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Table of Contents
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q
 
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2002
 
or
 
¨ 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 0-28030
 
i2 Technologies, Inc.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
     
75-2294945
(State or other jurisdiction of
incorporation or organization)
     
(I.R.S. Employer Identification No.)
        
One i2 Place
     
75234
11701 Luna Road
     
(Zip code)
Dallas, Texas
       
(Address of principal executive offices)
       
 
(469) 357-1000
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the 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) has been subject to such filing requirements for the past 90 days. Yes xNo ¨
 
As of August 7, 2002 the Registrant had 431,045,733 shares of $0.00025 par value Common Stock outstanding.
 

Table of Contents
 
i2 TECHNOLOGIES, INC.
 
QUARTERLY REPORT ON FORM 10-Q
June 30, 2002
 
TABLE OF CONTENTS
 
PART I    FINANCIAL INFORMATION
   
Page
Item 1.     Financial Statements
     
       
3
       
4
       
5
       
6
  
15
  
37
PART II    OTHER INFORMATION
     
  
38
  
39
  
39
  
39
  
39
  
39
  
41
 

2

Table of Contents
 
PART I – FINANCIAL INFORMATION
 
Item 1.    Financial Statements
 
i2 TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS—UNAUDITED
June 30, 2002 and December 31, 2001
(In thousands, except par value)
 
    
June 30,
2002
     
December 31,
2001
  
ASSETS
              
Current assets:
                  
Cash and cash equivalents
   
$
440,267
 
   
$
538,218
 
Short-term investments, at fair value
   
 
91,564
 
   
 
187,977
 
Accounts receivable, net of allowance for doubtful accounts of $31,678 and $50,286
   
 
71,037
 
   
 
140,246
 
Deferred income taxes, prepaids and other current assets
   
 
26,289
 
   
 
95,373
 
    
  
Total current assets
   
 
629,157
 
   
 
961,814
 
Premises and equipment, net
   
 
101,068
 
   
 
129,475
 
Long-term investments, at fair value
   
 
87,589
 
   
 
28,209
 
Deferred income taxes and other assets
   
 
266
 
   
 
564,768
 
Identified intangible assets and goodwill, net
   
 
79,862
 
   
 
106,771
 
    
  
Total assets
   
$
897,942
 
   
$
1,791,037
 
    
  
LIABILITIES AND STOCKHOLDERS’ EQUITY
         
Current liabilities:
                  
Accounts payable
   
$
42,686
 
   
$
43,681
 
Accrued liabilities
   
 
151,655
 
   
 
230,037
 
Accrued compensation and related expenses
   
 
49,297
 
   
 
62,176
 
Deferred revenue
   
 
131,758
 
   
 
151,624
 
    
  
Total current liabilities
   
 
375,396
 
   
 
487,518
 
Other long-term liabilities
   
 
13
 
   
 
345
 
Long-term debt
   
 
410,930
 
   
 
410,930
 
    
  
Total liabilities
   
 
786,339
 
   
 
898,793
 
Commitments and contingencies
                  
Stockholders’ equity:
                  
Preferred stock, $0.001 par value, 5,000 shares authorized, none issued
   
 
—  
 
   
 
—  
 
Series A junior participating preferred stock, $0.001 par value, 2,000 shares authorized, none issued
   
 
—  
 
   
 
—  
 
Common stock, $0.00025 par value, 2,000,000 shares authorized, 431,057 and 424,253 shares issued and outstanding
   
 
108
 
   
 
106
 
Additional paid-in capital
   
 
10,372,026
 
   
 
10,353,602
 
Accumulated other comprehensive income (loss)
   
 
(3,138
)
   
 
3,757
 
Accumulated deficit
   
 
(10,257,393
)
   
 
(9,465,221
)
    
  
Total stockholders’ equity
   
 
111,603
 
   
 
892,244
 
    
  
Total liabilities and stockholders’ equity
   
$
897,942
 
   
$
1,791,037
 
    
  
 
See accompanying notes to condensed consolidated financial statements.

