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 CONSOLIDATING BALANCE SHEET March 31, 2017 (Unaudited, in thousands except share and per share data) BALANCE SHEET j2 Global, Inc. j2 Cloud Services Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated ASSETS Cash and cash equivalents $ 15,150 $ 34,395 $ 137,864 $ — $ 187,409 Short-term investments — — 65 — 65 Accounts receivable, net 1 10,143 161,919 (1 ) 172,062 Prepaid expenses and other current assets 38,296 1,766 22,295 (38,180 ) 24,177 Intercompany receivable 679,103 299,743 149,971 (1,128,817 ) — Total current assets 732,550 346,047 472,114 (1,166,998 ) 383,713 Property and equipment, net — 6,088 63,626 — 69,714 Trade names, net — 10,439 102,900 — 113,339 Patent and patent licenses, net — 565 11,988 — 12,553 Customer relationships, net — 10,810 194,110 — 204,920 Goodwill — 70,480 1,068,220 — 1,138,700 Other purchased intangibles, net — 6,944 159,444 — 166,388 Investment in subsidiaries 1,121,423 751,821 (1,073 ) (1,872,171 ) — Deferred income taxes, non-current — 32,667 1,752 (27,507 ) 6,912 Other assets — 422 5,891 — 6,313 Total assets $ 1,853,973 $ 1,236,283 $ 2,078,972 $ (3,066,676 ) $ 2,102,552 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued expenses $ 6,697 $ 44,117 $ 133,294 $ (38,181 ) $ 145,927 Income taxes payable — 94,709 — (73,110 ) 21,599 Deferred revenue, current — 20,324 65,107 — 85,431 Line of credit 224,123 — — — 224,123 Other current liabilities — — 34 — 34 Intercompany payable 303,492 — 752,214 (1,055,706 ) — Total current liabilities 534,312 159,150 950,649 (1,166,997 ) 477,114 Long-term debt 357,462 246,811 — — 604,273 Deferred revenue, non-current — 822 — — 822 Liability for uncertain tax positions — 41,833 5,345 — 47,178 Deferred income taxes, non-current 31,738 — 35,521 (27,507 ) 39,752 Other long-term liabilities 1,107 559 1,321 — 2,987 Total liabilities 924,619 449,175 992,836 (1,194,504 ) 1,172,126 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 475 — — — 475 Additional paid-in capital 468,359 89,066 424,399 (669,356 ) 312,468 Retained earnings 460,520 697,822 713,024 (1,202,816 ) 668,550 Accumulated other comprehensive income (loss) — 220 (51,287 ) — (51,067 ) Total stockholders’ equity 929,354 787,108 1,086,136 (1,872,172 ) 930,426 Total liabilities and stockholders’ equity $ 1,853,973 $ 1,236,283 $ 2,078,972 $ (3,066,676 ) $ 2,102,552 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2016 (Unaudited, in thousands except share and per share data) BALANCE SHEET j2 Global, Inc. j2 Cloud Services Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated ASSETS Cash and cash equivalents $ 23,935 $ 22,949 $ 77,066 $ — $ 123,950 Short-term investments — — 60 — 60 Accounts receivable, net — 11,464 188,498 (91 ) 199,871 Prepaid expenses and other current assets 25,922 2,266 21,246 (25,316 ) 24,118 Intercompany receivable 635,740 281,078 166,210 (1,083,028 ) — Total current assets 685,597 317,757 453,080 (1,108,435 ) 347,999 Property and equipment, net — 6,318 61,776 — 68,094 Trade names, net — 10,097 105,756 — 115,853 Patent and patent licenses, net — 601 13,327 — 13,928 Customer relationships, net — 2,519 205,636 — 208,155 Goodwill — 58,310 1,064,500 — 1,122,810 Other purchased intangibles, net — 4,804 168,951 — 173,755 Investment in subsidiaries 1,091,412 730,153 (1,071 ) (1,820,494 ) — Deferred income taxes, non-current 1,346 26,667 2,171 (24,895 ) 5,289 Other assets — 443 6,002 — 6,445 Total assets $ 1,778,355 $ 1,157,669 $ 2,080,128 $ (2,953,824 ) $ 2,062,328 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued expenses $ 4,545 $ 28,179 $ 170,754 $ (25,407 ) $ 178,071 Income taxes payable — 82,795 — (66,042 ) 16,753 Deferred revenue, current — 19,277 