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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 September 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
  
(I.R.S. Employer Identification No.)
incorporation or organization)
    
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 x No ¨
 
As of November 5, 2002 the Registrant had 432,824,073 shares of $0.00025 par value Common Stock outstanding.
 

Table of Contents
i2 TECHNOLOGIES, INC.
 
QUARTERLY REPORT ON FORM 10-Q
September 30, 2002
 
TABLE OF CONTENTS
 
PART I    FINANCIAL INFORMATION
   
Page
Item 1.
   
Financial Statements
     
       
3
       
4
       
5
       
6
Item 2.
      
21
Item 3.
      
48
Item 4.
      
48
PART II    OTHER INFORMATION
     
Item 1.
      
48
Item 2.
      
49
Item 3.
      
49
Item 4.
      
49
Item 5.
      
49
Item 6.
      
51
  
52

2

Table of Contents
 
PART I – FINANCIAL INFORMATION
 
Item 1.    Financial Statements
 
i2 TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS—UNAUDITED
September 30, 2002 and December 31, 2001
(In thousands, except par value)
 
    
September 30, 2002
     
December 31, 2001
  
ASSETS
                  
Current assets:
                  
Cash and cash equivalents
   
$
419,411
 
   
$
538,218
 
Short-term investments, at fair value
   
 
64,950
 
   
 
187,977
 
Accounts receivable, net of allowance for doubtful accounts of $28,879 and $50,286
   
 
52,295
 
   
 
140,246
 
Deferred income taxes, prepaids and other current assets
   
 
25,168
 
   
 
95,373
 
    
  
Total current assets
   
 
561,824
 
   
 
961,814
 
Premises and equipment, net
   
 
92,322
 
   
 
129,475
 
Long-term investments, at fair value
   
 
42,311
 
   
 
28,209
 
Deferred income taxes and other assets
   
 
265
 
   
 
564,768
 
Intangible assets and goodwill, net
   
 
26,019
 
   
 
106,771
 
    
  
Total assets
   
$
722,741
 
   
$
1,791,037
 
    
  
LIABILITIES AND STOCKHOLDERS’ EQUITY
                  
Current liabilities:
                  
Accounts payable
   
$
32,933
 
   
$
43,681
 
Accrued liabilities
   
 
200,535
 
   
 
230,037
 
Accrued compensation and related expenses
   
 
41,788
 
   
 
62,176
 
Current portion of long-term debt
   
 
60,930
 
   
 
—  
 
Deferred revenue
   
 
123,697
 
   
 
151,624
 
    
  
Total current liabilities
   
 
459,883
 
   
 
487,518
 
Other long-term liabilities
   
 
13
 
   
 
345
 
Long-term debt
   
 
350,000
 
   
 
410,930
 
    
  
Total liabilities
   
 
809,896
 
   
 
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, 431,624 and 424,253 shares issued and outstanding
   
 
108
 
   
 
106
 
Additional paid-in capital
   
 
10,372,319
 
   
 
10,353,602
 
Accumulated other comprehensive income (loss)
   
 
(3,079
)
   
 
3,757
 
Accumulated deficit
   
 
(10,456,503
)
   
 
(9,465,221
)
    
  
Net stockholders’ equity
   
 
(87,155
)
   
 
892,244
 
    
  
Total liabilities and stockholders’ equity
   
$
722,741
 
   
$
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 Nine Months Ended September 30, 2002 and 2001
(In thousands, except per share data)
 
    
Three Months Ended
September 30,
     
Nine Months Ended
September 30,
  
    
2002
     
2001
     
2002
     
2001
  
Revenues:
                                    
Software licenses
   
$
30,376
 
   
$
67,997
 
   
$
115,096
 
   
$
384,955
 
Services
   
 
43,348
 
   
 
82,105
 
   
 
152,995
 
   
 
274,202
 
Maintenance
   
 
40,895
 
   
 
50,953
 
   
 
134,540
 
   
 
155,339
 
    
  
  
  
Total revenues
   
 
114,619
 
   
 
201,055
 
   
 
402,631
 
   
 
814,496
 
Costs and expenses:
                                    
Cost of revenues:
                                    
Cost of software licenses
   
 
3,093
 
   
 
11,693
 
   
 
20,677
 
   
 
51,920
 
Amortization of acquired technology
   
 
4,061
 
   
 
13,757
 
   
 
18,284
 
   
 
38,924
 
Cost of services and maintenance
   
 
54,499
 
   
 
75,337
 
   
 
173,701
 
   
 
258,995
 
Sales and marketing
   
 
40,129
 
   
 
106,540
 
   
 
165,690
 
   
 
393,146
 
Research and development
   
 
47,752
 
   
 
69,675
 
   
 
154,299
 
   
 
216,282
 
General and administrative
   
 
16,431
 
   
 
26,087
 
   
 
56,529
 
   
 
83,744
 
Amortization of intangibles
   
 
3,186
 
   
 
763,630
 
   
 
9,650
 
   
 
2,282,938
 
Write-off of acquired in-process research and development
   
 
—  
 
   
 
8,000
 
   
 
—  
 
   
 
12,700
 
Impairment of intangibles
   
 
46,233
 
   
 
4,740,519
 
   
 
46,233
 
   
 
4,740,519
 
Restructuring charges and adjustments
   
 
89,390
 
   
 
22,465
 
   
 
87,019
 
   
 
55,465
 
    
  
  
  
Total costs and expenses
   
 
304,774
 
   
 
5,837,703
 
   
 
732,082
 
   
 
8,134,633
 
    
  
  
  
Operating loss
   
 
(190,155
)
   
 
(5,636,648
)
   
 
(329,451
)
   
 
(7,320,137
)
Other income (expense), net:
                                    
Interest income
   
 
2,918
 
   
 
8,356
 
   
 
11,708
 
   
 
29,911
 
Interest expense
   
 
(5,810
)
   
 
(5,869
)
   
 
(17,376
)
   
 
(16,279
)
Realized gains (losses) on investments, net
   
 
(2,486
)
   
 
(45,169
)
   
 
1,776
 
   
 
(69,079
)
Foreign currency hedge and transaction gains (losses), net
   
 
(901
)
   
 
(394
)
   
 
(2,513
)
   
 
(2,211
)
Other
   
 
(551
)
   
 
(630
)
   
 
(1,420
)
   
 
(1,855
)
    
  
  
  
Total other income (expense), net
   
 
(6,830
)
   
 
(43,706
)
   
 
(7,825
)
   
 
(59,513
)
    
  
  
  
Loss before income taxes
   
 
(196,985
)
   
 
(5,680,354
)
   
 
(337,276
)
   
 
(7,379,650
)
Income tax expense (benefit)
   
 
2,125
 
   
 
(154,025
)
   
 
654,006
 
   
 
(218,296
)
    
  
  
  
Net loss
   
$
(199,110
)
   
$
(5,526,329
)
   
$
(991,282
)
   
$
(7,161,354
)
    
  
  
  
Loss per common share:
                                    
Basic
   
$
(0.46
)
   
$
(13.25
)
   
$
(2.32
)
   
$
(17.41
)
    
  
  
  
Diluted
   
$
(0.46
)
   
$
(13.25
)
   
$
(2.32
)
   
$
(17.41
)