10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the quarterly period ended March 31, 2017

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 0-25965

j2 GLOBAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	47-1053457
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

6922 Hollywood Boulevard, Suite 500

Los Angeles, California 90028

(Address of principal executive offices)

(323) 860-9200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ý    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act). (Check one):

Large accelerated filer ý	Accelerated filer o	Non-Accelerated filer o	Smaller reporting company o
Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes o        No ý

As of May 5, 2017, the registrant had 48,192,911 shares of common stock outstanding.

j2 GLOBAL, INC. AND SUBSIDIARIES

FOR THE QUARTER ENDED MARCH 31, 2017

INDEX

			PAGE
PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Condensed Consolidated Balance Sheets (unaudited)	3
		Condensed Consolidated Statements of Income (unaudited)	4
		Condensed Consolidated Statements of Comprehensive Income (unaudited)	5
		Condensed Consolidated Statements of Cash Flows (unaudited)	6
		Notes to Condensed Consolidated Financial Statements (unaudited)	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	56
	Item 4.	Controls and Procedures	57
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	58
	Item 1A.	Risk Factors	58
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
	Item 3.	Defaults Upon Senior Securities	58
	Item 4.	Mine Safety Disclosures	58
	Item 5.	Other Information	58
	Item 6.	Exhibits	59
		Signature	60

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PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands except share and per share data)

	March 31, 2017			December 31, 2016
ASSETS
Cash and cash equivalents	$	187,409		$	123,950
Short-term investments	65			60
Accounts receivable, net of allowances of $8,137 and $7,988, respectively	172,062			199,871
Prepaid expenses and other current assets	24,177			24,118
Total current assets	383,713			347,999
Property and equipment, net	69,714			68,094
Trade names, net	113,339			115,853
Patent and patent licenses, net	12,553			13,928
Customer relationships, net	204,920			208,155
Goodwill	1,138,700			1,122,810
Other purchased intangibles, net	166,388			173,755
Deferred income taxes, non-current	6,912			5,289
Other assets	6,313			6,445
TOTAL ASSETS	$	2,102,552		$	2,062,328
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	145,927		$	178,071
Income taxes payable	21,599			16,753
Deferred revenue, current	85,431			80,384
Line of credit	224,123			178,817
Other current liabilities	34			64
Total current liabilities	477,114			454,089
Long-term debt	604,273			601,746
Deferred revenue, non-current	822			1,588
Liability for uncertain tax positions	47,178			46,537
Deferred income taxes, non-current	39,752			40,357
Other long-term liabilities	2,987			3,475
TOTAL LIABILITIES	1,172,126			1,147,792
Commitments and contingencies	—			—
Preferred stock - Series A, $0.01 par value. Authorized 6,000; total issued and outstanding zero	—			—
Preferred stock - Series B, $0.01 par value. Authorized 20,000; total issued and outstanding zero	—			—
Common stock, $0.01 par value. Authorized 95,000,000; total issued and outstanding 47,484,889 and 47,443,716 shares, respectively	475			474
Additional paid-in capital	312,468			308,329
Retained earnings	668,550			660,382
Accumulated other comprehensive loss	(51,067		)	(54,649		)
TOTAL STOCKHOLDERS’ EQUITY	930,426			914,536
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,102,552		$	2,062,328

See Notes to Condensed Consolidated Financial Statements

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j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, in thousands except share and per share data)

	Three Months Ended March 31,
	2017		2016
Total revenues	$	254,669	$	200,502
Cost of revenues (1)	40,810		34,288
Gross profit	213,859		166,214
Operating expenses:
Sales and marketing (1)	77,477		48,112
Research, development and engineering (1)	11,752		8,988
General and administrative (1)	76,655		55,776
Total operating expenses	165,884		112,876
Income from operations	47,975		53,338
Interest expense, net	12,410		10,233
Other expense, net	323		126
Income before income taxes	35,242		42,979
Income tax expense	9,422		13,036
Net income	$	25,820	$	29,943
Net income per common share:
Basic	$	0.54	$	0.62
Diluted	$	0.52	$	0.61
Weighted average shares outstanding:
Basic	47,463,231		47,966,718
Diluted	48,766,031		48,238,098
Cash dividends paid per common share	$	0.3650	$	0.3250
(1) Includes share-based compensation expense as follows:
Cost of revenues	$	117	$	95
Sales and marketing	378		531
Research, development and engineering	238		207
General and administrative	2,881		1,976
Total	$	3,614	$	2,809

See Notes to Condensed Consolidated Financial Statements

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j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in thousands)

	Three Months Ended March 31,
	2017		2016
Net Income	$	25,820	$	29,943
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	3,582		3,415
Change in fair value on available-for-sale investments, net of tax expense (benefit) of $0 and ($1,441) for the three months of 2017 and 2016, respectively	—		(2,361		)
Other comprehensive income, net of tax	3,582		1,054
Comprehensive Income	$	29,402	$	30,997

See Notes to Condensed Consolidated Financial Statements

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j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Three Months Ended March 31,
	2017			2016
Cash flows from operating activities:
Net income	$	25,820		$	29,943
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	39,323			27,174
Accretion and amortization of discount and premium of investments	—			331
Amortization of financing costs and discounts	2,853			2,370
Share-based compensation	3,614			2,809
Excess tax benefits from share-based compensation	—			(264		)
Provision for doubtful accounts	2,640			2,825
Deferred income taxes, net	(2,361		)	(3,101		)
Loss on sale of available-for-sale investment	—			182
Decrease (increase) in:
Accounts receivable	25,110			15,773
Prepaid expenses and other current assets	(291		)	370
Other assets	162			(715		)
Increase (decrease) in:
Accounts payable and accrued expenses	(53,166		)	(23,797		)
Income taxes payable	4,795			6,360
Deferred revenue	2,384			1,250
Liability for uncertain tax positions	573			1,742
Other long-term liabilities	(265		)	1,272
Net cash provided by operating activities	51,191			64,524
Cash flows from investing activities:
Purchase of certificates of deposit	(5		)	—
Maturity of available-for-sale investments	—			26,224
Purchase of available-for-sale investments	—			(21,402		)
Purchases of property and equipment	(9,660		)	(4,321		)
Acquisition of businesses, net of cash received	(3,563		)	(47,989		)
Purchases of intangible assets	(142		)	(316		)
Net cash used in investing activities	(13,370		)	(47,804		)
Cash flows from financing activities:
Proceeds from line of credit, net	44,981			—
Repurchases of common stock and restricted stock	(314		)	(1,786		)
Issuance of common stock under employee stock purchase plan	67			58
Exercise of stock options	695			1,312
Dividends paid	(17,575		)	(15,817		)
Excess tax benefits from share-based compensation	—			264
Deferred payments for acquisitions	(2,299		)	(14,386		)
Other	(26		)	(25		)
Net cash provided by (used in) financing activities	25,529			(30,380		)
Effect of exchange rate changes on cash and cash equivalents	109			885
Net change in cash and cash equivalents	63,459			(12,775		)
Cash and cash equivalents at beginning of period	123,950			255,530
Cash and cash equivalents at end of period	$	187,409		$	242,755

See Notes to Condensed Consolidated Financial Statements

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2017

(UNAUDITED)

1.    Basis of Presentation

j2 Global, Inc., together with its subsidiaries (“j2 Global” or the “Company”), is a leading provider of Internet services. Through its Business Cloud Services Division, the Company provides cloud services to businesses of all sizes, from individuals to enterprises, and licenses its intellectual property (“IP”) to third parties. In addition, the Business Cloud Services Division includes j2 Cloud Connect, which primarily focuses on our voice and fax products. The Digital Media Division specializes in the technology, gaming, lifestyle markets and healthcare markets, reaching in-market buyers and influencers in both the consumer and business-to-business space.

The accompanying interim condensed consolidated financial statements include the accounts of j2 Global and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and note disclosures required by GAAP for complete financial statements although the Company believes that the disclosures made are adequate to make that information not misleading. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been reflected in these interim financial statements. It is suggested that these financial statements be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2016 included in our Annual Report (Form 10-K) filed with the SEC on March 1, 2017. Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed therein.

The results of operations for this interim period are not necessarily indicative of the operating results for the full year or for any future period.

Use of Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, including judgments about investment classifications, and the reported amounts of net revenue and expenses during the reporting period. We believe that our most significant estimates are those related to the valuation of assets acquired and liabilities assumed in connection with business combinations, long-lived and intangible asset impairment, contingent consideration, income taxes and contingencies and allowances for doubtful accounts. On an ongoing basis, management evaluates its estimates based on historical experience and on various other factors that the Company believes to be reasonable under the circumstances. Actual results could materially differ from those estimates.

Allowances for Doubtful Accounts

j2 Global reserves for receivables it may not be able to collect. These reserves for the Company’s Business Cloud Services segment are typically driven by the volume of credit card declines and past due invoices and are based on historical experience as well as an evaluation of current market conditions. These reserves for the Company’s Digital Media segment are typically driven by past due invoices based on historical experience. On an ongoing basis, management evaluates the adequacy of these reserves.

Revenue Recognition

Business Cloud Services

The Company’s Business Cloud Services revenues substantially consist of monthly recurring subscription and usage-based fees, which are primarily paid in advance by credit card. In accordance with GAAP, the Company recognizes revenue when persuasive evidence of an arrangement exists, services have been provided, the sales price is fixed and determinable and collection is probable. The Company defers the portions of monthly, quarterly, semi-annually and annually recurring subscription and usage-based fees collected in advance and recognizes them in the period earned. Additionally, the Company defers and recognizes subscriber activation fees and related direct incremental costs over a subscriber’s estimated useful life.

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Along with our numerous proprietary Business Cloud Services solutions, the Company also generates revenues by reselling various third party solutions, primarily through our email security and online backup lines of business.  These third party solutions, along with our proprietary products, allow the Company to offer customers a variety of solutions to better meet their needs.  The Company determines whether reseller revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance for principal-agent considerations and the Company places the most weight on three factors: whether or not the Company (i) is the primary obligor in the arrangement, (ii) has latitude in determining pricing and (iii) bears credit risk.

The Company records revenue on a gross basis with respect to reseller revenue as the Company is the primary obligator in the arrangement, has latitude in determining pricing and bears all credit risk associated with our reseller program partners.

j2 Global’s Business Cloud Services also include patent license revenues generated under license agreements that provide for the payment of contractually determined fully paid-up or royalty-bearing license fees to j2 Global in exchange for the grant of non-exclusive, retroactive and future licenses to our intellectual property, including patented technology. Patent revenues may also consist of revenues generated from the sale of patents. Patent license revenues are recognized when earned over the term of the license agreements. With regard to fully paid-up license arrangements, the Company recognizes as revenue in the period the license agreement is executed the portion of the payment attributable to past use of the intellectual property and amortizes the remaining portion of such payments on a straight-line basis, or pro-rata revenue basis, as appropriate over the life of the licensed patent(s). With regard to royalty-bearing license arrangements, the Company recognizes revenues of license fees earned during the applicable period. With regard to patent sales, the Company recognizes as revenue in the period of the sale the amount of the purchase price over the carrying value of the patent(s) sold.

The Business Cloud Services business also generates revenues by licensing certain technology to third parties. These licensing revenues are recognized when earned in accordance with the terms of the underlying agreement. Generally, revenue is recognized as the third party uses the licensed technology over the period.

Digital Media

The Company’s Digital Media revenues primarily consist of revenues generated from the sale of advertising campaigns that are targeted to the Company’s proprietary websites and to those websites operated by third parties that are part of the Digital Media business’s advertising network. Revenues for these advertising campaigns are recognized as earned, either when an ad is placed for viewing by a visitor to the appropriate web page or when the visitor “clicks through” on the ad, depending upon the terms with the individual advertiser.

Revenues for Digital Media business-to-business operations consist of lead-generation campaigns for IT vendors and are recognized as earned when the Company delivers the qualified leads to the customer.

j2 Global also generates Digital Media revenues through the license of certain assets to clients, for the clients’ use in their own promotional materials or otherwise. Such assets may include logos, editorial reviews, or other copyrighted material. Revenues under such license agreements are recognized when the assets are delivered to the client. Also, Digital Media revenues are generated through the license of certain speed testing technology which is recognized when delivered to the client through providing data services primarily to Internet Service Providers (“ISPs”) and wireless carriers which is recognized as earned over the term of the access period. The Digital Media business also generates other types of revenues, including business listing fees, subscriptions to online publications, and from other sources. Such other revenues are recognized as earned.

The Company determines whether Digital Media revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance for principal-agent considerations and the Company places the most weight on three factors: whether or not the Company (i) is the primary obligor in the arrangement, (ii) has latitude in determining pricing and (iii) bears credit risk.

The Company records revenue on a gross basis with respect to revenue generated (i) by the Company serving online display and video advertising across its owned-and-operated web properties, on third party sites or on unaffiliated advertising networks, (ii) through the Company’s lead-generation business and (iii) through the Company’s Digital Media licensing program. The Company records revenue on a net basis with respect to revenue paid to the Company by certain third-party advertising

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networks who serve online display and video advertising across the Company’s owned-and-operated web properties and certain third party sites.

Fair Value Measurements

j2 Global complies with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic No. 820, Fair Value Measurements and Disclosures (“ASC 820”), in measuring fair value and in disclosing fair value measurements. ASC 820 provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities.

As of March 31, 2017, the carrying value of cash and cash equivalents, short-term investments, accounts receivable, interest receivable, accounts payable, accrued expenses, interest payable, customer deposits and long-term debt are reflected in the financial statements at cost. With the exception of long-term debt, cost approximates fair value due to the short-term nature of such instruments. The fair value of the Company’s outstanding debt was determined using the quoted market prices of debt instruments with similar terms and maturities, if available. As of the same dates, the carrying value of other long-term liabilities approximated fair value as the related interest rates approximate rates currently available to j2 Global.

Property and Equipment

Property and equipment are stated at cost. Equipment under capital leases is stated at the present value of the minimum lease payments. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of property and equipment range from 1 to 10 years. Fixtures, which are comprised primarily of leasehold improvements and equipment under capital leases, are amortized on a straight-line basis over their estimated useful lives or for leasehold improvements, the related lease term, if less. The Company has capitalized certain internal use software and website development costs which are included in property and equipment. The estimated useful life of costs capitalized is evaluated for each specific project and ranges from 1 to 5 years.

Debt Issuance Costs and Debt Discount

j2 Global capitalizes costs incurred with borrowing and issuance of debt securities and records debt issuance costs and discounts as a reduction to the debt amount. These costs and discounts are amortized and included in interest expense over the life of the borrowing or term of the credit facility using the effective interest method.

Contingent Consideration

j2 Global measures the contingent earn-out liabilities in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy (see Note 5 - Fair Value Measurements). The Company may use various valuation techniques depending on the terms and conditions of the contingent consideration including a Monte-Carlo simulation. This simulation uses a probability distribution for each significant input to produce hundreds or thousands of possible outcomes and the results are analyzed to determine probabilities of different outcomes occurring. Significant increases or decreases to these inputs in isolation would result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and the amount paid will be recorded in earnings. The amount paid that is less than or equal to the liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows. Any amount paid in excess of the liability on the acquisition date is reflected as cash used in operating activities.

j2 Global reviews and re-assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could be materially different from the initial estimates or prior quarterly amounts. Changes in the estimated fair value of our contingent earn-out liabilities are reported in operating income, except for the time component of the present value calculation which is reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income.

Segment Reporting

Accounting guidance establishes standards for the way that public business enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. Accounting guidance also establishes standards for related disclosures about

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products and services, geographic areas and major customers. The Company operates as two segments: (1) Business Cloud Services and (2) Digital Media.

Reclassifications

Certain prior year reported amounts have been reclassified to conform to the 2017 presentation.

2.Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, as a new Topic, Accounting Standards Codification (“ASC”) Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. This ASU must be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is considering the alternatives of adoption of this ASU, has substantially completed a review of the likely impact to the existing portfolio of customer contracts entered into prior to this adoption and will continue to evaluate the effect of adopting this guidance upon the Company’s results of operations, cash flows and financial position. Currently, the Company does not expect the adoption of this ASU to have a material impact on our financial statements except that there are significant additional reporting requirements under the new standard.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this ASU modify how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will have to measure equity investments that do not result in consolidation and are not accounted under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicality exception. A practicality exception will apply to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under ASC 820, Fair Value Measurements, and as such these investments may be measured at cost. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company does not expect the adoption of this ASU to have a material impact on our financial statements and related disclosures.

In February 2016, the FASB issued ASU No. 2016-02, Leases. This ASU establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of this ASU on our financial statements. The Company currently has both capital and operating leases both domestically and internationally with varying expiration dates through 2025 in the aggregate amount of $71.8 million for the period ended March 31, 2017.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815). This ASU is related to the embedded derivative analysis for debt instruments with contingent call or put options. This ASU clarifies that an exercise contingency does not need to be evaluated to determine whether it relates only to interest rates or credit risk. Instead, the contingent put or call option should be evaluated for possible bifurcation as a derivative in accordance with the four-step decision sequence detailed in FASB ASC 815-15, without regard to the nature of the exercise contingency. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company has adopted this ASU and determined that there is no impact on our financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606). This ASU is related to reporting revenue gross versus net, or principal versus agent considerations. This ASU is meant to clarify the guidance in ASU 2014-09, Revenue from Contracts with Customers, as it pertains to principal versus agent considerations. Specifically, the guidance addresses how entities should identify goods and services being provided to a customer, the unit of account for a principal versus agent assessment, how to evaluate whether a good or service is controlled before being transferred to a customer, and how to assess whether an entity controls services performed by another party. This ASU has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The

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Company is considering the alternatives of adoption of this ASU, has substantially completed a review of the likely impact to the existing portfolio of customer contracts entered into prior to adoption and will continue to evaluate the effect of adopting this guidance upon the Company’s results of operations, cash flows and financial position. Currently, the Company does not expect the adoption of this ASU to have a material impact on our financial statements except that there are significant additional reporting requirements under the new standard.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718). This ASU is related to simplifications of employee share-based payment accounting. This pronouncement eliminates the APIC pool concept and requires that excess tax benefits and tax deficiencies be recorded in the income statement when awards are settled. The pronouncement also addresses simplifications related to statement of cash flows classification, accounting for forfeitures, and minimum statutory tax withholding requirements. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted.

The new standard requires prospective recognition of excess tax benefits and deficiencies resulting from stock-based compensation awards vesting and exercises be recognized in the income statement. Previously, these amounts were recognized in additional paid-in capital. Net excess tax benefits of $0.4 million for the three months ended March 31, 2017, were recognized as a reduction of income tax expense. In addition, ASU 2016-09 requires excess tax benefits and deficiencies to be prospectively excluded from the assumed future proceeds in the calculation of diluted shares, resulting in an insignificant increase in diluted weighted average shares outstanding for the three months ended March 31, 2017, which did not have a material impact on earnings per share.

The Company has elected to continue to estimate the number of stock-based awards expected to vest, as permitted by ASU 2016-09, rather than electing to account for forfeitures as they occur.

    The standard also requires that the excess tax benefits from share based compensation awards be reported as operating activities in the consolidated statements of cash flows. Previously, these cash flows were included in financing activities. We have elected to apply this change on a prospective basis, resulting in an increase in net cash provided by operating activities of $0.4 million for the three months ended March 31, 2017.

The prior period was not adjusted with the adoption of ASU 2016-09 due to the adoption of this standard on a prospective basis.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This ASU is meant to clarify the guidance in FASB ASU 2014-09, Revenue from Contracts with Customers. Specifically, the guidance addresses an entity’s identification of its performance obligations in a contract, as well as an entity’s evaluation of the nature of its promise to grant a license of intellectual property and whether or not that revenue is recognized over time or at a point in time. This ASU has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The Company is considering the alternatives of adoption of this ASU, has substantially completed a review of the likely impact to the existing portfolio of customer contracts entered into prior to adoption and will continue to evaluate the effect of adopting this guidance upon the Company’s results of operations, cash flows and financial position. Currently, the Company does not expect the adoption of this ASU to have a material impact on our financial statements except that there are significant additional reporting requirements under the new standard.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. This ASU does not change the core principle of the guidance in Topic 606. Instead, the amendments provide clarifying guidance in a few narrow areas and add some practical expedients to the guidance. This ASU has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The Company is considering the alternatives of adoption of this ASU, has substantially completed a review of the likely impact to the existing portfolio of customer contracts entered into prior to adoption and will continue to evaluate the effect of adopting this guidance upon the Company’s results of operations, cash flows and financial position. Currently, the Company does not expect the adoption of this ASU to have a material impact on our financial statements except that there are significant additional reporting requirements under the new standard.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU is effective for fiscal years, and for interim periods within those fiscal years,

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beginning after December 15, 2019. The adoption of this standard is not expected to have a material impact on our financial statements and related disclosures.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The new guidance is intended to reduce diversity in practice in how transactions are classified in the statement of cash flows. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on our financial statements.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory. The amendments in this ASU reduce the complexity in the accounting standards by allowing the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. Historically, the income tax consequence was not recognized until the asset was sold to an outside party. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on our financial statements.

In November 2016, the FASB issued 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash - a consensus of the FASB Emerging Issues Task Force. The amendments in this ASU require restricted cash and restricted cash equivalents to be classified in the statement of cash flows as cash and cash equivalents. The guidance will be applied on a retrospective basis beginning with the earliest period presented. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on our financial statements.

