Condensed Consolidating Financials (Tables)

9 Months Ended

Sep. 30, 2014

Condensed Financial Information [Abstract]

Condensed Balance Sheet [Table Text Block]

j2 Global, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands except share and per share data)

As of
September 30, 2014
BALANCE SHEET	j2 Global, Inc.		j2 Cloud Services, Inc.		Non-guarantor Subsidiaries		Consolidating Adjustments			j2 Global Consolidated
ASSETS
Cash and cash equivalents	$	313,667	$	14,799	$	186,531	$	—		$	514,997
Short-term investments	62,647		39,767		5,004		—			107,418
Accounts receivable, net	—		11,213		63,803		—			75,016
Prepaid expenses and other current assets	1,075		16,237		7,505		—			24,817
Deferred income taxes	—		—		9,081		(1,630		)	7,451
Intercompany receivable	—		81,095		—		(81,095		)	—
Total current assets	377,389		163,111		271,924		(82,725		)	729,699
Long-term investments	54,353		7,061		1		—			61,415
Property and equipment, net	—		8,349		30,438		—			38,787
Trade names, net	—		10,273		73,920		—			84,193
Patent and patent licenses, net	—		921		25,971		—			26,892
Customer relationships, net	—		1,049		143,349		—			144,398
Goodwill	—		50,803		482,600		—			533,403
Other purchased intangibles, net	—		4,308		3,713		—			8,021
Investment in subsidiaries	231,027		442,726		8,716		(682,469		)	—
Deferred income taxes	—		6,309		3,178		(9,487		)	—
Other assets	9,684		1,488		2,024		—			13,196
Total assets	$	672,453	$	696,398	$	1,045,834	$	(774,681	)	$	1,640,004
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	7,486	$	23,100	$	40,195	$	—		$	70,781
Income taxes payable	—		398		789		—			1,187
Deferred revenue - short term	—		23,312		34,087		—			57,399
Deferred income taxes	856		1,365		—		(1,630		)	591

Other current liabilities	—			—		540			—			540
Intercompany payable	42,256			—		38,839			(81,095		)	—
Total current liabilities	50,598			48,175		114,450			(82,725		)	130,498
Long term debt	345,409			246,055		—			—			591,464
Liability for uncertain tax positions	—			35,793		—			—			35,793
Deferred income taxes	24,332			—		46,865			(9,487		)	61,710
Deferred revenue - long term	—			8,870		2,075			—			10,945
Other long-term liabilities	—			881		5,152			—			6,033
Total liabilities	420,339			339,774		168,542			(92,212		)	836,443
Common stock, $0.01 par value.	469			—		—			—			469
Additional paid-in capital - common	270,857			231,027		421,401			(652,428		)	270,857
Retained earnings	(19,276		)	120,214		464,670			(30,041		)	535,567
Accumulated other comprehensive loss	64			5,383		(8,779		)	—			(3,332		)
Total j2 Global Inc., stockholders’ equity	252,114			356,624		877,292			(682,469		)	803,561
Total stockholders’ equity	252,114			356,624		877,292			(682,469		)	803,561
Total liabilities and stockholders’ equity	$	672,453		$	696,398	$	1,045,834		$	(774,681	)	$	1,640,004

j2 Global, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands except share and per share data)

As of
December 31, 2013
BALANCE SHEET	j2 Global, Inc.		j2 Cloud Services, Inc.		Non-guarantor Subsidiaries		Consolidating Adjustments			j2 Global Consolidated
ASSETS
Cash and cash equivalents	$	—	$	34,406	$	173,395	$	—		$	207,801
Short-term investments	—		67,848		22,941		—			90,789
Accounts receivable, net	—		11,541		55,704		—			67,245
Prepaid expenses and other current assets	—		16,662		3,402		—			20,064
Deferred income taxes	—		—		3,126		—			3,126
Intercompany receivable	—		4,433		—		(4,433		)	—
Total current assets	—		134,890		258,568		(4,433		)	389,025
Long-term investments	—		47,351		—		—			47,351
Property and equipment, net	—		11,232		19,968		—			31,200
Trade names, net	—		12,119		70,989		—			83,108
Patent and patent licenses, net	—		15,107		13,423		—			28,530
Customer relationships, net	—		6,125		94,855		—			100,980
Goodwill	—		86,025		371,397		—			457,422
Other purchased intangibles, net	—		5,306		5,609		—			10,915
Investment in subsidiaries	—		357,057		—		(357,057		)	—
Deferred income taxes	—		202		1,643		—			1,845
Other assets	—		1,576		1,837		—			3,413
Total assets	$	—	$	676,990	$	838,289	$	(361,490	)	$	1,153,789
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	—	$	29,419	$	40,151	$	—		$	69,570
Income taxes payable	—		—		1,569		—			1,569
Deferred revenue - short term	—		23,762		12,564		—			36,326
Liability for uncertain tax positions	—		5,532		3		—			5,535
Deferred income taxes	—		906		986		—			1,892
Intercompany payable	—		—		4,433		(4,433		)	—
Total current liabilities	—		59,619		59,706		(4,433		)	114,892
Long term debt	—		245,670		—		—			245,670

