the next five years (2010 through 2014), and, as a result, we do not expect to pay significant federal income taxes during this time. We also believe that in the subsequent years there is an additional $100 million of estimated future income tax benefits available. Our estimates of the cash benefit of the i2 net operating loss carry forwards are subject to review by the Internal Revenue Service.

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Results of Operations

          The following tables set forth a comparison of selected financial information (in thousands), expressed as both a dollar change and percentage change between periods for the three and nine months ended September 30, 2010 and 2009 and as a percentage of total revenues. In addition, the tables express certain gross margin data as a percentage of software license revenue, maintenance revenue, product revenues or services revenues, as appropriate. The operating results for the three and nine months ended September 30, 2010 include the impact of the i2 acquisition from the date of acquisition (January 28, 2010). The i2 acquisition also impacts the comparability of the information presented in the business segment and geographical regions disclosures that follow. The impact of the i2 acquisition on our product and service revenues in first nine months of 2010 is summarized inSignificant Trends and Developments in Our Business. The operating expenses of the combined company were co-mingled at the date of acquisition, and as a result, no separate disclosure is made of the impact of the i2 acquisition on operating expenses or operating income.

	Three Months ended
	September 30,										2009 to 2010
	2010		%			2009		%			$ Change			% Change
Revenues:
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

	Nine Months ended
	September 30,										2009 to 2010
	2010		%			2009		%			$ Change		% Change
Revenues:
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

          In connection with the acquisition of i2, management approved a realignment of our reportable business segments to better reflect the core business in which we operate, the supply chain management market, and how our chief operating decision maker views, evaluates and makes decisions about resource allocations within our business. As a result of this realignment, we have eliminatedRetailandManufacturing and Distributionas reportable business segments and beginning in first quarter 2010 have reported our operations within the following segments:

• 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 theRetailandManufacturing 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. ThePricing and Revenue Managementsegment is centrally managed by a team that has global responsibilities for this market.

Business Segments

          The following tables set forth selected comparative financial information on revenues for our revised business segments and geographical regions, expressed as a percentage change between the three and nine months ended September 30, 2010 and 2009. In addition, the tables set forth the contribution of each business segment and geographical region to total revenues in the three and nine months ended September 30, 2010 and 2009, expressed as a percentage of total revenues.

	Supply Chain						Pricing and Revenue Management
	September 30, 2010 vs. 2009						September 30, 2010 vs. 2009
	Three Months			Nine Months			Three Months			Nine Months
Software 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 Revenues
	September 30, 2010 vs. 2009
	Three Months						Nine Months
	2010			2009			2010			2009
Supply Chain		97	%		92	%		96	%		91	%
Pricing and Revenue Management		3	%		8	%		4	%		9	%
		100	%		100	%		100	%		100	%

35

Geographical Regions

	The Americas						Europe						Asia/Pacific
	September 30, 2010 vs. 2009						September 30, 2010 vs. 2009						September 30, 2010 vs. 2009
	Three Months			Nine Months			Three Months			Nine Months			Three Months			Nine Months
Software 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 Revenues
	September 30, 2010 vs. 2009
	Three Months						Nine Months
	2010			2009			2010			2009
The 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.

          The following table summarizes software license and subscription revenues by region for third quarter 2010 and 2009:

	Three Months Ended September 30,
Region	2010		2009		$ Change			% Change
Americas	$	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 sales in North America continue to be the most significant contributor to our software sales result. The increase in software license and subscription revenues in the Americas and Asia/Pacific regions in third quarter 2010 compared to third quarter 2009 is due primarily to the incremental sales of i2 products and the recurring subscription revenues on contracts assumed in the i2 acquisition. There was one large transaction (greater than $1 million) in the Americas for both the nine months ended September 30, 2010 and 2009, respectively.

          Approximately 88% and 81% of our software license and subscription revenues in third quarter 2010 and 2009, respectively, came from our install-base customers. We closed 40 new software deals in third quarter 2010 compared to 57 in third quarter 2009 and our average selling price (“ASP”) was $0.6 million for the 12-month period ended September 30, 2010 compared to $0.7 million for the 12-month period ended September 30, 2009 which included the impact of an unusually large transaction from fourth quarter 2008.

Software License and Subscription Results by Reportable Business Segment.

          Supply Chain.Software license and subscription revenues in this reportable business segment increased 34% in third quarter 2010 compared to third quarter 2009, due primarily to the incremental sales of i2 products and the recurring subscription revenues on contracts assumed in the i2 acquisition. Excluding the impact of these incremental revenues, software license and subscription revenues decreased by approximately 44% due to a decrease in the number of mid-sized software transactions. In total, there was one large transaction in this reportable business segment in third quarter 2010 compared to one in third quarter 2009.

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          Pricing and Revenue Management.Software license revenues in this reportable business segment decreased 68% in third quarter 2010 compared to third quarter 2009, due to a decrease in sales. There were no large transactions in this reportable business segment in third quarter 2010 or 2009.

Maintenance Services

          Maintenance services revenues increased $19.2 million, or 43%, to $64.2 million in third quarter 2010 compared to $45.0 million in third quarter 2009, and represented 40% and 47% of total revenues, respectively, in these periods. The increase is due primarily to $17.7 million of new incremental maintenance revenues from the i2 products and the year-over-year improvement in retention rates. The year-to-date retention rate in the third quarter 2010 increased to 95.9 percent from 92.7 percent in the third quarter 2009. In addition, net unfavorable foreign exchange rate variances decreased maintenance services revenues in third quarter 2010 by $0.4 million compared to third quarter 2009 due primarily to the strengthening of the U.S. Dollar against European currencies. Excluding the impact of the $17.7 million of new incremental maintenance from the i2 products and the unfavorable foreign exchange rate variance, maintenance services revenues increased $1.9 million in third quarter 2010 compared to third quarter 2009 due to an increase in maintenance revenues from new software sales, rate increases on annual renewals and the net release of previously suspended maintenance revenue upon the completion of contract renewals.

Service Revenues

          Service revenues, which include consulting services, managed services, training revenues, net revenues from our hardware reseller business and reimbursed expenses, increased $38.6 million, or 115%, to $72.2 million in third quarter 2010 compared to $33.6 million in third quarter 2009. The increase is due primarily to $33.8 million of new incremental service revenues from the i2 products. The increase includes the recognition of approximately $7.6 million of previously deferred consulting revenue upon the completion of certain contractual and administrative requirements. Excluding these incremental revenues our core consulting services business increased approximately $4.8 million in third quarter 2010 compared to third quarter 2009, primarily as a result of our improved software sales performance over the past three years and an increase in billable hours from certain large ongoing projects in each of our regions.

Cost of Product Revenues

          Cost of Software Licenses.The increase in cost of software licenses in third quarter 2010 compared to third quarter 2009 is due primarily to an increase in royalties on embedded third-party software applications.

          Amortization of Acquired Software Technology. The increase in amortization of acquired software technology in third quarter 2010 compared to third quarter 2009 is due primarily to the amortization on software technology acquired in the i2 acquisition.

          Cost of Maintenance Services.Cost of maintenance services increased $2.0 million, or 19%, to $12.9 million in third quarter 2010 compared to $10.9 million in third quarter 2009. The increase is due primarily to an increase in salaries and related benefits resulting from the associates added in the i2 acquisition.

Cost of Service Revenues

          Cost of service revenues increased $30.3 million, or 121%, to $55.3 million in third quarter 2010 compared to $25.0 million in third quarter 2009. The increase is due primarily to an increase in salaries, incentive compensation, related benefits and travel costs resulting from the associates added in the i2 acquisition, a $5.7 million increase in outside contractor costs and a $3.4 million increase in reimbursed expenses. In addition, the increase includes the release of deferred costs related to the completion of certain contractual and administrative requirements for a project in which the related revenue was also previously deferred.