In December 2016, the FASB issued 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The amendments in this ASU represent changes to clarify the Codification or to correct unintended application of guidance. Areas for correction or improvement include: Loan Guarantee Fees, Contract Costs - Impairment Testing, Contract Costs - Interaction of Impairment Testing with Guidance in Other Topics, Provisions for Losses on Construction-Type and Production Type Contracts, Scope of Topic 606, Disclosure of Remaining Performance Obligations, Disclosure of Prior-Period Performance Obligations, Contract Modification Example, Contract Asset versus Receivable, Refund Liability, Advertising Costs, Fixed-Odd Wagering Contracts in the Casino Industry and Cost Capitalization for Advisors to Private Funds and Public Funds. This ASU has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on our financial statements except that there are significant additional reporting requirements under the new standard.

In January 2017, the FASB issued 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this ASU provide a robust framework to use in determining when a set of assets and activities is a business. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted and the standard should be applied prospectively. The Company does not expect the adoption of this ASU to have a material impact on our financial statements and related disclosures.

In January 2017, the FASB issued 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this ASU simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test and eliminating the requirement for a reporting unit with a zero or negative carrying amount to perform a qualitative assessment. Instead, under this pronouncement, an entity would perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and would recognize an impairment change for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized is not to exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects will be considered, if applicable. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted and should be adopted on a prospective basis. The Company is currently evaluating the impact of this ASU on our financial statements and related disclosures.

In February 2017, the FASB issued 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU provides guidance which clarifies the scope and accounting for financial assets that meet the definition of an “in-substance nonfinancial asset” and defines the term, “in-substance nonfinancial asset.” In addition, this ASU also adds guidance for partial sales of nonfinancial assets. This ASU is effective for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted and should be adopted retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The Company is currently evaluating the impact of this ASU on our financial statements and related disclosures.

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In March 2017, the FASB issued 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this ASU shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This ASU is effective for those fiscal years, beginning after December 15, 2018. Early adoption is permitted and should be adopted on a modified retrospective bases through a cumulative-effect directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of this ASU on our financial statements and related disclosures.

3.Business Acquisitions

The Company uses acquisitions as a strategy to grow its customer base by increasing its presence in new and existing markets, expand and diversify its service offerings, enhance its technology, acquire skilled personnel and enter into other jurisdictions.

The Company completed the following acquisitions during the first three months of fiscal 2017, paying the purchase price in cash in each transaction: (a) an asset purchase of sFax, acquired on March 31, 2017, an Austin-based provider of mobile cloud faxing for healthcare; and (b) other immaterial acquisitions of email marketing and email security businesses.

The condensed consolidated statement of income, since the date of each acquisition, and balance sheet as of March 31, 2017, reflect the results of operations of all 2017 acquisitions. For the three months ended March 31, 2017, the contributions of the acquisitions were immaterial to the Company’s revenues. Net income contributed by these acquisitions was not separately identifiable due to j2 Global’s integration activities and is impracticable to provide. Total consideration for these transactions was $26.5 million, net of cash acquired and assumed liabilities and is subject to certain post-closing adjustments which may increase or decrease the final consideration paid.

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

Assets and Liabilities	Valuation
Other assets	$	61
Trade names	375
Customer relationships	11,954
Other intangibles	2,273
Goodwill	13,005
Deferred revenue	(1,145		)
Total	$	26,523

During the three months ended March 31, 2017, the purchase price accounting has been finalized for the following acquisitions: (i) Fonebox and (ii) other immaterial fax, online data backup and email marketing businesses. The initial accounting for all 2017 acquisitions is incomplete and subject to change, which may be significant. j2 Global has recorded provisional amounts which may be based upon past acquisitions with similar attributes for certain intangible assets (including trade names, software and customer relationships), preliminary acquisition date working capital and related tax items.

During the three months ended March 31, 2017, the Company recorded adjustments to prior period acquisitions due to the finalization of purchase accounting in the Business Cloud Services segment which resulted in a net decrease in goodwill in the amount of $(0.7) million. In addition, the Company recorded adjustments to the initial working capital related to prior period acquisitions in the Digital Media segment, which resulted in a net increase in goodwill in the amount of $0.8 million. Such adjustments had an immaterial impact to the amortization expense within the Condensed Consolidated Statement of Income for the three months ended March 31, 2017.

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 three months ended March 31, 2017 is $13.0 million, of which $13.0 million is expected to be deductible for income tax purposes.

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4.Investments

Short-term investments consist of certificates of deposits, which are stated at fair market value. 

5.Fair Value Measurements

j2 Global complies with the provisions of ASC 820, which defines fair value, provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. ASC 820 clarifies that the fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

l	Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
l	Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
l	Level 3 – Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The Company’s money market funds are classified within Level 1. The Company values these Level 1 investments using quoted market prices. The Company’s certificates of deposit are classified within Level 2. The Company values these Level 2 investments based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data.

The fair value of the Convertible Notes (see Note 7 - Long-Term Debt) is determined using recent quoted market prices or dealer quotes for such securities, which are Level 1 inputs. The fair value of the Senior Notes (see Note 7 - Long-Term Debt) is determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings, which are Level 2 inputs. The fair value of long-term debt at March 31, 2017 and December 31, 2016 was $803.8 million and $792.2 million, respectively.

In addition, the Convertible Notes contain terms that may require the Company to pay contingent interest on the Convertible Notes which is accounted for as a derivative with fair value adjustments being recorded to interest expense. This derivative is fair valued using a binomial lattice convertible bond pricing model using historical and implied market information, which are Level 2 inputs.

The Company classifies its contingent consideration liability in connection with the acquisitions of Ookla and Salesify within Level 3 because factors used to develop the estimated fair value are unobservable inputs, such as volatility and market risks, and are not supported by market activity. The fair value of the contingent consideration liability was determined using option based approaches. This methodology was utilized because the distribution of payments is not symmetric and amounts are only payable upon certain earnings before interest, tax, depreciation and amortization (“EBITDA”) thresholds being reached. Such valuation approach included the Monte-Carlo simulation for the contingency since the financial metric driving the payments is path dependent. Significant increases or decreases in either of the inputs noted above in isolation would result in a significantly lower or higher fair value of measurement.

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The following tables present the fair values of the Company’s financial assets or liabilities that are measured at fair value on a recurring basis (in thousands):

March 31, 2017	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market and other funds	$	19,836	$	—	$	—	$	19,836
Certificates of deposit	—		65		—		65
Total assets measured at fair value	$	19,836	$	65	$	—	$	19,901
Liabilities:
Contingent consideration	$	—	$	—	$	17,050	$	17,050
Contingent interest derivative	—		958		—		958
Total liabilities measured at fair value	$	—	$	958	$	17,050	$	18,008
December 31, 2016	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market and other funds	$	7,737	$	—	$	—	$	7,737
Certificates of deposit	—		60		—		60
Total assets measured at fair value	$	7,737	$	60	$	—	$	7,797
Liabilities:
Contingent consideration	$	—	$	—	$	17,450	$	17,450
Contingent interest derivative	—		958		—		958
Total liabilities measured at fair value	$	—	$	958	$	17,450	$	18,408

At the end of each reporting period, management reviews the inputs to the fair value measurements of financial and non-financial assets and liabilities to determine when transfers between levels are deemed to have occurred. For the three months ended March 31, 2017, there were no transfers that have occurred between levels.

The following table presents a reconciliation of the Company’s Level 3 financial assets or liabilities that are measured at fair value on a recurring basis (in thousands):

	Level 3			Affected line item in the Statement of Income
Balance as of January 1, 2017	$	17,450
Total fair value adjustments reported in earnings	(400		)	General and administrative
Balance as of March 31, 2017	$	17,050

In connection with the acquisition of Ookla, on December 1, 2014, contingent consideration of up to an aggregate of $40.0 million may be payable upon achieving certain future income thresholds and had a fair value of $17.0 million and $17.0 million at March 31, 2017 and December 31, 2016, respectively. Due to the Company’s achievement of certain earnings targets for the year ended December 31, 2016, $20.0 million ($17.0 million of contingent consideration and $3.0 million of compensation) is payable and is classified as a current liability on the consolidated balance sheet.

In connection with the acquisition of Salesify, on September 17, 2015, contingent consideration of up to an aggregate of $17.0 million may be payable upon achieving certain future income thresholds and had a fair value of $0.2 million and $0.6 million at March 31, 2017 and December 31, 2016, respectively, which was recorded as an other long-term liability on the consolidated balance sheet at March 31, 2017.

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During the three months ended March 31, 2017, the Company recorded a decrease in the fair value of the contingent consideration of $0.4 million and reported such decrease in general and administrative expenses.

The following table presents a reconciliation of the Company’s derivative instruments (in thousands):

	Amount		Affected line item in the Statement of Income
Derivative Liabilities:
Level 2:
Balance as of January 1, 2017	$	958
Total fair value adjustments reported in earnings	—
Balance as of March 31, 2017	$	958

Losses associated with other-than-temporary impairments are recorded as a component of other income (expenses). Gains and losses not associated with other-than-temporary impairments are recorded as a component of other comprehensive income. 

6.Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships, trademarks and trade names, developed technologies and other intangible assets. The fair values of these identified intangible assets are based upon expected future cash flows or income, which take into consideration certain assumptions such as customer turnover, trade names and patent lives. These determinations are primarily based upon the Company’s historical experience and expected benefit of each intangible asset. If it is determined that such assumptions are not accurate, then the resulting change will impact the fair value of the intangible asset. Identifiable intangible assets are amortized over the period of estimated economic benefit, which ranges from one to 20 years.

The changes in carrying amounts of goodwill for the three months ended March 31, 2017 are as follows (in thousands):

	Business Cloud Services			Digital Media		Consolidated
Balance as of January 1, 2017	$	559,152		$	563,658	$	1,122,810
Goodwill acquired (Note 3)	13,005			—		13,005
Purchase accounting adjustments (1)	(689		)	759		70
Foreign exchange translation	2,705			110		2,815
Balance as of March 31, 2017	$	574,173		$	564,527	$	1,138,700

⁽¹⁾ Purchase accounting adjustments relate to adjustments to goodwill in connection with prior year business acquisitions (see Note 3 - Business Acquisitions).

Intangible Assets with Indefinite Lives:

Intangible assets are summarized as of March 31, 2017 and December 31, 2016 as follows (in thousands):

	March 31, 2017		December 31, 2016
Trade name	$	27,379	$	27,379
Other	5,432		5,432
Total	$	32,811	$	32,811

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Intangible Assets Subject to Amortization:

As of March 31, 2017, intangible assets subject to amortization relate primarily to the following (in thousands):

	Weighted-Average   Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	11.5 years	$	127,893	$	41,933	$	85,960
Patent and patent licenses	6.6 years	65,614		53,061		12,553
Customer relationships (1)	9.5 years	405,167		200,247		204,920
Other purchased intangibles	6.0 years	198,470		37,514		160,956
Total		$	797,144	$	332,755	$	464,389

⁽¹⁾ Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset.

As of December 31, 2016, intangible assets subject to amortization relate primarily to the following (in thousands):

	Weighted-Average Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	11.5 years	$	127,342	$	38,868	$	88,474
Patent and patent licenses	6.6 years	65,605		51,677		13,928
Customer relationships (1)	9.6 years	390,930		182,775		208,155
Other purchased intangibles	6.0 years	195,913		27,590		168,323
Total		$	779,790	$	300,910	$	478,880

⁽¹⁾ Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset.

Amortization expense, included in general and administrative expense, approximated $30.9 million and $21.1 million for the three month periods ended March 31, 2017 and 2016, respectively. Amortization expense is estimated to approximate $137.3 million, $97.4 million, $68.3 million, $37.0 million and $29.8 million for fiscal years 2017 through 2021, respectively, and $125.4 million thereafter through the duration of the amortization period.

7.Long-Term Debt

8.0% Senior Notes

On July 26, 2012, the Company’s subsidiary issued in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended, $250 million aggregate principal amount of 8.0% senior unsecured notes (the “Senior Notes”) due August 1, 2020. j2 Cloud Services, LLC (formerly j2 Cloud Services, Inc.) received proceeds of$245 millionin cash, net of initial purchaser’s discounts and commissions of$5 million. The net proceeds were available for general corporate purposes, including acquisitions. Interest is payable semi-annuallyon February 1 and August 1 of each year. j2 Cloud Services, LLC has the option to call the Senior Notes in whole or in part afterAugust 1, 2016, subject to certain premiums as defined in the indenture governing the Senior Notes plus accrued and unpaid interest. Upon a change in control, the holders may put the Senior Notes at 101% of the principal amount of the Senior Notes plus accrued and unpaid interest, if any, to the repurchase date. In connection with the issuance of the Convertible Notes (defined below), j2 Global, Inc. unconditionally guaranteed, on an unsecured basis, the obligations of j2 Cloud Services, LLC under the Senior Notes.

The indenture governing the Senior Notes contains certain restrictive and other covenants applicable to j2 Cloud Services, LLC and subsidiaries designated as restricted subsidiaries including, but not limited to, limitations on debt and disqualified or

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preferred stock, restricted payments, liens, sale and leaseback transactions, dividends and other payment restrictions, asset sales and transactions with affiliates. Restricted payments are applicable only if j2 Cloud Services, LLC and subsidiaries designated as restricted subsidiaries has a pro forma leverage ratio of greater than 1.75 to 1.0. In addition, if such leverage ratio is in excess of 1.75 to 1.0, restricted payments are permitted up to $50 million. As of March 31, 2017, j2 Cloud Services was in compliance with all such covenants. Violation of these covenants could result in a default which could result in the acceleration of outstanding amounts if such default is not cured or waived within the time periods outlined in the indenture.

As of March 31, 2017 and December 31, 2016, the estimated fair value of the Senior Notes was approximately $259.4 million and $275.4 million, respectively, and was based on the quoted market prices of debt instruments with similar terms, credit rating and maturities of the Senior Notes which are Level 2 inputs (see Note 5 - Fair Value Measurements).

3.25% Convertible Notes

On June 10, 2014, j2 Global issued $402.5 million aggregate principal amount of 3.25% convertible senior notes due June 15, 2029 (the “Convertible Notes”). The Convertible Notes bear interest at a rate of 3.25% per annum, payable semiannually in arrears on June 15 and December 15 of each year. Beginning with the six-month interest period commencing on June 15, 2021, the Company must pay contingent interest on the Convertible Notes during any six-month interest period if the trading price per $1,000 principal amount of the Convertible Notes for each of the five trading days immediately preceding the first day of such interest period equals or exceeds $1,300. Any contingent interest payable on the Convertible Notes will be in addition to the regular interest payable on the Convertible Notes.

Holders may surrender their Convertible Notes for conversion at any time prior to the close of business on the business day immediately preceding the maturity date only if one or more of the following conditions is satisfied: (i) during any calendar quarter commencing after the calendar quarter ending on September 30, 2014 (and only during such calendar quarter), if the closing sale price of j2 Global common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs is more than 130% of the applicable conversion price of the Convertible Notes on each such trading day; (ii) during the five consecutive business day period following any ten consecutive trading day period in which the trading price for the Convertible Notes for each such trading day was less than 98% of the product of (a) the closing sale price of j2 Global common stock on each such trading day and (b) the applicable conversion rate on each such trading day; (iii) if j2 Global calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the business day prior to the redemption date; (iv) upon the occurrence of specified corporate events; or (v) during either the period beginning on, and including, March 15, 2021 and ending on, but excluding, June 20, 2021 or the period beginning on, and including, March 15, 2029 and ending on, but excluding, the maturity date. j2 Global will settle conversions of Convertible Notes by paying or delivering, as the case may be, cash, shares of j2 Global common stock or a combination thereof at j2 Global’s election. The Company currently intends to satisfy its conversion obligation by paying and delivering a combination of cash and shares of the Company’s common stock, where cash will be used to settle each $1,000 of principal and the remainder, if any, will be settled via the Company’s common stock.

As of March 31, 2017, the conversion rate is 14.5242 shares of j2 Global common stock for each $1,000 principal amount of Convertible Notes, which represents a conversion price of approximately $68.85 per share of j2 Global common stock. The conversion rate is subject to adjustment for certain events as set forth in the indenture governing the Convertible Notes, but will not be adjusted for accrued interest. In addition, following certain corporate events that occur on or prior to June 20, 2021, j2 Global will increase the conversion rate for a holder that elects to convert its Convertible Notes in connection with such a corporate event.

j2 Global may not redeem the Convertible Notes prior to June 20, 2021. On or after June 20, 2021, j2 Global may redeem for cash all or part of the Convertible Notes at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Convertible Notes.

Holders have the right to require j2 Global to repurchase for cash all or part of their Convertible Notes on each of June 15, 2021 and June 15, 2024 at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date. In addition, if a fundamental change, as defined in the indenture governing the Convertible Notes, occurs prior to the maturity date, holders may require j2 Global to repurchase for cash all or part of their Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

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The Convertible Notes are the Company’s general senior unsecured obligations and rank: (i) senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated in right of payment to the Convertible Notes; (ii) equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated, including in respect of j2 Global’s guarantee of the obligations of our subsidiary, j2 Cloud Services, LLC, with respect to its outstanding Senior Notes; (iii) effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries.

Accounting for the Convertible Notes

In accordance with ASC 470-20, Debt with Conversion and Other Options, convertible debt that can be settled for cash is required to be separated into the liability and equity component at issuance, with each component assigned a value. The value assigned to the liability component is the estimated fair value, as of the issuance date, of similar debt without the conversion feature. The difference between the cash proceeds and estimated fair value of the liability component, representing the value of the conversion premium assigned to the equity component, is recorded as a debt discount on the issuance date. This debt discount is amortized to interest expense using the effective interest method over the period from the issuance date through the first stated repurchase date on June 15, 2021.

j2 Global estimated the borrowing rates of similar debt without the conversion feature at origination to be 5.79% for the Convertible Notes and determined the debt discount to be $59.0 million. As a result, a conversion premium after tax of $37.7 million was recorded in additional paid-in capital. The aggregate debt discount is amortized as interest expense over the period from the issuance date through the first stated repurchase date on June 15, 2021, which management believes is the expected life of the Convertible Notes using an interest rate of 5.81%. As of March 31, 2017, the remaining period over which the unamortized debt discount will be amortized is 4.2 years.

The Convertible Notes are carried at face value less any unamortized debt discount and debt issuance costs. The fair value of the Convertible Notes at each balance sheet date is determined based on recent quoted market prices or dealer quotes for the Convertible Notes, which are Level 1 inputs (see Note 5 - Fair Value Measurements). If such information is not available, the fair value is determined using cash-flow models of the scheduled payments discounted at market interest rates for comparable debt without the conversion feature. As of March 31, 2017 and December 31, 2016, the estimated fair value of the Convertible Notes was approximately $544.4 million and $516.8 million, respectively.

Long-term debt as of March 31, 2017 and December 31, 2016 consists of the following (in thousands):

	March 31, 2017			December 31, 2016
8% Senior Notes	$	247,521		$	247,359
3.25% Convertible Notes	364,141			362,144
Less: Deferred issuance costs	(7,389		)	(7,757		)
Total long-term debt	604,273			601,746
Less: current portion	—			—
Total long-term debt, less current portion	$	604,273		$	601,746

8.Commitments and Contingencies

Litigation

From time-to-time, j2 Global and its affiliates are involved in litigation and other legal disputes or regulatory inquiries that arise in the ordinary course of business. Any claims or regulatory actions against j2 Global and its affiliates, whether meritorious or not, could be time consuming and costly, and could divert significant operational resources. The outcomes of such matters are subject to inherent uncertainties, carrying the potential for unfavorable rulings that could include monetary damages and injunctive relief.

On February 17, 2011, Emmanuel Pantelakis (“Pantelakis”) filed suit against a j2 Global affiliate in the Ontario Superior Court of Justice (No. 11-50673), alleging that the j2 Global affiliate breached a contract relating to Pantelakis’s use of the Campaigner^® service. The j2 Global affiliate filed a responsive pleading on March 23, 2011 and responses to undertakings on

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July 16, 2012. On November 6, 2012, Pantelakis filed a second amended statement of claim, reframing his lawsuit as a negligence action. The j2 Global affiliate filed an amended statement of defense on April 8, 2013. Discovery is ongoing.

On January 17, 2013, the Commissioner of the Massachusetts Department of Revenue (“Commissioner”) issued a notice of assessment to a j2 Global affiliate for sales and use tax for the period of July 1, 2003 through December 31, 2011. On July 22, 2014, the Commissioner denied the j2 Global affiliate’s application for abatement. On September 18, 2014, the j2 Global affiliate petitioned the Massachusetts Appellate Tax Board for abatement of the tax asserted in the notice of assessment (No. C325426). A trial was held on December 16, 2015. The Massachusetts Appellate Tax Board has not yet rendered its decision.

On January 18, 2013, Paldo Sign and Display Co. filed an amended complaint adding two j2 Global affiliates and a former employee as additional defendants in an existing putative class action pending in the U.S. District Court for the Northern District of Illinois (the “Northern District of Illinois”) (No. 1:13-cv-01896). The amended complaint alleged violations of the Telephone Consumer Protection Act (“TCPA”), the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), and common law conversion, arising from an indirect customer’s alleged use of a j2 Global affiliate’s systems to send unsolicited facsimile transmissions. The j2 Global affiliates filed a motion to dismiss the ICFA and conversion claims, which was granted. The Northern District of Illinois also dismissed the former employee for lack of personal jurisdiction. On August 23, 2013, a second plaintiff, Sabon, Inc., was added. On March 7, 2016, the j2 Global affiliates moved for summary judgment. The Northern District of Illinois granted summary judgment on March 10, 2017, dismissing all claims against the j2 Global affiliates. The time for appeal has not yet lapsed.

