Condensed Financial Statements [Text Block] | Condensed Consolidating Financial Statements 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 Senior Notes 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. 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 do not, as of June 30, 2014, meaningfully restrict j2 Cloud Services, Inc.’s ability to pay dividends to j2 Global, Inc. 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. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited, in thousands except share and per share data) June 30, 2015 BALANCE SHEET j2 Global, Inc. j2 Cloud Services, Inc. Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated ASSETS Cash and cash equivalents $ 220,787 $ 11,400 $ 183,743 $ — $ 415,930 Short-term investments 55,489 41,637 62 — 97,188 Accounts receivable, net — 12,423 74,939 (43 ) 87,319 Prepaid expenses and other current assets 1,595 16,989 10,111 (1,555 ) 27,140 Deferred income taxes 782 — 3,732 — 4,514 Intercompany receivable 72,000 105,827 — (177,827 ) — Total current assets 350,653 188,276 272,587 (179,425 ) 632,091 Long-term investments 47,119 7,058 — — 54,177 Property and equipment, net — 7,088 29,690 — 36,778 Trade names, net — 10,172 93,671 — 103,843 Patent and patent licenses, net — 815 21,042 — 21,857 Customer relationships, net — 1,699 173,789 — 175,488 Goodwill — 54,087 619,997 — 674,084 Other purchased intangibles, net — 4,248 10,732 — 14,980 Investment in subsidiaries 889,340 943,491 8,717 (1,841,548 ) — Other assets 8,786 2,718 2,007 — 13,511 Total assets $ 1,295,898 $ 1,219,652 $ 1,232,232 $ (2,020,973 ) $ 1,726,809 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued expenses $ 4,500 $ 28,429 $ 54,195 $ (43 ) $ 87,081 Income taxes payable — 2,770 — (1,555 ) 1,215 Deferred revenue, current — 20,461 54,892 — 75,353 Capital lease, current — — 324 — 324 Deferred income taxes — — 362 — 362 Intercompany payable 54,901 — 122,926 (177,827 ) — Total current liabilities 59,401 51,660 232,699 (179,425 ) 164,335 Long term debt 350,747 246,462 — — 597,209 Capital lease, non-current — — 195 — 195 Liability for uncertain tax positions — 25,136 — — 25,136 Deferred income taxes 26,759 — 36,508 — 63,267 Deferred revenue, non-current — 6,227 1,995 — 8,222 Other long-term liabilities 1,071 827 17,344 — 19,242 Total liabilities 437,978 330,312 288,741 (179,425 ) 877,606 Common stock, $0.01 par value. 476 — — — 476 Additional paid-in capital - common 282,702 235,332 422,108 (657,440 ) 282,702 Retained earnings 574,683 648,467 545,789 (1,184,108 ) 584,831 Accumulated other comprehensive loss 59 5,541 (24,406 ) — (18,806 ) Total stockholders’ equity 857,920 889,340 943,491 (1,841,548 ) 849,203 Total liabilities and stockholders’ equity $ 1,295,898 $ 1,219,652 $ 1,232,232 $ (2,020,973 ) $ 1,726,809 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited, in thousands except share and per share data) December 31, 2014 BALANCE SHEET j2 Global, Inc. j2 Cloud Services, Inc. Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated ASSETS Cash and cash equivalents $ 226,790 $ 36,810 $ 170,063 $ — $ 433,663 Short-term investments 47,880 48,261 65 — 96,206 Accounts receivable, net — 11,167 80,532 — 91,699 Prepaid expenses and other current assets 776 12,689 9,137 — 22,602 Deferred income taxes 1,271 — 742 — 2,013 Intercompany receivable 110,000 74,938 1,428 (186,366 ) — Total current assets 386,717 183,865 261,967 (186,366 ) 646,183 Long-term investments 55,452 5,056 — — 60,508 Property and equipment, net — 8,011 30,206 — 38,217 Trade names, net — 10,231 95,320 — 105,551 Patent and patent licenses, net — 886 24,041 — 24,927 Customer relationships, net — 2,206 161,560 — 163,766 Goodwill — 52,131 583,544 — 635,675 Other purchased intangibles, net — 4,276 13,280 — 17,556 Investment in subsidiaries 826,289 900,681 8,716 (1,735,686 ) — Other assets 9,328 1,368 2,123 — 12,819 Total assets $ 1,277,786 $ 1,168,711 $ 1,180,757 $ (1,922,052 ) $ 1,705,202 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued expenses $ 2,834 $ 28,414 $ 64,062 $ — $ 95,310 Income taxes payable — — — — — Deferred revenue, current — 23,091 40,366 — 63,457 Capital lease, current — — 258 — 258 Deferred income taxes — — 342 — 342 Intercompany payable 76,366 — 110,000 (186,366 ) — Total current liabilities 79,200 51,505 215,028 (186,366 ) 159,367 Long term debt 347,163 246,187 — — 593,350 Capital lease, non-current — — 141 — 141 Liability for uncertain tax positions — 37,551 — — 37,551 Deferred income taxes 21,728 (1,837 ) 42,069 — 61,960 Deferred revenue, non-current — 8,187 1,995 — 10,182 Other long-term liabilities 744 829 20,843 — 22,416 Total liabilities 448,835 342,422 280,076 (186,366 ) 884,967 Common stock, $0.01 par value 474 — — — 474 Additional paid-in capital - common 273,304 232,340 421,676 (654,016 ) 273,304 Retained earnings 555,158 584,591 495,505 (1,081,670 ) 553,584 Accumulated other comprehensive loss 15 9,358 (16,500 ) — (7,127 ) Total stockholders’ equity 828,951 826,289 900,681 (1,735,686 ) 820,235 Total liabilities and stockholders’ equity $ 1,277,786 $ 1,168,711 $ 1,180,757 $ (1,922,052 ) $ 1,705,202 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited, in thousands except share and per share data) Three Months Ended June 30, 2015 j2 Global, Inc. j2 Cloud Services, Inc Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Revenues: Total revenues $ — $ 56,547 $ 129,217 $ (9,726 ) $ 176,038 Cost of revenues 1 15,414 23,748 (9,669 ) 29,494 Gross profit (1 ) 41,133 105,469 (57 ) 146,544 Operating expenses: Sales and marketing — 10,512 29,966 (57 ) 40,421 Research, development and engineering 2 3,763 5,204 — 8,969 General and administrative 3,538 9,011 34,539 — 47,088 Total operating expenses 3,540 23,286 69,709 (57 ) 96,478 Operating income (3,541 ) 17,847 35,760 — 50,066 Equity earnings in subsidiaries 45,530 26,742 — (72,272 ) — Interest expense (income), net 2,772 5,791 2,318 — 10,881 Other expense (income), net (5 ) (28 ) 121 — 88 Income before income taxes 39,222 38,826 33,321 (72,272 ) 39,097 Income tax expense 306 (6,704 ) 6,579 — 181 Net income $ 38,916 $ 45,530 $ 26,742 $ (72,272 ) $ 38,916 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited, in thousands except share and per share data) Three Months Ended June 30, 2014 j2 Global, Inc. j2 Cloud Services, Inc Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Revenues: Total revenues $ — $ 65,313 $ 106,042 $ (26,611 ) $ 144,744 Cost of revenues — 19,051 33,065 (26,558 ) 25,558 Gross profit — 46,262 72,977 (53 ) 119,186 Operating expenses: Sales and marketing — 8,968 26,414 (53 ) 35,329 Research, development and engineering — 3,471 4,129 — 7,600 General and administrative 400 7,646 23,373 — 31,419 Total operating expenses 400 20,085 53,916 (53 ) 74,348 Operating income (400 ) 26,177 19,061 — 44,838 Equity earnings in subsidiaries — 12,780 — (12,780 ) — Interest expense (income), net 650 5,095 (63 ) — 5,682 Other expense (income), net — (40 ) (145 ) — (185 ) Income before income taxes (1,050 ) 33,902 19,269 (12,780 ) 39,341 Income tax expense (379 ) (1,818 ) 6,489 — 4,292 Net income $ (671 ) $ 35,720 $ 12,780 $ (12,780 ) $ 35,049 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited, in thousands except share and per share data) Six Months Ended June 30, 2015 j2 Global, Inc. j2 Cloud Services, Inc Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Revenues: Total revenues $ — $ 111,166 $ 245,652 $ (19,527 ) $ 337,291 Cost of revenues 1 30,942 46,143 (19,405 ) 57,681 Gross profit (1 ) 80,224 199,509 (122 ) 279,610 Operating expenses: Sales and marketing — 20,292 57,841 (122 ) 78,011 Research, development and engineering 2 7,618 