Operating Expenses

          Operating expenses, excluding amortization of intangibles, restructuring charges and acquisition-related costs were $55.2 million in third quarter 2010 compared to $40.7 million in third quarter 2009 and represented 35% and 42% of total revenues, respectively. The improvement in the percentage of total revenues is attributable to the continued cost leverage from the larger scale presented by the i2 acquisition.

          Product Development.Product development expense increased $4.9 million, or 39%, to $17.4 million in third quarter 2010 compared to $12.5 million in third quarter 2009 and represented 11% and 13% of total revenues, respectively. The increase is due

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primarily to an increase in salaries, incentive compensation and related benefits resulting from the associates added in the i2 acquisition.

          Sales and Marketing.Sales and marketing expense increased $4.4 million, or 28%, to $20.3 million in third quarter 2010 compared to $15.9 million in third quarter 2009 and represented 13% and 17% of total revenues, respectively. The increase is due primarily to an increase in salaries, related benefits and travel costs resulting from the associates added in the i2 acquisition.

          General and Administrative.General and administrative expense increased $5.2 million, or 43%, to $17.5 million in third quarter 2010 compared to $12.3 million in third quarter 2009 and represented 11% and 13% of total revenues, respectively. The increase is due primarily to $3.6 million in legal costs primarily related to the ongoing litigation between Dillard’s and i2 and the patent infringement litigation i2 filed against Oracle Corporation, an increase in salaries, incentive compensation and related benefits resulting primarily from the associates added in the i2 acquisition and $0.2 million of non-recurring, transition-related costs for salaries and retention bonuses for i2 employees that are being retained for a defined period of time. The non-recurring, transition-related costs are expected to be less than $0.1 million in the fourth quarter 2010 as transition personnel complete their assignments.

          Amortization of Intangibles.The increase in amortization of intangibles in third quarter 2010 compared to third quarter 2009 is due primarily to the amortization on customer list and trademark intangible assets acquired in the i2 acquisition, offset in part to the cessation of amortization on certain trademark intangibles from prior acquisitions that are now fully amortized.

          Restructuring Charges.We recorded restructuring charges of $4.2 million in third quarter 2010 for termination benefits, office closures and contract terminations primarily associated with the acquisition of i2 and the continued transition of additional on-shore activities to our CoE facilities. The charges include $3.9 million for termination benefits related to a workforce reduction of approximately 60 associates primarily in product development, sales, information technology and other administrative positions in each of our geographic regions. In addition, the charges include $0.3 million for estimated costs to close and integrate redundant office facilities and for the integration of information technology and termination of certain i2 contracts that have no future economic benefit to the Company and are incremental to the other costs that will be incurred by the combined Company.

          We recorded a restructuring charge of $2.6 million in third quarter 2009. This charge is includes termination benefits related to workforce reduction of 14 full-time employees and is primarily associated with the transition of additional on-shore activities to the CoE and certain restructuring activities in the Europe, Middle East and Africa (“EMEA”) sales organization. In addition, the charge includes $1.0 million in severance and other termination benefits pursuant to a separation agreement with our former Chief Operating Officer.

          Acquisition-Related Costs.During third quarter 2010 we expensed approximately $0.5 million of costs related to the acquisition of i2 on January 28, 2010. These costs consist primarily of legal and accounting fees.

Other Income (Expense)

          Interest Expense and Amortization of Loan Fees.The increase in interest expense and amortization of loan fees in third quarter 2010 compared to third quarter 2009 is due primarily to $5.5 million of interest on the Senior Notes issued and amortization of $0.4 million on the original issue discount on the Senior Notes and related loan origination fees.

          Interest Income and Other, Net.The decrease in interest income and other, net in third quarter 2010 compared to third quarter 2009 is due primarily to changes in foreign currency gains and losses. We recorded a net foreign currency exchange gain of $0.4 million in third quarter 2010 compared to a net foreign currency exchange gain of $0.8 million in third quarter 2009.

Income Tax Provision

          For the nine months ended September 30, 2010, income taxes were calculated using the liability method. The provision for income taxes reflects the Company’s estimate of the effective rate expected to be applicable for the full fiscal year, adjusted by any discrete events, which are reported in the period in which they occur. This estimate is re-evaluated each quarter based on our estimated tax expense for the year. Prior to January 1, 2010, the Company’s tax provisions were calculated using the discrete method which calculates the year-to-date effective tax rate and records discrete tax adjustments in the reporting period in which they occur. The discrete method was used by the Company due to its inability to forecast net income by the numerous jurisdictions from which it derives income and was therefore unable to reliably estimate an overall annual effective tax rate. The change in the method in 2010 is due to the Company’s ability to forecast income by jurisdiction and reliably estimate an overall annual effective tax rate.

          We recorded income tax provisions of $3.7 million and $3.9 million for the three months ended September 30, 2010 and 2009, respectively, representing effective income tax rates of 31% and 38%, respectively. Our effective income tax rate during the three months ended September 30, 2010 differs from the three months ended September 30, 2009 primarily due to the mix of revenue by jurisdiction, the 2010 benefit from the Domestic Production Activities for US manufacturers and expense related to our FIN 48 liability.

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Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2009

Software License and Subscription Results by Region.

          The following table summarizes software license and subscription revenues by region for the nine months ended September 30, 2010 and 2009:

	Nine Months Ended September 30,
Region	2010			2009		$ Change		% Change
Americas	$	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	%

          The increase in software license and subscription revenues in each region in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 is due primarily to the incremental sales of i2 products and the recurring subscription revenues on contracts assumed in the i2 acquisition offset in part by a $12.9 million decrease in sales of core JDA products.

          The following table summarizes the number of large transactions (greater than $1 million) by region for the nine months ended September 30, 2010 and 2009:

	# of Large Transactions
	Nine Months Ended September 30,
Region	2010						2009
	JDA		i2		Total
Americas		7		2		9		6
Europe		—		2		2		2
Asia/Pacific		1		3		4		1
Total		8		7		15		9

Software License and Subscription Results by Reportable Business Segment.

          Supply Chain.Software license and subscription revenues in this reportable business segment increased 74% in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009, due primarily to the incremental sales of i2 products (including seven large transactions) and the recurring subscription revenues on contracts assumed in the i2 acquisition, together with an increase in the number of mid-sized software transactions. In total, there were 15 large transactions in this reportable business segment in the nine months ended September 30, 2010 compared to seven in the nine months ended September 30, 2009.

          Pricing and Revenue Management.Software license revenues in this reportable business segment decreased 80% in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009, due to a decrease in the number of large transactions. There were no large transactions in this reportable business segment in the nine months ended September 30, 2010 compared to two in the nine months ended September 30, 2009, one of which was an unusually large transaction. The other large transaction in the nine months ended September 30, 2009 was being recognized on a percentage of completion basis, including approximately 66% during the nine months ended September 30, 2009. This project was substantially complete in 2009.

Maintenance Services

          Maintenance services revenues increased $49.5 million, or 37%, to $181.8 million in the nine months ended September 30, 2010 compared to $132.4 million in the nine months ended September 30, 2009, and represented 41% and 47% of total revenues, respectively, in these periods. The increase is due primarily to $43.4 million of new incremental maintenance revenues from the i2 products and improved retention rates. In addition, favorable foreign exchange rate variances increased maintenance services

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revenues in the nine months ended September 30, 2010 by approximately $2.0 million compared to the nine months ended September 30, 2009 due primarily to the weakening of the U.S. Dollar against European currencies. Excluding the impact of the $43.4 million of new incremental maintenance from the i2 products and the favorable foreign exchange rate variance, maintenance services revenues increased approximately $4.1 million in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 due to an increase in maintenance revenues from new software sales, rate increases on annual renewals and the net release of previously suspended maintenance revenue upon the completion of contract renewals. These increases were partially offset by decreases in recurring maintenance revenues due to attrition.