On August 28, 2013, Phyllis A. Huster (“Huster”) filed suit in the Northern District of Illinois (No. 1:13-cv-06143) against two j2 Global affiliates and three other parties for correction of inventorship for nine j2 Global patents. Huster seeks, among other things, a declaration that she was an inventor of the patents-in-suit, an order directing the U.S. Patent & Trademark Office to substitute or add her as an inventor, and payment of at least half of defendants’ earnings from licensing the patents-in-suit. On September 19, 2014, the Northern District of Illinois granted the defendants’ motion to dismiss for improper venue and transferred the case to the U.S. District Court for the Northern District of Georgia (the “Northern District of Georgia”) (No. 1:14-cv-03304). Huster filed an amended complaint on February 11, 2015, which she corrected on February 12, 2015. The corrected amended complaint added various common law claims. On November 12, 2015, the Northern District of Georgia dismissed all claims against the j2 Global affiliates. On January 28, 2016, all remaining claims were dismissed on summary judgment. Huster appealed to the U.S. Court of Appeals for the Federal Circuit (the “Federal Circuit”) (No. 16-1639). On March 29, 2017, the Federal Circuit modified the dismissal of the correction of inventorship claim to be without prejudice and affirmed the judgment as modified.

On October 16, 2013, a j2 Global affiliate entered an appearance as a plaintiff in a multi-district litigation pending in the Northern District of Illinois (No. 1:12-cv-06286). In this litigation, Unified Messaging Solutions, LLC (“UMS”), a company with rights to assert certain patents owned by the j2 Global affiliate, has asserted five j2 Global patents against a number of defendants. While claims against some defendants have been settled, other defendants have filed counterclaims for, among other things, non-infringement, unenforceability, and invalidity of the patents-in-suit. On December 20, 2013, the Northern District of Illinois issued a claim construction opinion and, on June 13, 2014, entered a final judgment of non-infringement for the remaining defendants based on that claim construction. UMS and the j2 Global affiliate filed a notice of appeal to the Federal Circuit on June 27, 2014 (No. 14-1611). The appeal is pending.

On June 23, 2014, Andre Free-Vychine (“Free-Vychine”) filed a putative class action against two j2 Global affiliates in the Superior Court for the State of California, County of Los Angeles (“Los Angeles Superior Court”) (No. BC549422). The complaint alleged two California statutory violations relating to late fees levied in certain eVoice® accounts. Free-Vychine sought, among other things, damages and injunctive relief on behalf of himself and a purported nationwide class of similarly situated persons. On August 26, 2014, Law Enforcement Officers, Inc. (“LEO”) and IV Pit Stop, Inc. (“IV Pit Stop”) filed a separate putative class action against the same j2 Global affiliates in Los Angeles Superior Court (No. BC555721). The complaint alleged three California statutory violations, negligence, breach of the implied covenant of good faith and fair dealing, and various other common law claims relating to late fees levied on any of the j2 Global affiliates’ customers, including those with eVoice® and Onebox® accounts. LEO and IV Pit Stop sought, among other things, damages and injunctive relief on behalf of themselves and a purported nationwide class of similarly situated persons. On September 29, 2014, the Los Angeles Superior Court related and consolidated both cases for discovery purposes. On March 13, 2015, a third amended complaint was filed in the case brought by LEO, which no longer included IV Pit Stop as a plaintiff but added Christopher Dancel (“Dancel”) as a plaintiff. On June 26, 2015, the case filed by Free-Vychine was dismissed pursuant to a settlement agreement. On October 7, 2015, the parties in the case brought by LEO and Dancel reached a tentative class-based settlement. On September 12, 2016, the Los Angeles Superior Court certified the class for settlement purposes only and provided its preliminary approved the settlement. The court will consider final approval of the settlement in early 2017.

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On January 21, 2016, Davis Neurology, P.A. filed a putative class action against two j2 Global affiliates in the Circuit Court for the County of Pope, State of Arkansas (58-cv-2016-40), alleging violations of the TCPA. The case was ultimately removed to the U.S. District Court for the Eastern District of Arkansas (the “Eastern District of Arkansas”) (No. 4:16-cv-00682). On June 6, 2016, the j2 Global affiliates filed a motion for judgment on the pleadings. On March 20, 2017, the Eastern District of Arkansas dismissed all claims against the j2 Global affiliates. On April 17, 2017, Davis Neurology filed a noticed of appeal to the Federal Circuit (No. 17-1820).

j2 Global does not believe, based on current knowledge, that the foregoing legal proceedings or claims, after giving effect to existing reserves, are likely to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could have a material effect on j2 Global’s consolidated financial position, results of operations, or cash flows in a particular period.

The Company has not accrued for any material loss contingencies relating to these legal proceedings because materially unfavorable outcomes are not considered probable by management.

Credit Agreement

On December 5, 2016, j2 Global, Inc. entered into a Credit Agreement (the “Credit Agreement”) with MUFG Union Bank, N.A., as administrative agent, and certain other lenders from time to time party thereto (collectively, the “Lenders”). Pursuant to the Credit Agreement, the Lenders have provided j2 with a credit facility of $225.0 million (the “Credit Facility”), $180.0 million of which was drawn at closing of the Everyday Health acquisition and used to finance a portion of the cash consideration in the acquisition. In the first quarter, the Company drew an additional $45.0 million making the total draw on the line of credit $225.0 million. The Company must repay $75.0 million six months subsequent to December 5, 2016.

At the Company’s option, amounts borrowed under the Credit Agreement will bear interest at either (i) the London interbank offered rate multiplied by the Statutory Reserve Rate (as defined in the Credit Agreement) (the “Eurocurrency Rate”) or (ii) a base rate (the “Base Rate”) equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the Reference Rate (as defined in the Credit Agreement) then in effect and (z) the Eurocurrency Rate for an interest period of one month, plus 1.0%, in each case, plus an applicable margin. Until the date that is six months after the Closing Date, the applicable margin relating to any Eurocurrency Rate loan is 1.75% and the applicable margin relating to any Base Rate loan is 0.75%. From and after the date that is six months after the Closing Date, the applicable margin relating to any Eurocurrency Rate loan is 2.25% and the applicable margin relating to any Base Rate loan is 1.25%.

The final maturity of the Credit Facility will occur on December 4, 2017 (the “Maturity Date”). j2 Global is permitted to make voluntary prepayments of the Credit Facility at any time without payment of a premium or penalty. Amounts repaid cannot be re-borrowed. The Company is required to make mandatory prepayments of loans under the Credit Facility with (i) net cash proceeds from issuances of debt (other than certain permitted debt), (ii) net cash proceeds from certain non-ordinary course asset sales (subject to reinvestment rights and other exceptions) and (iii) casualty proceeds and condemnation awards (subject to reinvestment rights and other exceptions). The Company is also required to make prepayments of loans under the Credit Facility in the amount equal to the then-outstanding loans under the Credit Facility minus $150.0 million, if on the date that is six months after the Closing Date, the aggregate principal amount of the loans under the Credit Facility is greater than $150.0 million.

The obligations under the Credit Facility and certain cash management and hedging obligations are and will be fully and unconditionally guaranteed by certain of j2 Global’s existing and subsequently acquired or organized direct and indirect subsidiaries (including Ziff Davis, LLC and Everyday Health) pursuant to a guarantee agreement and secured by a lien on the equity interests of certain of j2 Global’s subsidiaries, subject to customary exceptions.

The Credit Agreement contains financial maintenance covenants, including maintenance of (i) a maximum total leverage ratio as of the last date of any fiscal quarter not to exceed 3.25:1.00; and (ii) a minimum Consolidated EBITDA (as defined in the Credit Agreement) of not less than $75.0 million for any fiscal quarter. The Credit Agreement also contains restrictive covenants that limit, among other things, the Company’s and its restricted subsidiaries’ ability to incur additional indebtedness, create, incur or assume liens, consolidate, merge, liquidate or dissolve, pay dividends or make other distributions or other restricted payments, make or hold any investments, enter into certain transactions with affiliates, sell assets other than on terms specified by the Credit Agreement, amend the terms of certain other indebtedness and organizational documents and change their lines of business and fiscal years, in each case, subject to customary exceptions. j2 Global was in compliance with all such covenants. The Credit Agreement also sets forth customary events of default, including, among other things, the failure to make timely payments under the Credit Facility, the failure to satisfy certain covenants, cross-default and cross-acceleration to other material debt for borrowed money, the occurrence of a change of control and specified events of bankruptcy and insolvency.

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The Company has capitalized the total of $1.3 million in debt issuance costs, which are being amortized to interest expense over the life of the Credit Facility. As of March 31, 2017, these debt issuance costs, net of amortization, were $0.9 million. The related interest expense was $1.2 million for the three months ended March 31, 2017.

Non-Income Related Taxes

As a provider of cloud services for business, the Company does not provide telecommunications services. Thus, it believesthat its business and its users (by using the Company’s services) are generally not subject to various telecommunication taxes.Moreover, the Company generally does not believe that its business and its users (by using the Company’s services) are subject to other indirect taxes, such as sales, business tax and gross receipt tax. However, several state and municipal taxing authorities have challenged these beliefs and have and may continue to audit and assess the Company’s business and operations with respect to telecommunications and other indirect taxes.

On February 24, 2016, President Obama signed into law H.R. 644, the “Trade Facilitation and Trade Enforcement Act of 2015”, which included a provision to permanently ban state and local authorities from imposing access or discriminatory taxes on the Internet. The new law allows “grandfathered” states and local authorities to continue their existing taxes on Internet access through June 2020.

The Company is currently under audit for indirect taxes in several states and municipalities including New York State, Massachusetts, Ohio, and the City of Los Angeles. The Company currently has no reserves established for these matters, as the Company has determined that the liability is not probable and estimable. However, it is reasonably possible that such a liability could be incurred, which would result in additional expense, which could materially impact our financial results.

9.Income Taxes

The Company’s tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate. Each quarter the Company updates its estimated annual effective tax rate and, if the estimate changes, makes a cumulative adjustment. j2 Global’s annual effective tax rate is normally lower than the 35% U.S. federal statutory rate and applicable apportioned state tax rates primarily due to anticipated earnings of the Company’s subsidiaries outside of the U.S. in jurisdictions where the Company’s effective tax rate is lower than in the U.S. The Company’s effective tax rate was 26.7% and 30.3% for the three months ended March 31, 2017 and 2016, respectively. j2 Global does not provide for U.S. income taxes on the undistributed earnings of the Company’s foreign operations because the Company intends to permanently reinvest such earnings in foreign jurisdictions and any determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable. Income before income taxes included income from domestic operations of $0.1 million and $12.3 million for the three months ended March 31, 2017 and 2016, respectively, and income from foreign operations of $35.1 million and $30.7 million for the three months ended March 31, 2017 and 2016, respectively.

As of March 31, 2017 and December 31, 2016, the Company had $47.2 million and $46.5 million, respectively, in liabilities for uncertain income tax positions. Accrued interest and penalties related to unrecognized tax benefits are recognized in income tax expense on the Company’s consolidated statement of income.

Cash paid for income taxes net of refunds received was $6.5 million and $8.9 million for the three months ended March 31, 2017 and 2016, respectively.

Certain taxes are prepaid during the year and, where appropriate, included within prepaid expenses and other current assets on the consolidated balance sheet. The Company’s prepaid taxes were zero at March 31, 2017 and December 31, 2016, respectively.

Income Tax Audits:

The Company is under income tax audit by the U.S. Internal Revenue Service (“IRS”) for its 2012 through 2014 tax years. Additionally, the Company was notified on March 22, 2017 that the IRS will be auditing Everyday Health’s 2014 tax year.

j2 Global is also under income tax audit by the California Franchise Tax Board (the “FTB”) for its tax years 2012 and 2013. The FTB, however, has agreed to suspend its audit for 2012 and 2013 pending the outcome of the IRS audit for such tax years.

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The Company is under income tax audit by the New York State Department of Taxation and Finance (“NYS”) for tax years 2011 through 2013. On March 16, 2017, the Company was notified that NYS would be auditing its 2014 tax year.

It is reasonably possible that these audits may conclude in the next 12 months and that the uncertain tax positions the Company has recorded in relation to these tax years may change compared to the liabilities recorded for these periods. If the recorded uncertain tax positions are inadequate to cover the associated tax liabilities, the Company would be required to record additional tax expense in the relevant period, which could be material. If the recorded uncertain tax positions are adequate to cover the associated tax liabilities, the Company would be required to record any excess as a reduction in tax expense in the relevant period, which could be material. However, it is not currently possible to estimate the amount, if any, of such change.

10.Stockholders’ Equity

Common Stock Repurchase Program

In February 2012, the Company’s Board of Directors approved a program authorizing the repurchase of up to five million shares of our common stock through February 20, 2013 (the “2012 Program”) which was subsequently extended through February 19, 2018. During the three month period ended March 31, 2017, we repurchased zero shares under this program. Cumulatively at March 31, 2017, 2.1 million shares were repurchased at an aggregate cost of $58.6 million (including an immaterial amount of commission fees).

Periodically, participants in j2 Global’s stock plans surrender to the Company shares of j2 Global stock to pay the exercise price or to satisfy tax withholding obligations arising upon the exercise of stock options or the vesting of restricted stock. During the three month period ended March 31, 2017, the Company purchased 3,692 shares from plan participants for this purpose.

Dividends

The following is a summary of each dividend declared during fiscal year 2017 and 2016:

Declaration Date	Dividend per Common Share		Record Date	Payment Date
February 10, 2016	$	0.3250	February 23, 2016	March 10, 2016
May 5, 2016	$	0.3350	May 18, 2016	June 2, 2016
August 2, 2016	$	0.3450	August 17, 2016	September 1, 2016
November 1, 2016	$	0.3550	November 18, 2016	December 5, 2016
February 9, 2017	$	0.3650	February 22, 2016	March 9, 2017

Future dividends are subject to Board approval.

11.Stock Options and Employee Stock Purchase Plan

j2 Global’s share-based compensation plans include the Second Amended and Restated 1997 Stock Option Plan (the “1997 Plan”), 2007 Stock Plan (the “2007 Plan”), 2015 Stock Option Plan (the “2015 Plan”) and 2001 Employee Stock Purchase Plan (the “Purchase Plan”). Each plan is described below.

The 1997 Plan terminated in 2007. A total of 12,000,000 shares of j2 Global common stock were authorized to be used for 1997 Plan purposes. An additional 840,000 shares were authorized for issuance upon exercise of options granted outside the 1997 Plan. As of March 31, 2017, 8,998 shares underlying options and zero shares of restricted stock were outstanding under the 1997 Plan, all of which continue to be governed by the 1997 Plan.

The 2007 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units and other share-based awards. 4,500,000 shares of j2 Global common stock are authorized to be used for 2007 Plan purposes. Options under the 2007 Plan may be granted at exercise prices determined by the Board of Directors, provided that the exercise prices shall not be less than the fair market value of j2 Global’s common stock on the date of grant for incentive stock options and not less than 85% of the fair market value of j2 Global’s common stock on the date of grant for non-statutory stock options. As of March 31, 2017, 319,011 shares underlying options and 15,720 shares of restricted stock were outstanding under the 2007 Plan.

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The 2015 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units and other share-based awards and is intended as a successor plan to the 2007 Stock Plan since no further grants will be made under the 2007 Stock Plan. 4,200,000 shares of j2 Global common stock are authorized to be used for 2015 Plan purposes. Options under the 2015 Plan may be granted at exercise prices determined by the Board of Directors, provided that the exercise prices shall not be less than the higher of the par value or 100% of the fair market value of j2 Global’s common stock subject to the option on the date the option is granted. As of March 31, 2017, 62,000 shares underlying options and 33,500 shares of restricted stock units were outstanding under the 2015 Plan.

All stock option grants are approved by “outside directors” within the meaning of Internal Revenue Code Section 162(m).

Stock Options

The following table represents stock option activity for the three months ended March 31, 2017:

	Number of Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2017	413,858		$	31.09
Granted	—		—
Exercised	(23,847	)	29.18
Canceled	—		—
Outstanding at March 31, 2017	390,011		$	31.20	3.8	$	20,556,234
Exercisable at March 31, 2017	334,411		$	25.93	3.1	$	19,388,798
Vested and expected to vest at March 31, 2017	378,897		$	30.16	3.6	$	20,364,506

The total intrinsic values of options exercised during the three months ended March 31, 2017 and 2016 were $1.3 million and $1.8 million, respectively.

The Company recognized $0.1 million and $0.1 million of compensation expense related to stock options for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017 and December 31, 2016, unrecognized stock compensation related to non-vested stock options granted under each of the share-based compensation plans approximated $0.6 million and $0.7 million, respectively. Unrecognized stock compensation expense related to non-vested stock options granted under these plans is expected to be recognized ratably over a weighted-average period of 2.8 years (i.e., the remaining requisite service period).

Fair Value Disclosure

j2 Global uses the Black-Scholes option pricing model to calculate the fair value of each option grant. The expected volatility is based on historical volatility of the Company’s common stock. The Company estimates the expected term based upon the historical exercise behavior of our employees. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a term equal to the expected term of the option assumed at the date of grant. The Company uses an annualized dividend yield based upon the per share dividends declared by its Board of Directors. Estimated forfeiture rates were 15.31% and 14.35% as of March 31, 2017 and 2016, respectively.

Restricted Stock and Restricted Stock Units

j2 Global has awarded restricted stock and restricted stock units to its Board of Directors and senior staff pursuant to certain share-based compensation plans. Compensation expense resulting from restricted stock and restricted unit grants is measured at fair value on the date of grant and is recognized as share-based compensation expense over the applicable vesting period. Beginning in fiscal year 2012, vesting periods are approximately one year for awards to members of the Company’s Board of Directors and five years for senior staff (excluding market-based awards discussed below).

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Restricted Stock - Awards with Market Conditions

In May 2016, certain key employees were granted market-based restricted stock awards. The market-based awards have vesting conditions that are based on specified stock price targets of the Company’s common stock. Market conditions were factored into the grant date fair value using a Monte Carlo valuation model, which utilized multiple input variables to determine the probability of the Company achieving the specified stock price targets with a 20 day lookback (trading days). Stock-based compensation expense related to an award with a market condition will be recognized over the requisite service period using the graded-vesting method regardless of whether the market condition is satisfied, provided that the requisite service period has been completed. During the three months ended March 31, 2017 and 2016, the Company awarded zero market-based restricted stock awards, respectively.

Restricted stock award activity for the three months ended March 31, 2017 is set forth below:

	Shares		Weighted-Average Grant-Date Fair Value
Nonvested at January 1, 2017	705,015		$	41.40
Granted	15,270		82.69
Vested	(13,031	)	41.02
Canceled	—		—
Nonvested at March 31, 2017	707,254		$	42.30

Restricted stock unit award activity for the three months ended March 31, 2017 is set forth below:

	Number of Shares		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2017	51,950
Granted	7,100
Vested	(7,150	)
Canceled	(2,680	)
Outstanding at March 31, 2017	49,220		2.0	$	4,130,050
Vested and expected to vest at March 31, 2017	35,901		1.8	$	3,012,481

The Company recognized $3.5 million and $2.7 million of compensation expense related to restricted stock and restricted stock units for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017 and December 31, 2016, the Company had unrecognized share-based compensation cost of approximately $35.5 million and $37.9 million, respectively, associated with these awards. This cost is expected to be recognized over a weighted-average period of 3.1 years for awards and 3.6 years for units.

Employee Stock Purchase Plan

The Purchase Plan provides for the issuance of a maximum of two million shares of the Company’s common stock. Under the Purchase Plan, eligible employees can have up to 15% of their earnings withheld, up to certain maximums, to be used to purchase shares of j2 Global common stock at certain plan-defined dates. The price of the j2 Global common stock purchased under the Purchase Plan for the offering periods is equal to 95% of the fair market value of the j2 Global common stock at the end of the offering period. For the three months ended March 31, 2017 and 2016, 837 and 842 shares were purchased under the plan, respectively. Cash received upon the issuance of j2 Global common stock under the Purchase Plan was $67,000 and $58,000 for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, 1,625,689 shares were available under the Purchase Plan for future issuance.

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12.Earnings Per Share

The components of basic and diluted earnings per share are as follows (in thousands, except share and per share data):

	Three Months Ended March 31,
	2017			2016
Numerator for basic and diluted net income per common share:
Net income attributable to j2 Global, Inc. common shareholders	$	25,820		$	29,943
Net income available to participating securities (a)	(309		)	(412		)
Net income available to j2 Global, Inc. common shareholders	$	25,511		$	29,531
Denominator:
Weighted-average outstanding shares of common stock	47,463,231			47,966,718
Dilutive effect of:
Equity incentive plans	242,920			232,674
Convertible debt (b)	1,059,880			38,706
Common stock and common stock equivalents	48,766,031			48,238,098
Net income per share:
Basic	$	0.54		$	0.62
Diluted	$	0.52		$	0.61

^(a)  Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid).

^(b)  Represents the incremental shares issuable upon conversion of the Convertible Notes due June 15, 2029 by applying the treasury stock method when the average stock price exceeds the conversion price of the Convertible Notes (see Note 7 - Long Term Debt).

For the three months ended March 31, 2017 and 2016, there were zero options outstanding, respectively, which were excluded from the computation of diluted earnings per share because the exercise prices were greater than the average market price of the common stock.

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13.Segment Information

The Company’s business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. j2 Global’s reportable business segments are: (i) Business Cloud Services and (ii) Digital Media.

