Business Acquisitions

The Company acquired the following companies during fiscal 2013, in each case for cash: (a) IGN Entertainment, Inc. ("IGN"), an online publisher of video games, entertainment and men's lifestyle content; (b) MetroFax, Inc., a provider of online faxing services and advanced features; (c) Backup Connect BV, an online backup provider based in the Netherlands; (d) NetShelter, the largest community of technology publishers dedicated to consumer electronics, computing and mobile communications; (e) Email Protection Agency Limited, a UK-based provider of email security, email management and network security services; (f) TechBargains.com, the leading deal aggregation website for electronic products; and (g) other immaterial share and asset acquisitions in the Business Cloud Services segment.

The consolidated statement of income, since the date of each acquisition, and balance sheet, as of December 31, 2013, reflect the results of operations of all 2013 acquisitions. For the year ended December 31, 2013, these acquisitions contributed $98.1 million to the Company's revenues. Net income contributed by these acquisitions was not separately identifiable due to j2 Global's integration activities. Total consideration for these transactions was $163.5 million, net of cash acquired and including $15.7 million in assumed liabilities consisting primarily of deferred revenues, trade accounts payable, other accrued liabilities and net deferred tax liabilities.

The following table summarizes the allocation of the purchase consideration for these acquisitions (in thousands):



Asset	Valuation

Accounts Receivable	$	24,658
Property and Equipment		3,274
Other Assets		2,703
Deferred Tax Asset		2,058
Software		3,031
Content		2,460
Trade Name		18,581
Customer Relationship		40,275
Advertiser Relationship		11,770
Other Intangibles		168
Goodwill		54,472

Total	$	163,450

The initial accounting for these acquisitions is incomplete and subject to change, which may be significant. j2 Global has recorded provisional amounts for certain property and equipment, intangible assets (including trade names and software), preliminary working capital and related tax items with a corresponding net decrease to goodwill in the amount of $2.0 million related to IGN. The Company also recorded an adjustment to initial working capital related to the acquisition of Ziff Davis, Inc., which increased assumed liabilities with a corresponding increase to goodwill in the amount of $1.7 million. Actual amounts recorded upon finalization of the purchase accounting may differ materially from the information presented in this Annual Report on Form 10-K.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition. Goodwill recognized associated with these acquisitions during the year ended December 31, 2013 is $54.5 million, of which $36.6 million is expected to be deductible for income tax purposes.

Pro Forma Financial Information for 2013 Acquisitions

The following unaudited pro forma supplemental information is based on estimates and assumptions, which j2 Global believes are reasonable. However, this information is not necessarily indicative of the Company's consolidated financial position or results of income in future periods or the results that actually would have been realized had j2 Global and the acquired businesses been combined companies during the periods presented. These pro forma results exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2012 and do not take into consideration the exiting of any acquired lines of business. This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the acquisitions, net of the related tax effects.

The supplemental information on an unaudited pro forma financial basis presents the combined results of j2 Global and its 2013 acquisitions as if each acquisition had occurred on January 1, 2012 (in thousands, except per share amounts):



	Year ended
	December 31, 2013		December 31, 2012
	(unaudited)		(unaudited)
Revenues	$	545,952	$	470,190
Net Income	$	108,600	$	122,187
EPS - Basic	$	2.34	$	2.64
EPS - Diluted	$	2.31	$	2.62

2012

Ziff Davis

The Company acquired substantially all of the outstanding capital stock of Ziff Davis on November 9, 2012 for a cash purchase price of approximately $163.1 million, net of cash acquired and assumed liabilities of $28.8 million and subject to certain post-closing adjustments.

The consolidated statement of income, since the date of the acquisition, and balance sheet as of December 31, 2012 reflect the results of operations of Ziff Davis. For the year ended December 31, 2012, Ziff Davis contributed $9.7 million to the Company's revenues and $1.6 million to its net income.

The following table summarizes the allocation of the purchase consideration (including the portion allocable to the minority interest) as follows (in thousands):



Asset	Valuation

Accounts Receivable	$	14,450
Property and Equipment		842
Software		4,780
Other Assets		1,283
Deferred Tax Asset		1,139
Trade Name		37,730
Customer Relationship		5,380
Advertiser Relationship		14,500
Licensing Relationship		4,910
Other Intangibles		2,540
Goodwill		112,882
Total	$	200,436

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition. Goodwill recognized associated with the acquisition of Ziff Davis during the year ended December 31, 2012 is 112.9 million, of which $12.9 million is expected to be deductible for income tax purposes.

Other 2012 Acquisitions

The consolidated statement of income, since the date of the applicable acquisitions, and balance sheet as of December 31, 2012 reflect the results of operations of all six 2012 acquisitions, including Ziff Davis as noted above. For the year ended December 31, 2012, the five acquisitions other than Ziff Davis (the "other acquisitions") contributed $16.9 million to the Company's revenues. Net income contributed by the other acquisitions was not separately identifiable due to j2 Global's integration activities. Total consideration for the other acquisitions was $32.9 million, net of cash acquired. The financial impact to j2 Global for each of the other acquisitions, individually and in the aggregate, is immaterial as of the date of each acquisition.

Pro Forma Financial Information for 2012 Acquisitions

The following unaudited pro forma supplemental information is based on estimates and assumptions, which j2 Global believes are reasonable. However, this information is not necessarily indicative of the Company's consolidated financial position or results of income in future periods or the results that actually would have been realized had j2 Global and the acquired businesses been combined companies during the period presented. These pro forma results exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1 for the year ended December 31, 2011 and do not take into consideration the exiting of any acquired lines of business. This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the acquisitions, net of the related tax effects.

The supplemental information on an unaudited pro forma financial basis presents the combined results of j2 Global and its 2012 acquisitions as if each acquisition had occurred on January 1, 2011 (in thousands, except per share amounts):



	Year ended
	December 31, 2012		December 31, 2011
	(unaudited)		(unaudited)
Revenues	$	417,250	$	385,974
Net Income	$	120,210	$	114,889
EPS - Basic	$	2.60	$	2.47
EPS - Diluted	$	2.58	$	2.44

2011

In July 2011, the Company purchased for cash Data Haven Limited, an Ireland-based provider of online data backup services for businesses, and certain assets of the virtual PBX business of Buzz Networks Limited, a UK-based provider of voice services. In October 2011, the Company purchased for cash C Infinity, an Ireland-based provider of online data backup and hosting services for businesses. The financial impact to j2 Global for these transactions is immaterial as of the date of each acquisition. The consolidated statement of income, since the date of the applicable acquisition, and balance sheet as of December 31, 2011 reflect the results of operations of the acquisitions closed in 2011. Total consideration for these 2011 transactions was $3.8 million, net of cash acquired.