Service Revenues

          Service revenues, which include consulting services, managed services, training revenues, net revenues from our hardware reseller business and reimbursed expenses, increased $91.8 million, or 107%, to $177.9 million in the nine months ended September 30, 2010 compared to $86.1 million in the nine months ended September 30, 2009. The increase is due primarily to $69.2 million of new incremental service revenues from the i2 products. Excluding these incremental revenues, our core consulting services business increased approximately $22.5 million in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009, primarily as a result of our improved software sales performance over the past three years and an increase in billable hours from certain large ongoing projects in each of our regions that involve core JDA products.

Cost of Product Revenues

          Cost of Software Licenses.The increase in cost of software licenses in the nine months ended September 30, 2010 as compared to the nine months ended September 30, 2009 is due primarily to an increase in royalties on embedded third-party software applications.

          Amortization of Acquired Software Technology. The increase in amortization of acquired software technology in the nine months ended September 30, 2010 as compared to the nine months ended September 30, 2009 is due primarily to the amortization of software technology acquired in the i2 acquisition.

          Cost of Maintenance Services.Cost of maintenance services increased $6.8 million, or 21%, to $39.2 million in the nine months ended September 30, 2010 compared to $10.9 million in the nine months ended September 30, 2009. The increase is due primarily to an increase in salaries, incentive compensation and related benefits resulting from the associates added in the i2 acquisition and a $0.7 million increase in maintenance royalties and fees paid to third parties who provide first level support to certain of our customers.

Cost of Service Revenues

          Cost of service revenues increased $69.8 million, or 101%, to $138.7 million in the nine months ended September 30, 2010 compared to $68.9 million in the nine months ended September 30, 2009. The increase is due primarily to an increase in salaries, incentive compensation and related benefits resulting from the associates added in the i2 acquisition, an $11.9 million increase in outside contractor costs, a $6.5 million increase in reimbursed expenses and a $2.7 million increase in travel costs.

Operating Expenses

          Operating expenses, excluding amortization of intangibles, restructuring charges and acquisition-related costs were $175.0 million in the nine months ended September 30, 2010 compared to $119.0 million in the nine months ended September 30, 2009 and represented 39% and 43% of total revenues, respectively. The improvement in the percentage of total revenues is attributable to the continued cost leverage from the larger scale presented by the i2 acquisition.

          Product Development.Product development expense increased $16.4 million, or 43%, to $54.1 million in the nine months ended September 30, 2010 compared to $37.7 million in the nine months ended September 30, 2009 and represented 12% and 13% of total revenues, respectively. The increase is due primarily to an increase in salaries, incentive compensation and related benefits resulting from the associates added in the i2 acquisition.

          Sales and Marketing.Sales and marketing expense increased $19.5 million, or 42%, to $65.8 million in the nine months ended September 30, 2010 compared to $46.3 million in the nine months ended September 30, 2009 and represented 15% and 17% of total revenues, respectively. The increase is due primarily to an increase in salaries, incentive compensation and related benefits resulting from the associates added in the i2 acquisition and a $2.0 million increase in travel expenses.

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          General and Administrative.General and administrative expense increased $20.0 million, or 57%, to $55.0 million in the nine months ended September 30, 2010 compared to $35.0 million in the nine months ended September 30, 2009 and represented 12% and 13% of total revenues, respectively. The increase is due primarily to $9.4 million in legal costs primarily related to the ongoing litigation between Dillard’s and i2 and the patent infringement litigation i2 filed against Oracle Corporation, an increase in salaries, incentive compensation and related benefits resulting primarily from the associates added in the i2 acquisition and $1.6 million of non-recurring, transition-related costs for salaries and retention bonuses for i2 employees that are being retained for a defined period of time.

          Amortization of Intangibles.The increase in amortization of intangibles in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 is due primarily to the amortization on customer list and trademark intangible assets acquired in the i2 acquisition, offset in part to the cessation of amortization on certain trademark intangibles from prior acquisitions that are now fully amortized.

          Restructuring Charges.We recorded restructuring charges of $16.5 million in the nine months ended September 30, 2010, including $7.8 million in first quarter 2010, $4.6 million in second quarter 2010 and $4.1 million in the third quarter 2010. These charges are primarily for termination benefits, office closures and contract terminations associated with the acquisition of i2 and the continued transition of additional on-shore activities to our CoE facilities. The charges include $12.3 million for termination benefits related to a workforce reduction of approximately 185 associates primarily in product development, sales, information technology and other administrative positions primarily in the Americas. In addition, the charges include $4.1 million for estimated costs to close and integrate redundant office facilities and for the integration of information technology and termination of certain i2 contracts that have no future economic benefit to the Company and are incremental to the other costs that will be incurred by the combined Company. The nine months ended September 30, 2010 charges also include immaterial adjustments to increase reserves recorded for restructuring activities in prior periods.

          We recorded restructuring charges of $4.6 million in the nine months ended September 30, 2009, including $1.5 million in first quarter 2009, $2.3 million in second quarter 2009 and $2.5 million in third quarter 2009. These charges are primarily associated with the transition of additional on-shore activities to the CoE and certain restructuring activities in the EMEA sales organization. The charges include termination benefits related to a workforce reduction of 83 full-time employees in product development, service, support, sales and marketing, information technology and other administrative positions, primarily in the Americas region. In addition, the charge includes $2.0 million in severance and other termination benefits under separation agreements with our former Executive Vice President and Chief Financial Officer and our former Chief Operating Officer. We also recorded net adjustments of $0.3 million in the nine months ended 2009 to reduce estimated restructuring reserves established in prior years and to increase certain Manugistics acquisition reserves based on our revised estimate of sublease rentals and market adjustments on an unfavorable office facility in the United Kingdom.

          Acquisition-Related Costs.During the nine months ended September 30, 2010 we expensed approximately $8.1 million of costs related to the acquisition of i2 on January 28, 2010. These costs consist primarily of investment banking fees, commitment fees on unused bank financing, legal, accounting and other outside professional fees.

Other Income (Expense)

          Interest Expense and Amortization of Loan Fees.The increase in interest expense and amortization of loan fees in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 is due primarily to $16.5 million of interest on the Senior Notes issued and amortization of $1.3 million on the original issue discount on the Senior Notes and related loan origination fees.

          Interest Income and Other, Net.There was no significant change in interest income and other, net in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009.

Income Tax Provision

          For the nine months ended September 30, 2010, income taxes were calculated using the liability method. The provision for income taxes reflects the Company’s estimate of the effective rate expected to be applicable for the full fiscal year, adjusted by any discrete events, which are reported in the period in which they occur. This estimate is re-evaluated each quarter based on our estimated tax expense for the year. Prior to January 1, 2010, the Company’s tax provisions were calculated using the discrete method which calculates the year-to-date effective tax rate and records discrete tax adjustments in the reporting period in which they occur. The discrete method was used by the Company due to its inability to forecast net income by the numerous jurisdictions from which it derives income and was therefore unable to reliably estimate an overall annual effective tax rate. The change in the method in 2010 is due to the Company’s ability to forecast income by jurisdiction and reliably estimate an overall annual effective tax rate.

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          We recorded income tax provisions of $5.1 million and $10.4 million for the nine months ended September 30, 2010 and 2009, respectively, representing effective income tax rates of 30% and 37%, respectively. Our effective income tax rate during the nine months ended September 30, 2010 differs from the nine months ended September 30, 2009 primarily due to the mix of revenue by jurisdiction, the 2010 benefit from the Domestic Production Activities for US manufacturers and expense related to our FIN 48 liability.

Liquidity and Capital Resources

          We had working capital of $181.3 million at September 30, 2010 compared to $345.7 million at December 31, 2009. The working capital balances include cash of $182.7 million and $363.8 million, respectively, which includes restricted cash of $10.3 million and $287.9 million, respectively. The restricted cash balance at December 31, 2009 consisted primarily of net proceeds from the issuance of the Senior Notes (seeContractual Obligations) of approximately $265 million, which together with cash on hand at JDA and i2, was used to fund the cash portion of the merger consideration in the acquisition of i2 on January 28, 2010. We received approximately $460.0 million in cash collections in the nine months ended September 30, 2010 and as of September 30, 2010 we were in a net debt position of approximately $89.9 million.

