Unrestricted Subsidiaries

As of March 31, 2015, 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 March 31, 2015 and December 31, 2014 is as follows (in thousands):



	March 31, 2015			December 31, 2014
ASSETS
Cash and cash equivalents	$	39,314		$	27,944
Accounts receivable	49,837			57,005
Prepaid expenses and other current assets	3,527			2,986
Deferred income taxes	5,817			5,292
Total current assets	98,495			93,227
Property and equipment, net	13,061			12,834
Trade names, net	68,626			70,310
Patent and patent licenses, net	22,088			24,007
Customer relationships, net	52,781			55,925
Goodwill	241,388			245,613
Other purchased intangibles, net	7,899			8,901
Other assets	1,639			1,706
Total assets	$	505,977		$	512,523
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	35,634		$	40,296
Income taxes payable	—			316
Deferred revenue, current	6,086			5,277
Total current liabilities	41,720			45,889
Long-term debt	110,000			110,000
Deferred income taxes	18,253			17,397
Other long-term liabilities	13,638			16,243
Total liabilities	183,611			189,529
Additional paid-in capital	315,427			317,932
Retained Earnings	7,478			6,051
Accumulated other comprehensive income (loss)	(539		)	(989		)
Total stockholders’ equity	322,366			322,994
Total liabilities and stockholders’ equity	$	505,977		$	512,523

The results of operations of the Unrestricted Subsidiaries for the three months ended March 31, 2015 and 2014 is as follows (in thousands):



	Three Months Ended March 31,
	2015 (1)			2014
Revenues	$	44,420		$	33,368

Cost of revenues	4,354			3,852
Gross profit	40,066			29,516
Operating expenses:
Sales and marketing	17,662			14,958
Research, development and engineering	1,901			1,072
General and administrative	17,979			8,834
Total operating expenses	37,542			24,864
Income from operations	2,524			4,652
Interest expense (income), net	2,517			1
Other expense (income), net	243			(342		)
Income (loss) before income taxes	(236		)	4,993
Income tax expense	319			2,027
Net income (loss)	$	(555	)	$	2,966

⁽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.