8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report  (Date of earliest event reported)   May 7, 2013

j2 Global, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 0-25965 (Commission File Number) 51-0371142 (IRS Employer Identification No.)

6922 Hollywood Blvd.

Suite 500

Los Angeles, California  90028

(Address of principal executive offices)

(323) 860-9200

(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 AND 7.01.   RESULTS OF OPERATIONS AND FINANCIAL CONDITION AND REGULATION FD DISCLOSURE

On May 8, 2013, j2 Global, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter of fiscal 2013.  In the press release, the Company also increased its previously issued financial estimates for fiscal 2013 as follows:  Revenues between $510 and $535 million and non-GAAP net earnings per diluted share between $2.78 and $2.98.

The Company also announced that it has declared a quarterly cash dividend of $0.24 per common share. The dividend will be paid on June 4, 2013, to all shareholders of record as of the close of business on May 20, 2013. Future dividends will be subject to approval by the Company’s Board of Directors.

Also on May 8, 2013, at 5:00 p.m. Eastern Time, the Company hosted its first quarter 2013 earnings conference call and Webcast. Via the Webcast, the Company presented portions of its May 2013 Investor Presentation, which contains a summary of the Company’s financial results for the fiscal quarter ended March 31, 2013, increased financial estimates for the fiscal year 2013, and certain other financial and operating information regarding the Company. A copy of this presentation is furnished as Exhibit 99.2 to this Form 8-K.

NOTE: This information is being furnished under both Item 2.02 (Results of Operations and Financial Condition) and Item 7.01 (Regulation FD Disclosure) of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 5.07.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

(a)           On May 7, 2013, the Company held its 2013 Annual Meeting of Stockholders (the “Annual Meeting”) in Los Angeles, California.

(b)           Below are the voting results for the matters submitted to the Company's stockholders for a vote at the Annual Meeting:

(1)   The election of the following six director nominees to serve for the ensuing year and until their successors are elected and qualified. All nominees were elected as directors with the following vote:

Nominee	For	Against	Abstain	Broker Non-Votes
Douglas Y. Bech	37,862,888	1,048,867	154,871	4,067,187
Robert J. Cresci	38,015,386	898,272	152,968	4,067,187
W. Brian Kretzmer	38,126,267	787,439	152,920	4,067,187
Richard S. Ressler	38,160,186	753,977	152,463	4,067,187
Stephen Ross	38,279,179	634,385	153,062	4,067,187
Michael P. Schulhof	37,861,796	1,051,638	153,192	4,067,187

(2)   A proposal to ratify the appointment of SingerLewak, LLP to serve as the Company’s independent auditors for fiscal 2013. This proposal was approved with the following vote:

For 42,946,351

Against 26,449

Abstain 161,013

Broker Non-Votes 0

(3)   A proposal to approve, in an advisory vote, the compensation of the named executive officers.  This proposal was approved with the following vote:

For 38,551,625

Against 330,228

Abstain 184,773

Broker Non-Votes 4,067,187

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit Number	Description
99.1	Press Release dated May 8, 2013.
99.2	May 2013 Investor Presentation.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	j2 Global, Inc. (Registrant)
Date: May 8, 2013	By:	/s/ Jeffrey D. Adelman
		Jeffrey D. Adelman Vice President, General Counsel and Secretary

INDEX TO EXHIBITS

Exhibit Number	Description
99.1	Press Release dated May 8, 2013.
99.2	May 2013 Investor Presentation.

EX-99.1

EXHIBIT 99.1

j2 Reports Record Q1 2013 Revenues; Raises Full Year 2013 Revenues and Earnings Outlook

Announces Seventh Consecutive Quarterly Dividend Increase

LOS ANGELES ---- j2 Global, Inc. (NASDAQGS:JCOM) today reported financial results for the first quarter ended March 31, 2013, provided increased 2013 revenues and earnings estimates and announced that its Board of Directors has declared an increased quarterly cash dividend of $0.24 per share.