          Net accounts receivable were $98.3 million or 56 days sales outstanding (“DSO”) at September 30, 2010 compared to $68.9 million or 58 days DSO at December 31, 2009. DSO results can fluctuate significantly on a quarterly basis due to a number of factors including the percentage of total revenues that comes from software license sales which may have installment payment terms, seasonality, shifts in customer buying patterns, the timing of customer payments and annual maintenance renewals, lengthened contractual payment terms in response to competitive pressures, the underlying mix of products and services, and the geographic concentration of revenues.

          Operating activitiesprovided cash of $39.0 million in the nine months ended September 30, 2010 compared to $80.5 million in the nine months ended September 30, 2009. The principal sources of our cash flow from operations are typically net income adjusted for depreciation and amortization and bad debt provisions, collections on accounts receivable, and changes in deferred maintenance revenue. The decrease in cash flow in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 is due primarily to an $6.0 decrease in the current period net income, which includes $8.1 million of acquisition-related costs, $16.5 million of restructuring charges, the majority of which are related to actions taken as a result of the i2 acquisition, $9.4 million in legal expenses primarily related to inherited i2 litigation and $1.6 million of non-recurring, transition-related costs for salaries and retention bonuses for i2 employees that are being retained for a defined period of time. In addition, changes in working capital utilized approximately $27.0 million of cash in the nine months ended September 30, 2010 and provided approximately $18.9 million of cash in the nine months ended September 30, 2009 due to the timing and payment of accounts receivable, a decrease in deferred revenue and an increase in prepaid expenses and other current assets. Accounts receivable decreased $1.3 million in the nine months ended September 30, 2010 due primarily to improved cash collection efforts and decreased $19.5 million in the nine months ended September 30, 2009 due primarily to the collection of an unusually large receivable. In addition, operating cash flows for the nine months ended September 30, 2010 were negatively impacted by decreases in deferred revenue balances from maintenance and other contracts assumed in the i2 acquisition that were renewed in the months just prior to the acquisition and for which the related cash was collected by i2 prior to the acquisition close date.

          Investing activitiesprovided cash of $47.2 million in the nine months ended September 30, 2010 and utilized cash of $9.9 million in the nine months ended September 30, 2009. Cash provided from investing activities in the nine month ended September 30, 2010 includes a $277.6 million change in restricted cash offset by the $213.4 million of net cash expended to acquire i2. Investing activities also include purchases of property and equipment of $14.8 million and $5.5 million in the nine month ended September 30, 2010 and 2009, respectively, and the payment of direct costs related to prior acquisitions of $2.7 million and $4.4 million, respectively.

          Financing activitiesprovided cash of $9.2 million and utilized $19.8 in the nine months ended September 30, 2010 and 2009, respectively. Cash provided by financing activities includes $13.8 million and $14.5 million in proceeds from the issuance of stock, respectively, offset in part by treasury stock repurchases and other financing activities of $4.6 million and $3.9 million, respectively. The nine months ended September 30, 2009 also includes $28.1 million for the purchase of the remaining Series B preferred stock.

          Changes in the currency exchange rates of our foreign operationshad the effect of increasing cash by $1.0 million and $2.0 million in the nine months ended September 30, 2010 and 2009, respectively. We use derivative financial instruments, primarily forward exchange contracts, to manage a majority of the short-term foreign currency exchange exposure associated with foreign currency denominated assets and liabilities which exist as part of our ongoing business operations. We do not hedge the potential impact of foreign currency exposure on our ongoing revenues and expenses from foreign operations. The exposures relate primarily to the gain or loss recognized in earnings from the revaluation or settlement of current foreign currency denominated assets and

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liabilities. We do not enter into derivative financial instruments for trading or speculative purposes. The forward exchange contracts generally have maturities of less than 90 days and are not designated as hedging instruments. Forward exchange contracts are marked-to-market at the end of each reporting period, 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.

          Treasury Stock Repurchases.On March 5, 2009, the Board adopted a program to repurchase up to $30 million of our common stock in the open market or in private transactions at prevailing market prices during the 12-month period ended March 10, 2010. During 2009, we repurchased 0.3 million shares of our common stock under this program for $2.9 million at prices ranging from $10.34 to $11.00 per share. There have been no shares of common stock repurchased under this program in 2010.

          During the nine months ended September 30, 2010 and 2009, we also repurchased approximately 0.2 million and 0.1 million shares, respectively, tendered by employees for the payment of applicable statutory withholding taxes on the issuance of restricted shares under the 2005 Performance Incentive Plan. These shares were repurchased for $4.5 million at prices ranging from $22.47 to $30.06 in the nine months ended September 30, 2010 and for $1.4 million at prices ranging from $9.75 to $22.37 in the nine months ended September 30, 2009.

          Contractual Obligations. We currently lease office space in the Americas for 15 regional sales and support offices across the United States and Latin America, and for 24 other international sales and support offices located in major cities throughout Europe, Asia, Australia, Japan and our CoE facilities in Bangalore and Hyderabad, India. The leases are primarily non-cancelable operating leases with initial terms ranging from one to 20 years that expire at various dates through the year 2018. None of the leases contain contingent rental payments; however, certain of the leases contain scheduled rent increases and renewal options. We expect that in the normal course of business most of these leases will be renewed or that suitable additional or alternative space will be available on commercially reasonable terms as needed. In addition, we lease various computers, telephone systems, automobiles, and office equipment under non-cancelable operating leases with initial terms ranging from 12 to 48 months. Certain of the equipment leases contain renewal options and we expect that in the normal course of business some or all of these leases will be renewed or replaced by other leases.

          There have been no material changes in our contractual obligations and other commercial commitments since the end of fiscal year 2009 except for assumed lease obligations in connection with our acquisition of i2 on January 28, 2010. Information regarding our contractual obligations and commercial commitments, including those assumed in the acquisition of i2, is provided in our Annual Report on Form 10-K for the year ended December 31, 2009.

          We believe our cash and cash equivalents and net cash provided from operations will provide adequate liquidity to meet our normal operating requirements for the foreseeable future. A major component of our positive cash flow is the collection of accounts receivable and the generation of cash earnings.

Critical Accounting Policies

          There were no significant changes in our critical accounting policies during third quarter 2010. We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations where such policies affect our reported and expected financial results. The preparation of this Quarterly Report on Form 10-Q requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

•	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 ourSupply ChainandServices 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 ofTechnology-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 ofMarketing-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

     In September 2009, FASB issued an amendment to its accounting guidance on certain revenue arrangements with multiple deliverables that enables a vendor to account for products and services (deliverables) separately rather than as a combined unit. The revised guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) management’s best estimate of selling price. This guidance also eliminates the residual method of allocation and requires that the arrangement consideration be allocated at the inception of the arrangement to all deliverables. In addition, this guidance significantly expands required disclosures related to such revenue arrangements that have multiple deliverables. The revised guidance is effective for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010 with early adoption permitted. We are currently assessing the impact the new guidance will have on certain of our revenue arrangements, specifically those involving the delivery of software-as-a-service and certain other managed service offerings as i2 derived a significant portion of their revenues from these form of contracts. The ultimate impact on our consolidated financial statements will depend on the nature and terms of the revenue arrangements entered into or materially modified after the adoption date. The new guidance does not significantly change the accounting for the majority of our existing and future revenue arrangements that are subject to specific guidance in sections 605 and 985 of the Codification (seeRevenue Recognitiondiscussion above).

     In December 2009, FASB issued a new guidance for improvements to financial reporting by enterprises involved with variable interest entities. The new guidance provides an amendment to its consolidation guidance for variable interest entities and the definition of a variable interest entity and requires enhanced disclosures to provide more information about an enterprise’s involvement in a variable interest entity. This amendment also requires ongoing assessments of whether an enterprise is the primary beneficiary of a variable interest entity and is effective for reporting periods beginning after December 15, 2009. There was no significant impact from adoption of this guidance on our consolidated financial position or results of operations.