Liability for uncertain tax positions	—		38,329		—			—			38,329
Deferred income taxes	—		—		35,833			—			35,833
Deferred revenue - long term	—		10,753		436			—			11,189
Other long-term liabilities	—		989		469			—			1,458
Total liabilities	—		355,360		96,444			(4,433		)	447,371
Common stock, $0.01 par value	—		461		34			(34		)	461
Additional paid-in capital - common	—		216,871		326,984			(326,983		)	216,872
Retained earnings	—		97,754		417,136			(30,040		)	484,850
Accumulated other comprehensive loss	—		6,544		(2,309		)	—			4,235
Total j2 Global Inc., stockholders’ equity	—		321,630		741,845			(357,057		)	706,418
Noncontrolling interests	—		—		—			—			—
Total stockholders’ equity	—		321,630		741,845			(357,057		)	706,418
Total liabilities and stockholders’ equity	$	—	$	676,990	$	838,289		$	(361,490	)	$	1,153,789

Condensed Income Statement [Table Text Block]

j2 Global, Inc.

Condensed Consolidated Statements of Income

(Unaudited, in thousands except share and per share data)

Nine Months Ended
September 30, 2014
	j2 Global, Inc.			j2 Cloud Services, Inc		Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Revenues:
Total revenues	$	—		$	169,467	$	293,530		$	(31,111	)	$	431,886
Cost of revenues	—			35,729		72,191			(30,929		)	76,991
Gross profit	—			133,738		221,339			(182		)	354,895
Operating expenses:
Sales and marketing	—			27,148		78,369			(182		)	105,335
Research, development and engineering	—			10,411		12,040			—			22,451
General and administrative	3,463			24,004		66,742			—			94,209
Total operating expenses	3,463			61,563		157,151			(182		)	221,995
Operating income	(3,463		)	72,175		64,188			—			132,900
Interest expense (income), net	5,786			15,314		(347		)	—			20,753
Other expense (income), net	(2		)	6		(258		)	—			(254		)
Income before income taxes	(9,247		)	56,855		64,793			—			112,401
Income tax expense	(3,537		)	4,783		18,582			—			19,828
Net income attributable to j2 Global, Inc. common shareholders	$	(5,710	)	$	52,072	$	46,211		$	—		$	92,573

j2 Global, Inc.

Condensed Consolidated Statements of Income

(Unaudited, in thousands except share and per share data)

Nine Months Ended
September 30, 2013
	j2 Global, Inc.		j2 Cloud Services, Inc			Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Revenues:
Total revenues	$	—	$	199,696		$	228,681		$	(45,611	)	$	382,766
Cost of revenues	—		63,286			46,701			(45,272		)	64,715
Gross profit	—		136,410			181,980			(339		)	318,051
Operating expenses:
Sales and marketing	—		31,849			68,128			(339		)	99,638
Research, development and engineering	—		9,375			9,759			—			19,134
General and administrative	—		27,693			46,684			—			74,377
Total operating expenses	—		68,917			124,571			(339		)	193,149
Operating income	—		67,493			57,409			—			124,902
Interest expense (income), net	—		7,496			7,213			—			14,709
Other expense (income), net	—		(166		)	(434		)	—			(600		)
Income before income taxes	—		60,163			50,630			—			110,793
Income tax expense	—		17,478			6,950			—			24,428
Net income	$	—	$	42,685		$	43,680		$	—		$	86,365
Less net loss attributable to noncontrolling interest	—		—			—			(403		)	(403		)
Net income attributable to j2 Global, Inc. common shareholders	$	—	$	42,685		$	43,680		$	403		$	86,768

j2 Global, Inc.