Information on reportable segments and reconciliation to consolidated income from operations is as follows (in thousands):

	Three Months Ended March 31,
	2017			2016
Revenues by segment:
Business Cloud Services	$	141,544		$	138,139
Digital Media	113,131			62,409
Elimination of inter-segment revenues	(6		)	(46		)
Total revenues	254,669			200,502
Direct costs by segment(1):
Business Cloud Services	85,244			87,862
Digital Media	116,633			54,676
Direct costs by segment(1):	201,877			142,538
Business Cloud Services operating income(2)	56,300			50,277
Digital Media operating income	(3,502		)	7,733
Segment operating income	52,798			58,010
Global operating costs(2)	4,823			4,672
Income from operations	$	47,975		$	53,338
(1) Direct costs for each segment include cost of revenues and other operating expenses that are directly attributable to the segment, such as employee compensation expense, local sales and marketing expenses, engineering and network operations expense, depreciation and amortization and other administrative expenses.
(2) Global operating costs include general and administrative and other corporate expenses that are managed on a global basis and that are not directly attributable to any particular segment.

	March 31, 2017		December 31, 2016
Assets:
Business Cloud Services	$	971,639	$	911,327
Digital Media	1,114,708		1,124,535
Total assets from reportable segments	2,086,347		2,035,862
Corporate	16,205		26,466
Total assets	$	2,102,552	$	2,062,328
	Three Months Ended March 31,
	2017		2016
Capital expenditures:
Business Cloud Services	$	1,456	$	1,121
Digital Media	8,204		3,200
Total from reportable segments	9,660		4,321
Corporate	—		—
Total capital expenditures	$	9,660	$	4,321

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	Three Months Ended March 31,
	2017		2016
Depreciation and amortization:
Business Cloud Services	$	16,764	$	17,502
Digital Media	22,558		9,672
Total from reportable segments	39,322		27,174
Corporate	—		—
Total depreciation and amortization	$	39,322	$	27,174

The Company’s Business Cloud Services segment consists of several services which have similar economic characteristics, including the nature of the services and their production processes, the type of customers, as well as the methods used to distribute these services.

j2 Global groups its Business Cloud services into three main categories based on the similarities of these services: Cloud Connect, Cloud Services and Intellectual Property. Cloud Connect consists of our Fax and Voice services. Cloud Services consist of Backup, Email Security, Email Marketing and Web Hosting.

	Three Months Ended March 31, 2017
	Revenue		Depreciation and Amortization		Operating Income
Cloud Connect (Fax/Voice)	$	93,632	$	5,883	$	44,438
Cloud Services	46,714		9,534		12,416
Intellectual Property	1,198		1,347		(554		)
Total	$	141,544	$	16,764	$	56,300

	Three Months Ended March 31, 2016
	Revenue		Depreciation and Amortization		Operating Income
Cloud Connect (Fax/Voice)	$	90,244	$	5,570	$	40,520
Cloud Services	46,719		10,318		10,974
Intellectual Property	1,176		1,614		(1,217		)
Total	$	138,139	$	17,502	$	50,277

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j2 Global maintains operations in the U.S., Canada, Ireland, Japan and other countries. Geographic information about the U.S. and all other countries for the reporting periods is presented below. Such information attributes revenues based on jurisdictions where revenues are reported (in thousands).

	Three Months Ended March 31,
	2017		2016
Revenues:
United States	$	185,762	$	137,639
Canada	19,401		18,366
Ireland	17,901		12,549
All other countries	31,605		31,948
	$	254,669	$	200,502

	March 31, 2017		December 31, 2016
Long-lived assets:
United States	$	441,631	$	453,053
All other countries	92,472		93,430
Total	$	534,103	$	546,483

14.Unrestricted Subsidiaries (unaudited)

Reorganization

On August 12, 2016, all of the equity interests in Ziff Davis, LLC, a Delaware limited liability company, and all of the equity interests in Advanced Messaging Technologies, Inc., a Delaware corporation, held by j2 Cloud Services, LLC, a Delaware limited liability company, were distributed to j2 Global, the parent company of j2 Cloud Services, LLC.

Until the reorganization noted above, 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.

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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 for any period in which j2 Cloud Services had Unrestricted Subsidiaries. Accordingly, the Company is presenting the following tables.

The financial position of the Unrestricted Subsidiaries as of March 31, 2017 and December 31, 2016 is as follows (in thousands):

	March 31, 2017			December 31, 2016
ASSETS
Cash and cash equivalents	$	46,633		$	17,931
Accounts receivable	133,488			158,730
Prepaid expenses and other current assets	14,464			13,494
Total current assets	194,585			190,155
Property and equipment, net	42,575			38,752
Trade names, net	67,005			69,093
Patent and patent licenses, net	11,964			13,303
Customer relationships, net	89,415			95,855
Goodwill	564,527			563,658
Other purchased intangibles, net	153,723			163,023
Deferred income taxes, non-current	47			482
Other assets	5,408			5,541
Total assets	$	1,129,249		$	1,139,862
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	128,877		$	163,130
Income taxes payable	5,099			4,353
Deferred revenue, current	17,476			13,773
Total current liabilities	151,452			181,256
Long-term debt	642,662			602,662
Deferred income taxes, non-current	11,075			11,816
Other long-term liabilities	1,065			1,454
Total liabilities	806,254			797,188
Additional paid-in capital	318,127			318,160
Retained earnings	7,680			27,004
Accumulated other comprehensive loss	(2,812		)	(2,490		)
Total stockholders’ equity	322,995			342,674
Total liabilities and stockholders’ equity	$	1,129,249		$	1,139,862

-30-

The results of operations of the Unrestricted Subsidiaries for the three months ended March 31, 2017 and 2016 is as follows (in thousands):

	Three Months Ended March 31,
	2017			2016
Revenues	$	113,131		$	62,457
Cost of revenues	11,712			5,311
Gross profit	101,419			57,146
Operating expenses:
Sales and marketing	55,327			26,461
Research, development and engineering	5,499			2,482
General and administrative	45,847			22,819
Total operating expenses	106,673			51,762
Income (loss) from operations	(5,254		)	5,384
Interest expense, net	13,611			4,127
Other (income) expense, net	(624		)	172
Income (loss) before income taxes	(18,241		)	1,085
Income tax expense	1,083			580
Net income (loss)	$	(19,324	)	$	505

15.Accumulated Other Comprehensive Income

The following table summarizes the changes in accumulated balances of other comprehensive income, net of tax, for the three months ended March 31, 2017 (in thousands):

	Unrealized Gains (Losses) on Investments		Foreign Currency Translation			Total
Beginning balance	$	—	$	(54,649	)	$	(54,649	)
Other comprehensive income before reclassifications	—		3,582			3,582
Amounts reclassified from accumulated other comprehensive income	—		—			—
Net current period other comprehensive income	—		3,582			3,582
Ending balance	$	—	$	(51,067	)	$	(51,067	)

16.Condensed Consolidating Financial Statements

In connection with the June 2014 Convertible Note issuance, j2 Global, Inc. entered into a supplemental indenture related to the Senior Notes, pursuant to which it fully and unconditionally guaranteed, on an unsecured basis, the full and punctual payment of the Senior Notes issued by its wholly owned subsidiary, j2 Cloud Services, LLC. j2 Cloud Services, LLC is subject to restrictions on dividends in its existing indenture with respect to the Senior Notes. While substantially all of the Company’s assets (other than the net cash proceeds from the issuance of the Convertible Notes) are owned directly or indirectly by j2 Cloud Services, LLC, those contractual provisions did not, as of June 30, 2014, meaningfully restrict j2 Cloud Services, LLC’s ability to pay dividends to j2 Global, Inc.

The following condensed consolidating financial statements present, in separate columns, financial information for (i) j2 Global, Inc. (the “Parent”) on a parent-only basis, (ii) j2 Cloud Services, LLC, (iii) the non-guarantor subsidiaries on a combined basis, (iv) the eliminations and reclassifications necessary to arrive at the information for the Company on a consolidated basis, and (v) the Company on a consolidated basis. The condensed consolidating financial statements are presented in accordance with the equity method. Under this method, the investments in subsidiaries are recorded at cost and adjusted for the Company’s share

-31-

of subsidiaries’ cumulative results of operations, capital contributions, distributions and other equity changes. Intercompany charges (income) between the Parent and subsidiaries are recognized in the condensed consolidating financial statements during the period incurred and the settlement of intercompany balances is reflected in the condensed consolidating statement of cash flows based on the nature of the underlying transactions. Consolidating adjustments include consolidating and eliminating entries for investments in subsidiaries, intercompany activity and balances.

-32-

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

March 31, 2017

(Unaudited, in thousands except share and per share data)

BALANCE SHEET	j2 Global, Inc.		j2 Cloud Services		Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
ASSETS
Cash and cash equivalents	$	15,150	$	34,395	$	137,864		$	—		$	187,409
Short-term investments	—		—		65			—			65
Accounts receivable, net	1		10,143		161,919			(1		)	172,062
Prepaid expenses and other current assets	38,296		1,766		22,295			(38,180		)	24,177
Intercompany receivable	679,103		299,743		149,971			(1,128,817		)	—
Total current assets	732,550		346,047		472,114			(1,166,998		)	383,713
Property and equipment, net	—		6,088		63,626			—			69,714
Trade names, net	—		10,439		102,900			—			113,339
Patent and patent licenses, net	—		565		11,988			—			12,553
Customer relationships, net	—		10,810		194,110			—			204,920
Goodwill	—		70,480		1,068,220			—			1,138,700
Other purchased intangibles, net	—		6,944		159,444			—			166,388
Investment in subsidiaries	1,121,423		751,821		(1,073		)	(1,872,171		)	—
Deferred income taxes, non-current	—		32,667		1,752			(27,507		)	6,912
Other assets	—		422		5,891			—			6,313
Total assets	$	1,853,973	$	1,236,283	$	2,078,972		$	(3,066,676	)	$	2,102,552
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	6,697	$	44,117	$	133,294		$	(38,181	)	$	145,927
Income taxes payable	—		94,709		—			(73,110		)	21,599
Deferred revenue, current	—		20,324		65,107			—			85,431
Line of credit	224,123		—		—			—			224,123
Other current liabilities	—		—		34			—			34
Intercompany payable	303,492		—		752,214			(1,055,706		)	—
Total current liabilities	534,312		159,150		950,649			(1,166,997		)	477,114
Long-term debt	357,462		246,811		—			—			604,273

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Deferred revenue, non-current	—		822		—			—			822
Liability for uncertain tax positions	—		41,833		5,345			—			47,178
Deferred income taxes, non-current	31,738		—		35,521			(27,507		)	39,752
Other long-term liabilities	1,107		559		1,321			—			2,987
Total liabilities	924,619		449,175		992,836			(1,194,504		)	1,172,126
Commitments and contingencies	—		—		—			—			—
Preferred stock - Series A, $0.01 par value	—		—		—			—			—
Preferred stock - Series B, $0.01 par value	—		—		—			—			—
Common stock, $0.01 par value	475		—		—			—			475
Additional paid-in capital	468,359		89,066		424,399			(669,356		)	312,468
Retained earnings	460,520		697,822		713,024			(1,202,816		)	668,550
Accumulated other comprehensive income (loss)	—		220		(51,287		)	—			(51,067		)
Total stockholders’ equity	929,354		787,108		1,086,136			(1,872,172		)	930,426
Total liabilities and stockholders’ equity	$	1,853,973	$	1,236,283	$	2,078,972		$	(3,066,676	)	$	2,102,552

-34-

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2016

(Unaudited, in thousands except share and per share data)

BALANCE SHEET	j2 Global, Inc.		j2 Cloud Services		Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
ASSETS
Cash and cash equivalents	$	23,935	$	22,949	$	77,066		$	—		$	123,950
Short-term investments	—		—		60			—			60
Accounts receivable, net	—		11,464		188,498			(91		)	199,871
Prepaid expenses and other current assets	25,922		2,266		21,246			(25,316		)	24,118
Intercompany receivable	635,740		281,078		166,210			(1,083,028		)	—
Total current assets	685,597		317,757		453,080			(1,108,435		)	347,999
Property and equipment, net	—		6,318		61,776			—			68,094
Trade names, net	—		10,097		105,756			—			115,853
Patent and patent licenses, net	—		601		13,327			—			13,928
Customer relationships, net	—		2,519		205,636			—			208,155
Goodwill	—		58,310		1,064,500			—			1,122,810
Other purchased intangibles, net	—		4,804		168,951			—			173,755
Investment in subsidiaries	1,091,412		730,153		(1,071		)	(1,820,494		)	—
Deferred income taxes, non-current	1,346		26,667		2,171			(24,895		)	5,289
Other assets	—		443		6,002			—			6,445
Total assets	$	1,778,355	$	1,157,669	$	2,080,128		$	(2,953,824	)	$	2,062,328
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	4,545	$	28,179	$	170,754		$	(25,407	)	$	178,071
Income taxes payable	—		82,795		—			(66,042		)	16,753
Deferred revenue, current	—		19,277		61,107			—			80,384
Line of credit	178,817		—		—			—			178,817
Other current liabilities	—		—		64			—			64
Intercompany payable	296,658		11		720,317			(1,016,986		)	—
Total current liabilities	480,020		130,262		952,242			(1,108,435		)	454,089
Long-term debt	355,143		246,604		(1		)	—			601,746
Deferred revenue, non-current	—		1,588		—			—			1,588
Liability for uncertain tax positions	—		41,259		5,278			—			46,537

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Deferred income taxes, non-current	28,687		—		36,565			(24,895		)	40,357
Other long-term liabilities	1,040		505		1,930			—			3,475
Total liabilities	864,890		420,218		996,014			(1,133,330		)	1,147,792
Commitments and contingencies	—		—		—			—			—
Preferred stock - Series A, $0.01 par value	—		—		—			—			—
Preferred stock - Series B, $0.01 par value	—		—		—			—			—
Common stock, $0.01 par value	474		—		—			—			474
Additional paid-in capital	464,220		89,066		424,399			(669,356		)	308,329
Retained earnings	448,771		648,233		714,516			(1,151,138		)	660,382
Accumulated other comprehensive income (loss)	—		152		(54,801		)	—			(54,649		)
Total stockholders’ equity	913,465		737,451		1,084,114			(1,820,494		)	914,536
Total liabilities and stockholders’ equity	$	1,778,355	$	1,157,669	$	2,080,128		$	(2,953,824	)	$	2,062,328

-36-

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended March 31, 2017

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Revenues:
Total revenues	$	—		$	75,336		$	207,888		$	(28,555	)	$	254,669
Cost of revenues	—			17,227			52,131			(28,548		)	40,810
Gross profit	—			58,109			155,757			(7		)	213,859
Operating expenses:
Sales and marketing	—			10,810			66,674			(7		)	77,477
Research, development and engineering	—			2,950			8,802			—			11,752
General and administrative	4,824			4,771			67,060			—			76,655
Total operating expenses	4,824			18,531			142,536			(7		)	165,884
Income (loss) from operations	(4,824		)	39,578			13,221			—			47,975
Equity earnings in subsidiaries	26,430			17,828			—			(44,258		)	—
Interest (income) expense, net	(5,309		)	5,207			12,512			—			12,410
Other income, net	—			(46		)	369			—			323
Income before income taxes	26,915			52,245			340			(44,258		)	35,242
Income tax expense	1,095			6,489			1,838			—			9,422
Net income	$	25,820		$	45,756		$	(1,498	)	$	(44,258	)	$	25,820

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j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended March 31, 2016

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries		Consolidating Adjustments			j2 Global Consolidated
Revenues:
Total revenues	$	—		$	56,385		$	155,566	$	(11,449	)	$	200,502
Cost of revenues	—			17,489			28,202		(11,403		)	34,288
Gross profit	—			38,896			127,364		(46		)	166,214
Operating expenses:
Sales and marketing	—			10,628			37,530		(46		)	48,112
Research, development and engineering	—			3,289			5,699		—			8,988
General and administrative	4,672			5,471			45,633		—			55,776
Total operating expenses	4,672			19,388			88,862		(46		)	112,876
Income (loss) from operations	(4,672		)	19,508			38,502		—			53,338
Equity earnings in subsidiaries	34,323			27,696			—		(62,019		)	—
Interest expense, net	1,871			5,233			3,129		—			10,233
Other expense (income), net	91			(920		)	955		—			126
Income before income taxes	27,689			42,891			34,418		(62,019		)	42,979
Income tax expense (benefit)	(2,254		)	8,568			6,722		—			13,036
Net income	$	29,943		$	34,323		$	27,696	$	(62,019	)	$	29,943

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j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

Three Months Ended March 31, 2017

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.		j2 Cloud Services		Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Net income	$	25,820	$	45,756	$	(1,498	)	$	(44,258	)	$	25,820
Other comprehensive income, net of tax:
Foreign currency translation adjustment	—		—		3,582			—			3,582
Change in fair value on available-for-sale investments, net of tax expense (benefit)	—		—		—			—			—
Other comprehensive income, net of tax	—		—		3,582			—			3,582
Comprehensive income	$	25,820	$	45,756	$	2,084		$	(44,258	)	$	29,402

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j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Three Months Ended March 31, 2016

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services		Non-guarantor Subsidiaries		Consolidating Adjustments			j2 Global Consolidated
Net income	$	29,943		$	34,323	$	27,696	$	(62,019	)	$	29,943
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	—			—		3,415		—			3,415
Change in fair value on available-for-sale investments, net of tax benefit	(2,361		)	—		—		—			(2,361		)
Other comprehensive income (loss), net of tax	(2,361		)	—		3,415		—			1,054
Comprehensive income	$	27,582		$	34,323	$	31,111	$	(62,019	)	$	30,997

-40-

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

Three Months Ended March 31, 2017

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries			Consolidating Adjustments		j2 Global Consolidated
Net cash (used in) provided by operating activities	$	(71,295	)	$	20,798		$	101,688		$	—	$	51,191
Cash flows from investing activities:
Purchase of certificates of deposit	—			—			(5		)	—		(5		)
Purchases of property and equipment	—			(479		)	(9,181		)	—		(9,660		)
Acquisition of businesses, net of cash received	—			2			(3,565		)	—		(3,563		)
Purchases of intangible assets	—			(2		)	(140		)	—		(142		)
Net cash used in investing activities	—			(479		)	(12,891		)	—		(13,370		)
Cash flows from financing activities:
Proceeds from line of credit, net	44,981			—			—			—		44,981
Repurchases of common and restricted stock	(314		)	—			—			—		(314		)
Issuance of common stock under employee stock purchase plan	67			—			—			—		67
Exercise of stock options	695			—			—			—		695
Dividends paid	(17,575		)	—			—			—		(17,575		)
Deferred payments for acquisitions	—			(1,035		)	(1,264		)	—		(2,299		)
Other	—			—			(26		)	—		(26		)
Intercompany	34,656			(7,906		)	(26,750		)	—		—
Net cash (used in) provided by financing activities	62,510			(8,941		)	(28,040		)	—		25,529
Effect of exchange rate changes on cash and cash equivalents	—			68			41			—		109
Net change in cash and cash equivalents	(8,785		)	11,446			60,798			—		63,459
Cash and cash equivalents at beginning of period	23,935			22,949			77,066			—		123,950
Cash and cash equivalents at end of period	$	15,150		$	34,395		$	137,864		$	—	$	187,409

-41-

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

Three Months Ended March 31, 2016

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries			Consolidating Adjustments		j2 Global Consolidated
Net cash (used in) provided by operating activities	$	5,686		$	(450	)	$	59,288		$	—	$	64,524
Cash flows from investing activities:
Maturity of available-for-sale investments	26,224			—			—			—		26,224
Purchase of available-for-sale investments	(21,402		)	—			—			—		(21,402		)
Purchases of property and equipment	—			(284		)	(4,037		)	—		(4,321		)
Acquisition of businesses, net of cash received	—			—			(47,989		)	—		(47,989		)
Purchases of intangible assets	—			—			(316		)	—		(316		)
Net cash (used in) provided by investing activities	4,822			(284		)	(52,342		)	—		(47,804		)
Cash flows from financing activities:
Repurchases of common stock and restricted stock	(1,786		)	—			—			—		(1,786		)
Issuance of common stock under employee stock purchase plan	58			—			—			—		58
Exercise of stock options	1,312			—			—			—		1,312
Dividends paid	(15,817		)	—			—			—		(15,817		)
Excess tax benefits from share-based compensation	264			—			—			—		264
Deferred payments for acquisitions	—			(528		)	(13,858		)	—		(14,386		)
Other	—			—			(25		)	—		(25		)
Intercompany	(13,327		)	(4,147		)	17,474			—		—
Net cash (used in) provided by financing activities	(29,296		)	(4,675		)	3,591			—		(30,380		)
Effect of exchange rate changes on cash and cash equivalents	(91		)	(30		)	1,006			—		885
Net change in cash and cash equivalents	(18,879		)	(5,439		)	11,543			—		(12,775		)
Cash and cash equivalents at beginning of period	55,516			9,975			190,039			—		255,530
Cash and cash equivalents at end of period	$	36,637		$	4,536		$	201,582		$	—	$	242,755

-42-

17.Subsequent Events

On May 4, 2017, the Company’s Board of Directors approved a quarterly cash dividend of $0.3750 per share of j2 Global common stock payable on June 2, 2017 to all stockholders of record as of the close of business on May 19, 2017.

-43-

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Information

In addition to historical information, we have also made forward-looking statements in this report. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations. Forward-looking statements also include those preceded or followed by the words “anticipates,” “believes,” “estimates,” “hopes” or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those discussed below, the risk factors discussed in Part II, Item 1A - “Risk Factors” of this Quarterly Report on Form 10-Q (if any) and in Part I, Item 1A - “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016 (together, the “Risk Factors”), and the factors discussed in the section in this Quarterly Report on Form 10-Q entitled “Quantitative and Qualitative Disclosures About Market Risk.” Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Readers should carefully review the Risk Factors and the risk factors set forth in other documents we file from time to time with the SEC.

