Condensed Consolidating Financials (Notes) | 9 Months Ended |
Sep. 30, 2014 |
Condensed Financial Information [Abstract] | ' |
Condensed Financial Statements [Text Block] | ' |
Condensed Consolidating Financial Statements |
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In connection with the June 2014 Convertible Note issuance, j2 Global, Inc. entered into a supplemental indenture related to the Senior Notes, pursuant to which it fully and unconditionally guaranteed, on an unsecured basis, the full and punctual payment of the 8.0% senior unsecured notes due 2020 that were issued by its wholly owned subsidiary, j2 Cloud Services, Inc. j2 Cloud Services, Inc. is subject to restrictions on dividends in its existing indenture with respect to the Senior Notes and the credit facility with Union Bank. While substantially all of the Company’s assets (other than the net cash proceeds from the issuance of the Convertible Notes) are owned directly or indirectly by j2 Cloud Services, Inc., those contractual provisions did not, as of June 30, 2014, meaningfully restrict j2 Cloud Services, Inc.’s ability to pay dividends to j2 Global, Inc. |
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The following condensed consolidating financial statements present, in separate columns, financial information for (i) j2 Global, Inc. (the “Parent”) on a parent-only basis, (ii) j2 Cloud Services, Inc., (iii) the non-guarantor subsidiaries on a combined basis, (iv) the eliminations and reclassifications necessary to arrive at the information for the Company on a consolidated basis, and (v) the Company on a consolidated basis. The condensed consolidating financial statements are presented in accordance with the equity method. Under this method, the investments in subsidiaries are recorded at cost and adjusted for the Company’s share of subsidiaries’ cumulative results of operations, capital contributions, distributions and other equity changes. Intercompany charges (income) between the Parent and subsidiaries are recognized in the condensed consolidating financial statements during the period incurred and the settlement of intercompany balances is reflected in the condensed consolidating statement of cash flows based on the nature of the underlying transactions. Consolidating adjustments include consolidating and eliminating entries for investments in subsidiaries, intercompany activity and balances. |
j2 Global, Inc. |
Condensed Consolidated Balance Sheets |
(Unaudited, in thousands except share and per share data) |
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| | | | | | | | | | | | | | | | | | | |
As of |
30-Sep-14 |
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 | |
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Short-term investments | 62,647 | | | 39,767 | | | 5,004 | | | — | | | 107,418 | |
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Accounts receivable, net | — | | | 11,213 | | | 63,803 | | | — | | | 75,016 | |
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Prepaid expenses and other current assets | 1,075 | | | 16,237 | | | 7,505 | | | — | | | 24,817 | |
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Deferred income taxes | — | | | — | | | 9,081 | | | (1,630 | ) | | 7,451 | |
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Intercompany receivable | — | | | 81,095 | | | — | | | (81,095 | ) | | — | |
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Total current assets | 377,389 | | | 163,111 | | | 271,924 | | | (82,725 | ) | | 729,699 | |
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Long-term investments | 54,353 | | | 7,061 | | | 1 | | | — | | | 61,415 | |
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Property and equipment, net | — | | | 8,349 | | | 30,438 | | | — | | | 38,787 | |
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Trade names, net | — | | | 10,273 | | | 73,920 | | | — | | | 84,193 | |
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Patent and patent licenses, net | — | | | 921 | | | 25,971 | | | — | | | 26,892 | |
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Customer relationships, net | — | | | 1,049 | | | 143,349 | | | — | | | 144,398 | |
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Goodwill | — | | | 50,803 | | | 482,600 | | | — | | | 533,403 | |
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Other purchased intangibles, net | — | | | 4,308 | | | 3,713 | | | — | | | 8,021 | |
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Investment in subsidiaries | 231,027 | | | 442,726 | | | 8,716 | | | (682,469 | ) | | — | |
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Deferred income taxes | — | | | 6,309 | | | 3,178 | | | (9,487 | ) | | — | |
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Other assets | 9,684 | | | 1,488 | | | 2,024 | | | — | | | 13,196 | |
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Total assets | $ | 672,453 | | | $ | 696,398 | | | $ | 1,045,834 | | | $ | (774,681 | ) | | $ | 1,640,004 | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | |
