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Discontinued Operations and Disposition of Businesses
 12 Months Ended
Dec. 31, 2021
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations and Disposition of Businesses Discontinued Operations and Disposition of Businesses
On October 7, 2021, the Former Parent transferred certain assets and liabilities associated with its Cloud Fax business to Consensus, including the equity interests in J2 Cloud Services, in exchange for approximately $259.1 million in cash, an asset related to the $500 million aggregate principal amount of the 6.5% Senior Notes due 2028, and the return of the assets and liabilities related to the non-fax business back to Ziff Davis. The transfer to the Former Parent of the non-fax business met the accounting requirements to be presented as a discontinued operation once the Separation was completed as the disposition of the non-fax business constitutes a strategic shift that will have a major effect on the Company’s operations relative to the historical operations of J2 Cloud Services.

Accordingly, the consolidated financial statements reflect the results of the non-fax business as a discontinued operation for all periods presented. The Consolidated Balance Sheets and Consolidated Statements of Income report discontinued operations separate from continuing operations. The Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows (including Note 18 - Supplemental Cash Flow Information) and Consolidated Statements of Stockholders’ Equity combine continuing and discontinued operations. The Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows and Consolidated Statements of Stockholders’ Equity include the non-fax business activity through October 7, 2021.
The following table summarizes the major classes of assets and liabilities of discontinued operations that were included in the Company’s Consolidated Balance Sheet as of December 31, 2020 (in thousands):
December 31,
2020
ASSETS
Cash and cash equivalents$61,979 
Accounts receivable, net of allowances $4,322
26,174 
Prepaid expenses and other current assets
26,094 
Total current assets, discontinued operations
114,247 
Property and equipment, net
34,028 
Operating lease right-of-use assets30,230 
Intangibles, net
137,112 
Goodwill
582,067 
Notes receivable from related parties, noncurrent8,834 
Deferred income taxes, noncurrent9,772 
Other assets
3,525 
Total noncurrent assets, discontinued operations
805,568 
Total assets, discontinued operations$919,815 
LIABILITIES
Accounts payable and accrued expenses$48,243 
Income taxes payable, current8,224 
Deferred revenue, current
79,277 
Operating lease liabilities, current7,235 
Other current liabilities
495 
Total current liabilities, discontinued operations
143,474 
Deferred revenue, noncurrent
14,200 
Operating lease liabilities, noncurrent23,758 
Liability for uncertain tax positions49,268 
Deferred income taxes, noncurrent16,003 
Other long-term liabilities
22,748 
Total noncurrent liabilities, discontinued operations
125,977 
Total liabilities, discontinued operations$269,451 
The key components of income from discontinued operations that were included in the Company’s Consolidated Statement of Income are as follows (in thousands):

Year ended December 31
202120202019
Revenues
$271,571 $347,293 $339,276 
Cost of revenues
74,294 100,871 94,280 
Gross Profit197,277 246,422 244,996 
Operating expenses:
Sales and marketing
72,425 72,080 58,875 
Research, development and engineering
16,756 15,681 14,332 
General and administrative
84,213 118,608 123,812 
Goodwill impairment on business32,629 — — 
Total operating expense206,023 206,369 197,019 
(Loss) income from discontinued operations(8,746)40,053 47,977 
Interest expense(235)(939)(1,015)
Interest income693 963 467 
(Loss) gain on sale of businesses
(21,797)17,122 — 
Other income (expense)
1,752 (1,606)103 
(Loss) income from discontinued operations before income taxes
(28,333)55,593 47,532 
Income tax (benefit) expense
(16,160)25,093 13,448 
(Loss) income from discontinued operations, net of income taxes
$(12,173)$30,500 $34,084 

The key components of cash flows from discontinued operations are as follows (in thousands):

Year ended December 31
202120202019
Depreciation and amortization
$39,727 $67,995 $70,700 
Capital expenditure
14,322 19,633 15,229 
Share-based compensation expense
602 4,138 2,711 
Non-cash operating lease costs2,814 4,364 5,454 
Deferred taxes554 7,723 (193)
Foreign currency remeasurement gain(9)3,574 1,420 
Lease asset impairments and other charges990 — — 
Loss (gain) on sale of businesses21,797 (17,122)— 
Goodwill impairment on business$32,629 $— $— 
Prior to the Separation, the Company completed the following dispositions that did not meet the criteria for discontinued operations by themselves but were subsequently classified as discontinued operations as they are part of the non-fax business transferred back to the Former Parent.

Voice Asset Sales

During the first quarter of 2021, the Company committed to a plan to sell certain Voice assets in the United Kingdom as they were determined to be non-core assets. On February 9, 2021, in a cash transaction, the Company sold the Voice assets. The total gain recognized on the sale of these Voice assets was $2.8 million which was recorded in discontinued operations on the Consolidated Statement of Income in the year ended December 31, 2021.
During the second quarter of 2020, the Company committed to a plan to sell certain Voice assets in Australia and New Zealand as they were determined to be non-core assets. On August 31, 2020, in a cash transaction, the Company sold these Voice assets for a gain of $17.1 million which was recorded in discontinued operations on the Consolidated Statement of Income in the year ended December 31, 2020.


B2B Back-up
During the first quarter of 2021, the Company committed to a plan to sell its B2B Backup business as it was determined to be a non-core business. The B2B Backup business met the held for sale criteria, and accordingly, the assets and liabilities were presented as held for sale on the Consolidated Balance Sheets at March 31, 2021 and June 30, 2021. During the second quarter of 2021, the Company received an offer to purchase the B2B Backup business and management determined that the fair value of the business less cost to sell was lower than its carrying amount. As a result, the Company recorded an impairment to goodwill of $32.6 million during the second quarter of 2021, which was recorded in impairment of business on the Consolidated Statement of Income (see Note 8 - Goodwill and Intangible Assets). On September 17, 2021, in a cash transaction, the Company sold the B2B Backup business. The total loss recognized on the sale of the B2B Backup business was $24.6 million which was recorded in discontinued operations on the Consolidated Statement of Income in the year ended December 31, 2021.