Some factors that could cause actual results to differ materially from those anticipated in these forward-looking statements include, but are not limited to, our ability and intention to:

◦ Sustain growth or profitability, particularly in light of an uncertain U.S. or worldwide economy and the related impact on customer acquisition and retention rates, customer usage levels and credit and debit card payment declines;

◦ Maintain and increase our Cloud Services customer base and average revenue per user;

◦ Generate sufficient cash flow to make interest and debt payments and reinvest in our business, and pursue desired activities and businesses plans while satisfying restrictive covenants relating to debt obligations;

◦ Acquire businesses on acceptable terms and successfully integrate and realize anticipated synergies from such acquisitions;

◦ Continue to expand our businesses and operations internationally in the wake of numerous risks, including adverse currency fluctuations, difficulty in staffing and managing international operations, higher operating costs as a percentage of  revenues or the implementation of adverse regulations;

◦ Maintain our financial position, operating results and cash flows in the event that we incur new or unanticipated costs or tax liabilities, including those relating to federal and state income tax and indirect taxes, such as sales, value-added and telecommunication taxes;

◦ Accurately estimate the assumptions underlying our effective worldwide tax rate;

◦ Continue to pay a comparable cash dividend on a quarterly basis;

◦ Maintain favorable relationships with critical third-party vendors whose financial condition will not negatively impact the services they provide;

◦ Create compelling digital media content causing increased traffic and advertising levels; additional advertisers or an increase in advertising spend; and effectively target digital media advertisements to desired audiences;

◦ Manage certain risks inherent to our business, such as costs associated with fraudulent activity, system failure or network security breach; effectively maintaining and managing our billing systems; time and resources required to manage our legal proceedings; or adhering to our internal controls and procedures;

◦ Compete with other similar providers with regard to price, service and functionality;

◦ Cost-effectively procure, retain and deploy large quantities of telephone numbers in desired locations in the United States and abroad;

◦ Achieve business and financial objectives in light of burdensome domestic and international telecommunications, Internet or other regulations including data privacy, security and retention;

◦ Successfully manage our growth, including but not limited to our operational and personnel-related resources, and integration of newly acquired businesses;

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◦ Successfully adapt to technological changes and diversify services and related revenues at acceptable levels of financial return;

◦ Successfully develop and protect our intellectual property, both domestically and internationally, including our brands, patents, trademarks and domain names, and avoid infringing upon the proprietary rights of others; and

◦ Recruit and retain key personnel.

In addition, our financial results could be materially impacted by risks associated with new accounting pronouncements.

Overview

j2 Global, Inc., together with its subsidiaries (“j2 Global”, the “Company”, “our”, “us” or “we”), is a leading provider of Internet services.Through our Business Cloud Services Division, we provide cloud services to businesses of all sizes, from individuals to enterprises, and license our intellectual property (“IP”) to third parties. In addition, the Business Cloud Services Division includes our j2 Cloud Connect business which primarily focuses on our voice and fax products. The Digital Media Division specializes in the technology, gaming, lifestyle and healthcare markets, reaching in-market buyers and influencers in both the consumer and business-to-business space.

Our Business Cloud Services Division generates revenues primarily from customer subscription and usage fees and from IP licensing fees. Our Digital Media Division generates revenues primarily from advertising and sponsorship, subscription and usage fees, performance marketing and licensing fees.

In addition to growing our businesses organically, on a regular basis, we acquire businesses to grow our customer bases, expand and diversify our service offerings, enhance our technology and acquire skilled personnel.

Our consolidated revenues are currently generated from three basic business models, each with different financial profiles and variability. Our Business Cloud Services Division is driven primarily by subscription revenues that are relatively higher margin, stable and predictable from quarter to quarter with some seasonal weakness in the fourth quarter. The Business Cloud Services Division also includes the results of our IP licensing business, which can vary dramatically in both revenues and profitability from period to period. Our Digital Media Division is driven primarily by advertising revenues, has relatively higher sales and marketing expense and has seasonal strength in the fourth quarter. We continue to pursue additional acquisitions, which may include companies operating under business models that differ from those we operate under today. Such acquisitions could impact our consolidated profit margins and the variability of our revenues.

j2 Global was incorporated in 2014 as a Delaware corporation through the creation of a new holding company structure, and our Business Cloud Services segment, operated by our wholly-owned subsidiary, j2 Cloud Services, LLC (formerly j2 Cloud Services, Inc.), and its subsidiaries, was founded in 1995. We manage our operations through two business segments: Business Cloud Services and Digital Media. Information regarding revenue and operating income attributable to each of our reportable segments is included within Note 13 - Segment Information of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

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Business Cloud Services Segment Performance Metrics

The following table sets forth certain key operating metrics for our Business Cloud Services segment as of and for the three months ended March 31, 2017 and 2016 (in thousands, except for percentages):

	Three Months Ended March 31,
	2017			2016
Subscriber revenues:
Fixed	$	116,590		$	115,496
Variable	23,742			21,452
Total subscriber revenues	$	140,332		$	136,948
Other license revenues	1,212			1,191
Total revenues	$	141,544		$	138,139
Percentage of total subscriber revenues:
Fixed	83.1		%	84.3		%
Variable	16.9		%	15.7		%
Total revenues:
Number-based	$	93,438		$	89,967
Non-number-based	48,106			48,172
Total revenues	$	141,544		$	138,139
Average monthly revenue per Cloud Business Customer (ARPU) (1)(2)	$	15.03		$	14.95
Cancel Rate(3)	2.3		%	2.2		%

⁽¹⁾  Quarterly ARPU is calculated using our standard convention of applying the average of the quarter’s beginning and ending base to the total revenue for the quarter. We believe ARPU provides investors an understanding of the average monthly revenues we recognize associated with each Cloud Business Customer. As ARPU varies based on fixed subscription fee and variable usage components, we believe it can serve as a measure by which investors can evaluate trends in the types of services, levels of services and the usage levels of those services across our Cloud Business Customer base.

⁽²⁾  Cloud Business Customers is defined as paying direct inward dialing numbers for fax and voice services, and direct and resellers’ accounts for other services.

⁽³⁾  Cancel Rate is defined as cancels of small and medium business and individual Cloud Business Customers with greater than four months of continuous service (continuous service includes Cloud Business Customers administratively canceled and reactivated within the same calendar month), and enterprise Cloud Business Customers beginning with their first day of service. Calculated monthly and expressed as an average over the three months of the quarter.

Digital Media Segment Performance Metrics

The following table sets forth certain key operating metrics for our Digital Media segment for the three months ended March 31, 2017 and 2016 (in millions):

	Three Months Ended March 31,
	2017	2016
Visits	1,402	1,096
Page views	5,386	3,637

Sources: Google Analytics and Partner Platforms

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Critical Accounting Policies and Estimates

In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements. Actual results could differ significantly from those estimates under different assumptions and conditions. Our critical accounting policies are described in our 2016 Annual Report on Form 10-K filed with the SEC on March 1, 2017. During the three months ended March 31, 2017, there were no significant changes in our critical accounting policies and estimates.

Results of Operations for the Three Months Ended March 31, 2017

Business Cloud Services Segment

Assuming a stable or improving economic environment, and subject to our risk factors, we expect the revenue and profits as included in the results of operations below in our Business Cloud Services segment to be stable for the foreseeable future (excluding the impact of acquisitions). The main focus of our Business Cloud Services offerings is to reduce or eliminate costs, increase sales and enhance productivity, mobility, business continuity and security of our customers as the technologies and devices they use evolve over time. As a result, we expect to continue to take steps to enhance our existing offerings and offer new services to continue to satisfy the evolving needs of our customers. Through our IP licensing operations, which are included in the Business Cloud Services segment, we seek to make our IP available for license to third parties, and we expect to continue to attempt to obtain additional IP through a combination of acquisitions and internal development in an effort to increase available licensing opportunities and related revenues.

We expect acquisitions to remain an important component of our strategy and use of capital in this segment; however, we cannot predict whether our current pace of acquisitions will remain the same within this segment. In a given period, we may close greater or fewer acquisitions than in prior periods or acquisitions of greater or lesser significance than in prior periods. Moreover, future acquisitions of businesses within this segment but with different business models may impact the segment’s overall profit margins. Also, as IP licensing often involves litigation, the timing of licensing transactions is unpredictable and canand does vary significantly from period to period. This variability can cause the overall segment’s financial results to materially vary from period to period.

Digital Media Segment

Assuming a stable or improving economic environment, and subject to our risk factors, we expect the revenue and profits in our Digital Media segment to improve over the next several quarters as we integrate our recent acquisitions and over the longer term as advertising transactions continue to shift from offline to online. However, we expect overall lower margins in our Digital Media segment as the recent acquisition of Everyday Health currently operates at a lower level than our historical results. We expect that margins will trend back towards historical levels once the acquisition of Everyday Health is integrated into our existing cost structure and amortization expense is substantially realized. The main focus of our advertising programs is to provide relevant and useful advertising to visitors to our websites and those included within our advertising networks, reflecting our commitment to constantly improve their overall web experience. As a result, we expect to continue to take steps to improve the relevance of the ads displayed on our websites and those included within our advertising networks.

The operating margin we realize on revenues generated from ads placed on our websites is significantly higher than the operating margin we realize from revenues generated from those placed on third-party websites. Growth in advertising revenues from our websites has generally exceeded that from third-party websites. This trend has had a positive impact on our operating margins, and we expect that this will continue for the foreseeable future. However, the trend in advertising spend is shifting to mobile devices and other newer advertising formats which generally experience lower margins than those from desktop computers and tablets. We expect this trend to continue to put pressure on our margins.

We expect acquisitions to remain an important component of our strategy and use of capital in this segment; however, we cannot predict whether our current pace of acquisitions will remain the same within this segment. In a given period, we may close greater or fewer acquisitions than in prior periods or acquisitions of greater or lesser significance than in prior periods. Moreover, future acquisitions of businesses within this segment but with different business models may impact the segment’s overall profit margins.

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j2 Global Consolidated

We anticipate that the stable revenue trend in our Business Cloud Services segment combined with the improving revenue and profits in our Digital Media segment will result in overall improved revenue and profits for j2 Global on a consolidated basis, excluding the impact of any future acquisitions and revenues associated with licensing our IP which can vary dramatically from period to period.

We expect operating profit as a percentage of revenues to generally decrease in the future primarily due to the fact that revenue with respect to our Digital Media segment (i) is increasing as a percentage of our revenue on a consolidated basis and (ii) has historically operated at a lower operating margin. Moreover, we expect lower overall margins as the recent acquisition of Everyday Health currently operates at a lower level as compared to our historical results. We expect that margins will trend back towards historical levels once the acquisition of Everyday Health is integrated into our existing cost structure and amortization expense is substantially realized.

Revenues

(in thousands, except percentages)	Three Months Ended March 31,		Percentage Change
	2017	2016
Revenues	$254,669	$200,502	27%

Our revenues consist of revenues from our Business Cloud Services segment and from our Digital Media segment. Business Cloud Services revenues primarily consist of revenues from “fixed” customer subscription revenues and “variable” revenues generated from actual usage of our services. We also generate Business Cloud Services revenues from IP licensing. Digital Media revenues primarily consist of advertising revenues, fees paid for generating business leads, and licensing and sale of editorial content and trademarks.

Our revenues in 2017 have increased over the comparable three month period of 2016 primarily due to a combination of acquisitions and organic growth within both the Digital Media and Business Cloud Services segments.

Cost of Revenues

(in thousands, except percentages)	Three Months Ended March 31,		Percentage Change
	2017	2016
Cost of revenue	$40,810	$34,288	19%
As a percent of revenue	16%	17%

Cost of revenues is primarily comprised of costs associated with data and voice transmission, numbers, network operations, customer service, editorial and production costs, online processing fees and equipment depreciation. The increase in cost of revenues for the three months ended March 31, 2017 was primarily due to an increase in costs associated with businesses acquired in and subsequent to the first quarter 2016 that resulted in additional editorial and production costs, customer services, and depreciation.

Operating Expenses

Sales and Marketing.

(in thousands, except percentages)	Three Months Ended March 31,		Percentage Change
	2017	2016
Sales and Marketing	$77,477	$48,112	61%
As a percent of revenue	30%	24%

Our sales and marketing costs consist primarily of Internet-based advertising, sales and marketing, personnel costs and other business development-related expenses. Our Internet-based advertising relationships consist primarily of fixed cost and performance-based (cost-per-impression, cost-per-click and cost-per-acquisition) advertising relationships with an array of online

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service providers. Advertising cost for the three months ended March 31, 2017 was $31.5 million (primarily consists of $20.7 million of third-party advertising costs and $10.0 million of personnel costs) compared to 2016 of $23.6 million (primarily consists of $16.1 million third-party advertising costs and $5.9 million personnel costs). The increase in sales and marketing expenses for the three months ended March 31, 2017 versus the prior comparable period was primarily due to increased personnel costs and advertising associated with the acquisition of Everyday Health within the Digital Media segment, which was acquired in December 2016.

Research, Development and Engineering.

(in thousands, except percentages)	Three Months Ended March 31,		Percentage Change
	2017	2016
Research, Development and Engineering	$11,752	$8,988	31%
As a percent of revenue	5%	4%

Our research, development and engineering costs consist primarily of personnel-related expenses. The increase in research, development and engineering costs for the three months ended March 31, 2017 versus the prior comparable period was primarily due to additional personnel costs associated with acquisitions within the Business Cloud Services and Digital Media segments and additional expenses for professional services.

General and Administrative.

	Three Months Ended March 31,		Percentage Change
	2017	2016
General and Administrative	$76,655	$55,776	37%
As a percent of revenue	30%	28%

Our general and administrative costs consist primarily of personnel-related expenses, depreciation and amortization, changes in the fair value associated with contingent consideration, share-based compensation expense, bad debt expense, professional fees, severance and insurance costs. The increase in general and administrative expense for the three months ended March 31, 2017 versus the prior comparable period was primarily due to additional amortization of intangible assets, personnel costs relating to businesses acquired in and subsequent to the first quarter 2016, severance costs associated with acquisitions and depreciation of fixed assets.

Share-Based Compensation

The following table represents share-based compensation expense included in cost of revenues and operating expenses in the accompanying condensed consolidated statements of income for the three months ended March 31, 2017 and 2016 (in thousands):

	Three Months Ended March 31,
	2017		2016
Cost of revenues	$	117	$	95
Operating expenses:
Sales and marketing	378		531
Research, development and engineering	238		207
General and administrative	2,881		1,976
Total	$	3,614	$	2,809

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Non-Operating Income and Expenses

Interest expense, net. Our interest expense, net is generated primarily from interest expense due to outstanding debt, partially offset by interest income earned on cash, cash equivalents and short and long-term investments. Interest expense, net was $12.4 million and $10.2 million for the three months ended March 31, 2017 and 2016, respectively. Interest expense, net has increased over the prior comparable period primarily due to increased interest expense associated with our line of credit borrowings and decreased interest income on cash, cash equivalents and investments.

Other expense, net. Our other expense, net is generated primarily from miscellaneous items and gain or losses on currency exchange and sale of investments. Other expense, net was $0.3 million and $0.1 million for the three months ended March 31, 2017 and 2016, respectively. Other expense, net increased over the prior comparable period primarily due to increased losses on currency exchange.

Income Taxes

Our effective tax rate is based on pre-tax income, statutory tax rates, tax regulations (including those related to transfer pricing) and different tax rates in the various jurisdictions in which we operate. The tax bases of our assets and liabilities reflect our best estimate of the tax benefits and costs we expect to realize. When necessary, we establish valuation allowances to reduce our deferred tax assets to an amount that will more likely than not be realized. 

Provision for income taxes amounted to $9.4 million and $13.0 million for the three months ended March 31, 2017 and 2016, respectively. Our effective tax rate was 26.7% and 30.3% for the three months ended March 31, 2017 and 2016, respectively.

The decrease in our effective income tax rate for the three months and nine months ended March 31, 2017 was primarily attributable to the following:

1. a decrease during 2017 in the valuation allowance for foreign tax credit carryforwards;

2. an increase in the portion of our income being taxed in foreign jurisdictions and subject to lower tax rates than in the U.S. (relative to income from U.S. domestic operations); partially offset by

3. an increase during 2017 in the amount of deemed distribution income (Subpart F) from our foreign subsidiaries.

Significant judgment is required in determining our provision for income taxes and in evaluating our tax positions on a worldwide basis. We believe our tax positions, including intercompany transfer pricing policies, are consistent with the tax laws in the jurisdictions in which we conduct our business. Certain of these tax positions have in the past been, and are currently being, challenged, and this may have a significant impact on our effective tax rate if our tax reserves are insufficient.

Segment Results

Our business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. Our reportable business segments are: (i) Business Cloud Services; and (ii) Digital Media.

We evaluate the performance of our operating segments based on segment revenues, including both external and intersegment net sales, and segment operating income. We account for intersegment sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments. Identifiable assets by segment are those assets used in the respective reportable segment’s operations. Corporate assets consist of cash and cash equivalents, deferred income taxes and certain other assets. All significant intersegment amounts are eliminated to arrive at our consolidated financial results.

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Revenues

The following table presents our revenues by source as a percentage of total revenues for thethree months ended March 31, 2017 and 2016:

	Three Months Ended March 31,
	2017		2016
Business Cloud Services revenues:
Fax and Voice	36.8	%	45.0	%
Other	18.8	%	23.9	%
Total Business Cloud Services revenues:	55.6	%	68.9	%
Digital Media revenues:
Media	44.4	%	31.1	%
Total revenues	100.0	%	100.0	%

Business Cloud Services

The following segment results are presented for the three months ended March 31, 2017 and 2016 (in thousands):

	Three Months Ended March 31,
	2017		2016
External net sales	$	141,544	$	138,139
Inter-segment net sales	—		—
Segment net sales	141,544		138,139
Cost of revenues	29,097		28,982
Gross profit	112,447		109,157
Operating expenses	56,147		58,880
Segment operating income	$	56,300	$	50,277

Segment net sales of $141.5 million for the three months ended March 31, 2017 increased $3.4 million, or 2.5% from the prior comparable period primarily due to business acquisitions.

Segment gross profit of $112.4 million for the three months ended March 31, 2017 increased $3.3 million from the prior comparable period primarily due to business acquisitions.

Segment operating expenses of $56.1 million for the three months ended March 31, 2017 decreased $(2.7) million from the prior comparable period primarily due to (a) lower amortization of intangible assets and transition service costs associated with businesses acquired in and subsequent to the prior comparable period; and (b) reduced miscellaneous general and administrative related fees. As a result of these factors, segment operating income of $56.3 million for the three months ended March 31, 2017 increased $6.0 million, or 12.0% from the prior comparable period. Our Business Cloud Services segment consists of several services which have similar economic characteristics, including the nature of the services and their production processes, the type of customers, as well as the methods used to distribute these services.

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We group these services into three main categories based on the similarities of these services: Cloud Connect, Other Cloud Services and Intellectual Property. Cloud Connect consists of our Fax and Voice services and Other Cloud Services consist of Backup, Email Security, Email Marketing and Web Hosting.

	Three Months Ended March 31, 2017
	Revenue		Depreciation and Amortization		Operating Income
Cloud Connect  (Fax/Voice)	$	93,632	$	5,883	$	44,438
Cloud Services	46,714		9,534		12,416
Intellectual Property	1,198		1,347		(554		)
Total	$	141,544	$	16,764	$	56,300

	Three Months Ended March 31, 2016
	Revenue		Depreciation and Amortization		Operating Income
Cloud Connect (Fax/Voice)	$	90,244	$	5,570	$	40,520
Cloud Services	46,719		10,318		10,974
Intellectual Property	1,176		1,614		(1,217		)
Total	$	138,139	$	17,502	$	50,277

Digital Media

 The following segment results are presented for the three months ended March 31, 2017 and 2016 (in thousands):

	Three Months Ended March 31,
	2017			2016
External net sales	$	113,125		$	62,363
Inter-segment net sales	6			46
Segment net sales	113,131			62,409
Cost of revenues	11,713			5,306
Gross profit	101,418			57,103
Operating expenses	104,920			49,370
Segment operating (loss) income	$	(3,502	)	$	7,733

Segment net sales of $113.1 million for the three months ended March 31, 2017 increased $50.7 million, or 81.3% from the prior comparable period primarily due to the acquisition of Everyday Health in December 2016.

Segment gross profit of $101.4 million for the three months ended March 31, 2017 increased $44.3 million from the prior comparable period primarily due to the acquisition of Everyday Health in December 2016.

Segment operating expenses of $104.9 million for the three months ended March 31, 2017 increased $55.6 million from the prior comparable period primarily due to the acquisition of Everyday Health in December 2016 comprised primarily of salary and related costs, marketing costs, and amortization of intangible assets.

As a result of these factors, segment operating income of $(3.5) million for the three months ended March 31, 2017 decreased $(11.2) million or (145.3)% from the prior comparable periods.

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Liquidity and Capital Resources

Cash and Cash Equivalents and Investments

At March 31, 2017, we had cash and investments of $187.5 million compared to $124.0 million at December 31, 2016.The increase in cash and investments resulted primarily from cash from operations, partially offset by business acquisitions, dividends and interest paid, and repurchase of stock. At March 31, 2017, cash and investments consisted of cash and cash equivalents of $187.4 million and short-term investments of $0.1 million. We retain a substantial portion of our cash and investments in foreign jurisdictions for future reinvestment. As of March 31, 2017, cash and investments held within foreign and domestic jurisdictions were $99.5 million and $87.9 million, respectively. If we were to repatriate funds held within foreign jurisdictions, we would incur U.S. income tax on the repatriated amount at the federal statutory rate of 35% and the state statutory rate where applicable, net of a credit for foreign taxes paid on such amounts.