FIRST QUARTER 2013 RESULTS

Quarterly revenues increased 31% to a record $113.6 million compared to $86.7 million for Q1 2012.  This result was driven by 4.7% growth in Business Cloud Services revenues and the first full quarter of Digital Media revenues.  Digital Media revenues are seasonal, with Q1 expected to contribute 15-20% of annual revenues and Q4 expected to contribute as much as 35%.  Both segments performed in line with j2’s expectations.

GAAP and Non-GAAP earnings per diluted share(1)(2) for the quarter decreased (18.3)% and (9.4)%, respectively, to $0.49 and $0.58, respectively, compared to $0.60 and $0.64, respectively, for Q1 2012, reflecting $0.07 of interest expense not present in Q1 2012, $0.04 of Digital Media Division non-cash amortization expense and $0.05 of integration expenses associated with j2’s Q1 2013 acquisition of IGN Entertainment (which integration expenses are already excluded from Non-GAAP results presented).

Quarterly EBITDA(3) increased 7.1% to a Q1 record $48.2 million compared to $45.0 million for Q1 2012.

Q1 2013 free cash flow(4) increased 1.0% to $38.4 million compared to $38.1 million for Q1 2012.

Cancel rate(5) for the quarter was within our annual range at 2.4%, while the net subscriber base grew by 60,000 DIDs.

j2 ended the quarter with approximately $310 million in cash and investments after deploying $73.5 million during the quarter for acquisitions and j2’s regular quarterly dividend.

Key financial results for Q1 2013 versus Q1 2012 are set forth in the following table (in millions, except per share). Reconciliations of non-GAAP earnings per diluted share, EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.

	Q1 2013		Q1 2012		% Change
Revenues	$113.6 million		$86.7 million			31.0%
Earnings per Diluted Share(1)		$0.49		$0.60		(18.3)%
Non-GAAP Earnings per Diluted Share(1) (2)		$0.58		$0.64		(9.4)%
EBITDA(3)	$48.2 million		$45.0 million			7.1%
Free Cash Flow(4)	$38.4 million		$38.1 million			1.0%

“Over the past several quarters we have made enormous strides in expanding and diversifying j2’s Internet-related businesses,” said Hemi Zucker, CEO of j2. “We have added a Digital Media Division by means of several key acquisitions to complement our leading business cloud services. We have also continued to grow our Business Cloud Services Division geographically with expansion of our voice and online backup services in Australia and New Zealand.  We intend to continue to focus on growing and diversifying our Internet-related businesses in market segments that will provide substantial profit opportunities.”

BUSINESS OUTLOOK

During Q2 2013, j2 entered into a patent license agreement pursuant to which it has received $27 million, as further described in j2’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 25, 2013.

j2 currently estimates that it will generate fiscal 2013 revenues and earnings per diluted share associated with past damages from this license agreement in amounts exceeding $10 million and $0.13, respectively.  Accordingly, j2 is increasing both its fiscal 2013 revenues and non-GAAP earnings per diluted share estimates by equal amounts as follows:

Increasing fiscal 2013 revenues estimate to between $510 and $535 million from the previous estimate of between $500 and $525 million.

Increasing fiscal 2013 non-GAAP earnings per diluted share estimate to between $2.78 and $2.98 from the previous estimate of between $2.65 and $2.85.

Non-GAAP earnings per diluted share for 2013 excludes acquisition-related integration costs of approximately $4 million and share-based compensation of between $11 and $12 million.

It is anticipated that the normalized tax rate for 2013 (exclusive of the release of reserves for uncertain tax positions) will be between 25% and 27%.

DIVIDEND

j2’s Board of Directors has approved a quarterly cash dividend of $0.24 per common share, a 3.2% increase versus last quarter’s dividend and a 11.6% increase versus the dividend paid in Q2 2012.  This is j2’s seventh consecutive quarterly dividend increase and represents a 20% increase versus its first quarterly dividend in September 2011.  The dividend will be paid on June 4, 2013 to all shareholders of record as of the close of business on May 20, 2013.  Future dividends will be subject to Board approval.