Accounts payable and accrued expenses | $ | 7,486 | | | $ | 23,100 | | | $ | 40,195 | | | $ | — | | | $ | 70,781 | |
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Income taxes payable | — | | | 398 | | | 789 | | | — | | | 1,187 | |
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Deferred revenue - short term | — | | | 23,312 | | | 34,087 | | | — | | | 57,399 | |
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Deferred income taxes | 856 | | | 1,365 | | | — | | | (1,630 | ) | | 591 | |
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| | | | | | | | | | | | | | | | | | | |
Other current liabilities | — | | | — | | | 540 | | | — | | | 540 | |
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Intercompany payable | 42,256 | | | — | | | 38,839 | | | (81,095 | ) | | — | |
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Total current liabilities | 50,598 | | | 48,175 | | | 114,450 | | | (82,725 | ) | | 130,498 | |
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Long term debt | 345,409 | | | 246,055 | | | — | | | — | | | 591,464 | |
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Liability for uncertain tax positions | — | | | 35,793 | | | — | | | — | | | 35,793 | |
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Deferred income taxes | 24,332 | | | — | | | 46,865 | | | (9,487 | ) | | 61,710 | |
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Deferred revenue - long term | — | | | 8,870 | | | 2,075 | | | — | | | 10,945 | |
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Other long-term liabilities | — | | | 881 | | | 5,152 | | | — | | | 6,033 | |
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Total liabilities | 420,339 | | | 339,774 | | | 168,542 | | | (92,212 | ) | | 836,443 | |
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Common stock, $0.01 par value. | 469 | | | — | | | — | | | — | | | 469 | |
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Additional paid-in capital - common | 270,857 | | | 231,027 | | | 421,401 | | | (652,428 | ) | | 270,857 | |
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Retained earnings | (19,276 | ) | | 120,214 | | | 464,670 | | | (30,041 | ) | | 535,567 | |
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Accumulated other comprehensive loss | 64 | | | 5,383 | | | (8,779 | ) | | — | | | (3,332 | ) |
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Total j2 Global Inc., stockholders’ equity | 252,114 | | | 356,624 | | | 877,292 | | | (682,469 | ) | | 803,561 | |
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Total stockholders’ equity | 252,114 | | | 356,624 | | | 877,292 | | | (682,469 | ) | | 803,561 | |
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Total liabilities and stockholders’ equity | $ | 672,453 | | | $ | 696,398 | | | $ | 1,045,834 | | | $ | (774,681 | ) | | $ | 1,640,004 | |
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j2 Global, Inc. |
Condensed Consolidated Statements of Income |
(Unaudited, in thousands except share and per share data) |
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Three Months Ended |
30-Sep-14 |
| 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 | |
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Cost of revenues | — | | | (3,275 | ) | | 22,060 | | | 9,259 | | | 28,044 | |
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Gross profit | — | | | 56,235 | | | 68,794 | | | (55 | ) | | 124,974 | |
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Operating expenses: | | | | | | | | | | |
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Sales and marketing | — | | | 9,168 | | | 27,934 | | | (55 | ) | | 37,047 | |
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Research, development and engineering | — | | | 3,320 | | | 4,317 | | | — | | | 7,637 | |
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General and administrative | 3,063 | | | 6,789 | | | 23,960 | | | — | | | 33,812 | |
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Total operating expenses | 3,063 | | | 19,277 | | | 56,211 | | | (55 | ) | | 78,496 | |
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Operating income | (3,063 | ) | | 36,958 | | | 12,583 | | | — | | | 46,478 | |
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Interest expense (income), net | 5,136 | | | 5,116 | | | (129 | ) | | — | | | 10,123 | |
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Other expense (income), net | (2 | ) | | 78 | | | 175 | | | — | | | 251 | |
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Income before income taxes | (8,197 | ) | | 31,764 | | | 12,537 | | | — | | | 36,104 | |
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Income tax expense | (3,158 | ) | | 3,458 | | | 7,045 | | | — | | | 7,345 | |
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Net income attributable to j2 Global, Inc. common shareholders | $ | (5,039 | ) | | $ | 28,306 | | | $ | 5,492 | | | $ | — | | | $ | 28,759 | |
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j2 Global, Inc. |