On February 9, 2017, the Company declared a quarterly cash dividend of $0.3650 per share of common stock payable on March 9, 2017 to all stockholders of record as of the close of business on February 22, 2017. Future dividends are subject to Board approval.

On December 5, 2016, j2 Global, Inc. entered into a Credit Agreement (the “Credit Agreement”) with MUFG Union Bank, N.A., as administrative agent, and certain other lenders from time to time party thereto (collectively, the “Lenders”). Pursuant to the Credit Agreement, the Lenders have provided j2 with a credit facility of $225.0 million (the “Credit Facility”), $180.0 million of which was drawn at closing of the Everyday Health acquisition and used to finance a portion of the cash consideration in the acquisition. In the first quarter, the Company drew an additional $45.0 million. The Company must repay $75.0 million six months subsequent to the Closing Date.

In order to timely complete the Everyday Health acquisition, the Company borrowed $126.8 million from its non-US subsidiaries. The Company has the ability, in the short term, to repay its non-U.S. subsidiaries from additional domestic financing or cash from its domestic operations. At March 31, 2017, the Company does not expect the borrowing from its non-U.S. subsidiaries to result in incremental U.S. tax expense in future periods due to the availability of foreign tax credits. Additionally, j2 is in the process of negotiating and expects to secure commitments for domestic-based financing that would provide further U.S. liquidity; however, there are no assurances that it will consummate such financing. The Company’s practice and intent is to continue to indefinitely reinvest earnings from its non-U.S. subsidiaries to support growth outside of the U.S. through funding of acquisitions, operating expenses, research and development expenses, capital expenditures and other cash needs of its non-U.S. subsidiaries. Should the Company’s domestic cash from operations and refinancing not result in liquidity sufficient to repay the loans from its foreign subsidiaries as anticipated, the Company could have a higher effective tax rate in future periods. It is not practical to estimate potential incremental U.S. taxes if U.S. liquidity does not meet the Company’s expectations.

We currently anticipate that our existing cash and cash equivalents and short-term investment balances and cash generated from operations and the additional debt facilities described above will be sufficient to meet our anticipated needs for working capital, capital expenditure, stock repurchases and cash dividends for at least the next 12 months.

Cash Flows

Our primary sources of liquidity are cash flows generated from operations, together with cash and cash equivalents and short-term investments. Net cash provided by operating activities was $51.2 million and $64.5 million for the three months ended March 31, 2017 and 2016, respectively. Our operating cash flows resulted primarily from cash received from our customers offsetby cash payments we made to third parties for their services, employee compensation and interest payments associated with our debt. The decrease in our net cash provided by operating activities in 2017 compared to 2016 was primarily attributable to a decrease in accounts payable and accrued expenses including a $20.0 million payment of certain contingent compensation obligations of Everyday Health as well as payments of $22.0 million for general and acquisition related accrued expenses, specific to Everyday Health; partially offset by a decrease in accounts receivable and increased depreciation and amortization. Certain taxes are prepaid during the year and are included within prepaid expenses and other current assets on the condensed consolidated balance sheet. Our prepaid taxes were zero and zero at March 31, 2017 and December 31, 2016, respectively. Our cash and cash equivalents and short-term investments were $187.5 million and $124.0 million at March 31, 2017 and December 31, 2016, respectively.

Net cash used in investing activities was $(13.4) million and $(47.8) million for the three months ended March 31, 2017 and 2016, respectively. For the three months ended March 31, 2017, net cash used in investing activities was primarily attributable

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to capital expenditures associated with the purchase of property and equipment, business acquisitions and the purchase of intangible assets. For the three months ended March 31, 2016, net cash used in investing activities was primarily attributable to business acquisitions, the purchase of available-for-sale investments, property and equipment and intangible assets; partially offset by the maturity of available-for-sale investments. The decrease in our net cash used in investing activities in 2017 compared to 2016 was primarily attributable to a decrease in business acquisitions and the purchase of investments; partially offset by the maturity of investments.

Net cash provided by (used in) financing activities was $25.5 million and $(30.4) million for the three months ended March 31, 2017 and 2016, respectively. For the three months ended March 31, 2017, net cash provided by financing activities was primarily attributable to proceeds from a line of credit and exercise of stock options; partially offset by dividends paid, business acquisitions, and repurchases of stock. For the three months ended March 31, 2016, net cash used in financing activities was primarily attributable to dividends paid, business acquisitions and repurchases of stock; partially offset by the exercise of stock options and excess tax benefit from share-based compensation. The change in net cash provided by financing activities in 2017 compared to 2016 was primarily attributable to the proceeds from a line of credit and lower deferred payments for acquisitions.

Stock Repurchase Program

In February 2012, the Company’s Board of Directors approved a program authorizing the repurchase of up to five million shares of our common stock through February 20, 2013 (the “2012 Program”) which was subsequently extended through February 19, 2018. During the three month period ended March 31, 2017, we repurchased zero shares under this program. Cumulatively at March 31, 2017, 2.1 million shares were repurchased at an aggregate cost of $58.6 million (including an immaterial amount of commission fees).

Contractual Obligations and Commitments

The following table summarizes our contractual obligations and commitments as of March 31, 2017:

	Payments Due in (in thousands)
Contractual Obligations	2017		2018		2019		2020		2021		Thereafter		Total
Long-term debt - principal (a)	$	—	$	—	$	—	$	250,000	$	402,500	$	—	$	652,500
Long-term debt - interest (b)	23,081		33,081		33,081		32,803		6,541		—		128,587
Line of Credit - principal (c)	225,000		—		—		—		—		—		225,000
Operating leases (d)	11,527		14,065		12,249		8,967		8,061		16,914		71,783
Capital leases (e)	29		8		—		—		—		—		37
Telecom services and co-location facilities (f)	3,857		2,362		540		43		—		—		6,802
Holdback payment (g)	5,232		508		—		—		—		—		5,740
Contingent consideration (h)	20,000		—		—		—		—		—		20,000
Other (i)	560		—		—		—		—		—		560
Total	$	289,286	$	50,024	$	45,870	$	291,813	$	417,102	$	16,914	$	1,111,009

(a) These amounts represent principal on long-term debt.

(b) These amounts represent interest on long-term debt.

(c) These amounts represent principal on the line of credit (see Note 8 - Commitments and Contingencies). The associated interest is not included in the schedule above due its variable nature.

(d) These amounts represent undiscounted future minimum rental commitments under noncancellable operating leases.

(e) These amounts represent undiscounted future minimum rental commitments under noncancellable capital leases.

(f) These amounts represent service commitments to various telecommunication providers.

(g) These amounts represent the holdback amounts in connection with certain business acquisitions.

(h) These amounts represent the contingent earn-out liabilities in connection with certain business acquisitions.

(i) These amounts represent certain consulting and Board of Directors fee arrangements.

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As of March 31, 2017, our liability for uncertain tax positions was $47.2 million. The future payments related to uncertain tax positions have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with such authorities.

We have not presented the contingent consideration (other than $20 million in contingent consideration associated with the acquisition of Ookla) in the table above due to the uncertainty of the amounts and the timing of cash settlements.

Off-Balance Sheet Arrangements

We are not party to any material off-balance sheet arrangements.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk

The following discussion of the market risks we face contains forward-looking statements. Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those discussed in forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. j2 Global undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements. Readers should carefully review the risk factors described in this document and in the other documents incorporated by reference herein, including our Annual Report on Form 10-K for the year ended December 31, 2016 as well as in other documents we file from time to time with the SEC, including the Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K filed or to be filed by us in 2017.

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. The primary objectives of our investment activities are to preserve our principal while at the same time maximizing yields without significantly increasing risk. To achieve these objectives, we maintain our portfolio of cash equivalents and investments in a mix of instruments that meet high credit quality standards, as specified in our investment policy. Our cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these instruments. As of March 31, 2017, the carrying value of our cash and cash equivalents approximated fair value. Our return on these investments is subject to interest rate fluctuations.

As of March 31, 2017, we had no investments in debt securities with effective maturities greater than one year. As of March 31, 2017 and December 31, 2016, we had cash and cash equivalent investments primarily in time deposits and money market funds with maturities of 90 days or less of $187.4 million and $124.0 million, respectively. 

We cannot ensure that future interest rate movements will not have a material adverse effect on our future business, prospects, financial condition, operating results and cash flows. To date, we have not entered into interest rate hedging transactions to control or minimize certain of these risks.

Foreign Currency Risk

We conduct business in certain foreign markets, primarily in Canada, Australia and the European Union. Our principal exposure to foreign currency risk relates to investment and inter-company debt in foreign subsidiaries that transact business in functional currencies other than the U.S. Dollar, primarily the Australian Dollar, the Canadian Dollar, the Euro, the Hong Kong Dollar, the Japanese Yen, the New Zealand Dollar, the Norwegian Kroner and the British Pound Sterling. If we are unable to settle our short-term inter-company debts in a timely manner, we remain exposed to foreign currency fluctuations.

As we expand our international presence, we become further exposed to foreign currency risk by entering new markets with additional foreign currencies. The economic impact of currency exchange rate movements is often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. These changes, if material, could cause us to adjust our financing and operating strategies.

As currency exchange rates change, translation of the income statements of the international businesses into U.S. Dollars affects year-over-year comparability of operating results, the impact of which is immaterial to the comparisons set forth in this Quarterly Report on Form 10-Q.

Historically, we have not hedged translation risks because cash flows from international operations were generally reinvested locally; however, we may do so in the future. Our objective in managing foreign exchange risk is to minimize the potential exposure to changes that exchange rates might have on earnings, cash flows and financial position.

Foreign exchange losses were not material to our earnings, amounting to approximately $(0.3) million and $(0.8) million, for the three months ended March 31, 2017 and 2016, respectively. Cumulative translation adjustments included in other comprehensive income amounted to approximately $3.6 million and $3.4 million, for the three months ended March 31, 2017 and 2016, respectively.

We currently do not have derivative financial instruments for hedging, speculative or trading purposes and therefore are not subject to such hedging risk. However, we may in the future engage in hedging transactions to manage our exposure to fluctuations in foreign currency exchange rates.

-56-

Item 4.Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the principal executive officer and the principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.    

As of the end of the period covered by this report, j2 Global’s management, with the participation of Nehemia Zucker, our principal executive officer, and R. Scott Turicchi, our principal financial officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, Mr. Zucker and Mr. Turicchi concluded that these disclosure controls and procedures were effective as of the end of the period covered in this Quarterly Report on Form 10-Q.

(b) Changes in Internal Controls

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) which occurred during the first quarter ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

-57-

PART II.   OTHER INFORMATION

Item 1.Legal Proceedings

See Note 8 – Commitments and Contingencies of the Notes to Financial Statements (Part I, Item 1) for information regarding certain legal proceedings in which we are involved.

Item 1A. Risk Factors

In addition to the other information set forth in this report, before deciding to invest in j2 Global or to maintain or increase your investment, you should carefully consider the factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report onForm 10-K for the year ended December 31, 2016 (the “10-K Risk Factors”) as well as in other documents we file from time to time with the SEC, including the Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K filed or to be filed by us in 2017. If any of these risks occur, our business, prospects, financial condition, operating results and cash flows could be materially adversely affected. The 10-K Risk Factors are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. There have been no material changes from the 10-K Risk Factors.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Equity Securities

None.

(b) Issuer Purchases of Equity Securities

Effective February 15, 2012, the Company’s Board of Directors approved a program authorizing the repurchase of up to five million shares of our common stock through February 20, 2013 (the “2012 Program”) which was subsequently extended through February 19, 2018. During the three month period ended March 31, 2017, we repurchased zero shares under this program. Cumulatively at March 31, 2017, 2.1 million shares were repurchased at an aggregate cost of $58.6 million (including an immaterial amount of commission fees).

The following table details the repurchases that were made under and outside the 2012 Program during the three months ended March 31, 2017:

Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Program	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Program
January 1, 2017 - January 31, 2017	—	$	—	—	1,938,689
February 1, 2017 - February 29, 2017	2,941	$	86.09	—	1,938,689
March 1, 2017 - March 31, 2017	751	$	81.43	—	1,938,689
Total	3,692			—	1,938,689

⁽¹⁾  All shares purchased were surrendered to the Company to pay the exercise price and/or to satisfy tax withholding obligations in connection with employee stock options and/or the vesting of restricted stock issued to employees.

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not Applicable.

Item 5.Other Information

None.

-58-

Item 6.Exhibits

31.1	Rule 13a-14(a) Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Rule 13a-14(a) Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Section 1350 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Section 1350 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from j2 Global, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016, (ii) Condensed Consolidated Statements of Income for the three months ended March 31, 2017 and 2016, (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and 2016, (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016, and (v) the Notes to Condensed Consolidated Financial Statements.

-59-

SIGNATURE

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 thereunto duly authorized.

		j2 Global, Inc.
Date:	May 9, 2017	By:	/s/ NEHEMIA ZUCKER
			Nehemia Zucker
			Chief Executive Officer
			(Principal Executive Officer)

Date:	May 9, 2017	By:	/s/ R. SCOTT TURICCHI
			R. Scott Turicchi
			President and Chief Financial Officer
			(Principal Financial Officer)

Date:	May 9, 2017	By:	/s/ STEVE P. DUNN
			Steve P. Dunn
			Chief Accounting Officer

-60-

INDEX TO EXHIBITS

Exhibit Number	Description
31.1	Rule 13a-14(a) Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Rule 13a-14(a) Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Section 1350 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Section 1350 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from j2 Global, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016, (ii) Condensed Consolidated Statements of Income for the three months ended March 31, 2017 and 2016, (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and 2016, (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016, and (v) the Notes to Condensed Consolidated Financial Statements.

-61-

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Nehemia Zucker, certify that:

1. I have reviewed this quarterly report on Form 10-Q of j2 Global, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

		/s/ NEHEMIA ZUCKER
		Nehemia Zucker
Dated:	May 9, 2017	Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, R. Scott Turicchi, certify that:

1. I have reviewed this quarterly report on Form 10-Q of j2 Global, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

		/s/ R. SCOTT TURICCHI
		R. Scott Turicchi
Dated:	May 9, 2017	President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Nehemia Zucker, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The accompanying quarterly report on Form 10-Q for the quarter ended March 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities and Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of j2 Global, Inc.

		/s/ NEHEMIA ZUCKER
		Nehemia Zucker
Dated:	May 9, 2017	Chief Executive Officer (Principal Executive Officer)

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act has been provided to j2 Global, Inc. and will be retained by j2 Global, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, R. Scott Turicchi, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The accompanying quarterly report on Form 10-Q for the quarter ended March 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities and Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of j2 Global, Inc.

		/s/ R. SCOTT TURICCHI
		R. Scott Turicchi
Dated:	May 9, 2017	President and Chief Financial Officer (Principal Financial Officer)

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act has been provided to j2 Global, Inc. and will be retained by j2 Global, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information Document - shares	3 Months Ended
	Mar. 31, 2017	May 05, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	J2 GLOBAL, INC.
Entity Central Index Key	0001084048
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		48,192,911

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
ASSETS
Cash and cash equivalents	$ 187,409	$ 123,950
Short-term investments	65	60
Accounts receivable, net of allowances of $8,137 and $7,988, respectively	172,062	199,871
Prepaid expenses and other current assets	24,177	24,118
Total current assets	383,713	347,999
Property and equipment, net	69,714	68,094
Trade names, net	113,339	115,853
Patent and patent licenses, net	12,553	13,928
Customer relationships, net	204,920	208,155
Goodwill	1,138,700	1,122,810
Other purchased intangibles, net	166,388	173,755
Deferred tax assets, non-current	6,912	5,289
Other assets	6,313	6,445
Total assets	2,102,552	2,062,328
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	145,927	178,071
Income taxes payable	21,599	16,753
Deferred revenue, current	85,431	80,384
Line of credit	224,123	178,817
Other current liabilities	34	64
Total current liabilities	477,114	454,089
Long-term debt	604,273	601,746
Deferred revenue, non-current	822	1,588
Liability for uncertain tax positions	47,178	46,537
Deferred income taxes, non-current	39,752	40,357
Other long-term liabilities	2,987	3,475
Total liabilities	1,172,126	1,147,792
Commitments and contingencies	0	0
Common stock, $0.01 par value. Authorized 95,000,000; total issued and outstanding 47,484,889 and 47,443,716 shares, respectively	475	474
Additional paid-in capital	312,468	308,329
Retained earnings	668,550	660,382
Accumulated other comprehensive loss	(51,067)	(54,649)
Stockholders' Equity Attributable to Parent	930,426	914,536
Total liabilities and stockholders' equity	2,102,552	2,062,328
Series A Preferred Stock [Member]
LIABILITIES AND STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value	0	0
Series B Preferred Stock [Member]
LIABILITIES AND STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value	$ 0	$ 0

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Allowance for doubtful accounts	$ 8,137	$ 7,988
Preferred stock, par value	$ 0.01	$ 0.01
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	95,000,000	95,000,000
Common stock, shares issued	47,484,889	47,443,716
Common stock, shares outstanding	47,484,889	47,443,716
Series A Preferred Stock [Member]
Preferred stock, shares authorized	6,000	6,000
Series B Preferred Stock [Member]
Preferred stock, shares authorized	20,000	20,000

XML

Condensed Consolidated Statements Of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues:
Total revenues	$ 254,669	$ 200,502
Cost of revenues (1)	40,810	34,288
Gross profit	213,859	166,214
Operating expenses:
Sales and marketing (1)	77,477	48,112
Research, development and engineering (1)	11,752	8,988
General and administrative (1)	76,655	55,776
Total operating expenses	165,884	112,876
Income from operations	47,975	53,338
Interest expense, net	12,410	10,233
Other expense, net	323	126
Income (loss) before income taxes	35,242	42,979
Income tax expense	9,422	13,036
Net income	$ 25,820	$ 29,943
Net income per common share:
Basic	$ 0.54	$ 0.62
Diluted	$ 0.52	$ 0.61
Weighted average shares outstanding:
Basic	47,463,231	47,966,718
Diluted	48,766,031	48,238,098
Cash dividends paid per common share	$ 0.3650	$ 0.3250
Allocated Share-based Compensation Expense	$ 3,614	$ 2,809
Cost of Sales [Member]
Allocated Share-based Compensation Expense	117	95
Selling and Marketing Expense [Member]
Allocated Share-based Compensation Expense	378	531
Research and Development Expense [Member]
Allocated Share-based Compensation Expense	238	207
General and Administrative Expense [Member]
Allocated Share-based Compensation Expense	$ 2,881	$ 1,976

XML

Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net income	$ 25,820	$ 29,943
Foreign currency translation adjustment	3,582	3,415
Change in fair value on available-for-sale investments, net of tax expense (benefit) of $0 and ($1,441) for the three months of 2017 and 2016, respectively	0	(2,361)
Other Comprehensive Income (Loss), Net of Tax	3,582	1,054
Comprehensive Income	$ 29,402	$ 30,997

XML

Condensed Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Foreign currency translation adjustment	$ 0	$ 0
Unrealized gain on available-for-sale investments	$ 0	$ (1,441)

XML

Condensed Consolidated Statement Of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income	$ 25,820	$ 29,943
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	39,323	27,174
Accretion and amortization of discount and premium of investments	0	331
Amortization of financing costs and discounts	2,853	2,370
Share-based compensation	3,614	2,809
Excess tax benefits from share-based compensation	0	(264)
Provision for doubtful accounts	2,640	2,825
Deferred income taxes	(2,361)	(3,101)
Loss on sale of available-for-sale investment	0	182
Decrease (increase) in:
Accounts receivable	25,110	15,773
Prepaid expenses and other current assets	(291)	370
Other assets	162	(715)
(Decrease) increase in:
Accounts payable and accrued expenses	(53,166)	(23,797)
Income taxes payable	4,795	6,360
Deferred revenue	2,384	1,250
Liability for uncertain tax positions	573	1,742
Other	(265)	1,272
Net cash provided by operating activities	51,191	64,524
Cash flows from investing activities:
Purchase of certificates of deposit	5	0
Sales of available-for-sale investments	0	26,224
Purchase of available-for-sale investments	0	(21,402)
Purchases of property and equipment	(9,660)	(4,321)
Acquisition of businesses, net of cash received	(3,563)	(47,989)
Purchases of intangible assets	(142)	(316)
Net Cash Provided by (Used in) Investing Activities	(13,370)	(47,804)
Cash flows from financing activities:
Proceeds from Lines of Credit	44,981	0
Repurchases of common stock and restricted stock	(314)	(1,786)
Issuance of common stock under employee stock purchase plan	67	58
Exercise of stock options	695	1,312
Dividends paid	(17,575)	(15,817)
Excess tax benefits from share-based compensation	0	264
Deferred payments for acquisitions	(2,299)	(14,386)
Proceeds from (Payments for) Other Financing Activities	(26)	(25)
Net Cash Provided by (Used in) Financing Activities	25,529	(30,380)
Effect of exchange rate changes on cash and cash equivalents	109	885
Cash and Cash Equivalents, Period Increase (Decrease)	63,459	(12,775)
Cash and cash equivalents	187,409	242,755
Cash and cash equivalents at end of period	$ 187,409	$ 242,755

XML

Basis Of Presentation

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

Basis of Presentation

j2 Global, Inc., together with its subsidiaries (“j2 Global” or the “Company”), is a leading provider of Internet services. Through its Business Cloud Services Division, the Company provides cloud services to businesses of all sizes, from individuals to enterprises, and licenses its intellectual property (“IP”) to third parties. In addition, the Business Cloud Services Division includes j2 Cloud Connect, which primarily focuses on our voice and fax products. The Digital Media Division specializes in the technology, gaming, lifestyle markets and healthcare markets, reaching in-market buyers and influencers in both the consumer and business-to-business space.