Notes:

(1)	The estimated GAAP effective tax rates were approximately 19.5% for Q1 2013 and 22.6% for Q1 2012.  The estimated Non-GAAP effective tax rates were approximately 23.2% for Q1 2013 and 23.1% for Q1 2012.
(2)	For Q1 2013, Non-GAAP earnings per diluted share excludes share-based compensation and certain acquisition-related integration costs, in each case net of tax, totaling $0.09. For Q1 2012, Non-GAAP earnings per diluted share excludes share-based compensation and related payroll taxes, and certain acquisition-related integration costs, in each case net of tax, totaling $0.04. Non-GAAP earnings per diluted share amounts are not meant as a substitute for GAAP, but are solely for informational purposes.
(3)	EBITDA is defined as earnings before interest and other expense, net; income tax expense; depreciation and amortization; and the items used to reconcile GAAP to Non-GAAP financial measures, including (1) share-based compensation expense and related payroll taxes and (2) certain acquisition-related integration costs.  EBITDA amounts are not meant as a substitute for GAAP, but are solely for informational purposes.
(4)	Free cash flow is defined as net cash provided by operating activities, less purchases of property, plant and equipment, plus excess tax benefit from share-based compensation. Free cash flow amounts are not meant as a substitute for GAAP, but are solely for informational purposes.
(5)	Cancel rate is defined as cancels related to individual customer DIDs with greater than four months of continuous service (continuous service includes customer DIDs administratively cancelled and reactivated within the same calendar month), and DIDs related to enterprise customers beginning with their first day of service. For the quarter, calculated monthly and expressed here as an average over the three months of the quarter. For the year, expressed as an average over the four quarters of the year.

About j2

j2 Global, Inc. (NASDAQGS:JCOM) provides Internet services through its two divisions: Business Cloud Services and Digital Media. The Business Cloud Services Division offers Internet fax, virtual phone, hosted email, email marketing, online backup, unified communications and CRM solutions. It markets its services principally under the brand names eFax®, eVoice®, FuseMail®, Campaigner®, KeepItSafe® and Onebox® and operates a messaging network spanning 49 countries on six continents. The Digital Media Division consists of Ziff Davis Inc., which offers technology, gaming and lifestyle content through its digital properties which include PCMag.com, IGN.com, AskMen.com, Toolbox.com and others. Ziff Davis also operates BuyerBase, an advanced digital ad targeting platform and Ziff Davis B2B, a leading provider of research to enterprise buyers and leads to IT vendors. As of December 31, 2012, j2 had achieved 17 consecutive fiscal years of revenue growth.  For more information about j2, please visit www.j2global.com.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this Press Release are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995, particularly those contained in Hemi Zucker’s quote and the “Business Outlook” portion regarding the Company’s expected fiscal 2013 financial performance.  These forward-looking statements are based on management’s current expectations or beliefs and are subject to numerous assumptions, risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.  These factors and uncertainties include, among other items: ability to successfully diversify and grow our business, both the Business Cloud Services and Digital Media Divisions; ability to identify, close and successfully integrate acquisitions; risks of geographic expansion; risks that markets we choose to enter fail to achieve desired levels of growth and profitability prospects; subscriber growth and retention; variability of revenue based on changing conditions in particular industries and the economy generally; protection of the Company’s proprietary technology or infringement by the Company of intellectual property of others; the risk of adverse changes in the U.S. or international regulatory environments surrounding messaging and communications, including but not limited to the imposition or increase of taxes or regulatory-related fees; and the numerous other factors set forth in j2’s filings with the Securities and Exchange Commission (“SEC”). For a more detailed description of the risk factors and uncertainties affecting j2, refer to the 2012 Annual Report on Form 10-K filed by j2 on March 1, 2013, and the other reports filed by j2 from time-to-time with the SEC, each of which is available at www.sec.gov. The forward-looking statements provided in this press release and particularly those contained in Hemi Zucker’s quote and the “Business Outlook” portion regarding the Company’s expected fiscal 2013 financial performance are based on limited information available to the Company at this time, which is subject to change. Although management’s expectations may change after the date of this press release, the Company undertakes no obligation to revise or update these statements.

