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, LLC. j2 Cloud Services, LLC 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, LLC, those contractual provisions did not, as of June 30, 2014, meaningfully restrict j2 Cloud Services, LLC'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, LLC, (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, 2016 BALANCE SHEET j2 Global, Inc. j2 Cloud Services, LLC Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated ASSETS Cash and cash equivalents $ 46,203 $ 8,433 $ 230,927 $ — $ 285,563 Short-term investments 39,845 — 63 — 39,908 Accounts receivable, net — 13,872 100,714 (5 ) 114,581 Prepaid expenses and other current assets 32,347 1,846 17,015 (24,641 ) 26,567 Intercompany receivable 130,000 201,099 — (331,099 ) — Total current assets 248,395 225,250 348,719 (355,745 ) 466,619 Long-term investments 53,421 — — — 53,421 Property and equipment, net — 6,763 54,674 — 61,437 Trade names, net — 10,130 108,761 — 118,891 Patent and patent licenses, net — 637 13,804 — 14,441 Customer relationships, net — 2,543 172,891 — 175,434 Goodwill — 61,419 792,372 — 853,791 Other purchased intangibles, net — 4,438 12,450 — 16,888 Investment in subsidiaries 1,062,379 723,601 (1,072 ) (1,784,908 ) — Deferred income taxes, non-current — 22,475 2,284 (20,305 ) 4,454 Other assets — 457 3,312 — 3,769 Total assets $ 1,364,195 $ 1,057,713 $ 1,508,195 $ (2,160,958 ) $ 1,769,145 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $ 6,461 $ 24,111 $ 90,973 $ (19,715 ) $ 101,830 Income taxes payable — 7,138 — (4,931 ) 2,207 Deferred revenue, current — 19,977 56,282 — 76,259 Capital lease, current — — 191 — 191 Intercompany payable 77,121 — 253,978 (331,099 ) — Total current liabilities 83,582 51,226 401,424 (355,745 ) 180,487 Long-term debt 352,858 246,402 — — 599,260 Capital lease, non-current — — 12 — 12 Liability for uncertain tax positions — 44,418 — — 44,418 Deferred income taxes, non-current 29,111 — 31,169 (20,305 ) 39,975 Deferred revenue, non-current — 2,354 — — 2,354 Other long-term liabilities 1,522 581 2,342 — 4,445 Total liabilities 467,073 344,981 434,947 (376,050 ) 870,951 Commitments and contingencies — — — — — Preferred stock - Series A, $0.01 par value — — — — — Preferred stock - Series B, $0.01 par value — — — — — Common stock, $0.01 par value 472 — — — 472 Additional paid-in capital 460,276 89,066 425,550 (670,507 ) 304,385 Retained earnings 436,285 623,518 688,984 (1,114,401 ) 634,386 Accumulated other comprehensive income (loss) 89 148 (41,286 ) — (41,049 ) Total stockholders' equity 897,122 712,732 1,073,248 (1,784,908 ) 898,194 Total liabilities and stockholders' equity $ 1,364,195 $ 1,057,713 $ 1,508,195 $ (2,160,958 ) $ 1,769,145 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited, in thousands except share and per share data) December 31, 2015 BALANCE SHEET j2 Global, Inc. j2 Cloud Services, LLC Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated ASSETS Cash and cash equivalents $ 55,516 $ 9,975 $ 190,039 $ — $ 255,530 Short-term investments 79,595 — 60 — 79,655 Accounts receivable, net — 10,679 104,131 (130 ) 114,680 Prepaid expenses and other current assets 6,887 8,500 14,319 (3,984 ) 25,722 Deferred income taxes, current — 3,316 4,413 (511 ) 7,218 Intercompany receivable 117,000 174,127 — (291,127 ) — Total current assets 258,998 206,597 312,962 (295,752 ) 482,805 Long-term investments 78,563 — — — 78,563 Property and equipment, net — 6,557 50,885 — 57,442 Trade names, net — 10,118 108,847 — 118,965 Patent and patent licenses, net — 743 18,098 — 18,841 Customer relationships, net — 1,193 196,126 — 197,319 Goodwill — 56,296 751,365 — 807,661 Other purchased intangibles, net — 4,218 13,298 — 17,516 Investment in subsidiaries 1,051,927 1,095,155 — (2,147,082 ) — Deferred income taxes, non-current — 14,978 (14,978 ) — — Other assets 8,219 1,167 4,370 (9,149 ) 4,607 Total assets $ 1,397,707 $ 1,397,022 $ 1,440,973 $ (2,451,983 ) $ 1,783,719 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $ 4,573 $ 27,976 $ 81,965 $ (130 ) $ 114,384 Income taxes payable — 9,573 — (3,984 ) 5,589 Deferred revenue, current — 19,530 56,574 — 76,104 Capital lease, current — — 214 — 214 Deferred income taxes, current 511 — 363 (511 ) 363 Intercompany payable 121,263 — 169,864 (291,127 ) — Total current liabilities 126,347 57,079 308,980 (295,752 ) 196,654 Long-term debt 354,437 246,749 — (9,149 ) 592,037 Capital lease, non-current — — 148 — 148 Liability for uncertain tax positions — 35,917 — — 35,917 Deferred income taxes, non-current 24,936 — 19,053 — 43,989 Deferred revenue, non-current — 4,667 1,871 — 6,538 Other long-term liabilities 1,779 683 15,766 — 18,228 Total liabilities 507,499 345,095 345,818 (304,901 ) 893,511 Commitments and contingencies — — — — — Preferred stock - Series A, $0.01 par value — — — — — Preferred stock - Series B, $0.01 par value — — — — — Common stock, $0.01 par value 479 — — — 479 Additional paid-in capital 292,064 238,631 524,031 (762,662 ) 292,064 Retained earnings 595,216 813,058 602,935 (1,384,420 ) 626,789 Accumulated other comprehensive income (loss) 2,449 238 (31,811 ) — (29,124 ) Total stockholders' equity 890,208 1,051,927 1,095,155 (2,147,082 ) 890,208 Total liabilities and stockholders' equity $ 1,397,707 $ 1,397,022 $ 1,440,973 $ (2,451,983 ) $ 1,783,719 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited, in thousands except share and per share data) Three Months Ended September 30, 2016 j2 Global, Inc. j2 Cloud Services, LLC Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Revenues: Total revenues $ — $ 57,751 $ 165,317 $ (12,952 ) $ 210,116 Cost of revenues — 19,421 30,479 (12,908 ) 36,992 Gross profit — 38,330 134,838 (44 ) 173,124 Operating expenses: Sales and marketing — 10,166 36,303 (44 ) 46,425 Research, development and engineering — 3,097 5,868 — 8,965 General and administrative 4,667 5,793 45,152 — 55,612 Total operating expenses 4,667 19,056 87,323 (44 ) 111,002 Income (loss) from operations (4,667 ) 19,274 47,515 — 62,122 Equity earnings in subsidiaries 45,662 28,224 — (73,886 ) — Interest expense, net 1,799 5,199 3,438 — 10,436 Other income, net (7,500 ) (56 ) (2,162 ) — (9,718 ) Income before income taxes 46,696 42,355 46,239 (73,886 ) 61,404 Income tax expense 1,127 7,110 7,598 — 15,835 Net income $ 45,569 $ 35,245 $ 38,641 $ (73,886 ) $ 45,569 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, LLC 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 Income (loss) from operations (3,711 ) 8,981 50,463 — 55,733 Equity earnings in subsidiaries 41,260 41,357 — (82,617 ) — Interest expense, 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 (benefit) (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) Nine Months Ended September 30, 2016 j2 Global, Inc. j2 Cloud Services, LLC Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Revenues: Total revenues $ — $ 180,390 $ 486,962 $ (44,934 ) $ 622,418 Cost of revenues — 53,902 97,767 (44,799 ) 106,870 Gross profit — 126,488 389,195 (135 ) 515,548 Operating expenses: Sales and marketing — 31,055 112,235 (135 ) 143,155 Research, development and engineering — 9,316 17,849 — 27,165 General and administrative 14,417 15,694 140,712 — 170,823 Total operating expenses 14,417 56,065 270,796 (135 ) 341,143 Income (loss) from operations (14,417 ) 70,423 118,399 — 174,405 Equity earnings in subsidiaries 118,004 76,706 — (194,710 ) — Interest expense, net 5,262 15,624 10,085 — 30,971 Other income, net (7,709 ) (1,070 ) (1,026 ) — (9,805 ) Income before income taxes 106,034 132,575 109,340 (194,710 ) 153,239 Income tax expense (benefit) (3,247 ) 24,987 22,218 — 43,958 Net income $ 109,281 $ 