Segment and Geographic Information

6 Months Ended

Jun. 30, 2016

Segments, Geographical Areas [Abstract]

Segment and Geographic Information

Segment Information

The Company's business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. j2 Global's reportable business segments are: (i) Business Cloud Services and (ii) Digital Media.

Information on reportable segments and reconciliation to consolidated income from operations is presented below (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Revenues by segment:
Business Cloud Services	$	142,460		$	125,188		$	280,599		$	243,249
Digital Media	69,385			50,907			131,794			94,164
Elimination of inter-segment revenues	(45		)	(57		)	(91		)	(122		)
Total revenues	211,800			176,038			412,302			337,291
Direct costs by segment(1):
Business Cloud Services	89,987			72,858			177,849			143,901
Digital Media	57,835			40,986			112,511			80,075
Direct costs by segment(1):	147,822			113,844			290,360			223,976
Business Cloud Services operating income(2)	52,473			52,330			102,750			99,348
Digital Media operating income	11,550			9,921			19,283			14,089
Segment operating income	64,023			62,251			122,033			113,437
Global operating costs(2)(3)	5,078			12,185			9,750			22,841
Income from operations	$	58,945		$	50,066		$	112,283		$	90,596
(1) Direct costs for each segment include cost of revenues and other operating expenses that are directly attributable to the segment, such as employee compensation expense, local sales and marketing expenses, engineering and network operations expense, depreciation and amortization and other administrative expenses.
(2) During 2016, the Company determined certain personnel and third-party costs were directly attributable to a particular segment. As a result, these costs were no longer classified as Global operating costs in 2016. If such costs in the prior period were classified consistent with the 2016 presentation, the operating income for the Business Cloud Services segment would have been $44.7 million and $86.7 million for the three and six months ended June 30, 2015, respectively. Global operating costs would have been $4.6 million and $10.2 million for the three and six month ended June 30, 2015, respectively.
(3) Global operating costs include general and administrative and other corporate expenses that are managed on a global basis and that are not directly attributable to any particular segment.

	June 30, 2016		December 31, 2015
Assets:
Business Cloud Services	$	1,067,436	$	1,017,676
Digital Media	403,549		427,647
Total assets from reportable segments	1,470,985		1,445,323
Corporate	322,166		338,396
Total assets	$	1,793,151	$	1,783,719
	Six Months Ended June 30,
	2016		2015
Capital expenditures:
Business Cloud Services	$	2,087	$	3,477
Digital Media	7,099		3,296
Total from reportable segments	9,186		6,773
Corporate	—		182
Total capital expenditures	$	9,186	$	6,955

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Depreciation and amortization:
Business Cloud Services	$	21,251	$	14,758	$	38,752	$	28,772
Digital Media	9,808		6,944		19,481		14,024
Total from reportable segments	31,059		21,702		58,233		42,796
Corporate	—		192		—		385
Total depreciation and amortization	$	31,059	$	21,894	$	58,233	$	43,181

The Company's Business Cloud Services segment consists of several services which have similar economic characteristics, including the nature of the services and their production processes, the type of customers, as well as the methods used to distribute these services.

j2 Global groups its Business Cloud services into three main categories based on the similarities of these services: Cloud Connect, Other Cloud Services and Intellectual Property. Cloud Connect consists of our Fax and Voice services. Other Cloud Services consist of Backup, Email Security, Email Marketing and Web Hosting.

	Three Months Ended June 30, 2016							Six Months Ended June 30, 2016
	Revenue		Depreciation and Amortization		Operating Income(4)			Revenue		Depreciation and Amortization		Operating Income(4)
Cloud Connect (Fax/Voice)	$	92,858	$	7,575	$	42,574		$	183,102	$	13,145	$	83,094
Cloud Services	48,509		12,184		10,650			95,228		22,501		21,624
Intellectual Property	1,093		1,492		(751		)	2,269		3,106		(1,968		)
Total	$	142,460	$	21,251	$	52,473		$	280,599	$	38,752	$	102,750

	Three Months Ended June 30, 2015							Six Months Ended June 30, 2015
	Revenue		Depreciation and Amortization		Operating Income(4)			Revenue		Depreciation and Amortization		Operating Income(4)
Cloud Connect (Fax/Voice)	$	89,273	$	5,709	$	45,549		$	175,477	$	10,979	$	88,563
Cloud Services	34,632		7,155		7,794			64,231		13,779		12,349
Intellectual Property	1,283		1,894		(1,013		)	3,541		4,014		(1,564		)
Total	$	125,188	$	14,758	$	52,330		$	243,249	$	28,772	$	99,348
(4) During 2016, the Company determined certain personnel and third-party costs were directly attributable to a particular segment. As a result, these costs were no longer classified as Global operating costs in 2016. If such costs in the prior period were classified consistent with the 2016 presentation, the operating income for Cloud Connect and Other Cloud Services would have been $39.4 million and $6.3 million, respectively, for the three months ended June 30, 2015 and $79.0 million and $9.2 million, respectively, for the six months ended June 30, 2015.

j2 Global maintains operations in the U.S., Canada, Ireland, Japan and other countries. Geographic information about the U.S. and all other countries for the reporting periods is presented below. Such information attributes revenues based on jurisdictions where revenues are reported (in thousands).

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Revenues:
United States	$	144,475	$	121,017	$	282,113	$	230,049
Canada	18,900		18,947		37,266		37,086
Ireland	18,595		10,820		36,449		20,755
All other countries	29,830		25,254		56,474		49,401
	$	211,800	$	176,038	$	412,302	$	337,291

	June 30, 2016		December 31, 2015
Long-lived assets:
United States	$	298,139	$	271,796
All other countries	138,971		105,477
Total	$	437,110	$	377,273