j2 GLOBAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED, IN THOUSANDS)

	MARCH 31,			DECEMBER 31,
	2013			2012
ASSETS
Cash and cash equivalents	$	193,126		$	218,680
Short-term investments		100,846			105,054
Accounts receivable,
net of allowances of $3,216 and $3,213, respectively		56,164			37,285
Prepaid expenses and other current assets		15,891			15,388
Deferred income taxes		2,438			1,092
Total current assets		368,465			377,499
Long-term investments		16,118			19,841
Property and equipment, net		24,874			19,599
Goodwill		429,293			407,825
Other purchased intangibles, net		195,645			165,316
Deferred income taxes		2,165			1,852
Other assets		3,266			3,238
TOTAL ASSETS	$	1,039,826		$	995,170
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses	$	57,122		$	39,874
Income taxes payable		3,277			3,004
Deferred revenue		32,753			30,493
Liability for uncertain tax positions		5,532			5,523
Deferred income taxes		1,107			33
Total current liabilities		99,791			78,927
Long-term debt		245,310			245,194
Liability for uncertain tax positions		33,439			32,155
Deferred income taxes		39,163			32,393
Other long-term liabilities		3,001			3,166
Mandatorily redeemable financial instrument		9,068			8,740
Total liabilities		429,772			400,575
Commitments and contingencies		—			—
Stockholders' Equity:
Preferred stock		—			—
Common stock		453			451
Additional paid-in capital		173,231			169,542
Retained earnings		435,976			424,790
Accumulated other comprehensive income (loss)		980			(88	)
Total j2 Global, Inc. stockholder's equity		610,640			594,695
Noncontrolling interest		(586	)		(100	)
Total stockholders' equity		610,054			594,595
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,039,826		$	995,170

j2 GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

	THREE MONTHS ENDED MARCH 31,
	2013			2012
Revenues		113,617			86,652
Cost of revenues (including share-based compensation of $214 and $242 for the three months of 2013 and 2012, respectively)		20,235			15,864
Gross profit		93,382			70,788
Operating expenses:
Sales and marketing (including share-based compensation of $418 and $375 for the three months of 2013 and 2012, respectively)		29,638			14,860
Research, development and engineering (including share-based compensation of $106 and $116 for the three months of 2013 and 2012, respectively)		6,746			4,489
General and administrative (including share-based compensation of $1,610 and $1,560 for the three months of 2013 and 2012, respectively)		24,011			13,829
Total operating expenses		60,395			33,178
Income from operations		32,987			37,610
Interest and other expense, net		(4,716	)		(719	)
Income before income taxes		28,271			36,891
Income tax expense		5,500			8,352
Net income		22,771			28,539
Less net loss attributable to noncontrolling interest		(151	)		—
Net income attributable to j2 Global, Inc. common stockholders	$	22,922		$	28,539
Basic net income per common share:
Net income attributable to j2 Global, Inc. common stockholders	$	0.50		$	0.61
Diluted net income per common share:
Net income attributable to j2 Global, Inc. common stockholders	$	0.49		$	0.60
Basic weighted average shares outstanding		45,160,140			46,400,441
Diluted weighted average shares outstanding		45,668,167			46,794,603

j2 GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED, IN THOUSANDS)