Condensed Consolidated Statements of Income |
(Unaudited, in thousands except share and per share data) |
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| | | | | | | | | | | | | | | | | | | |
Nine Months Ended |
30-Sep-14 |
| 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 | |
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| | | | | | | | | |
Cost of revenues | — | | | 35,729 | | | 72,191 | | | (30,929 | ) | | 76,991 | |
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Gross profit | — | | | 133,738 | | | 221,339 | | | (182 | ) | | 354,895 | |
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Operating expenses: | | | | | | | | | |
Sales and marketing | — | | | 27,148 | | | 78,369 | | | (182 | ) | | 105,335 | |
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Research, development and engineering | — | | | 10,411 | | | 12,040 | | | — | | | 22,451 | |
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General and administrative | 3,463 | | | 24,004 | | | 66,742 | | | — | | | 94,209 | |
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Total operating expenses | 3,463 | | | 61,563 | | | 157,151 | | | (182 | ) | | 221,995 | |
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Operating income | (3,463 | ) | | 72,175 | | | 64,188 | | | — | | | 132,900 | |
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Interest expense (income), net | 5,786 | | | 15,314 | | | (347 | ) | | — | | | 20,753 | |
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Other expense (income), net | (2 | ) | | 6 | | | (258 | ) | | — | | | (254 | ) |
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Income before income taxes | (9,247 | ) | | 56,855 | | | 64,793 | | | — | | | 112,401 | |
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Income tax expense | (3,537 | ) | | 4,783 | | | 18,582 | | | — | | | 19,828 | |
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Net income attributable to j2 Global, Inc. common shareholders | $ | (5,710 | ) | | $ | 52,072 | | | $ | 46,211 | | | $ | — | | | $ | 92,573 | |
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j2 Global, Inc. |
Condensed Consolidated Statements of Comprehensive Income |
(Unaudited, in thousands except share and per share data) |
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Three Months Ended |
30-Sep-14 |
| j2 Global, Inc. | | j2 Cloud Services, Inc. | | Non-guarantor Subsidiaries | | Consolidating Adjustments | | j2 Global Consolidated |
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Net income | $ | (5,039 | ) | | $ | 28,306 | | | $ | 5,492 | | | $ | — | | | $ | 28,759 | |
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Other comprehensive income (loss), net of tax: | | | | | | | | | |
Foreign currency translation adjustment, net of tax expense (benefit) | — | | | 2,300 | | | (9,277 | ) | | — | | | (6,977 | ) |
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Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit) | 64 | | | (3,068 | ) | | (2 | ) | | — | | | (3,006 | ) |
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Other comprehensive income (loss), net of tax | 64 | | | (768 | ) | | (9,279 | ) | | — | | | (9,983 | ) |
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Comprehensive income attributable to j2 Global, Inc. | $ | (4,975 | ) | | $ | 27,538 | | | $ | (3,787 | ) | | $ | — | | | $ | 18,776 | |
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j2 Global, Inc. |
Condensed Consolidated Statements of Comprehensive Income |
(Unaudited, in thousands except share and per share data) |
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Nine Months Ended |
30-Sep-14 |
| j2 Global, Inc. | | j2 Cloud Services, Inc. | | Non-guarantor Subsidiaries | | Consolidating Adjustments | | j2 Global Consolidated |
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Net income | $ | (5,710 | ) | | $ | 52,072 | | | $ | 46,211 | | | $ | — | | | $ | 92,573 | |
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Other comprehensive income (loss), net of tax: | | | | | | | | | |
Foreign currency translation adjustment, net of tax expense (benefit) | — | | | 1,644 | | | (6,450 | ) | | — | | | (4,806 | ) |
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Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit) | 64 | | | (2,834 | ) | | 9 | | | — | | | (2,761 | ) |
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Other comprehensive income (loss), net of tax | 64 | | | (1,190 | ) | | (6,441 | ) | | — | | | (7,567 | ) |
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Comprehensive income attributable to j2 Global, Inc. | $ | (5,646 | ) | | $ | 50,882 | | | $ | 39,770 | | | $ | — | | | $ | 85,006 | |
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j2 Global, Inc. |
Condensed Consolidated Statement of Cash Flows |
(Unaudited, in thousands) |
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Nine Months Ended |
30-Sep-14 |
| 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 | |
