Unrestricted Subsidiaries

As of September 30, 2014, the Company's Board of Directors had designated the following entities as “Unrestricted Subsidiaries” under the indenture governing j2 Cloud Services' Senior Notes:

Ziff Davis, LLC and subsidiaries

Advanced Messaging Technologies, Inc. and subsidiaries

The financial position and results of operations of these Unrestricted Subsidiaries are included in the Company's condensed consolidated financial statements.

As required by the indenture governing j2 Cloud Services' Senior Notes, information sufficient to ascertain the financial condition and results of operations excluding the Unrestricted Subsidiaries must be presented. Accordingly, the Company is presenting the following tables.

The financial position of the Unrestricted Subsidiaries as of September 30, 2014 is as follows (in thousands):



	September 30, 2014
ASSETS
Cash and cash equivalents	$	28,093
Accounts receivable	47,081
Prepaid expenses and other current assets	3,570
Deferred income taxes	9,289
Total current assets	88,033
Property and equipment, net	12,737
Trade names, net	50,156
Patent and patent licenses, net	25,904
Customer relationships, net	49,885
Goodwill	148,080
Other purchased intangibles, net	802
Deferred income taxes	1,280
Other assets	1,707
Total assets	$	378,584
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	36,700
Income taxes payable	249
Deferred revenue, current	4,044
Deferred income taxes	—
Total current liabilities	40,993
Deferred income taxes	25,238
Other long-term liabilities	1,541
Total liabilities	67,772
Additional paid-in capital	316,124
Accumulated deficit	(5,306		)
Accumulated other comprehensive income (loss)	(6		)
Total stockholders’ equity	310,812
Total liabilities and stockholders’ equity	$	378,584

The results of operations of the Unrestricted Subsidiaries for the three and nine months ended September 30, 2014 and 2013 is as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014 ⁽¹⁾			2013			2014 ⁽¹⁾			2013
Revenues	$	43,618		$	33,522		$	115,801		$	89,207

Cost of revenues	5,299			4,398			13,596			12,682
Gross profit	38,319			29,124			102,205			76,525
Operating expenses:
Sales and marketing	18,163			18,085			49,552			49,049
Research, development and engineering	1,565			943			3,792			4,401
General and administrative	13,527			9,225			35,320			26,713
Total operating expenses	33,255			28,253			88,664			80,163
Income (loss) from operations	5,064			871			13,541			(3,638		)
Interest expense (income), net	(3		)	2,633			(5		)	6,350
Other expense (income), net	518			278			100			85
Income (loss) before income taxes	4,549			(2,040		)	13,446			(10,073		)
Income tax expense (benefit)	4,015			1,624			8,250			(1,836		)
Net income (loss)	$	534		$	(3,664	)	$	5,196		$	(8,237	)

⁽¹⁾ Effective in the second quarter of 2014, Advanced Messaging Technologies, Inc. and subsidiaries were classified as Unrestricted Subsidiaries. As a result, the prior period may not be comparable to the current period presentation.