	THREE MONTHS ENDED MARCH 31,
	2013			2012
Cash flows from operating activities:
Net income	$	22,771		$	28,539
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		8,762			4,926
Accretion and amortization of discount and premium of investments		453			319
Amortization of financing costs and discounts		150			—
Share-based compensation		2,348			2,280
Excess tax benefit from share-based compensation		(280	)		(286	)
Provision for doubtful accounts		833			1,289
Deferred income taxes		(1,446	)		(3,498	)
Decrease (increase) in:
Accounts receivable		2,495			936
Prepaid expenses and other current assets		(139	)		(1,055	)
Other assets		357			150
(Decrease) increase in:
Accounts payable and accrued expenses		160			(4,488	)
Income taxes payable		2,138			7,532
Deferred revenue		92			700
Liability for uncertain tax positions		1,294			1,536
Other liabilities		60			62
Net cash provided by operating activities		40,048			38,942
Cash flows from investing activities:
Maturity of certificate of deposit		22,106			—
Purchase of certificates of deposit		(8,165	)		(5,822	)
Sales of available-for-sale investments		31,932			45,164
Purchases of available-for-sale investments		(35,244	)		(15,537	)
Purchases of property and equipment		(1,933	)		(1,159	)
Purchases of intangible assets		(333	)		(900	)
Acquisition of businesses, net of cash received		(62,771	)		(18,843	)
Net cash (used in) provided by investing activities		(54,408	)		2,903
Cash flows from financing activities:
Debt issuance costs		(47	)		—
Repurchases of common stock and restricted stock		(2,069	)		(40,273	)
Issuance of common stock under employee stock purchase plan		56			29
Exercise of stock options		2,025			2,591
Excess tax benefit from share-based compensation		280			286
Dividends paid		(10,684	)		(9,975	)
Net cash used in financing activities		(10,439	)		(47,342	)
Effect of exchange rate changes on cash and cash equivalents		(755	)		1,820
Net decrease in cash and cash equivalents		(25,554	)		(3,677	)
Cash and cash equivalents at beginning of period		218,680			139,359
Cash and cash equivalents at end of period	$	193,126		$	135,682

j2 GLOBAL, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

THREE MONTHS ENDED MARCH 31, 2013 AND 2012

(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Non-GAAP net income are GAAP net income with the following modifications: (1) elimination of share-based compensation expense and the associated payroll taxes; (2) elimination of certain acquisition and related exit costs and (3) elimination of income tax provision associated with share-based compensation and associated payroll taxes and certain acquisition and related exit costs.

	THREE MONTHS ENDED MARCH 31, 2013										THREE MONTHS ENDED MARCH 31, 2012
	GAAP		(1) Share-based Compensation			(2) Acquisition and Exit Costs			Non-GAAP		GAAP		(1) Share-based Compensation			(2) Acquisition and Exit Costs			Non-GAAP
Revenues		113,617		—			(44	)		113,573		86,652		—			—			86,652
Cost of revenues		20,235		(214	)		(88	)		19,933		15,864		(242	)		(6	)		15,616
Operating expenses:
Sales and marketing		29,638		(418	)		(992	)		28,228		14,860		(375	)		(90	)		14,395
Research, development and engineering		6,746		(106	)		(579	)		6,061		4,489		(116	)		(5	)		4,368
General and administrative		24,011		(1,610	)		(2,479	)		19,922		13,829		(1,630	)		(48	)		12,151
Income tax provision(3)	$	5,500		774			1,763		$	8,037	$	8,352		733			34			9,119
Net income attributable to j2 Global, Inc. common stockholders	$	22,922		1,574			2,331		$	26,827	$	28,539		1,630			115		$	30,284
Net income per share attributable to
j2 Global, Inc. common stockholders*:
Basic	$	0.50		0.03			0.05		$	0.58	$	0.61		0.03			0.00		$	0.64
Diluted	$	0.49		0.03			0.05		$	0.58	$	0.60		0.03			0.00		$	0.64

* The reconciliation of Net income per share from GAAP to Non-GAAP may not foot since each is calculated independently.