107,588 $ 87,122 $ (194,710 ) $ 109,281 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, LLC 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 Income (loss) from operations (11,434 ) 45,434 112,329 — 146,329 Equity earnings in subsidiaries 113,042 91,640 — (204,682 ) — Interest expense, 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 (benefit) (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 COMPREHENSIVE INCOME (Unaudited, in thousands except share and per share data) Three Months Ended September 30, 2016 j2 Global, Inc. j2 Cloud Services, LLC Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net income $ 45,569 $ 35,245 $ 38,641 $ (73,886 ) $ 45,569 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment — — (328 ) — (328 ) Change in fair value on available-for-sale investments, net of tax expense (benefit) (2,249 ) — — — (2,249 ) Other comprehensive income (loss), net of tax (2,249 ) — (328 ) — (2,577 ) Comprehensive income $ 43,320 $ 35,245 $ 38,313 $ (73,886 ) $ 42,992 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, LLC 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 — — (4,652 ) — (4,652 ) Change in fair value 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) Nine Months Ended September 30, 2016 j2 Global, Inc. j2 Cloud Services, LLC Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net income $ 109,281 $ 107,588 $ 87,122 $ (194,710 ) $ 109,281 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax — — (9,566 ) — (9,566 ) Change in fair value on available-for-sale investments, net of tax expense (benefit) (2,359 ) — — — (2,359 ) Other comprehensive income (loss), net of tax (2,359 ) — (9,566 ) — (11,925 ) Comprehensive income $ 106,922 $ 107,588 $ 77,556 $ (194,710 ) $ 97,356 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, LLC 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 — — (12,777 ) — (12,777 ) Change in fair value 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 CASH FLOW (Unaudited, in thousands except share and per share data) Nine Months Ended September 30, 2016 j2 Global, Inc. j2 Cloud Services, LLC Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net cash (used in) provided by operating activities $ (4,416 ) $ 35,756 $ 161,200 $ — $ 192,540 Cash flows from investing activities: Maturity of available-for-sale investments 145,005 — — — 145,005 Purchase of available-for-sale investments (75,834 ) — — — (75,834 ) Purchases of property and equipment — (2,458 ) (14,989 ) — (17,447 ) Acquisition of businesses, net of cash received — (6,292 ) (85,109 ) — (91,401 ) Purchases of intangible assets — (106 ) (1,908 ) — (2,014 ) Net cash (used in) provided by investing activities 69,171 (8,856 ) (102,006 ) — (41,691 ) Cash flows from financing activities: Repurchases of common and restricted stock (56,083 ) — — — (56,083 ) Issuance of common stock under employee stock purchase plan 191 — — — 191 Exercise of stock options 3,272 — — — 3,272 Dividends paid (48,768 ) — — — (48,768 ) Excess tax benefits from share-based compensation 2,071 — — — 2,071 Deferred payments for acquisitions — (1,378 ) (17,561 ) — (18,939 ) Other — — (391 ) — (391 ) Intercompany 25,463 (26,973 ) 1,510 — — Net cash used in financing activities (73,854 ) (28,351 ) (16,442 ) — (118,647 ) Effect of exchange rate changes on cash and cash equivalents (214 ) (91 ) (1,864 ) — (2,169 ) Net change in cash and cash equivalents (9,313 ) (1,542 ) 40,888 — 30,033 Cash and cash equivalents at beginning of period 55,516 9,975 190,039 — 255,530 Cash and cash equivalents at end of period $ 46,203 $ 8,433 $ 230,927 $ — $ 285,563 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, LLC 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 ) 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 stock 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 |