Investments

Short-term investments consist generally of corporate and governmental debt securities and certificates of deposits which are stated at fair market value. Realized gains and losses of short- and long-term investments are recorded using the specific identification method, average cost method or other method, as appropriate.

The following table summarizes j2 Global’s debt securities designated as available-for-sale, classified by the contractual maturity date of the security (in thousands):



	December 31, 2016		December 31, 2015
Due within 1 year	$	—	$	56,940
Due within more than 1 year but less than 5 years	—		78,248
Due within more than 5 years but less than 10 years	—		—
Due 10 years or after	—		315
Total	$	—	$	135,503

The following table summarizes the Company’s investments (in thousands):



	December 31, 2016		December 31, 2015
Available-for-sale	$	—	$	158,158
Certificates of deposit	60		60
Total	$	60	$	158,218

During the third quarter of 2016, the Company sold its strategic investment in Carbonite resulting in recognized gains before tax of $7.6 million ($2.9 million of income tax), which is reflected in the Condensed Consolidated Statements of Income. In connection with the acquisition of Everyday Health (see Note 3 - Business Acquisitions), j2 Global liquidated all of its remaining available-for-sale investments to facilitate this transaction.

The following table summarizes the gross unrealized gains and losses and fair values for investments classified as available for sale as of December 31, 2016 and December 31, 2015 aggregated by major security type (in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2016
Corporate debt securities	$	—	$	—	$	—		$	—
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	—		—		—			—
Debt securities issued by states of the United States and political subdivisions of the states	—		—		—			—
Equity securities	—		—		—			—
Total	$	—	$	—	$	—		$	—

December 31, 2015
Corporate debt securities	$	88,852	$	110	$	(213	)	$	88,749
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	40,715		—		(63		)	40,652
Debt securities issued by states of the United States and political subdivisions of the states	6,111		2		(10		)	6,103
Equity securities	18,536		4,118		—			22,654
Total	$	154,214	$	4,230	$	(286	)	$	158,158

For the years ended December 31, 2016, 2015 and 2014, the Company recorded realized gains from the sale of investments of approximately $7.7 million, $0.5 million and $0.1 million, respectively.

Recognition and Measurement of Other-Than-Temporary Impairment

j2 Global regularly reviews and evaluates each investment that has an unrealized loss. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses that are determined to be temporary in nature are recorded, net of tax, in accumulated other comprehensive income for available-for-sale securities.

Regardless of the classification of the securities as available-for-sale or held-to-maturity, the Company has assessed each position for impairment.

Factors considered in determining whether a loss is temporary include:


•	the length of time and the extent to which fair value has been below cost;


•	the severity of the impairment;


•	the cause of the impairment and the financial condition and near-term prospects of the issuer;


•	activity in the market of the issuer which may indicate adverse credit conditions; and


•	the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery.

j2 Global’s review for impairment generally entails:


•	identification and evaluation of investments that have indications of possible impairment;


•	analysis of individual investments that have fair values less than amortized cost, including consideration of the length of time the investment has been in an unrealized loss position and the expected recovery period;


•	discussion of evidential matter, including an evaluation of factors or triggers that could cause individual investments to qualify as having an other-than-temporary impairment and those that would not support an other-than-temporary impairment;


•	documentation of the results of these analyses, as required under business policies; and


•	information provided by third-party valuation experts.

For these securities, a critical component of the evaluation for other-than-temporary impairments is the identification of credit impairment, where management does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the security. Credit impairment is assessed using a combination of a discounted cash flow model that estimates the cash flows on the underlying securities and a market comparables method, where the security is valued based upon indications from the secondary market of what discounts buyers demand when purchasing similar securities. The cash flow model incorporates actual cash flows from the securities through the current period and then projects the remaining cash flows using relevant interest rate curves over the remaining term. These cash flows are discounted using a number of assumptions, some of which include prevailing implied credit risk premiums, incremental credit spreads and illiquidity risk premiums, among others.

Securities that have been identified as other-than-temporarily impaired are written down to their current fair value. For debt securities that are intended to be sold or that management believes it more-likely-than-not that will be required to sell prior to recovery, the full impairment is recognized immediately in earnings.

For available-for-sale and held-to-maturity securities that management has no intent to sell and believes that it more-likely-than-not that it will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the rest of the fair value impairment is recognized in other comprehensive income. The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security.

The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2016 and December 31, 2015, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands):



	As of December 31, 2016
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Corporate debt securities	$	—	$	—		$	—	$	—		$	—	$	—
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	—		—			—		—			—		—
Debt securities issued by states of the United States and political subdivisions of the states	—		—			—		—			—		—
Total	$	—	$	—		$	—	$	—		$	—	$	—

	As of December 31, 2015
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Corporate debt securities	$	74,807	$	(212	)	$	1,000	$	(1	)	$	75,807	$	(213	)
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	38,004		(62		)	649		(1		)	38,653		(63		)
Debt securities issued by states of the United States and political subdivisions of the states	4,189		(10		)	—		—			4,189		(10		)
Total	$	117,000	$	(284	)	$	1,649	$	(2	)	$	118,649	$	(286	)

During the years ended December 31, 2016 and December 31, 2015, we did not recognize any other-than-temporary impairment losses.