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) September 30, 2015 BALANCE SHEET j2 Global, Inc. j2 Cloud Services, Inc. Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated ASSETS Cash and cash equivalents $ 109,554 $ 11,854 $ 150,960 $ — $ 272,368 Short-term investments 85,353 — 57 — 85,410 Accounts receivable, net 69 11,353 85,954 — 97,376 Prepaid expenses and other current assets 10,289 18,486 12,331 (4,368 ) 36,738 Deferred income taxes 267 857 6,663 — 7,787 Intercompany receivable 92,000 153,610 — (245,610 ) — Total current assets 297,532 196,160 255,965 (249,978 ) 499,679 Long-term investments 52,889 — — — 52,889 Property and equipment, net — 7,064 52,765 — 59,829 Trade names, net — 10,145 113,193 — 123,338 Patent and patent licenses, net — 779 19,573 — 20,352 Customer relationships, net — 1,445 204,315 — 205,760 Goodwill — 53,543 719,373 — 772,916 Other purchased intangibles, net — 4,232 12,405 — 16,637 Investment in subsidiaries 1,027,107 1,081,389 8,714 (2,117,210 ) — Other assets 8,506 2,928 2,165 — 13,599 Total assets $ 1,386,034 $ 1,357,685 $ 1,388,468 $ (2,367,188 ) $ 1,764,999 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued expenses $ 7,102 $ 25,860 $ 56,676 $ — $ 89,638 Income taxes payable — 4,430 — (4,368 ) 62 Deferred revenue, current — 19,847 55,270 — 75,117 Capital lease, current — — 248 — 248 Deferred income taxes — — 364 — 364 Intercompany payable 118,263 — 127,347 (245,610 ) — Total current liabilities 125,365 50,137 239,905 (249,978 ) 165,429 Long term debt 352,579 246,604 — — 599,183 Capital lease, non-current — — 175 — 175 Liability for uncertain tax positions — 27,634 — — 27,634 Deferred income taxes 26,339 — 39,867 — 66,206 Deferred revenue, non-current — 5,446 1,921 — 7,367 Other long-term liabilities 1,071 757 25,211 — 27,039 Total liabilities 505,354 330,578 307,079 (249,978 ) 893,033 Common stock, $0.01 par value. 477 — — — 477 Additional paid-in capital - common 289,196 236,965 523,584 (760,549 ) 289,196 Retained earnings 600,139 785,386 587,147 (1,365,864 ) 606,808 Accumulated other comprehensive loss (9,132 ) 4,756 (29,342 ) 9,203 (24,515 ) Total stockholders’ equity 880,680 1,027,107 1,081,389 (2,117,210 ) 871,966 Total liabilities and stockholders’ equity $ 1,386,034 $ 1,357,685 $ 1,388,468 $ (2,367,188 ) $ 1,764,999 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 September 30, 2015 j2 Global, Inc. j2 Cloud Services, Inc Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Revenues: Total revenues $ — $ 56,753 $ 148,648 $ (26,700 ) $ 178,701 Cost of revenues (1 ) 29,375 27,948 (26,653 ) 30,669 Gross profit 1 27,378 120,700 (47 ) 148,032 Operating expenses: Sales and marketing — 9,684 29,171 (47 ) 38,808 Research, development and engineering (2 ) 3,646 4,645 — 8,289 General and administrative 3,714 5,067 36,421 — 45,202 Total operating expenses 3,712 18,397 70,237 (47 ) 92,299 Operating income (3,711 ) 8,981 50,463 — 55,733 Equity earnings in subsidiaries 41,260 41,357 — (82,617 ) — Interest expense (income), net 3,293 5,179 1,787 — 10,259 Other expense (income), net (2 ) 37 1,051 — 1,086 Income before income taxes 34,258 45,122 47,625 (82,617 ) 44,388 Income tax expense (3,117 ) 3,862 6,268 — 7,013 Net income $ 37,375 $ 41,260 $ 41,357 $ (82,617 ) $ 37,375 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT 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 Equity earnings in subsidiaries 33,798 5,492 — (39,290 ) — Interest expense (income), net 5,136 5,116 (129 ) — 10,123 Other expense (income), net (2 ) 78 175 — 251 Income before income taxes 25,601 37,256 12,537 (39,290 ) 36,104 Income tax expense (3,158 ) 3,458 7,045 — 7,345 Net income $ 28,759 $ 33,798 $ 5,492 $ (39,290 ) $ 28,759 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited, in thousands except share and per share data) Nine Months Ended September 30, 2015 j2 Global, Inc. j2 Cloud Services, Inc Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Revenues: Total revenues $ — $ 167,919 $ 394,300 $ (46,227 ) $ 515,992 Cost of revenues — 60,317 74,091 (46,058 ) 88,350 Gross profit — 107,602 320,209 (169 ) 427,642 Operating expenses: Sales and marketing — 29,976 87,012 (169 ) 116,819 Research, development and engineering — 11,264 14,440 — 25,704 General and administrative 11,434 20,928 106,428 — 138,790 Total operating expenses 11,434 62,168 207,880 (169 ) 281,313 Operating income (11,434 ) 45,434 112,329 — 146,329 Equity earnings in subsidiaries 113,042 91,640 — (204,682 ) — Interest expense (income), net 8,651 16,079 6,723 — 31,453 Other expense (income), net (20 ) 347 63 — 390 Income before income taxes 92,977 120,648 105,543 (204,682 ) 114,486 Income tax expense (5,192 ) 7,606 13,903 — 16,317 Net income $ 98,169 $ 113,042 $ 91,640 $ (204,682 ) $ 98,169 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT 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 — 27,149 78,368 (182 ) 105,335 Research, development and engineering — 10,411 12,040 — 22,451 General and administrative 3,463 24,003 66,743 — 94,209 Total operating expenses 3,463 61,563 157,151 (182 ) 221,995 Operating income (3,463 ) 72,175 64,188 — 132,900 Equity earnings in subsidiaries 98,283 46,211 — (144,494 ) — Interest expense (income), net 5,786 15,314 (347 ) — 20,753 Other expense (income), net (2 ) 6 (258 ) — (254 ) Income before income taxes 89,036 103,066 64,793 (144,494 ) 112,401 Income tax expense (3,537 ) 4,783 18,582 — 19,828 Net income $ 92,573 $ 98,283 $ 46,211 $ (144,494 ) $ 92,573 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited, in thousands except share and per share data) Three Months Ended September 30, 2015 j2 Global, Inc. j2 Cloud Services, Inc. Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net income $ 37,375 $ 41,260 $ 41,357 $ (82,617 ) $ 37,375 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax expense (benefit) — — (4,652 ) — (4,652 ) Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit) (1,057 ) — — — (1,057 ) Other comprehensive income (loss), net of tax (1,057 ) — (4,652 ) — (5,709 ) Comprehensive income $ 36,318 $ 41,260 $ 36,705 $ (82,617 ) $ 31,666 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT 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 $ 28,759 $ 33,798 $ 5,492 $ (39,290 ) $ 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 $ 28,823 $ 33,030 $ (3,787 ) $ (39,290 ) $ 18,776 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited, in thousands except share and per share data) Nine Months Ended September 30, 2015 j2 Global, Inc. j2 Cloud Services, Inc. Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net income $ 98,169 $ 113,042 $ 91,640 $ (204,682 ) $ 98,169 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax expense (benefit) — — (12,777 ) — (12,777 ) Unrealized gain (loss) on available-for-sale investments, net of tax expense (benefit) (4,611 ) — — — (4,611 ) Other comprehensive income (loss), net of tax (4,611 ) — (12,777 ) — (17,388 ) Comprehensive income $ 93,558 $ 113,042 $ 78,863 $ (204,682 ) $ 80,781 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT 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 $ 92,573 $ 98,283 $ 46,211 $ (144,494 ) $ 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 $ 92,637 $ 97,093 $ 39,770 $ (144,494 ) $ 85,006 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited, in thousands except share and per share data) Nine Months Ended September 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 $ (21,341 ) $ 34,297 $ 135,617 $ — $ 148,573 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 87,976 — — — 87,976 Purchase of available-for-sale investments (78,281 ) — — — (78,281 ) Purchases of property and equipment — (1,355 ) (10,572 ) — (11,927 ) Acquisition of businesses, net of cash received — 47 (259,885 ) — (259,838 ) Purchases of intangible assets — 166 (1,424 ) — (1,258 ) Investment in subsidiaries — — — — — Intercompany (53,317 ) 53,317 — — — Net cash (used in) provided by investing activities (43,619 ) 52,175 (271,881 ) — (263,325 ) Cash flows from financing activities: Repurchases of common and restricted stock (3,159 ) — — — (3,159 ) Issuance of common stock under employee stock purchase plan 196 — — — 196 Exercise of stock options 4,618 — — — 4,618 Dividends paid (43,526 ) — — — (43,526 ) Excess tax benefits from share-based compensation 4,541 — — — 4,541 Deferred payments for acquisitions — — (5,411 ) — (5,411 ) Other — — (250 ) — (250 ) Intercompany (13,713 ) (103,533 ) 117,246 — — Net cash (used in) provided by financing activities (51,043 ) (103,533 ) 111,585 — (42,991 ) Effect of exchange rate changes on cash and cash equivalents (1,233 ) (7,895 ) 5,576 — (3,552 ) Net change in cash and cash equivalents (117,236 ) (24,956 ) (19,103 ) — (161,295 ) Cash and cash equivalents at beginning of period 226,790 36,810 170,063 — 433,663 Cash and cash equivalents at end of period $ 109,554 $ 11,854 $ 150,960 $ — $ 272,368 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (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 cash provided by operating activities $ 11,254 $ 38,535 $ 82,332 $ — $ 132,121 Cash flows from investing activities: Maturity of certificates of deposit — 8,210 6,310 — 14,520 Maturity 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) provided by 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 ) (4,734 ) — — (5,473 ) Issuance of common stock under employee stock purchase plan 76 123 — — 199 Exercise of stock options 1,193 5,194 — — 6,387 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 — — (711 ) — (711 ) Intercompany (20,620 ) (11,292 ) 55,734 (23,822 ) — Net cash (used in) provided by financing activities 358,999 (31,208 ) 41,271 (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 |