The Company discloses non-GAAP Earnings Per Share (EPS) as supplemental non-GAAP financial performance measure, as it believes it is useful metric by which to compare the performance of its business from period to period. The Company also understands that this non-GAAP measure is broadly used by analysts, rating agencies and investors in assessing the Company's performance. Accordingly, the Company believes that the presentation of this non-GAAP financial measure provides useful information to investors.

Non-GAAP EPS is not in accordance with, or an alternative to, Net income per share and may be different from non-GAAP measures with similar or even identical names used by other companies. In addition, this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. This non-GAAP measure has limitations in that they do not reflect all of the amounts associated with the Company's results of operations determined in accordance with GAAP.

j2 GLOBAL, INC.

NET INCOME TO EBITDA RECONCILIATION

THREE MONTHS ENDED MARCH 31, 2013 AND 2012

(UNAUDITED, IN THOUSANDS)

The following table sets forth a reconciliation of EBITDA to net income, the most directly comparable GAAP financial measure.

	THREE MONTHS ENDED MARCH 31,
	2013		2012
Net income	$	22,771	$	28,539
Plus:
Interest and other expense, net		4,716		719
Income tax expense		5,500		8,352
Depreciation and amortization		8,794		4,906
Reconciliation of GAAP to Non-GAAP financial measures:
Share-based compensation		2,348		2,363
Exit costs		4,094		149
EBITDA	$	48,223	$	45,028

EBITDA as calculated above represents earnings before interest and other expense, net, income tax expense, depreciation and amortization and the items used to reconcile GAAP to Non-GAAP financial measures, including (1) share-based compensation expense and the associated payroll taxes and (2) certain acquisition and related exit costs.  We disclose EBITDA as a supplemental non-GAAP financial performance measure as we believe it is a useful metric by which to compare the performance of our business from period to period. We understand that measures similar to EBITDA are broadly used by analysts, rating agencies and investors in assessing our performance. Accordingly, we believe that the presentation of EBITDA provides useful information to investors.

EBITDA is not in accordance with, or an alternative to, Net income, and may be different from non-GAAP measures used by other companies. In addition, EBITDA is not based on any comprehensive set of accounting rules or principles. This non-GAAP measure has limitations in that it does not reflect all of the amounts associated with the company’s results of operations determined in accordance with GAAP.

j2 GLOBAL, INC.

NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

		Q1			Q2			Q3			Q4		YTD
2013
Net cash provided by operating activities	$	40,048											$	40,048
Less: Purchases of property and equipment		(1,933	)											(1,933	)
Add: Excess tax benefit (deficit) from share-based compensation		280												280
Free cash flows	$	38,395		$	—		$	—		$	—		$	38,395
2012
Net cash provided by operating activities	$	38,942		$	46,382		$	38,193		$	46,394		$	169,911
Less: Purchases of property and equipment		(1,159	)		(1,631	)		(956	)		(1,159	)		(4,905	)
Add: Excess tax benefit (deficit) from share-based compensation		286			821			(91	)		(55	)		961
Free cash flows	$	38,069		$	45,572		$	37,146		$	45,180		$	165,967

The Company discloses non-GAAP Free Cash Flows as supplemental non-GAAP financial performance measure, as it believes it is a useful metrics by which to compare the performance of its business from period to period. The Company also understands that this non-GAAP measure is broadly used by analysts, rating agencies and investors in assessing the Company's performance.  Accordingly, the Company believes that the presentation of this non-GAAP financial measure provides useful information to investors.

Free Cash Flows is not in accordance with, or an alternative to, Cash Flows from Operating Activities, and may be different from non-GAAP measures with similar or even identical names used by other companies. In addition, the non-GAAP measure is not based on any comprehensive set of accounting rules or principles. This non-GAAP measure has limitations in that it do not reflect all of the amounts associated with the Company's results of operations determined in accordance with GAAP.

EX-99.2

EXHIBIT 99.2