61,107 — 80,384 Line of credit 178,817 — — — 178,817 Other current liabilities — — 64 — 64 Intercompany payable 296,658 11 720,317 (1,016,986 ) — Total current liabilities 480,020 130,262 952,242 (1,108,435 ) 454,089 Long-term debt 355,143 246,604 (1 ) — 601,746 Deferred revenue, non-current — 1,588 — — 1,588 Liability for uncertain tax positions — 41,259 5,278 — 46,537 Deferred income taxes, non-current 28,687 — 36,565 (24,895 ) 40,357 Other long-term liabilities 1,040 505 1,930 — 3,475 Total liabilities 864,890 420,218 996,014 (1,133,330 ) 1,147,792 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 474 — — — 474 Additional paid-in capital 464,220 89,066 424,399 (669,356 ) 308,329 Retained earnings 448,771 648,233 714,516 (1,151,138 ) 660,382 Accumulated other comprehensive income (loss) — 152 (54,801 ) — (54,649 ) Total stockholders’ equity 913,465 737,451 1,084,114 (1,820,494 ) 914,536 Total liabilities and stockholders’ equity $ 1,778,355 $ 1,157,669 $ 2,080,128 $ (2,953,824 ) $ 2,062,328 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended March 31, 2017 (Unaudited, in thousands except share and per share data) j2 Global, Inc. j2 Cloud Services Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Revenues: Total revenues $ — $ 75,336 $ 207,888 $ (28,555 ) $ 254,669 Cost of revenues — 17,227 52,131 (28,548 ) 40,810 Gross profit — 58,109 155,757 (7 ) 213,859 Operating expenses: Sales and marketing — 10,810 66,674 (7 ) 77,477 Research, development and engineering — 2,950 8,802 — 11,752 General and administrative 4,824 4,771 67,060 — 76,655 Total operating expenses 4,824 18,531 142,536 (7 ) 165,884 Income (loss) from operations (4,824 ) 39,578 13,221 — 47,975 Equity earnings in subsidiaries 26,430 17,828 — (44,258 ) — Interest (income) expense, net (5,309 ) 5,207 12,512 — 12,410 Other income, net — (46 ) 369 — 323 Income before income taxes 26,915 52,245 340 (44,258 ) 35,242 Income tax expense 1,095 6,489 1,838 — 9,422 Net income $ 25,820 $ 45,756 $ (1,498 ) $ (44,258 ) $ 25,820 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended March 31, 2016 (Unaudited, in thousands except share and per share data) j2 Global, Inc. j2 Cloud Services Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Revenues: Total revenues $ — $ 56,385 $ 155,566 $ (11,449 ) $ 200,502 Cost of revenues — 17,489 28,202 (11,403 ) 34,288 Gross profit — 38,896 127,364 (46 ) 166,214 Operating expenses: Sales and marketing — 10,628 37,530 (46 ) 48,112 Research, development and engineering — 3,289 5,699 — 8,988 General and administrative 4,672 5,471 45,633 — 55,776 Total operating expenses 4,672 19,388 88,862 (46 ) 112,876 Income (loss) from operations (4,672 ) 19,508 38,502 — 53,338 Equity earnings in subsidiaries 34,323 27,696 — (62,019 ) — Interest expense, net 1,871 5,233 3,129 — 10,233 Other expense (income), net 91 (920 ) 955 — 126 Income before income taxes 27,689 42,891 34,418 (62,019 ) 42,979 Income tax expense (benefit) (2,254 ) 8,568 6,722 — 13,036 Net income $ 29,943 $ 34,323 $ 27,696 $ (62,019 ) $ 29,943 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME Three Months Ended March 31, 2017 (Unaudited, in thousands except share and per share data) j2 Global, Inc. j2 Cloud Services Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net income $ 25,820 $ 45,756 $ (1,498 ) $ (44,258 ) $ 25,820 Other comprehensive income, net of tax: Foreign currency translation adjustment — — 3,582 — 3,582 Change in fair value on available-for-sale investments, net of tax expense (benefit) — — — — — Other comprehensive income, net of tax — — 3,582 — 3,582 Comprehensive income $ 25,820 $ 45,756 $ 2,084 $ (44,258 ) $ 29,402 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Three Months Ended