TEXT-S&P revises JDA Software outlook to stable from negative

Overview
-- U.S. software applications provider JDA Software Group filed its
Annual Report for the year ended Dec. 31, 2011, is current on its 2012
Quarterly reports, and is in compliance with applicable filing requirements.
-- The reports contain restated selected financial data for the years
2007-2010. The restated results reflect a change in the timing of recorded
revenue over the indicated periods.
-- We are revising the outlook on JDA to stable from negative and are
affirming our 'BB-' corporate credit rating and senior unsecured ratings on
the company.
-- The stable rating outlook incorporates our expectation that leverage
will be managed at 4x or below over time..

Rating Action
On Aug. 16, 2012, Standard & Poor's Ratings Services revised its outlook on
Scottsdale, Ariz.-based JDA Software Group Inc. to stable from
negative. We also affirmed our ratings on JDA, including our 'BB-' corporate
credit rating and our 'BB-' senior unsecured rating. The '3' recovery rating on
the senior unsecured debt remains unchanged.

The internal investigation led by JDA's audit committee found no indication of
fraud or intentional wrongdoing. Additionally, the internal investigation did
not reveal any issues with the existence of the recorded revenue or any impact
to actual cash received or reported cash balances as of December 2011, 2010,
and 2009. With its filings, JDA believes it is in compliance with applicable
requirements.

Rationale
The ratings on JDA reflect its second-tier presence in a highly competitive
and consolidating industry and its niche product offerings. A solid base of
recurring revenues and currently moderate leverage for the rating partially
offset these fundamental business characteristics.

JDA is a provider of software applications offering a comprehensive suite of
products, specializing in enterprise resource planning (ERP),
supply-and-demand chain optimization, and analytics.

The acquisition of I2 Technologies Inc. expanded JDA's customer base and
product capabilities into the discrete manufacturing market, provided
additional scale, and should help JDA realize cost synergies through higher
utilization and rationalization of the combined sales, product development,
and service organizations. Revenues for 2011 were about $700 million with more
than one-third of that amount from recurring annual service and subscription
fees. Since the rating incorporates Standard & Poor's expectation for
continued acquisitive growth, the company's established track record of
integrating operations helps temper acquisition-related risk concerns.

Oracle Corp. and SAP AG are the foremost players in the market for core ERP
software and services. They hold the majority share of the market, while the
remaining ERP marketplace is highly fragmented. Oracle and SAP derive much of
their business from large companies (greater than $5 billion in revenues). JDA
primarily focuses on smaller, midsize companies ($100 million to $5 billion in
revenues), a less penetrated market with higher growth prospects.

JDA's "fair" business risk reflects its high customer retention rates, along
with the fact that roughly 40% of revenues derive from maintenance contracts,
support good revenue visibility, and enhance JDA's business position. Despite
JDA's good market position in its niche, the company still faces competitive
pressures from the leading players, which also participate in this segment and
possess greater financial resources and technical capabilities.

JDA's "significant" financial risk profile reflects EBITDA margins in the
mid-20% area, largely because of increased scale and cost-reduction efforts.
JDA generated moderate free operating cash flow (FOCF; about $92 million in
2011), helped, in part, by low capital expenditures (less than 3% of revenues)
and minimal working capital requirements. Total debt to EBITDA is in the2x
area.

The company's financial flexibility has improved following the favorable
settlement and final resolution of a lawsuit filed by a customer.

JDA received a notice from the SEC requesting information related to revenue
recognition and other accounting and financial reporting matters for certain
past fiscal years.

Liquidity
The company has "adequate" liquidity and can cover its needs for the
foreseeable future, even if EBITDA declines moderately. In addition to good
free cash flow generation, other liquidity sources consist of cash of $366
million as of June 30, 2012), and currently full availability under its $100
million revolving credit facility. The company is in compliance with all debt
covenants.

Outlook
The stable rating outlook incorporates our expectation that leverage will be
managed at 4x or below over time. We could, however, lower the rating if the
company has issues integrating acquired operations, shifts to a more
aggressive growth strategy, or implements shareholder-friendly initiatives
leading to sustained leverage above 4.5x.

A possible upgrade is not likely over the near term. We will monitor
developments regarding the ongoing SEC inquiry and progress of remediating its
material weakness in its internal control of financial reporting.

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-- Criteria Methodology: Business Risk/Financial Risk Matrix Expanded,
May 27, 2009
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008

Ratings List

Ratings Affirmed; Outlook Action
To From
JDA Software Group Inc.
Corporate Credit Rating BB-/Stable/-- BB-/Negative/--

Ratings Affirmed; Recovery Rating Unchanged

JDA Software Group Inc.
Senior Unsecured BB-
Recovery Rating 3

Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left
column.