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Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | | | | | | |
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Depreciation and amortization | — | | | 4,950 | | | 38,357 | | | — | | | 43,307 | |
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Amortization of discount or premium of investments | 142 | | | 677 | | | 164 | | | — | | | 983 | |
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Amortization of financing costs and discounts | 2,266 | | | 562 | | | — | | | — | | | 2,828 | |
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Share-based compensation | 2,191 | | | 4,514 | | | (167 | ) | | — | | | 6,538 | |
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Excess tax benefits from share-based compensation | (1,925 | ) | | (4,802 | ) | | (1 | ) | | — | | | (6,728 | ) |
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Provision for doubtful accounts | — | | | 1,395 | | | 1,883 | | | — | | | 3,278 | |
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Deferred income taxes | 4,614 | | | (2,657 | ) | | (4,911 | ) | | — | | | (2,954 | ) |
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(Gain) loss on sale of available-for-sale investments | (2 | ) | | (18 | ) | | (49 | ) | | — | | | (69 | ) |
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Decrease (increase) in: | | | | | | | | | | |
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Accounts receivable | — | | | (1,894 | ) | | 3,161 | | | — | | | 1,267 | |
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Prepaid expenses and other current assets | (1,075 | ) | | (2,197 | ) | | (852 | ) | | — | | | (4,124 | ) |
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Other assets | (896 | ) | | (83 | ) | | 851 | | | — | | | (128 | ) |
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(Decrease) increase in: | | | | | | | | | | |
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Accounts payable and accrued expenses | 9,915 | | | (4,119 | ) | | (8,745 | ) | | — | | | (2,949 | ) |
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Income taxes payable | 1,734 | | | 2,822 | | | 3,009 | | | — | | | 7,565 | |
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Deferred revenue | — | | | (942 | ) | | 127 | | | — | | | (815 | ) |
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Liability for uncertain tax positions | — | | | (8,069 | ) | | (2 | ) | | — | | | (8,071 | ) |
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Other | — | | | (108 | ) | | (272 | ) | | — | | | (380 | ) |
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Net cash provided by operating activities | 11,254 | | | 42,103 | | | 78,764 | | | — | | | 132,121 | |
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Cash flows from investing activities: | | | | | | | | | |
Maturity of certificates of deposit | — | | | 8,210 | | | 6,310 | | | — | | | 14,520 | |
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Purchase of certificates of deposit | — | | | — | | | — | | | — | | | — | |
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Sales of available-for-sale investments | 2,005 | | | 46,863 | | | 11,588 | | | — | | | 60,456 | |
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Purchase of available-for-sale investments | (58,591 | ) | | (54,393 | ) | | 1 | | | — | | | (112,983 | ) |
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Purchases of property and equipment | — | | | (925 | ) | | (6,830 | ) | | — | | | (7,755 | ) |
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Proceeds from sale of assets | — | | | — | | | 608 | | | — | | | 608 | |
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Acquisition of businesses, net of cash received | — | | | — | | | (118,238 | ) | | — | | | (118,238 | ) |
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Purchases of intangible assets | — | | | (2,871 | ) | | (1,935 | ) | | — | | | (4,806 | ) |
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Investment in subsidiaries | — | | | (23,822 | ) | | — | | | 23,822 | | | — | |
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Net cash used in investing activities | (56,586 | ) | | (26,938 | ) | | (108,496 | ) | | 23,822 | | | (168,198 | ) |
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Cash flows from financing activities: | | | | | | | | | |
Issuance of long-term debt | 402,500 | | | — | | | — | | | — | | | 402,500 | |
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| | | | | | | | | |
Debt issuance costs | (12,069 | ) | | — | | | 542 | | | — | | | (11,527 | ) |
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Repurchases of common stock and restricted stock | (739 | ) | | (4,733 | ) | | (1 | ) | | — | | | (5,473 | ) |
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Issuance of common stock under employee stock purchase plan | 76 | | | 123 | | | — | | | — | | | 199 | |
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Exercise of stock options | 1,193 | | | 5,248 | | | — | | | — | | | 6,441 | |