March 31, 2016 (Unaudited, in thousands except share and per share data) j2 Global, Inc. j2 Cloud Services Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net income $ 29,943 $ 34,323 $ 27,696 $ (62,019 ) $ 29,943 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment — — 3,415 — 3,415 Change in fair value on available-for-sale investments, net of tax benefit (2,361 ) — — — (2,361 ) Other comprehensive income (loss), net of tax (2,361 ) — 3,415 — 1,054 Comprehensive income $ 27,582 $ 34,323 $ 31,111 $ (62,019 ) $ 30,997 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW Three Months Ended March 31, 2017 (Unaudited, in thousands except share and per share data) j2 Global, Inc. j2 Cloud Services Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net cash (used in) provided by operating activities $ (71,295 ) $ 20,798 $ 101,688 $ — $ 51,191 Cash flows from investing activities: Purchase of certificates of deposit — — (5 ) — (5 ) Purchases of property and equipment — (479 ) (9,181 ) — (9,660 ) Acquisition of businesses, net of cash received — 2 (3,565 ) — (3,563 ) Purchases of intangible assets — (2 ) (140 ) — (142 ) Net cash used in investing activities — (479 ) (12,891 ) — (13,370 ) Cash flows from financing activities: Proceeds from line of credit, net 44,981 — — — 44,981 Repurchases of common and restricted stock (314 ) — — — (314 ) Issuance of common stock under employee stock purchase plan 67 — — — 67 Exercise of stock options 695 — — — 695 Dividends paid (17,575 ) — — — (17,575 ) Deferred payments for acquisitions — (1,035 ) (1,264 ) — (2,299 ) Other — — (26 ) — (26 ) Intercompany 34,656 (7,906 ) (26,750 ) — — Net cash (used in) provided by financing activities 62,510 (8,941 ) (28,040 ) — 25,529 Effect of exchange rate changes on cash and cash equivalents — 68 41 — 109 Net change in cash and cash equivalents (8,785 ) 11,446 60,798 — 63,459 Cash and cash equivalents at beginning of period 23,935 22,949 77,066 — 123,950 Cash and cash equivalents at end of period $ 15,150 $ 34,395 $ 137,864 $ — $ 187,409 j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW Three Months Ended March 31, 2016 (Unaudited, in thousands except share and per share data) j2 Global, Inc. j2 Cloud Services Non-guarantor Subsidiaries Consolidating Adjustments j2 Global Consolidated Net cash (used in) provided by operating activities $ 5,686 $ (450 ) $ 59,288 $ — $ 64,524 Cash flows from investing activities: Maturity of available-for-sale investments 26,224 — — — 26,224 Purchase of available-for-sale investments (21,402 ) — — — (21,402 ) Purchases of property and equipment — (284 ) (4,037 ) — (4,321 ) Acquisition of businesses, net of cash received — — (47,989 ) — (47,989 ) Purchases of intangible assets — — (316 ) — (316 ) Net cash (used in) provided by investing activities 4,822 (284 ) (52,342 ) — (47,804 ) Cash flows from financing activities: Repurchases of common stock and restricted stock (1,786 ) — — — (1,786 ) Issuance of common stock under employee stock purchase plan 58 — — — 58 Exercise of stock options 1,312 — — — 1,312 Dividends paid (15,817 ) — — — (15,817 ) Excess tax benefits from share-based compensation 264 — — — 264 Deferred payments for acquisitions — (528 ) (13,858 ) — (14,386 ) Other — — (25 ) — (25 ) Intercompany (13,327 ) (4,147 ) 17,474 — — Net cash (used in) provided by financing activities (29,296 ) (4,675 ) 3,591 — (30,380 ) Effect of exchange rate changes on cash and cash equivalents (91 ) (30 ) 1,006 — 885 Net change in cash and cash equivalents (18,879 ) (5,439 ) 11,543 — (12,775 ) Cash and cash equivalents at beginning of period 55,516 9,975 190,039 — 255,530 Cash and cash equivalents at end of period $ 36,637 $ 4,536 $ 201,582 $ — $ 242,755 |