Condensed Consolidated Statements of Income

(Unaudited, in thousands except share and per share data)

Three Months Ended
September 30, 2013
	j2 Global, Inc.		j2 Cloud Services, Inc			Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Revenues:
Total revenues	$	—	$	70,126		$	71,865		$	(14,203	)	$	127,788
Cost of revenues	—		21,378			14,501			(14,078		)	21,801
Gross profit	—		48,748			57,364			(125		)	105,987
Operating expenses:
Sales and marketing	—		10,577			24,335			(125		)	34,787
Research, development and engineering	—		3,323			2,677			—			6,000
General and administrative	—		9,238			16,654			—			25,892
Total operating expenses	—		23,138			43,666			(125		)	66,679
Operating income	—		25,610			13,698			—			39,308
Interest expense (income), net	—		2,263			2,709			—			4,972
Other expense (income), net	—		(67		)	(329		)	—			(396		)
Income before income taxes	—		23,414			11,318			—			34,732
Income tax expense	—		3,101			4,004			—			7,105
Net income	$	—	$	20,313		$	7,314		$	—		$	27,627
Less net loss attributable to noncontrolling interest	—		—			—			(179		)	(179		)
Net income attributable to j2 Global, Inc. common shareholders	$	—	$	20,313		$	7,314		$	179		$	27,806

j2 Global, Inc.

Condensed Consolidated Statements of Income

(Unaudited, in thousands except share and per share data)

Three Months Ended
September 30, 2014
	j2 Global, Inc.			j2 Cloud Services, Inc			Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Revenues:
Total revenues	$	—		$	52,960		$	90,854		$	9,204		$	153,018
Cost of revenues	—			(3,275		)	22,060			9,259			28,044
Gross profit	—			56,235			68,794			(55		)	124,974
Operating expenses:
Sales and marketing	—			9,168			27,934			(55		)	37,047
Research, development and engineering	—			3,320			4,317			—			7,637
General and administrative	3,063			6,789			23,960			—			33,812
Total operating expenses	3,063			19,277			56,211			(55		)	78,496
Operating income	(3,063		)	36,958			12,583			—			46,478
Interest expense (income), net	5,136			5,116			(129		)	—			10,123
Other expense (income), net	(2		)	78			175			—			251
Income before income taxes	(8,197		)	31,764			12,537			—			36,104
Income tax expense	(3,158		)	3,458			7,045			—			7,345
Net income attributable to j2 Global, Inc. common shareholders	$	(5,039	)	$	28,306		$	5,492		$	—		$	28,759

Condensed Comprehensive Income Statement [Table Text Block]

j2 Global, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited, in thousands except share and per share data)

Three Months Ended
September 30, 2014
	j2 Global, Inc.			j2 Cloud Services, Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments		j2 Global Consolidated
Net income	$	(5,039	)	$	28,306		$	5,492		$	—	$	28,759
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax expense (benefit)	—			2,300			(9,277		)	—		(6,977		)
Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit)	64			(3,068		)	(2		)	—		(3,006		)
Other comprehensive income (loss), net of tax	64			(768		)	(9,279		)	—		(9,983		)
Comprehensive income attributable to j2 Global, Inc.	$	(4,975	)	$	27,538		$	(3,787	)	$	—	$	18,776

j2 Global, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited, in thousands except share and per share data)

Nine Months Ended
September 30, 2014
	j2 Global, Inc.			j2 Cloud Services, Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments		j2 Global Consolidated
Net income	$	(5,710	)	$	52,072		$	46,211		$	—	$	92,573
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax expense (benefit)	—			1,644			(6,450		)	—		(4,806		)
Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit)	64			(2,834		)	9			—		(2,761		)
Other comprehensive income (loss), net of tax	64			(1,190		)	(6,441		)	—		(7,567		)
Comprehensive income attributable to j2 Global, Inc.	$	(5,646	)	$	50,882		$	39,770		$	—	$	85,006

j2 Global, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited, in thousands)