9,795 — 17,415 General and administrative 7,717 15,861 70,010 — 93,588 Total operating expenses 7,719 43,771 137,646 (122 ) 189,014 Operating income (7,720 ) 36,453 61,863 — 90,596 Equity earnings in subsidiaries 71,782 50,283 — (122,065 ) — Interest expense (income), net 5,360 10,899 4,935 — 21,194 Other expense (income), net (17 ) 311 (990 ) — (696 ) Income before income taxes 58,719 75,526 57,918 (122,065 ) 70,098 Income tax expense (2,075 ) 3,744 7,635 — 9,304 Net income $ 60,794 $ 71,782 $ 50,283 $ (122,065 ) $ 60,794 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited, in thousands except share and per share data) Six Months Ended June 30, 2014 j2 Global, Inc. j2 Cloud Services, Inc Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Revenues: Total revenues $ — $ 116,507 $ 202,676 $ (40,315 ) $ 278,868 Cost of revenues — 39,004 50,131 (40,188 ) 48,947 Gross profit — 77,503 152,545 (127 ) 229,921 Operating expenses: Sales and marketing — 17,980 50,435 (127 ) 68,288 Research, development and engineering — 7,091 7,723 — 14,814 General and administrative 400 17,215 42,782 — 60,397 Total operating expenses 400 42,286 100,940 (127 ) 143,499 Operating income (400 ) 35,217 51,605 — 86,422 Equity earnings in subsidiaries — 40,720 — (40,720 ) — Interest expense (income), net 650 10,198 (218 ) — 10,630 Other expense (income), net — (71 ) (434 ) — (505 ) Income before income taxes (1,050 ) 65,810 52,257 (40,720 ) 76,297 Income tax expense (379 ) 1,325 11,537 — 12,483 Net income $ (671 ) $ 64,485 $ 40,720 $ (40,720 ) $ 63,814 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited, in thousands except share and per share data) Three Months Ended June 30, 2015 j2 Global, Inc. j2 Cloud Services, Inc. Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net income $ 38,916 $ 45,530 $ 26,742 $ (72,272 ) $ 38,916 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax expense (benefit) — — 7,112 — 7,112 Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit) (267 ) (3,667 ) — — (3,934 ) Other comprehensive income (loss), net of tax (267 ) (3,667 ) 7,112 — 3,178 Comprehensive income $ 38,649 $ 41,863 $ 33,854 $ (72,272 ) $ 42,094 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited, in thousands except share and per share data) Three Months Ended June 30, 2014 j2 Global, Inc. j2 Cloud Services, Inc. Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net income $ (671 ) $ 35,720 $ 12,780 $ (12,780 ) $ 35,049 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax expense (benefit) — — 1,334 — 1,334 Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit) — 2,477 408 — 2,885 Other comprehensive income (loss), net of tax — 2,477 1,742 — 4,219 Comprehensive income $ (671 ) $ 38,197 $ 14,522 $ (12,780 ) $ 39,268 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited, in thousands except share and per share data) Six Months Ended June 30, 2015 j2 Global, Inc. j2 Cloud Services, Inc. Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net income $ 60,794 $ 71,782 $ 50,283 $ (122,065 ) $ 60,794 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax expense (benefit) — — (8,125 ) — (8,125 ) Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit) 44 (3,598 ) — — (3,554 ) Other comprehensive income (loss), net of tax 44 (3,598 ) (8,125 ) — (11,679 ) Comprehensive income $ 60,838 $ 68,184 $ 42,158 $ (122,065 ) $ 49,115 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited, in thousands except share and per share data) Six Months Ended June 30, 2014 j2 Global, Inc. j2 Cloud Services, Inc. Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net income $ (671 ) $ 64,485 $ 40,720 $ (40,720 ) $ 63,814 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax expense (benefit) — — 2,171 — 2,171 Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit) — (421 ) 666 — 245 Other comprehensive income (loss), net of tax — (421 ) 2,837 — 2,416 Comprehensive income $ (671 ) $ 64,064 $ 43,557 $ (40,720 ) $ 66,230 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited, in thousands except share and per share data) Six Months Ended June 30, 2015 j2 Global, Inc. j2 Cloud Services, Inc. Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net cash (used in) provided by operating activities $ (26,174 ) $ 35,542 $ 88,242 $ — $ 97,610 Cash flows from investing activities: Maturity of certificates of deposit — 65 — — 65 Purchase of certificates of deposit — (62 ) — — (62 ) Maturity of available-for-sale investments 38,047 18,048 — — 56,095 Purchase of available-for-sale investments (37,734 ) (19,731 ) — — (57,465 ) Purchases of property and equipment — (496 ) (6,459 ) — (6,955 ) Acquisition of businesses, net of cash received — (497 ) (73,811 ) — (74,308 ) Purchases of intangible assets — 291 (1,157 ) — (866 ) Investment in subsidiaries — — — — — Net cash (used in) provided by investing activities 313 (2,382 ) (81,427 ) — (83,496 ) Cash flows from financing activities: Repurchases of common and restricted stock (2,302 ) — — — (2,302 ) Issuance of common stock under employee stock purchase plan 126 — — — 126 Exercise of stock options 3,009 — — — 3,009 Dividends paid (28,610 ) — — — (28,610 ) Excess tax benefits from share-based compensation 2,104 — — — 2,104 Deferred payments for acquisitions — (656 ) (3,227 ) — (3,883 ) Other — — (180 ) — (180 ) Intercompany 45,533 (60,376 ) 14,843 — — Net cash (used in) provided by financing activities 19,860 (61,032 ) 11,436 — (29,736 ) Effect of exchange rate changes on cash and cash equivalents (2 ) 2,462 (4,571 ) — (2,111 ) Net change in cash and cash equivalents (6,003 ) (25,410 ) 13,680 — (17,733 ) Cash and cash equivalents at beginning of period 226,790 36,810 170,063 — 433,663 Cash and cash equivalents at end of period $ 220,787 $ 11,400 $ 183,743 $ — $ 415,930 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited, in thousands except share and per share data) Six Months Ended June 30, 2014 j2 Global, Inc. j2 Cloud Services, Inc. Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net cash provided by operating activities $ 52 $ 2,497 $ 89,257 $ — $ 91,806 Cash flows from investing activities: Maturity of certificates of deposit — 8,210 6,310 — 14,520 Maturity of available-for-sale investments — 40,340 11,589 — 51,929 Purchase of available-for-sale investments — (45,044 ) 1 — (45,043 ) Purchases of property and equipment — (533 ) (4,098 ) — (4,631 ) Proceeds from sale of assets — — 608 — 608 Acquisition of businesses, net of cash received — 55 (79,601 ) — (79,546 ) Purchases of intangible assets — (2,804 ) (1,095 ) — (3,899 ) Investment in subsidiaries — (1,021 ) 1,021 — — Net cash (used in) provided by investing activities — (797 ) (65,265 ) — (66,062 ) Cash flows from financing activities: Issuance of long-term debt 402,500 — — — 402,500 Debt issuance costs (11,069 ) — — — (11,069 ) Repurchases of common stock and restricted stock — (4,733 ) — — (4,733 ) Issuance of common stock under employee stock purchase plan — 123 — — 123 Exercise of stock options — 5,247 — — 5,247 Dividends paid — (25,302 ) — — (25,302 ) Excess tax benefits from share-based compensation — 4,803 — — 4,803 Deferred payments for acquisitions — (3,996 ) (9,477 ) — (13,473 ) Other — (54 ) (163 ) — (217 ) Intercompany — 17,792 (17,792 ) — — Net cash (used in) provided by financing activities 391,431 (6,120 ) (27,432 ) — 357,879 Effect of exchange rate changes on cash and cash equivalents — (18 ) 475 — 457 Net change in cash and cash equivalents 391,483 (4,438 ) (2,965 ) — 384,080 Cash and cash equivalents at beginning of period — 34,406 173,395 — 207,801 Cash and cash equivalents at end of period $ 391,483 $ 29,968 $ 170,430 $ — $ 591,881 |