3

Table of Contents
 
i2 TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS—UNAUDITED
For the Three and Six Months Ended June 30, 2002 and 2001
(In thousands, except per share data)
 
    
Three Months Ended
June 30,
     
Six Months Ended
June 30,
  
    
2002
     
2001
     
2002
     
2001
  
Revenues:
                                    
Software licenses
   
$
26,105
 
   
$
105,826
 
   
$
84,720
 
   
$
316,958
 
Services
   
 
47,330
 
   
 
91,210
 
   
 
108,183
 
   
 
192,097
 
Maintenance
   
 
46,163
 
   
 
52,183
 
   
 
95,109
 
   
 
104,386
 
    
  
  
  
Total revenues
   
 
119,598
 
   
 
249,219
 
   
 
288,012
 
   
 
613,441
 
Costs and expenses:
                                    
Cost of revenues:
                                    
Cost of software licenses
   
 
1,327
 
   
 
18,416
 
   
 
17,584
 
   
 
40,227
 
Amortization of acquired technology
   
 
6,501
 
   
 
12,909
 
   
 
14,223
 
   
 
25,167
 
Cost of services and maintenance
   
 
59,224
 
   
 
92,909
 
   
 
119,202
 
   
 
183,658
 
Sales and marketing
   
 
62,664
 
   
 
145,977
 
   
 
125,561
 
   
 
286,606
 
Research and development
   
 
50,542
 
   
 
71,371
 
   
 
106,547
 
   
 
146,607
 
General and administrative
   
 
19,755
 
   
 
27,958
 
   
 
40,098
 
   
 
57,657
 
Amortization of intangibles
   
 
3,232
 
   
 
762,608
 
   
 
6,464
 
   
 
1,519,308
 
Write-off of acquired in-process research and development
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
4,700
 
Restructuring charges and adjustments
   
 
(2,114
)
   
 
33,000
 
   
 
(2,371
)
   
 
33,000
 
    
  
  
  
Total costs and expenses
   
 
201,131
 
   
 
1,165,148
 
   
 
427,308
 
   
 
2,296,930
 
    
  
  
  
Operating loss
   
 
(81,533
)
   
 
(915,929
)
   
 
(139,296
)
   
 
(1,683,489
)
Other income (expense), net:
                                    
Interest income
   
 
4,202
 
   
 
9,490
 
   
 
8,791
 
   
 
21,555
 
Interest expense
   
 
(5,745
)
   
 
(5,736
)
   
 
(11,566
)
   
 
(10,410
)
Realized gains (losses) on investments, net
   
 
(1,270
)
   
 
(5,681
)
   
 
4,262
 
   
 
(23,910
)
Foreign currency hedge and transaction gains (losses), net
   
 
(1,218
)
   
 
342
 
   
 
(1,612
)
   
 
(1,817
)
Other
   
 
(416
)
   
 
(685
)
   
 
(870
)
   
 
(1,225
)
    
  
  
  
Total other income (expense), net
   
 
(4,447
)
   
 
(2,270
)
   
 
(995
)
   
 
(15,807
)
    
  
  
  
Loss before income taxes
   
 
(85,980
)
   
 
(918,199
)
   
 
(140,291
)
   
 
(1,699,296
)
Income tax expense (benefit)
   
 
671,433
 
   
 
(57,325
)
   
 
651,881
 
   
 
(64,271
)
    
  
  
  
Net loss
   
$
(757,413
)
   
$
(860,874
)
   
$
(792,172
)
   
$
(1,635,025
)
    
  
  
  
Loss per common share:
                                    
Basic
   
$
(1.77
)
   
$
(2.08
)
   
$
(1.86
)
   
$
(3.99
)
    
  
  
  
Diluted
   
$
(1.77
)
   
$
(2.08
)
   
$
(1.86
)
   
$
(3.99
)
    
  
  
  
Weighted-average common shares outstanding:
                                    
Basic
   
 
428,676
 
   
 
412,937
 
   
 
426,689
 
   
 
409,517
 
Diluted
   
 
428,676
 
   
 
412,937
 
   
 
426,689
 
   
 
409,517
 
Comprehensive loss:
                                    
Net loss
   
$
(757,413