     In January 2010, FASB issued an amendment to its accounting guidance for fair value measurements which adds new requirements for disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements related to Level 3 measurements. The revised guidance also clarifies existing fair value disclosures about the level of

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disaggregation and about inputs and valuation techniques used to measure fair value. The amendment is effective for the first reporting period beginning after December 15, 2009, except for the requirements to provide the Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which will be effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. There was no significant impact from adoption of this guidance on our consolidated financial position or results of operations.

Item 3: Quantitative and Qualitative Disclosures about Market Risk

          We are exposed to certain market risks in the ordinary course of our business. These risks result primarily from changes in foreign currency exchange rates and interest rates. In addition, our international operations are subject to risks related to differing economic conditions, changes in political climate, differing tax structures, and other regulations and restrictions.

          Foreign currency exchange rates. Our international operations expose us to foreign currency exchange rate changes that could impact translations of foreign currency denominated assets and liabilities into U.S. dollars and future earnings and cash flows from transactions denominated in different currencies. International revenues represented 40% of our total revenues in 2009 and 44% in the nine months ended September 30, 2010. In addition, the identifiable net assets of our foreign operations totaled 23% and 19% of consolidated net assets at September 30, 2010 and December 31, 2009, respectively. Our exposure to currency exchange rate changes is diversified due to the number of different countries in which we conduct business. We operate outside the United States primarily through wholly owned subsidiaries in Europe, Asia/Pacific, Canada and Latin America. We have determined that the functional currency of each of our foreign subsidiaries is the local currency and as such, foreign currency translation adjustments are recorded as a separate component of stockholders’ equity. Changes in the currency exchange rates of our foreign subsidiaries resulted in our reporting an unrealized foreign currency exchange gain of $3.7 million in the nine months ended September 30, 2010 and an unrealized foreign currency exchange gain of $5.6 million in the nine months ended September 30, 2009.

          The foreign currency exchange gain in the nine months ended September 30, 2010 resulted primarily from the weakening of the U.S. Dollar, particularly against the British Pound and the Euro. Foreign currency gains and losses will continue to result from fluctuations in the value of the currencies in which we conduct operations as compared to the U.S. Dollar, and future operating results will be affected to some extent by gains and losses from foreign currency exposure. We prepared sensitivity analyses of our exposures from foreign net working capital as of September 30, 2010 to assess the impact of hypothetical changes in foreign currency rates. Based upon the results of these analyses, a 10% adverse change in all foreign currency rates from the September 30, 2010 rates would result in a currency translation loss of less than $0.1 million before tax.

          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 denominated assets and liabilities which exist as part of our ongoing business operations. The exposures relate primarily to the gain or loss recognized in earnings from the revaluation or 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 less than 90 days, and are not designated as hedging instruments under SFAS No. 133. Forward exchange contracts are marked-to-market at the end of each reporting period, with gains and losses recognized in other income offset by the gains or losses resulting from the settlement of the underlying foreign 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 $0.6 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.”

          Interest rates. Excess cash balances as of September 30, 2010 and December 31, 2009 are included in our operating account. Cash balances in foreign currencies overseas are also operating balances and are invested in short-term deposits of the local operating

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bank. Interest income earned on investments is reflected in our financial statements under the caption “Interest income and other, net.” Investments in both fixed rate and floating rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall.

          We issued $275 million of Senior Notes in December 2009 at an initial offering price of 98.988% of the principal amount. The net proceeds from the sale of the Senior Notes, which exclude the original issue discount ($2.8 million) and other debt issuance costs ($7.1 million) were placed in escrow and subsequently used, together with cash on hand at JDA and i2, to fund the cash portion of the merger consideration in the acquisition of i2 on January 28, 2010. The Senior Notes mature in 2014. Interest accrues on the Senior Notes at a fixed rate of 8% per annum, payable semi-annually in cash on September 15 and December 15 of each year, commencing on September 15, 2010. The interest is computed on the basis of a 360-day year comprised of twelve 30-day months.

Item 4: Controls and Procedures

          Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of our disclosure controls and procedures that were in effect at the end of the period covered by this report. The phrase “disclosure controls and procedures” is defined under Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Act”) and refers to those controls and other procedures of an issuer that are designed to ensure that the information required to be disclosed by the issuer in the reports it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s (the “Commission”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on their evaluation, our principal executive officer and principal financial and accounting officer have concluded that our disclosure controls and procedures that were in effect on September 30, 2010 were effective to ensure that information required to be disclosed in our reports to be filed under the Act is accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding disclosures and is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

          Changes in Internal Control Over Financial Reporting.The term “internal control over financial reporting” is defined under Rule 13a-15(f) of the Act and refers to the process of a company that is designed by, or under the supervision of, the issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.

          There were no changes in our internal controls over financial reporting during the three months ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

          Information pertaining to legal proceedings can be found in Note 8. “Legal Proceedings” to our Condensed Consolidated Financial Statements elsewhere in this Quarterly Report on Form 10-Q, and is incorporated by reference herein.

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Item 1A.Risk Factors

          We operate in a dynamic and rapidly changing environment that involves numerous risks and uncertainties. The following section describes material risks and uncertainties that we believe may adversely affect our business, financial condition, results of operations or the market price of our stock. This section should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and Notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations as of September 30, 2010 and for the three months then ended contained elsewhere in this Form 10-Q.

Risks Related To Our Business

We may not be able to sustain profitability in the future.

          Our ability to sustain profitability will depend, in part, on our ability to:

• 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 may not be able to do any of these successfully, and our failure to do so is likely to have a negative impact on our operating results and cash flows, which could affect our ability to make payments on the notes.

We have a substantial amount of debt, which could impact our ability to obtain future financing or pursue our growth strategy.

          After the acquisition of i2, we have $275 million of long-term debt. Cash flow from operations was $39.0 million for the nine months ended September 30, 2010 and includes the impact of i2 from the January 28, 2010 (date of acquisition) through September 30, 2009. Cash flow from operations, without the cash flow from i2, was $80.5 million for the nine months ended September 30, 2010, and $96.5 million and $47.1 million in the years ended December 31, 2009 and 2008, respectively. Our indebtedness could have significant adverse effects on our business, including the following:

• 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.

          The instruments governing the notes contain, and the instruments governing any indebtedness we may incur in the future may contain, restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests. Our failure to

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comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all or a portion of our outstanding indebtedness.

Payments on our indebtedness will require a significant amount of cash.

          As a result of financial, business, economic and other factors, many of which we cannot control, our business may not generate sufficient cash flow from operations in the future and our currently anticipated growth in revenue and cash flow may not be realized, either or both of which could result in our being unable to repay indebtedness, including our outstanding notes, or to fund other liquidity needs. If we do not have sufficient cash resources in the future, we may be required to refinance all or part of our then existing debt, sell assets or borrow more money. There can be no assurance that we will be able to accomplish any of these alternatives on terms acceptable to us or at all. In addition, the terms of existing or future debt agreements may restrict us from adopting any of these alternatives.

We may incur substantial additional indebtedness that could further exacerbate the risks associated with our indebtedness.

          We may incur substantial additional indebtedness in the future. Although the indenture governing our outstanding notes contains restrictions on our incurrence of additional debt, these restrictions are subject to a number of qualifications and exceptions, and we could incur substantial additional secured or unsecured indebtedness, which may include a credit facility that may include financial ratio requirements and covenants. If we incur additional debt, the risks related to our leverage and debt service requirements would increase.

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.