Three Months Ended
September 30, 2013
	j2 Global, Inc.		j2 Cloud Services, Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Net income	$	—	$	20,313		$	7,314		$	—		$	27,627
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax expense (benefit)	—		(586		)	2,176			—			1,590
Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit)	—		4,247			12			—			4,259
Other comprehensive income (loss), net of tax	—		3,661			2,188			—			5,849
Comprehensive income	—		23,974			9,502			—			33,476
Net loss attributable to noncontrolling interest	—		—			—			(179		)	(179		)
Foreign currency translation adjustment attributable to noncontrolling interest, net of tax expense (benefit)	—		—			(13		)	—			(13		)
Comprehensive income attributable to j2 Global, Inc.	$	—	$	23,974		$	9,515		$	179		$	33,668

j2 Global, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited, in thousands)

Nine Months Ended
September 30, 2013
	j2 Global, Inc.		j2 Cloud Services, Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Net income	$	—	$	42,685		$	43,680		$	—		$	86,365
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax expense (benefit)	—		(159		)	(367		)	—			(526		)
Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit)	—		5,767			3,493			—			9,260
Other comprehensive income (loss), net of tax	—		5,608			3,126			—			8,734
Comprehensive income	—		48,293			46,806			—			95,099
Net loss attributable to noncontrolling interest	—		—			—			(403		)	(403		)
Foreign currency translation adjustment attributable to noncontrolling interest, net of tax expense (benefit)	—		—			(35		)	—			(35		)
Comprehensive income attributable to j2 Global, Inc.	$	—	$	48,293		$	46,841		$	403		$	95,537

Condensed Cash Flow Statement [Table Text Block]

j2 Global, Inc.

Condensed Consolidated Statement of Cash Flows

(Unaudited, in thousands)

Nine Months Ended
September 30, 2014
	j2 Global, Inc.			j2 Cloud Services, Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments		j2 Global Consolidated
Cash flows from operating activities:
Net income	$	(5,710	)	$	52,072		$	46,211		$	—	$	92,573
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	—			4,950			38,357			—		43,307
Amortization of discount or premium of investments	142			677			164			—		983
Amortization of financing costs and discounts	2,266			562			—			—		2,828
Share-based compensation	2,191			4,514			(167		)	—		6,538
Excess tax benefits from share-based compensation	(1,925		)	(4,802		)	(1		)	—		(6,728		)
Provision for doubtful accounts	—			1,395			1,883			—		3,278
Deferred income taxes	4,614			(2,657		)	(4,911		)	—		(2,954		)
(Gain) loss on sale of available-for-sale investments	(2		)	(18		)	(49		)	—		(69		)
Decrease (increase) in:
Accounts receivable	—			(1,894		)	3,161			—		1,267
Prepaid expenses and other current assets	(1,075		)	(2,197		)	(852		)	—		(4,124		)
Other assets	(896		)	(83		)	851			—		(128		)
(Decrease) increase in:
Accounts payable and accrued expenses	9,915			(4,119		)	(8,745		)	—		(2,949		)
Income taxes payable	1,734			2,822			3,009			—		7,565
Deferred revenue	—			(942		)	127			—		(815		)
Liability for uncertain tax positions	—			(8,069		)	(2		)	—		(8,071		)
Other	—			(108		)	(272		)	—		(380		)
Net cash provided by operating activities	11,254			42,103			78,764			—		132,121
Cash flows from investing activities:
Maturity of certificates of deposit	—			8,210			6,310			—		14,520
Purchase of certificates of deposit	—			—			—			—		—
Sales of available-for-sale investments	2,005			46,863			11,588			—		60,456

Purchase of available-for-sale investments	(58,591		)	(54,393		)	1			—			(112,983		)
Purchases of property and equipment	—			(925		)	(6,830		)	—			(7,755		)
Proceeds from sale of assets	—			—			608			—			608
Acquisition of businesses, net of cash received	—			—			(118,238		)	—			(118,238		)
Purchases of intangible assets	—			(2,871		)	(1,935		)	—			(4,806		)
Investment in subsidiaries	—			(23,822		)	—			23,822			—
Net cash used in investing activities	(56,586		)	(26,938		)	(108,496		)	23,822			(168,198		)
Cash flows from financing activities:
Issuance of long-term debt	402,500			—			—			—			402,500
Debt issuance costs	(12,069		)	—			542			—			(11,527		)
Repurchases of common stock and restricted stock	(739		)	(4,733		)	(1		)	—			(5,473		)
Issuance of common stock under employee stock purchase plan	76			123			—			—			199
Exercise of stock options	1,193			5,248			—			—			6,441
Dividends paid	(13,267		)	(25,302		)	22			—			(38,547		)
Excess tax benefits from share-based compensation	1,925			4,803			—			—			6,728
Deferred payments for acquisitions	—			—			(14,316		)	—			(14,316		)
Other	—			(54		)	(711		)	—			(765		)
Intercompany	(20,620		)	(14,861		)	59,303			(23,822		)	—
Net cash provided by financing activities	358,999			(34,776		)	44,839			(23,822		)	345,240
Effect of exchange rate changes on cash and cash equivalents	—			4			(1,971		)	—			(1,967		)
Net change in cash and cash equivalents	313,667			(19,607		)	13,136			—			307,196
Cash and cash equivalents at beginning of period	—			34,406			173,395			—			207,801
Cash and cash equivalents at end of period	$	313,667		$	14,799		$	186,531		$	—		$	514,997