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Dividends paid | (13,267 | ) | | (25,302 | ) | | 22 | | | — | | | (38,547 | ) |
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Excess tax benefits from share-based compensation | 1,925 | | | 4,803 | | | — | | | — | | | 6,728 | |
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Deferred payments for acquisitions | — | | | — | | | (14,316 | ) | | — | | | (14,316 | ) |
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Other | — | | | (54 | ) | | (711 | ) | | — | | | (765 | ) |
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Intercompany | (20,620 | ) | | (14,861 | ) | | 59,303 | | | (23,822 | ) | | — | |
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Net cash provided by financing activities | 358,999 | | | (34,776 | ) | | 44,839 | | | (23,822 | ) | | 345,240 | |
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Effect of exchange rate changes on cash and cash equivalents | — | | | 4 | | | (1,971 | ) | | — | | | (1,967 | ) |
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Net change in cash and cash equivalents | 313,667 | | | (19,607 | ) | | 13,136 | | | — | | | 307,196 | |
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Cash and cash equivalents at beginning of period | — | | | 34,406 | | | 173,395 | | | — | | | 207,801 | |
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Cash and cash equivalents at end of period | $ | 313,667 | | | $ | 14,799 | | | $ | 186,531 | | | $ | — | | | $ | 514,997 | |
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j2 Global, Inc. |
Condensed Consolidated Balance Sheets |
(Unaudited, in thousands except share and per share data) |
|
| | | | | | | | | | | | | | | | | | | |
As of |
31-Dec-13 |
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 | |
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Short-term investments | — | | | 67,848 | | | 22,941 | | | — | | | 90,789 | |
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Accounts receivable, net | — | | | 11,541 | | | 55,704 | | | — | | | 67,245 | |
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Prepaid expenses and other current assets | — | | | 16,662 | | | 3,402 | | | — | | | 20,064 | |
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Deferred income taxes | — | | | — | | | 3,126 | | | — | | | 3,126 | |
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Intercompany receivable | — | | | 4,433 | | | — | | | (4,433 | ) | | — | |
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Total current assets | — | | | 134,890 | | | 258,568 | | | (4,433 | ) | | 389,025 | |
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Long-term investments | — | | | 47,351 | | | — | | | — | | | 47,351 | |
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Property and equipment, net | — | | | 11,232 | | | 19,968 | | | — | | | 31,200 | |
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Trade names, net | — | | | 12,119 | | | 70,989 | | | — | | | 83,108 | |
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Patent and patent licenses, net | — | | | 15,107 | | | 13,423 | | | — | | | 28,530 | |
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Customer relationships, net | — | | | 6,125 | | | 94,855 | | | — | | | 100,980 | |
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Goodwill | — | | | 86,025 | | | 371,397 | | | — | | | 457,422 | |
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Other purchased intangibles, net | — | | | 5,306 | | | 5,609 | | | — | | | 10,915 | |
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Investment in subsidiaries | — | | | 357,057 | | | — | | | (357,057 | ) | | — | |
|
Deferred income taxes | — | | | 202 | | | 1,643 | | | — | | | 1,845 | |
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Other assets | — | | | 1,576 | | | 1,837 | | | — | | | 3,413 | |
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Total assets | $ | — | | | $ | 676,990 | | | $ | 838,289 | | | $ | (361,490 | ) | | $ | 1,153,789 | |
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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 | |
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j2 Global, Inc. |
Condensed Consolidated Statements of Income |
(Unaudited, in thousands except share and per share data) |
|
| | | | | | | | | | | | | | | | | | | |
Three Months Ended |
30-Sep-13 |
| 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) |
|
| | | | | | | | | | | | | | | | | | | |
Nine Months Ended |
30-Sep-13 |
| 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 Comprehensive Income |
(Unaudited, in thousands) |
|
| | | | | | | | | | | | | | | | | | | |
Three Months Ended |
30-Sep-13 |
| 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 |
30-Sep-13 |
| 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 | |
|
j2 Global, Inc. |
Condensed Consolidated Statement of Cash Flows |
(Unaudited, in thousands) |
|
| | | | | | | | | | | | | | | | | | | |
Nine Months Ended |
30-Sep-13 |
| 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 | |
|
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