          Developing and localizing software is expensive and the investment in product development often involves a long payback cycle. We have made and expect to continue making significant investments in software research and development and related product opportunities. If product life cycles shorten or key technologies upon which we depend change rapidly, we may need to make high levels of expenditures for research and development that could adversely affect our operating results if not offset by corresponding revenue increases. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts to maintain our competitive position. However, it is difficult to estimate when, if ever, we will receive significant revenues from these investments.

We may misjudge when software sales will be realized, which may materially reduce our revenue and cash flow and adversely affect our business.

          Software license revenues in any quarter depend substantially upon contracts signed and the related shipment of software in that quarter. Because of the timing of our sales, we typically recognize the substantial majority of our software license revenues in the last weeks or days of the quarter. In addition, it is difficult to forecast the timing of large individual software license sales with a high degree of certainty due to the extended length of the sales cycle and the generally more complex contractual terms that may be associated with such licenses that could result in the deferral of some or all of the revenue to future periods. Our customers and potential customers, especially for large individual software license sales, are increasingly requiring that their senior executives, board of directors and significant equity investors approve such purchases without the benefit of the direct input from our sales representatives. As a result, we may have less visibility into the progression of the selection and approval process throughout our sales cycles, which in turn makes it more difficult to predict the quarter in which individual sales will occur, especially in large sales opportunities.

          We are also at risk of having pending transactions abruptly terminated if the boards of directors or executive management of our customers decide to withdraw funding from information technology projects as a result of a deep or prolonged global economic downturn and credit crisis. If this type of behavior becomes commonplace among existing or potential customers then we may face a significant reduction in new software sales. We have seen an increasing number of our prospects indicate to us that they can sign agreements prior to the end of our quarter, when in fact their approval process precludes them from being able to complete the transaction until after the end of our quarter. In addition, because of the current economic condition, we may need to increase our use of alternate licensing models that reduce the amount of software revenue we recognize upon shipment of our software.

          Each of these circumstances adds to the difficulty of accurately forecasting the timing of deals. We expect to experience continued difficulty in accurately forecasting the timing of deals. If we receive any significant cancellation or deferral of customer orders, or if we are unable to conclude license negotiations by the end of a fiscal quarter, our quarterly operating results will be lower than anticipated.

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          In addition to the above, we may be unable to recognize revenues associated with certain projects assumed in the acquisition of i2 in accordance with our expectations. i2 historically recognized a significant portion of revenues from sales of software solutions and development projects over time using the percentage of completion method of contract accounting. Failure to complete project phases in accordance with the overall project plan can create variability in our expected revenue streams if we are not able to recognize revenues related to particular projects because of delays in development and delivery.

We may face liability if our products are defective or if we make errors implementing our products.

          Our software products are highly complex and sophisticated. As a result, they could contain design defects, software errors or security problems that are difficult to detect and correct. In particular, it is common for complex software programs such as ours to contain undetected errors, particularly in early versions of our products. Errors are discovered only after the product has been implemented and used over time with different computer systems and in a variety of applications and environments. Despite extensive testing, we have in the past discovered certain defects or errors in our products or custom configurations only after our software products have been used by many clients.

          In addition, implementation of our products may involve customer-specific configuration by third parties or us, and may involve integration with systems developed by third parties. Our clients may occasionally experience difficulties integrating our products with other hardware or software in their particular environment that are unrelated to defects in our products. Such defects, errors or difficulties may cause future delays in product introductions, result in increased costs and diversion of development resources, require design modifications or impair customer satisfaction with our products. If clients experience significant problems with implementation of our products or are otherwise dissatisfied with their functionality or performance, or if our products fail to achieve market acceptance for any reason, our market reputation could suffer, and we could be subject to claims for significant damages. There can be no assurances that the contractual provisions in our customer agreements that limit our liability and exclude consequential damages will be enforced. Any such damages claim could impair our market reputation and could have a material adverse affect on our business, operating results and financial condition.

We may have difficulty implementing our software products, which would harm our business and relations with customers.

     Our software products are complex and perform or directly affect mission-critical functions across many different functional and geographic areas of the enterprise. Consequently, implementation of our software products can be a lengthy process, and commitment of resources by our clients is subject to a number of significant risks over which we have little or no control. The implementation time for certain of our applications can be longer and more complicated than our other applications as they typically:

• 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.

          Delays in the implementations of any of our software products, whether by our business partners or by us, may result in client dissatisfaction, disputes with our customers, damage to our reputation or cancellation of large projects. With the i2 acquisition, we have increased the number of large, complex projects with global tier one customers. Cancellation of a large, global implementation project could have a material adverse affect on our operating results.

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.

          A portion of our consulting services revenues are derived under fixed price arrangements that require us to provide identified deliverables for a fixed fee. With the acquisition of i2, the percentage of consulting services revenues derived under fixed price arrangements may increase. Our failure to meet our contractual obligations under fixed price contracts within our estimated cost structure may result in our having to record the cost related to the performance of services in the period that the services were rendered, but delay the timing of revenue recognition to a future period in which the obligations are met, which may cause our operating results to suffer.

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Litigation could harm our business.

          We may be subject to legal proceedings and claims involving customer, stockholder, consumer, competition and other issues on a global basis. As described in “Item 1, Note 8 – Legal Proceedings” in Part I of this Form 10-Q, we are currently engaged in a number of legal proceedings, including litigation with Dillard’s, Oracle and a group of i2’s shareholders. These legal proceedings are subject to inherent uncertainties, and unfavorable rulings could occur and could have a material adverse effect on our business, financial position, results of operations or cash flows.

We may have difficulty developing our new managed services offering, which could reduce future revenue growth opportunities.

          We have limited experience operating our applications for our customers under our Managed Services offering, either on a hosted or remote basis. We began these services in late 2009 and through September 30, 2010 they represented a very small part of our revenues. We have hired management personnel with significant expertise in operating a managed services business, and we have begun to make capital expenditures for this business. We may encounter difficulties developing our Managed Services into a mature services offering, or the rate of adoption by our customers may be slower than anticipated. If our Managed Services business does not grow or operate as expected, it could divert management resources, harm our strategy and reduce opportunities for future revenue growth.

The enforcement and protection of our intellectual property rights may be expensive and could divert our valuable resources.

          We rely primarily on patent, copyright and trademark laws, as well as nondisclosure and confidentiality agreements and other methods, to protect our proprietary information, technologies and processes. Policing unauthorized use of our products and technologies is difficult and time-consuming. Unauthorized parties may try to copy or reverse engineer portions of our products, circumvent our security devices or otherwise obtain and use our intellectual property. We cannot be certain that the steps we have taken will prevent the misappropriation or unauthorized use of our proprietary information and technologies, particularly in foreign countries where the laws may not protect our proprietary intellectual property rights as fully or as readily as United States laws. We cannot be certain that the laws and policies of any country, including the United States, or the practices of any of the standards bodies, foreign or domestic, with respect to intellectual property enforcement or licensing will not be changed in a way detrimental to our licensing program or to the sale or use of our products or technology.

          We may need to litigate to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights of others. As a result of any such litigation, we could lose our ability to enforce one or more patents or incur substantial unexpected operating costs. Any action we take to enforce our intellectual property rights could be costly and could absorb significant management time and attention and result in counterclaims, which, in turn, could negatively impact our operating results. Our patent infringement lawsuit against Oracle, originally brought by i2 against Oracle alleging the infringement by Oracle of certain i2 patents, and Oracle’s corresponding patent infringement counterclaim against us is an example of such intellectual property litigation. In addition, failure to protect our trademark rights could impair our brand identity.

Third parties may claim we infringe their intellectual property rights, which would result in an increase in litigation and other related costs.

          We periodically receive notices or claims from others that we are infringing upon their intellectual property rights, especially patent rights. We expect the number of such claims will increase as the functionality of products overlap and the volume of issued software patents continues to increase. Responding to any infringement claim, regardless of its validity, could:

• 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 a successful claim is made against us and we fail to develop or license a substitute technology, our business, results of operations, financial condition or cash flows could be adversely affected.