The accompanying interim condensed consolidated financial statements include the accounts of j2 Global and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and note disclosures required by GAAP for complete financial statements although the Company believes that the disclosures made are adequate to make that information not misleading. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been reflected in these interim financial statements. It is suggested that these financial statements be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2016 included in our Annual Report (Form 10-K) filed with the SEC on March 1, 2017. Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed therein.

The results of operations for this interim period are not necessarily indicative of the operating results for the full year or for any future period.

Use of Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, including judgments about investment classifications, and the reported amounts of net revenue and expenses during the reporting period. We believe that our most significant estimates are those related to the valuation of assets acquired and liabilities assumed in connection with business combinations, long-lived and intangible asset impairment, contingent consideration, income taxes and contingencies and allowances for doubtful accounts. On an ongoing basis, management evaluates its estimates based on historical experience and on various other factors that the Company believes to be reasonable under the circumstances. Actual results could materially differ from those estimates.

Allowances for Doubtful Accounts

j2 Global reserves for receivables it may not be able to collect. These reserves for the Company’s Business Cloud Services segment are typically driven by the volume of credit card declines and past due invoices and are based on historical experience as well as an evaluation of current market conditions. These reserves for the Company’s Digital Media segment are typically driven by past due invoices based on historical experience. On an ongoing basis, management evaluates the adequacy of these reserves.

Revenue Recognition

Business Cloud Services

The Company’s Business Cloud Services revenues substantially consist of monthly recurring subscription and usage-based fees, which are primarily paid in advance by credit card. In accordance with GAAP, the Company recognizes revenue when persuasive evidence of an arrangement exists, services have been provided, the sales price is fixed and determinable and collection is probable. The Company defers the portions of monthly, quarterly, semi-annually and annually recurring subscription and usage-based fees collected in advance and recognizes them in the period earned. Additionally, the Company defers and recognizes subscriber activation fees and related direct incremental costs over a subscriber’s estimated useful life.

Along with our numerous proprietary Business Cloud Services solutions, the Company also generates revenues by reselling various third party solutions, primarily through our email security and online backup lines of business.  These third party solutions, along with our proprietary products, allow the Company to offer customers a variety of solutions to better meet their needs.  The Company determines whether reseller revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance for principal-agent considerations and the Company places the most weight on three factors: whether or not the Company (i) is the primary obligor in the arrangement, (ii) has latitude in determining pricing and (iii) bears credit risk.

The Company records revenue on a gross basis with respect to reseller revenue as the Company is the primary obligator in the arrangement, has latitude in determining pricing and bears all credit risk associated with our reseller program partners.

j2 Global’s Business Cloud Services also include patent license revenues generated under license agreements that provide for the payment of contractually determined fully paid-up or royalty-bearing license fees to j2 Global in exchange for the grant of non-exclusive, retroactive and future licenses to our intellectual property, including patented technology. Patent revenues may also consist of revenues generated from the sale of patents. Patent license revenues are recognized when earned over the term of the license agreements. With regard to fully paid-up license arrangements, the Company recognizes as revenue in the period the license agreement is executed the portion of the payment attributable to past use of the intellectual property and amortizes the remaining portion of such payments on a straight-line basis, or pro-rata revenue basis, as appropriate over the life of the licensed patent(s). With regard to royalty-bearing license arrangements, the Company recognizes revenues of license fees earned during the applicable period. With regard to patent sales, the Company recognizes as revenue in the period of the sale the amount of the purchase price over the carrying value of the patent(s) sold.

The Business Cloud Services business also generates revenues by licensing certain technology to third parties. These licensing revenues are recognized when earned in accordance with the terms of the underlying agreement. Generally, revenue is recognized as the third party uses the licensed technology over the period.

Digital Media

The Company’s Digital Media revenues primarily consist of revenues generated from the sale of advertising campaigns that are targeted to the Company’s proprietary websites and to those websites operated by third parties that are part of the Digital Media business’s advertising network. Revenues for these advertising campaigns are recognized as earned, either when an ad is placed for viewing by a visitor to the appropriate web page or when the visitor “clicks through” on the ad, depending upon the terms with the individual advertiser.

Revenues for Digital Media business-to-business operations consist of lead-generation campaigns for IT vendors and are recognized as earned when the Company delivers the qualified leads to the customer.

j2 Global also generates Digital Media revenues through the license of certain assets to clients, for the clients’ use in their own promotional materials or otherwise. Such assets may include logos, editorial reviews, or other copyrighted material. Revenues under such license agreements are recognized when the assets are delivered to the client. Also, Digital Media revenues are generated through the license of certain speed testing technology which is recognized when delivered to the client through providing data services primarily to Internet Service Providers (“ISPs”) and wireless carriers which is recognized as earned over the term of the access period. The Digital Media business also generates other types of revenues, including business listing fees, subscriptions to online publications, and from other sources. Such other revenues are recognized as earned.

The Company determines whether Digital Media revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance for principal-agent considerations and the Company places the most weight on three factors: whether or not the Company (i) is the primary obligor in the arrangement, (ii) has latitude in determining pricing and (iii) bears credit risk.

The Company records revenue on a gross basis with respect to revenue generated (i) by the Company serving online display and video advertising across its owned-and-operated web properties, on third party sites or on unaffiliated advertising networks, (ii) through the Company’s lead-generation business and (iii) through the Company’s Digital Media licensing program. The Company records revenue on a net basis with respect to revenue paid to the Company by certain third-party advertising networks who serve online display and video advertising across the Company’s owned-and-operated web properties and certain third party sites.

Fair Value Measurements

j2 Global complies with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic No. 820, Fair Value Measurements and Disclosures (“ASC 820”), in measuring fair value and in disclosing fair value measurements. ASC 820 provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities.

As of March 31, 2017, the carrying value of cash and cash equivalents, short-term investments, accounts receivable, interest receivable, accounts payable, accrued expenses, interest payable, customer deposits and long-term debt are reflected in the financial statements at cost. With the exception of long-term debt, cost approximates fair value due to the short-term nature of such instruments. The fair value of the Company’s outstanding debt was determined using the quoted market prices of debt instruments with similar terms and maturities, if available. As of the same dates, the carrying value of other long-term liabilities approximated fair value as the related interest rates approximate rates currently available to j2 Global.

Property and Equipment

Property and equipment are stated at cost. Equipment under capital leases is stated at the present value of the minimum lease payments. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of property and equipment range from 1 to 10 years. Fixtures, which are comprised primarily of leasehold improvements and equipment under capital leases, are amortized on a straight-line basis over their estimated useful lives or for leasehold improvements, the related lease term, if less. The Company has capitalized certain internal use software and website development costs which are included in property and equipment. The estimated useful life of costs capitalized is evaluated for each specific project and ranges from 1 to 5 years.

Debt Issuance Costs and Debt Discount

j2 Global capitalizes costs incurred with borrowing and issuance of debt securities and records debt issuance costs and discounts as a reduction to the debt amount. These costs and discounts are amortized and included in interest expense over the life of the borrowing or term of the credit facility using the effective interest method.

Contingent Consideration

j2 Global measures the contingent earn-out liabilities in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy (see Note 5 - Fair Value Measurements). The Company may use various valuation techniques depending on the terms and conditions of the contingent consideration including a Monte-Carlo simulation. This simulation uses a probability distribution for each significant input to produce hundreds or thousands of possible outcomes and the results are analyzed to determine probabilities of different outcomes occurring. Significant increases or decreases to these inputs in isolation would result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and the amount paid will be recorded in earnings. The amount paid that is less than or equal to the liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows. Any amount paid in excess of the liability on the acquisition date is reflected as cash used in operating activities.

j2 Global reviews and re-assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could be materially different from the initial estimates or prior quarterly amounts. Changes in the estimated fair value of our contingent earn-out liabilities are reported in operating income, except for the time component of the present value calculation which is reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income.

Segment Reporting

Accounting guidance establishes standards for the way that public business enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. Accounting guidance also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company operates as two segments: (1) Business Cloud Services and (2) Digital Media.

Reclassifications

Certain prior year reported amounts have been reclassified to conform to the 2017 presentation.

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2017

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, as a new Topic, Accounting Standards Codification (“ASC”) Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. This ASU must be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is considering the alternatives of adoption of this ASU, has substantially completed a review of the likely impact to the existing portfolio of customer contracts entered into prior to this adoption and will continue to evaluate the effect of adopting this guidance upon the Company’s results of operations, cash flows and financial position. Currently, the Company does not expect the adoption of this ASU to have a material impact on our financial statements except that there are significant additional reporting requirements under the new standard.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this ASU modify how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will have to measure equity investments that do not result in consolidation and are not accounted under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicality exception. A practicality exception will apply to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under ASC 820, Fair Value Measurements, and as such these investments may be measured at cost. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company does not expect the adoption of this ASU to have a material impact on our financial statements and related disclosures.

In February 2016, the FASB issued ASU No. 2016-02, Leases. This ASU establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of this ASU on our financial statements. The Company currently has both capital and operating leases both domestically and internationally with varying expiration dates through 2025 in the aggregate amount of $71.8 million for the period ended March 31, 2017.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815). This ASU is related to the embedded derivative analysis for debt instruments with contingent call or put options. This ASU clarifies that an exercise contingency does not need to be evaluated to determine whether it relates only to interest rates or credit risk. Instead, the contingent put or call option should be evaluated for possible bifurcation as a derivative in accordance with the four-step decision sequence detailed in FASB ASC 815-15, without regard to the nature of the exercise contingency. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company has adopted this ASU and determined that there is no impact on our financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606). This ASU is related to reporting revenue gross versus net, or principal versus agent considerations. This ASU is meant to clarify the guidance in ASU 2014-09, Revenue from Contracts with Customers, as it pertains to principal versus agent considerations. Specifically, the guidance addresses how entities should identify goods and services being provided to a customer, the unit of account for a principal versus agent assessment, how to evaluate whether a good or service is controlled before being transferred to a customer, and how to assess whether an entity controls services performed by another party. This ASU has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The Company is considering the alternatives of adoption of this ASU, has substantially completed a review of the likely impact to the existing portfolio of customer contracts entered into prior to adoption and will continue to evaluate the effect of adopting this guidance upon the Company’s results of operations, cash flows and financial position. Currently, the Company does not expect the adoption of this ASU to have a material impact on our financial statements except that there are significant additional reporting requirements under the new standard.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718). This ASU is related to simplifications of employee share-based payment accounting. This pronouncement eliminates the APIC pool concept and requires that excess tax benefits and tax deficiencies be recorded in the income statement when awards are settled. The pronouncement also addresses simplifications related to statement of cash flows classification, accounting for forfeitures, and minimum statutory tax withholding requirements. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted.

The new standard requires prospective recognition of excess tax benefits and deficiencies resulting from stock-based compensation awards vesting and exercises be recognized in the income statement. Previously, these amounts were recognized in additional paid-in capital. Net excess tax benefits of $0.4 million for the three months ended March 31, 2017, were recognized as a reduction of income tax expense. In addition, ASU 2016-09 requires excess tax benefits and deficiencies to be prospectively excluded from the assumed future proceeds in the calculation of diluted shares, resulting in an insignificant increase in diluted weighted average shares outstanding for the three months ended March 31, 2017, which did not have a material impact on earnings per share.

The Company has elected to continue to estimate the number of stock-based awards expected to vest, as permitted by ASU 2016-09, rather than electing to account for forfeitures as they occur.

    The standard also requires that the excess tax benefits from share based compensation awards be reported as operating activities in the consolidated statements of cash flows. Previously, these cash flows were included in financing activities. We have elected to apply this change on a prospective basis, resulting in an increase in net cash provided by operating activities of $0.4 million for the three months ended March 31, 2017.

The prior period was not adjusted with the adoption of ASU 2016-09 due to the adoption of this standard on a prospective basis.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This ASU is meant to clarify the guidance in FASB ASU 2014-09, Revenue from Contracts with Customers. Specifically, the guidance addresses an entity’s identification of its performance obligations in a contract, as well as an entity’s evaluation of the nature of its promise to grant a license of intellectual property and whether or not that revenue is recognized over time or at a point in time. This ASU has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The Company is considering the alternatives of adoption of this ASU, has substantially completed a review of the likely impact to the existing portfolio of customer contracts entered into prior to adoption and will continue to evaluate the effect of adopting this guidance upon the Company’s results of operations, cash flows and financial position. Currently, the Company does not expect the adoption of this ASU to have a material impact on our financial statements except that there are significant additional reporting requirements under the new standard.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. This ASU does not change the core principle of the guidance in Topic 606. Instead, the amendments provide clarifying guidance in a few narrow areas and add some practical expedients to the guidance. This ASU has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The Company is considering the alternatives of adoption of this ASU, has substantially completed a review of the likely impact to the existing portfolio of customer contracts entered into prior to adoption and will continue to evaluate the effect of adopting this guidance upon the Company’s results of operations, cash flows and financial position. Currently, the Company does not expect the adoption of this ASU to have a material impact on our financial statements except that there are significant additional reporting requirements under the new standard.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. The adoption of this standard is not expected to have a material impact on our financial statements and related disclosures.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The new guidance is intended to reduce diversity in practice in how transactions are classified in the statement of cash flows. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on our financial statements.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory. The amendments in this ASU reduce the complexity in the accounting standards by allowing the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. Historically, the income tax consequence was not recognized until the asset was sold to an outside party. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on our financial statements.

In November 2016, the FASB issued 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash - a consensus of the FASB Emerging Issues Task Force. The amendments in this ASU require restricted cash and restricted cash equivalents to be classified in the statement of cash flows as cash and cash equivalents. The guidance will be applied on a retrospective basis beginning with the earliest period presented. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on our financial statements.

In December 2016, the FASB issued 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The amendments in this ASU represent changes to clarify the Codification or to correct unintended application of guidance. Areas for correction or improvement include: Loan Guarantee Fees, Contract Costs - Impairment Testing, Contract Costs - Interaction of Impairment Testing with Guidance in Other Topics, Provisions for Losses on Construction-Type and Production Type Contracts, Scope of Topic 606, Disclosure of Remaining Performance Obligations, Disclosure of Prior-Period Performance Obligations, Contract Modification Example, Contract Asset versus Receivable, Refund Liability, Advertising Costs, Fixed-Odd Wagering Contracts in the Casino Industry and Cost Capitalization for Advisors to Private Funds and Public Funds. This ASU has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on our financial statements except that there are significant additional reporting requirements under the new standard.

In January 2017, the FASB issued 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this ASU provide a robust framework to use in determining when a set of assets and activities is a business. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted and the standard should be applied prospectively. The Company does not expect the adoption of this ASU to have a material impact on our financial statements and related disclosures.

In January 2017, the FASB issued 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this ASU simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test and eliminating the requirement for a reporting unit with a zero or negative carrying amount to perform a qualitative assessment. Instead, under this pronouncement, an entity would perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and would recognize an impairment change for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized is not to exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects will be considered, if applicable. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted and should be adopted on a prospective basis. The Company is currently evaluating the impact of this ASU on our financial statements and related disclosures.

In February 2017, the FASB issued 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU provides guidance which clarifies the scope and accounting for financial assets that meet the definition of an “in-substance nonfinancial asset” and defines the term, “in-substance nonfinancial asset.” In addition, this ASU also adds guidance for partial sales of nonfinancial assets. This ASU is effective for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted and should be adopted retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The Company is currently evaluating the impact of this ASU on our financial statements and related disclosures.

In March 2017, the FASB issued 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this ASU shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This ASU is effective for those fiscal years, beginning after December 15, 2018. Early adoption is permitted and should be adopted on a modified retrospective bases through a cumulative-effect directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of this ASU on our financial statements and related disclosures.

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Business Acquisition

3 Months Ended

Mar. 31, 2017

Business Combinations [Abstract]

Business Acquisition

Business Acquisitions

The Company uses acquisitions as a strategy to grow its customer base by increasing its presence in new and existing markets, expand and diversify its service offerings, enhance its technology, acquire skilled personnel and enter into other jurisdictions.

The Company completed the following acquisitions during the first three months of fiscal 2017, paying the purchase price in cash in each transaction: (a) an asset purchase of sFax, acquired on March 31, 2017, an Austin-based provider of mobile cloud faxing for healthcare; and (b) other immaterial acquisitions of email marketing and email security businesses.

The condensed consolidated statement of income, since the date of each acquisition, and balance sheet as of March 31, 2017, reflect the results of operations of all 2017 acquisitions. For the three months ended March 31, 2017, the contributions of the acquisitions were immaterial to the Company’s revenues. Net income contributed by these acquisitions was not separately identifiable due to j2 Global’s integration activities and is impracticable to provide. Total consideration for these transactions was $26.5 million, net of cash acquired and assumed liabilities and is subject to certain post-closing adjustments which may increase or decrease the final consideration paid.

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

Assets and Liabilities	Valuation
Other assets	$	61
Trade names	375
Customer relationships	11,954
Other intangibles	2,273
Goodwill	13,005
Deferred revenue	(1,145		)
Total	$	26,523

During the three months ended March 31, 2017, the purchase price accounting has been finalized for the following acquisitions: (i) Fonebox and (ii) other immaterial fax, online data backup and email marketing businesses. The initial accounting for all 2017 acquisitions is incomplete and subject to change, which may be significant. j2 Global has recorded provisional amounts which may be based upon past acquisitions with similar attributes for certain intangible assets (including trade names, software and customer relationships), preliminary acquisition date working capital and related tax items.

During the three months ended March 31, 2017, the Company recorded adjustments to prior period acquisitions due to the finalization of purchase accounting in the Business Cloud Services segment which resulted in a net decrease in goodwill in the amount of $(0.7) million. In addition, the Company recorded adjustments to the initial working capital related to prior period acquisitions in the Digital Media segment, which resulted in a net increase in goodwill in the amount of $0.8 million. Such adjustments had an immaterial impact to the amortization expense within the Condensed Consolidated Statement of Income for the three months ended March 31, 2017.

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 three months ended March 31, 2017 is $13.0 million, of which $13.0 million is expected to be deductible for income tax purposes.

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Investments

3 Months Ended

Mar. 31, 2017

Investments [Abstract]

Investments

Investments

Short-term investments consist of certificates of deposits, which are stated at fair market value.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Fair Value Measurements

j2 Global complies with the provisions of ASC 820, which defines fair value, provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. ASC 820 clarifies that the fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

l	Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
l	Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
l	Level 3 – Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The Company’s money market funds are classified within Level 1. The Company values these Level 1 investments using quoted market prices. The Company’s certificates of deposit are classified within Level 2. The Company values these Level 2 investments based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data.

The fair value of the Convertible Notes (see Note 7 - Long-Term Debt) is determined using recent quoted market prices or dealer quotes for such securities, which are Level 1 inputs. The fair value of the Senior Notes (see Note 7 - Long-Term Debt) is determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings, which are Level 2 inputs. The fair value of long-term debt at March 31, 2017 and December 31, 2016 was $803.8 million and $792.2 million, respectively.

In addition, the Convertible Notes contain terms that may require the Company to pay contingent interest on the Convertible Notes which is accounted for as a derivative with fair value adjustments being recorded to interest expense. This derivative is fair valued using a binomial lattice convertible bond pricing model using historical and implied market information, which are Level 2 inputs.

The Company classifies its contingent consideration liability in connection with the acquisitions of Ookla and Salesify within Level 3 because factors used to develop the estimated fair value are unobservable inputs, such as volatility and market risks, and are not supported by market activity. The fair value of the contingent consideration liability was determined using option based approaches. This methodology was utilized because the distribution of payments is not symmetric and amounts are only payable upon certain earnings before interest, tax, depreciation and amortization (“EBITDA”) thresholds being reached. Such valuation approach included the Monte-Carlo simulation for the contingency since the financial metric driving the payments is path dependent. Significant increases or decreases in either of the inputs noted above in isolation would result in a significantly lower or higher fair value of measurement.

The following tables present the fair values of the Company’s financial assets or liabilities that are measured at fair value on a recurring basis (in thousands):

March 31, 2017	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market and other funds	$	19,836	$	—	$	—	$	19,836
Certificates of deposit	—		65		—		65
Total assets measured at fair value	$	19,836	$	65	$	—	$	19,901
Liabilities:
Contingent consideration	$	—	$	—	$	17,050	$	17,050
Contingent interest derivative	—		958		—		958
Total liabilities measured at fair value	$	—	$	958	$	17,050	$	18,008
December 31, 2016	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market and other funds	$	7,737	$	—	$	—	$	7,737
Certificates of deposit	—		60		—		60
Total assets measured at fair value	$	7,737	$	60	$	—	$	7,797
Liabilities:
Contingent consideration	$	—	$	—	$	17,450	$	17,450
Contingent interest derivative	—		958		—		958
Total liabilities measured at fair value	$	—	$	958	$	17,450	$	18,408

At the end of each reporting period, management reviews the inputs to the fair value measurements of financial and non-financial assets and liabilities to determine when transfers between levels are deemed to have occurred. For the three months ended March 31, 2017, there were no transfers that have occurred between levels.

The following table presents a reconciliation of the Company’s Level 3 financial assets or liabilities that are measured at fair value on a recurring basis (in thousands):

	Level 3			Affected line item in the Statement of Income
Balance as of January 1, 2017	$	17,450
Total fair value adjustments reported in earnings	(400		)	General and administrative
Balance as of March 31, 2017	$	17,050

In connection with the acquisition of Ookla, on December 1, 2014, contingent consideration of up to an aggregate of $40.0 million may be payable upon achieving certain future income thresholds and had a fair value of $17.0 million and $17.0 million at March 31, 2017 and December 31, 2016, respectively. Due to the Company’s achievement of certain earnings targets for the year ended December 31, 2016, $20.0 million ($17.0 million of contingent consideration and $3.0 million of compensation) is payable and is classified as a current liability on the consolidated balance sheet.