j2 Global, Inc.

Condensed Consolidated Statement of Cash Flows

(Unaudited, in thousands)

Nine Months Ended
September 30, 2013
	j2 Global, Inc.		j2 Cloud Services, Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments		j2 Global Consolidated
Cash flows from operating activities:
Net income	$	—	$	42,685		$	43,680		$	—	$	86,365
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	—		6,659			21,765			—		28,424
Amortization of discount or premium of investments	—		948			375			—		1,323
Amortization of financing costs and discounts	—		456			—			—		456
Share-based compensation	—		7,108			—			—		7,108
Excess tax benefits from share-based compensation	—		(3,171		)	—			—		(3,171		)
Provision for doubtful accounts	—		1,016			1,549			—		2,565
Deferred income taxes	—		451			21			—		472
Loss on sale of available-for-sale investment	—		—			103			—		103
Decrease (increase) in:
Accounts receivable	—		(1,514		)	(5,981		)	—		(7,495		)
Prepaid expenses and other current assets	—		1,227			(282		)	—		945
Other assets	—		(7		)	189			—		182
(Decrease) increase in:
Accounts payable and accrued expenses	—		(9,583		)	13,618			—		4,035
Income taxes payable	—		(1,235		)	(2,051		)	—		(3,286		)
Deferred revenue	—		14,331			(1,282		)	—		13,049
Liability for uncertain tax positions	—		3,865			2			—		3,867
Other	—		(44		)	(18		)	—		(62		)
Net cash provided by operating activities	—		63,192			71,688			—		134,880
Cash flows from investing activities:
Maturity of certificates of deposit	—		30,270			12,345			—		42,615
Purchase of certificates of deposit	—		(16,375		)	(5,696		)	—		(22,071		)
Sales of available-for-sale investments	—		72,384			10,505			—		82,889

Purchase of available-for-sale investments	—		(119,049		)	(20,906		)	—			(139,955		)
Purchases of property and equipment	—		(4,134		)	(6,982		)	—			(11,116		)
Proceeds from sale of assets	—		1			—			—			1
Acquisition of businesses, net of cash received	—		(2,305		)	(79,261		)	—			(81,566		)
Purchases of intangible assets	—		(1,828		)	(956		)	—			(2,784		)
Investment in subsidiaries	—		(12,498		)	—			12,498			—
Other	—		3,281			(3,281		)	—			—
Net cash used in investing activities	—		(50,253		)	(94,232		)	12,498			(131,987		)
Cash flows from financing activities:
Debt issuance costs	—		(47		)	—			—			(47		)
Repurchases of common stock and restricted stock	—		(4,514		)	1			—			(4,513		)
Issuance of common stock under employee stock purchase plan	—		161			—			—			161
Exercise of stock options	—		13,515			—			—			13,515
Dividends paid	—		(33,267		)	—			—			(33,267		)
Excess tax benefits from share-based compensation	—		3,171			—			—			3,171
Other	—		—			(171		)	—			(171		)
Intercompany	—		(18,120		)	30,618			(12,498		)	—
Net cash used in financing activities	—		(39,101		)	30,448			(12,498		)	(21,151		)
Effect of exchange rate changes on cash and cash equivalents	—		(23		)	(1,218		)	—			(1,241		)
Net change in cash and cash equivalents	—		(26,185		)	6,686			—			(19,499		)
Cash and cash equivalents at beginning of period	—		76,712			141,968			—			218,680
Cash and cash equivalents at end of period	$	—	$	50,527		$	148,654		$	—		$	199,181