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 license and integrate technology from third parties in certain of our software products. Our third-party licenses generally require us to pay royalties and fulfill confidentiality obligations. If we are unable to continue to license any of this third party software, or if the third party licensors do not adequately maintain or update their products, we would likely face delays in the releases of our software until equivalent technology can be identified, licensed or developed, and integrated into our software products. These delays, if they occur, could harm our business, operating results and financial condition. It is also possible that intellectual property acquired from third parties through acquisitions, mergers, licenses, or otherwise obtained may not have been adequately protected, or infringes another parties intellectual property rights.

We may face difficulties in our highly competitive markets, which may make it difficult to attract and retain clients and grow revenues.

          The supply chain software market continues to consolidate and this has resulted in larger, new competitors with significantly greater financial and marketing resources and more numerous technical resources than we possess. This could create a significant competitive advantage for our competitors and negatively impact our business. It is difficult to estimate what long term effect these acquisitions will have on our competitive environment. We have encountered competitive situations with certain enterprise software vendors where, in order to encourage customers to purchase licenses of their specific applications and gain market share, we suspect they have also offered to license at no charge certain of their retail and/or supply chain software applications that compete with our solutions. If large competitors such as Oracle and SAP AG are willing to license their retail, supply chain and/or other applications at no charge, it may result in a more difficult competitive environment for our products. We cannot guarantee that we will be able to compete successfully for customers or acquisition targets against our current or future competitors, or that competition will not have a material adverse effect on our business, operating results and financial condition.

          We encounter competitive products from a different set of vendors in many of our primary product categories. We believe that while our markets are subject to intense competition, the number of competitors in many of our application markets has decreased over the past five years. We believe the principal competitive factors in our markets are feature and functionality, the depth of planning and optimization provided and available deployment models. We compete on the basis of the reputation of our products, the performance and scalability of our products, the quality of our customer base, our ability to implement, our retail and supply chain industry expertise, our lower total cost of ownership, technology platform and quality of customer support across multiple regions for global customers.

          The competitive markets in which we compete could put pressure on us to reduce our prices. If our competitors offer deep discounts on certain products, we may need to lower prices or offer other favorable terms in order to compete successfully. Any such changes would likely reduce margins and would adversely affect our operating results. Our software license updates and product support fees are generally priced as a percentage of our new license fees. Our competitors may offer a lower percentage pricing on product updates and support, which could put pressure on us to further discount our new license prices. Any broadly-based changes to our prices and pricing policies could cause new software license and services revenues to decline or be delayed as our sales force implements and our customers adjust to the new pricing policies.

          We have increased our off-shore resources through our CoE. However, our consulting services business model is currently largely based on relatively high-cost on-shore resources and, although it has started to increase, utilization of CoE consulting services resources in the Hyderabad facility has been lower than planned.

          We believe the primary reason for this lower-than-expected utilization may be due to slower internal adoption of our planned mix of on-shore/off-shore services. Further, we face competition from low-cost off-shore service providers and smaller boutique consulting firms. This competition is expected to continue and our on-shore hourly rates are much higher than those offered by these competitors. As these competitors gain more experience with our products, the quality gap between our service offerings and theirs may diminish, resulting in decreased revenues and profits from our consulting practice. In addition, we face increased competition for services work from ex-employees of JDA who offer services directly or through lower cost boutique consulting firms. These competitive service providers have taken business from JDA and while some are still relatively small compared to our consulting services business, if they grow successfully, it will be largely at our expense. We continue to attempt to improve our competitive position by further developing and increasing the utilization of our own offshore consulting services group at our CoE facility in

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Hyderabad, and this should be enhanced by the CoE facility in Bangalore that we obtained in the i2 acquisition since it has been in operation for a longer period of time; however, we cannot guarantee these efforts will be successful or enhance our ability to compete.

There are many risks associated with international operations, which may negatively impact our overall business and profitability.

          International revenues represented approximately 44% of our total revenues for the nine months ended September 30, 2010 and approximately 40% of our total revenues in the three years ended December 31, 2009, 2008 and 2007, or 40%, 40% and 41% on a pro forma basis, after giving effect to acquisition of i2, and we expect to generate a significant portion of our revenues from international sales in the future.

          Our international business operations are subject to risks associated with international activities, including:

• currency fluctuations, the impact of which could significantly increase as a result of:

Ø	our continuing expansion of the CoE in India; and
Ø	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.

          We expect that an increasing portion of our international software license, consulting services and maintenance services revenues will be denominated in foreign currencies, subjecting us to fluctuations in foreign currency exchange rates. If we expand our international operations, exposures to gains and losses on foreign currency transactions may increase. 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 denominated assets and liabilities which exist as part of our ongoing business operations but we do not hedge ongoing or anticipated revenues, costs and expenses, including the additional costs we expect to incur with the expansion of our CoE in India. We cannot guarantee that any currency exchange strategy would be successful in avoiding exchange-related losses.

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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.

          We are continuing the expansion of our CoE facilities located in Hyderabad and Bangalore, India. In order to take advantage of cost efficiencies associated with India’s lower wage scale, we expanded the CoE during 2008 beyond a research and development center to include consulting services, customer support and information technology resources. We believe that a properly functioning CoE will be important in achieving desired long-term operating results. Although we have not yet fully utilized certain of the service capabilities of the CoE, we believe progress is being made. We are satisfied with the progress of our product development, information technology and other administrative support functions at the CoE. We are also beginning to gain leverage from the CoE in our consulting services business, and we expect the overall share of consulting services work performed by the CoE will continue to increase. We have also started to leverage the CoE in our customer support organization although we believe there remain further opportunities to increase this leverage. If we encounter any delays in our efforts to increase the utilization of our services resources at the CoE,it may have an overall effect of reducing our consulting services margins and negatively impacting our operating results. Additional risks associated with our CoE strategy include, but are not limited to:

• 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.

          In addition, i2 conducted a large portion of its software solutions development and services operations in Bangalore, India and the distributed nature of its development and consulting resources could create increased operational challenges and complications for us based upon the above factors.

Economic, political and market conditions can adversely affect our revenue and profitability.

          Our revenue and profitability depend on the overall demand for our software and related services. Historically, events such as terrorist attacks, natural catastrophes and contagious diseases have created uncertainties in our markets and caused disruptions in our sales cycles. A regional and/or global change in the economy or financial markets, such as the current protracted global economic downturn, could result in delay or cancellation of customer purchases. A downturn in the economy may cause an increase in customer bankruptcy reorganizations, liquidations and consolidations, which may negatively impact our accounts receivables and expected future revenues from such customers. Adverse conditions in credit markets, reductions in consumer confidence and spending and the fluctuating commodities and/or fuel costs are examples of changes that have delayed or terminated certain customer purchases. These adverse conditions have delayed or terminated certain of our customer deals. A further worsening or broadening or protracted extension of these conditions would have a significant negative impact on our operating results. In addition to the potential negative impact of the economic downturn on our software sales, customers are increasingly seeking to reduce their maintenance fees or to avoid price increases. This has resulted in elevated levels of maintenance attrition in recent periods. A prolonged economic downturn may increase our attrition rates, particularly if many of our larger maintenance customers cease operations. Because maintenance is our largest source of revenue, increases in our attrition rates can have a significant adverse impact on our operating results. Weak and uncertain economic conditions could also impair our customers’ ability to pay for our products or services. Any of these factors could adversely impact our quarterly or annual operating results and our financial condition.

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We may be unable to retain key personnel, which could materially impact our ability to further develop our business.

          While the rate of retention of our associates is high compared to industry averages, our operations are dependent upon our ability to attract and retain highly skilled associates and the loss of certain key individuals to any of our competitors could adversely impact our business. In addition, our performance depends in large part on the continued performance of our executive officers and other key employees, particularly the performance and services of James D. Armstrong, our Chairman, and Hamish N. Brewer, our Chief Executive Officer. Following our acquisition of i2, our associates (including our associates who were former associates of i2) may experience uncertainty as a result of integration activities, which may adversely affect our ability to attract and retain key personnel. We also must continue to attract new talent and continue to properly motivate our other existing associates and keep them focused on our strategies and goals, which effort may be adversely affected as a result of the uncertainty and difficulties with integrating i2 with JDA.

          We do not have in place “key person” life insurance policies on any of our employees. The loss of the services of Mr. Armstrong, Mr. Brewer or other key executive officers or employees without a successor in place, or any difficulties associated with a successor, could negatively affect our financial performance.

We may have difficulty integrating future acquisitions, which would reduce the anticipated benefits of those transactions.

          We intend to continually evaluate potential acquisitions of complementary businesses, products and technologies, including those that are significant in size and scope. In pursuit of our strategy to acquire complementary products, we have completed eleven acquisitions over the past twelve years, including our acquisitions of i2 in January 2010 and of Manugistics in July 2006. The risks we commonly encounter in acquisitions include:

• 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.

          Our failure to effectively integrate any future acquisition would adversely affect the benefit of such transaction, including potential synergies or sales growth opportunities, to the extent in or the time frame anticipated.

Government contracts are subject to unique costs, terms, regulations, claims and penalties that could reduce their profitability to us.

          As a result of the acquisition of Manugistics, we acquired a number of contracts with the U.S. government. Government contracts entail many unique risks, including, but not limited to, the following:

• 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.

          These risks may make the contracts less profitable or cause them to be terminated, which would adversely affect the business.

If we do not identify, adopt and develop product architecture that is compatible withemerging industry standards, our products will be less attractive to customers.

          The markets for our software products are characterized by rapid technological change, evolving industry standards, changes in customer requirements and frequent new product introductions and enhancements. We continuously evaluate new technologies and when appropriate implement into our products advanced technology such as our current JDA Enterprise Architecture platform effort. However, if we fail in our product development efforts to accurately address in a timely manner, evolving industry standards, new technology advancements or important third-party interfaces or product architectures, sales of our products and services may suffer.

          Our software products can be licensed with a variety of popular industry standard platforms and are authored in various development environments using different programming languages and underlying databases and architectures. There may be future or existing platforms that achieve popularity in the marketplace that may not be compatible with our software product design. Developing and maintaining consistent software product performance across various technology platforms could place a significant strain on our resources and software product release schedules, which could adversely affect our results of operations.

We may be impacted by shifts in consumer preferences affecting the supply chain that could reduce our revenues.

          We are dependent upon and derive most of our revenue from the supply chain linking manufacturers, distributors and retailers to consumers, or the consumer products supply chain vertical. If a shift in spending occurs in this vertical market that results in decreased demand for the types of solutions we sell, it would be difficult to adjust our strategies and solution offerings because of our dependence on these markets. If the consumer products supply chain vertical experiences a decline in business, it could have a significant adverse impact on our business prospects, particularly if it is a prolonged decline. The current economic downturn has caused declines in certain areas of the consumer products supply chain. If economic conditions continue to deteriorate or the failure rates of customers in our target markets increase, we may experience an overall decline in sales that would adversely impact our business.

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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.

          The success of our acquisition of i2 will depend in part on the success of our management in integrating the operations, technologies and personnel of i2 with JDA. Management’s inability to meet the challenges involved in integrating successfully the operations of JDA and i2 or otherwise to realize the anticipated benefits of the transaction could seriously harm our results of operations. In addition, the overall integration of the two companies will require substantial attention from our management, particularly in light of the geographically dispersed operations of the two companies, which could further harm our results of operations.

          The challenges involved in integration include:

• 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.

          We may not be able to successfully integrate the operations of i2 in a timely manner, or at all, and we may not realize the anticipated benefits of the acquisition, including potential synergies or sales or growth opportunities, to the extent or in the time frame anticipated. The anticipated benefits and synergies of the acquisition are based on assumptions and current expectations, with limited actual experience, and assume that we will successfully integrate and reallocate resources among our facilities without unanticipated costs and that our efforts will not have unforeseen or unintended consequences. In addition, our ability to realize the benefits and synergies of the business combination could be adversely impacted to the extent that JDA’s or i2’s relationships with existing or potential clients, suppliers or strategic partners is adversely affected as a consequence of the transaction, as a result of further weakening of global economic conditions, or by practical or legal constraints on its ability to combine operations. Furthermore, a portion of our ability to realize synergies and cost savings depends on our ability to continue to migrate work from certain of our on-shore facilities to our off-shore facilities.

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.

          As a result of our acquisition of i2, we have approximately 3,000 employees. In order to pursue business opportunities, we will need to continue to build our infrastructure, client initiatives and operational capabilities. Our ability to do any of these successfully could be affected by one or more of the following factors:

• 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.

          Our failure to adequately address the above factors would have a significant impact on our ability to implement our business plan and our ability to pursue other opportunities that arise, which might negatively affect our business.

i2 has been, and we may be, subject to product quality and performance claims, which could seriously harm our business.

          From time to time prior to the acquisition, customers of i2 made claims pertaining to the quality and performance of i2’s software and services, citing a variety of issues. The Dillard’s judgment was the result of such a software performance customer claim. Whether customer claims regarding the quality and performance of i2’s products and services are founded or unfounded, they may adversely impact customer demand and affect JDA’s market perception, its products and services. Any such damage to our reputation could have a material adverse effect on our business, results of operations, cash flow and financial condition.

Risks Related To Our Stock

Our quarterly operating results may fluctuate significantly, which could adversely affect the price of our stock.

          Our quarterly operating results have varied in the past and are expected to continue to vary in the future. If our quarterly or annual operating results, particularly our software revenues, fail to meet management’s or analysts’ expectations, the price of our stock could decline. Many factors may cause these fluctuations, including:

• 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.

          Charges to earnings resulting from past or future acquisitions, including our acquisition of i2, or internal reorganizations may also adversely affect our operating results. Under the acquisition method of accounting, we allocate the total purchase price to an acquired company’s net tangible assets, amortizable intangible assets and in-process research and development, if any, based on their fair values as of the date of the acquisition and record the excess of the purchase price over those fair values as goodwill. Management’s estimates of fair value are based upon assumptions believed to be reasonable but which are inherently uncertain. 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 acquired deferred revenue balances, tax-related accounts, amortization of intangible assets and the residual amount allocated to goodwill. As a result, we are unable to fully forecast at this time certain operating results that will ultimately impact our GAAP results for 2010, including the amount of potential amortization on acquired intangibles and the amount of depreciation on acquired property and equipment. As a result, any of the following or other factors could result in material charges that would adversely affect our results:

• 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.

          In addition, fluctuations in the price of our common stock may expose us to the risk of securities class action lawsuits. Defending against such lawsuits could result in substantial costs and divert management’s attention and resources. Furthermore, any settlement or adverse determination of these lawsuits could subject us to significant liabilities.

Anti-takeover provisions in our organizational documents and Delaware law could prevent or delay a change in control.

          Our certificate of incorporation, which authorizes the issuance of “blank check preferred” stock and Delaware state corporate laws which restrict business combinations between a corporation and 15% or more owners of outstanding voting stock of the corporation for a three-year period, individually or in combination, may discourage, delay or prevent a merger or acquisition that a JDA stockholder may consider favorable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds —Not applicable

Item 3. Defaults Upon Senior Securities— Not applicable

Item 4.Reserved

Item 5. Other Information— Not applicable

Item 6. Exhibits— See Exhibits Index

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JDA SOFTWARE GROUP, INC.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	JDA SOFTWARE GROUP, INC.
Dated: November 9, 2010	By:	/s/ Hamish N. Brewer
		Hamish N. Brewer
		President and Chief Executive Officer (Principal Executive Officer)
	By:	/s/ Peter S. Hathaway
		Peter S. Hathaway
		Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

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EXHIBIT INDEX

Exhibit #		Description of Document
3.1	—	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).

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