In connection with the acquisition of Salesify, on September 17, 2015, contingent consideration of up to an aggregate of $17.0 million may be payable upon achieving certain future income thresholds and had a fair value of $0.2 million and $0.6 million at March 31, 2017 and December 31, 2016, respectively, which was recorded as an other long-term liability on the consolidated balance sheet at March 31, 2017.

During the three months ended March 31, 2017, the Company recorded a decrease in the fair value of the contingent consideration of $0.4 million and reported such decrease in general and administrative expenses.

The following table presents a reconciliation of the Company’s derivative instruments (in thousands):

	Amount		Affected line item in the Statement of Income
Derivative Liabilities:
Level 2:
Balance as of January 1, 2017	$	958
Total fair value adjustments reported in earnings	—
Balance as of March 31, 2017	$	958

Losses associated with other-than-temporary impairments are recorded as a component of other income (expenses). Gains and losses not associated with other-than-temporary impairments are recorded as a component of other comprehensive income.

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Goodwill And Intangible Assets

3 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Intangible Assets

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships, trademarks and trade names, developed technologies and other intangible assets. The fair values of these identified intangible assets are based upon expected future cash flows or income, which take into consideration certain assumptions such as customer turnover, trade names and patent lives. These determinations are primarily based upon the Company’s historical experience and expected benefit of each intangible asset. If it is determined that such assumptions are not accurate, then the resulting change will impact the fair value of the intangible asset. Identifiable intangible assets are amortized over the period of estimated economic benefit, which ranges from one to 20 years.

The changes in carrying amounts of goodwill for the three months ended March 31, 2017 are as follows (in thousands):

	Business Cloud Services			Digital Media		Consolidated
Balance as of January 1, 2017	$	559,152		$	563,658	$	1,122,810
Goodwill acquired (Note 3)	13,005			—		13,005
Purchase accounting adjustments (1)	(689		)	759		70
Foreign exchange translation	2,705			110		2,815
Balance as of March 31, 2017	$	574,173		$	564,527	$	1,138,700

⁽¹⁾ Purchase accounting adjustments relate to adjustments to goodwill in connection with prior year business acquisitions (see Note 3 - Business Acquisitions).

Intangible Assets with Indefinite Lives:

Intangible assets are summarized as of March 31, 2017 and December 31, 2016 as follows (in thousands):

	March 31, 2017		December 31, 2016
Trade name	$	27,379	$	27,379
Other	5,432		5,432
Total	$	32,811	$	32,811

Intangible Assets Subject to Amortization:

As of March 31, 2017, intangible assets subject to amortization relate primarily to the following (in thousands):

	Weighted-Average   Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	11.5 years	$	127,893	$	41,933	$	85,960
Patent and patent licenses	6.6 years	65,614		53,061		12,553
Customer relationships (1)	9.5 years	405,167		200,247		204,920
Other purchased intangibles	6.0 years	198,470		37,514		160,956
Total		$	797,144	$	332,755	$	464,389

⁽¹⁾ Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset.

As of December 31, 2016, intangible assets subject to amortization relate primarily to the following (in thousands):

	Weighted-Average Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	11.5 years	$	127,342	$	38,868	$	88,474
Patent and patent licenses	6.6 years	65,605		51,677		13,928
Customer relationships (1)	9.6 years	390,930		182,775		208,155
Other purchased intangibles	6.0 years	195,913		27,590		168,323
Total		$	779,790	$	300,910	$	478,880

⁽¹⁾ Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset.

Amortization expense, included in general and administrative expense, approximated $30.9 million and $21.1 million for the three month periods ended March 31, 2017 and 2016, respectively. Amortization expense is estimated to approximate $137.3 million, $97.4 million, $68.3 million, $37.0 million and $29.8 million for fiscal years 2017 through 2021, respectively, and $125.4 million thereafter through the duration of the amortization period.

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Long Term Debt

3 Months Ended

Mar. 31, 2017

Long-term Debt, Unclassified [Abstract]

Debt Disclosure [Text Block]

Long-Term Debt

8.0% Senior Notes

On July 26, 2012, the Company’s subsidiary issued in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended, $250 million aggregate principal amount of 8.0% senior unsecured notes (the “Senior Notes”) due August 1, 2020. j2 Cloud Services, LLC (formerly j2 Cloud Services, Inc.) received proceeds of$245 millionin cash, net of initial purchaser’s discounts and commissions of$5 million. The net proceeds were available for general corporate purposes, including acquisitions. Interest is payable semi-annuallyon February 1 and August 1 of each year. j2 Cloud Services, LLC has the option to call the Senior Notes in whole or in part afterAugust 1, 2016, subject to certain premiums as defined in the indenture governing the Senior Notes plus accrued and unpaid interest. Upon a change in control, the holders may put the Senior Notes at 101% of the principal amount of the Senior Notes plus accrued and unpaid interest, if any, to the repurchase date. In connection with the issuance of the Convertible Notes (defined below), j2 Global, Inc. unconditionally guaranteed, on an unsecured basis, the obligations of j2 Cloud Services, LLC under the Senior Notes.

The indenture governing the Senior Notes contains certain restrictive and other covenants applicable to j2 Cloud Services, LLC and subsidiaries designated as restricted subsidiaries including, but not limited to, limitations on debt and disqualified or preferred stock, restricted payments, liens, sale and leaseback transactions, dividends and other payment restrictions, asset sales and transactions with affiliates. Restricted payments are applicable only if j2 Cloud Services, LLC and subsidiaries designated as restricted subsidiaries has a pro forma leverage ratio of greater than 1.75 to 1.0. In addition, if such leverage ratio is in excess of 1.75 to 1.0, restricted payments are permitted up to $50 million. As of March 31, 2017, j2 Cloud Services was in compliance with all such covenants. Violation of these covenants could result in a default which could result in the acceleration of outstanding amounts if such default is not cured or waived within the time periods outlined in the indenture.

As of March 31, 2017 and December 31, 2016, the estimated fair value of the Senior Notes was approximately $259.4 million and $275.4 million, respectively, and was based on the quoted market prices of debt instruments with similar terms, credit rating and maturities of the Senior Notes which are Level 2 inputs (see Note 5 - Fair Value Measurements).

3.25% Convertible Notes

On June 10, 2014, j2 Global issued $402.5 million aggregate principal amount of 3.25% convertible senior notes due June 15, 2029 (the “Convertible Notes”). The Convertible Notes bear interest at a rate of 3.25% per annum, payable semiannually in arrears on June 15 and December 15 of each year. Beginning with the six-month interest period commencing on June 15, 2021, the Company must pay contingent interest on the Convertible Notes during any six-month interest period if the trading price per $1,000 principal amount of the Convertible Notes for each of the five trading days immediately preceding the first day of such interest period equals or exceeds $1,300. Any contingent interest payable on the Convertible Notes will be in addition to the regular interest payable on the Convertible Notes.

Holders may surrender their Convertible Notes for conversion at any time prior to the close of business on the business day immediately preceding the maturity date only if one or more of the following conditions is satisfied: (i) during any calendar quarter commencing after the calendar quarter ending on September 30, 2014 (and only during such calendar quarter), if the closing sale price of j2 Global common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs is more than 130% of the applicable conversion price of the Convertible Notes on each such trading day; (ii) during the five consecutive business day period following any ten consecutive trading day period in which the trading price for the Convertible Notes for each such trading day was less than 98% of the product of (a) the closing sale price of j2 Global common stock on each such trading day and (b) the applicable conversion rate on each such trading day; (iii) if j2 Global calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the business day prior to the redemption date; (iv) upon the occurrence of specified corporate events; or (v) during either the period beginning on, and including, March 15, 2021 and ending on, but excluding, June 20, 2021 or the period beginning on, and including, March 15, 2029 and ending on, but excluding, the maturity date. j2 Global will settle conversions of Convertible Notes by paying or delivering, as the case may be, cash, shares of j2 Global common stock or a combination thereof at j2 Global’s election. The Company currently intends to satisfy its conversion obligation by paying and delivering a combination of cash and shares of the Company’s common stock, where cash will be used to settle each $1,000 of principal and the remainder, if any, will be settled via the Company’s common stock.

As of March 31, 2017, the conversion rate is 14.5242 shares of j2 Global common stock for each $1,000 principal amount of Convertible Notes, which represents a conversion price of approximately $68.85 per share of j2 Global common stock. The conversion rate is subject to adjustment for certain events as set forth in the indenture governing the Convertible Notes, but will not be adjusted for accrued interest. In addition, following certain corporate events that occur on or prior to June 20, 2021, j2 Global will increase the conversion rate for a holder that elects to convert its Convertible Notes in connection with such a corporate event.

j2 Global may not redeem the Convertible Notes prior to June 20, 2021. On or after June 20, 2021, j2 Global may redeem for cash all or part of the Convertible Notes at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Convertible Notes.

Holders have the right to require j2 Global to repurchase for cash all or part of their Convertible Notes on each of June 15, 2021 and June 15, 2024 at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date. In addition, if a fundamental change, as defined in the indenture governing the Convertible Notes, occurs prior to the maturity date, holders may require j2 Global to repurchase for cash all or part of their Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Convertible Notes are the Company’s general senior unsecured obligations and rank: (i) senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated in right of payment to the Convertible Notes; (ii) equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated, including in respect of j2 Global’s guarantee of the obligations of our subsidiary, j2 Cloud Services, LLC, with respect to its outstanding Senior Notes; (iii) effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries.

Accounting for the Convertible Notes

In accordance with ASC 470-20, Debt with Conversion and Other Options, convertible debt that can be settled for cash is required to be separated into the liability and equity component at issuance, with each component assigned a value. The value assigned to the liability component is the estimated fair value, as of the issuance date, of similar debt without the conversion feature. The difference between the cash proceeds and estimated fair value of the liability component, representing the value of the conversion premium assigned to the equity component, is recorded as a debt discount on the issuance date. This debt discount is amortized to interest expense using the effective interest method over the period from the issuance date through the first stated repurchase date on June 15, 2021.

j2 Global estimated the borrowing rates of similar debt without the conversion feature at origination to be 5.79% for the Convertible Notes and determined the debt discount to be $59.0 million. As a result, a conversion premium after tax of $37.7 million was recorded in additional paid-in capital. The aggregate debt discount is amortized as interest expense over the period from the issuance date through the first stated repurchase date on June 15, 2021, which management believes is the expected life of the Convertible Notes using an interest rate of 5.81%. As of March 31, 2017, the remaining period over which the unamortized debt discount will be amortized is 4.2 years.

The Convertible Notes are carried at face value less any unamortized debt discount and debt issuance costs. The fair value of the Convertible Notes at each balance sheet date is determined based on recent quoted market prices or dealer quotes for the Convertible Notes, which are Level 1 inputs (see Note 5 - Fair Value Measurements). If such information is not available, the fair value is determined using cash-flow models of the scheduled payments discounted at market interest rates for comparable debt without the conversion feature. As of March 31, 2017 and December 31, 2016, the estimated fair value of the Convertible Notes was approximately $544.4 million and $516.8 million, respectively.

Long-term debt as of March 31, 2017 and December 31, 2016 consists of the following (in thousands):

	March 31, 2017			December 31, 2016
8% Senior Notes	$	247,521		$	247,359
3.25% Convertible Notes	364,141			362,144
Less: Deferred issuance costs	(7,389		)	(7,757		)
Total long-term debt	604,273			601,746
Less: current portion	—			—
Total long-term debt, less current portion	$	604,273		$	601,746

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Commitments And Contingencies

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

Commitments and Contingencies

Litigation

From time-to-time, j2 Global and its affiliates are involved in litigation and other legal disputes or regulatory inquiries that arise in the ordinary course of business. Any claims or regulatory actions against j2 Global and its affiliates, whether meritorious or not, could be time consuming and costly, and could divert significant operational resources. The outcomes of such matters are subject to inherent uncertainties, carrying the potential for unfavorable rulings that could include monetary damages and injunctive relief.

On February 17, 2011, Emmanuel Pantelakis (“Pantelakis”) filed suit against a j2 Global affiliate in the Ontario Superior Court of Justice (No. 11-50673), alleging that the j2 Global affiliate breached a contract relating to Pantelakis’s use of the Campaigner^® service. The j2 Global affiliate filed a responsive pleading on March 23, 2011 and responses to undertakings on July 16, 2012. On November 6, 2012, Pantelakis filed a second amended statement of claim, reframing his lawsuit as a negligence action. The j2 Global affiliate filed an amended statement of defense on April 8, 2013. Discovery is ongoing.

On January 17, 2013, the Commissioner of the Massachusetts Department of Revenue (“Commissioner”) issued a notice of assessment to a j2 Global affiliate for sales and use tax for the period of July 1, 2003 through December 31, 2011. On July 22, 2014, the Commissioner denied the j2 Global affiliate’s application for abatement. On September 18, 2014, the j2 Global affiliate petitioned the Massachusetts Appellate Tax Board for abatement of the tax asserted in the notice of assessment (No. C325426). A trial was held on December 16, 2015. The Massachusetts Appellate Tax Board has not yet rendered its decision.

On January 18, 2013, Paldo Sign and Display Co. filed an amended complaint adding two j2 Global affiliates and a former employee as additional defendants in an existing putative class action pending in the U.S. District Court for the Northern District of Illinois (the “Northern District of Illinois”) (No. 1:13-cv-01896). The amended complaint alleged violations of the Telephone Consumer Protection Act (“TCPA”), the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), and common law conversion, arising from an indirect customer’s alleged use of a j2 Global affiliate’s systems to send unsolicited facsimile transmissions. The j2 Global affiliates filed a motion to dismiss the ICFA and conversion claims, which was granted. The Northern District of Illinois also dismissed the former employee for lack of personal jurisdiction. On August 23, 2013, a second plaintiff, Sabon, Inc., was added. On March 7, 2016, the j2 Global affiliates moved for summary judgment. The Northern District of Illinois granted summary judgment on March 10, 2017, dismissing all claims against the j2 Global affiliates. The time for appeal has not yet lapsed.

On August 28, 2013, Phyllis A. Huster (“Huster”) filed suit in the Northern District of Illinois (No. 1:13-cv-06143) against two j2 Global affiliates and three other parties for correction of inventorship for nine j2 Global patents. Huster seeks, among other things, a declaration that she was an inventor of the patents-in-suit, an order directing the U.S. Patent & Trademark Office to substitute or add her as an inventor, and payment of at least half of defendants’ earnings from licensing the patents-in-suit. On September 19, 2014, the Northern District of Illinois granted the defendants’ motion to dismiss for improper venue and transferred the case to the U.S. District Court for the Northern District of Georgia (the “Northern District of Georgia”) (No. 1:14-cv-03304). Huster filed an amended complaint on February 11, 2015, which she corrected on February 12, 2015. The corrected amended complaint added various common law claims. On November 12, 2015, the Northern District of Georgia dismissed all claims against the j2 Global affiliates. On January 28, 2016, all remaining claims were dismissed on summary judgment. Huster appealed to the U.S. Court of Appeals for the Federal Circuit (the “Federal Circuit”) (No. 16-1639). On March 29, 2017, the Federal Circuit modified the dismissal of the correction of inventorship claim to be without prejudice and affirmed the judgment as modified.

On October 16, 2013, a j2 Global affiliate entered an appearance as a plaintiff in a multi-district litigation pending in the Northern District of Illinois (No. 1:12-cv-06286). In this litigation, Unified Messaging Solutions, LLC (“UMS”), a company with rights to assert certain patents owned by the j2 Global affiliate, has asserted five j2 Global patents against a number of defendants. While claims against some defendants have been settled, other defendants have filed counterclaims for, among other things, non-infringement, unenforceability, and invalidity of the patents-in-suit. On December 20, 2013, the Northern District of Illinois issued a claim construction opinion and, on June 13, 2014, entered a final judgment of non-infringement for the remaining defendants based on that claim construction. UMS and the j2 Global affiliate filed a notice of appeal to the Federal Circuit on June 27, 2014 (No. 14-1611). The appeal is pending.

On June 23, 2014, Andre Free-Vychine (“Free-Vychine”) filed a putative class action against two j2 Global affiliates in the Superior Court for the State of California, County of Los Angeles (“Los Angeles Superior Court”) (No. BC549422). The complaint alleged two California statutory violations relating to late fees levied in certain eVoice® accounts. Free-Vychine sought, among other things, damages and injunctive relief on behalf of himself and a purported nationwide class of similarly situated persons. On August 26, 2014, Law Enforcement Officers, Inc. (“LEO”) and IV Pit Stop, Inc. (“IV Pit Stop”) filed a separate putative class action against the same j2 Global affiliates in Los Angeles Superior Court (No. BC555721). The complaint alleged three California statutory violations, negligence, breach of the implied covenant of good faith and fair dealing, and various other common law claims relating to late fees levied on any of the j2 Global affiliates’ customers, including those with eVoice® and Onebox® accounts. LEO and IV Pit Stop sought, among other things, damages and injunctive relief on behalf of themselves and a purported nationwide class of similarly situated persons. On September 29, 2014, the Los Angeles Superior Court related and consolidated both cases for discovery purposes. On March 13, 2015, a third amended complaint was filed in the case brought by LEO, which no longer included IV Pit Stop as a plaintiff but added Christopher Dancel (“Dancel”) as a plaintiff. On June 26, 2015, the case filed by Free-Vychine was dismissed pursuant to a settlement agreement. On October 7, 2015, the parties in the case brought by LEO and Dancel reached a tentative class-based settlement. On September 12, 2016, the Los Angeles Superior Court certified the class for settlement purposes only and provided its preliminary approved the settlement. The court will consider final approval of the settlement in early 2017.

On January 21, 2016, Davis Neurology, P.A. filed a putative class action against two j2 Global affiliates in the Circuit Court for the County of Pope, State of Arkansas (58-cv-2016-40), alleging violations of the TCPA. The case was ultimately removed to the U.S. District Court for the Eastern District of Arkansas (the “Eastern District of Arkansas”) (No. 4:16-cv-00682). On June 6, 2016, the j2 Global affiliates filed a motion for judgment on the pleadings. On March 20, 2017, the Eastern District of Arkansas dismissed all claims against the j2 Global affiliates. On April 17, 2017, Davis Neurology filed a noticed of appeal to the Federal Circuit (No. 17-1820).

j2 Global does not believe, based on current knowledge, that the foregoing legal proceedings or claims, after giving effect to existing reserves, are likely to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could have a material effect on j2 Global’s consolidated financial position, results of operations, or cash flows in a particular period.

The Company has not accrued for any material loss contingencies relating to these legal proceedings because materially unfavorable outcomes are not considered probable by management.

Credit Agreement

On December 5, 2016, j2 Global, Inc. entered into a Credit Agreement (the “Credit Agreement”) with MUFG Union Bank, N.A., as administrative agent, and certain other lenders from time to time party thereto (collectively, the “Lenders”). Pursuant to the Credit Agreement, the Lenders have provided j2 with a credit facility of $225.0 million (the “Credit Facility”), $180.0 million of which was drawn at closing of the Everyday Health acquisition and used to finance a portion of the cash consideration in the acquisition. In the first quarter, the Company drew an additional $45.0 million making the total draw on the line of credit $225.0 million. The Company must repay $75.0 million six months subsequent to December 5, 2016.

At the Company’s option, amounts borrowed under the Credit Agreement will bear interest at either (i) the London interbank offered rate multiplied by the Statutory Reserve Rate (as defined in the Credit Agreement) (the “Eurocurrency Rate”) or (ii) a base rate (the “Base Rate”) equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the Reference Rate (as defined in the Credit Agreement) then in effect and (z) the Eurocurrency Rate for an interest period of one month, plus 1.0%, in each case, plus an applicable margin. Until the date that is six months after the Closing Date, the applicable margin relating to any Eurocurrency Rate loan is 1.75% and the applicable margin relating to any Base Rate loan is 0.75%. From and after the date that is six months after the Closing Date, the applicable margin relating to any Eurocurrency Rate loan is 2.25% and the applicable margin relating to any Base Rate loan is 1.25%.

The final maturity of the Credit Facility will occur on December 4, 2017 (the “Maturity Date”). j2 Global is permitted to make voluntary prepayments of the Credit Facility at any time without payment of a premium or penalty. Amounts repaid cannot be re-borrowed. The Company is required to make mandatory prepayments of loans under the Credit Facility with (i) net cash proceeds from issuances of debt (other than certain permitted debt), (ii) net cash proceeds from certain non-ordinary course asset sales (subject to reinvestment rights and other exceptions) and (iii) casualty proceeds and condemnation awards (subject to reinvestment rights and other exceptions). The Company is also required to make prepayments of loans under the Credit Facility in the amount equal to the then-outstanding loans under the Credit Facility minus $150.0 million, if on the date that is six months after the Closing Date, the aggregate principal amount of the loans under the Credit Facility is greater than $150.0 million.

The obligations under the Credit Facility and certain cash management and hedging obligations are and will be fully and unconditionally guaranteed by certain of j2 Global’s existing and subsequently acquired or organized direct and indirect subsidiaries (including Ziff Davis, LLC and Everyday Health) pursuant to a guarantee agreement and secured by a lien on the equity interests of certain of j2 Global’s subsidiaries, subject to customary exceptions.

The Credit Agreement contains financial maintenance covenants, including maintenance of (i) a maximum total leverage ratio as of the last date of any fiscal quarter not to exceed 3.25:1.00; and (ii) a minimum Consolidated EBITDA (as defined in the Credit Agreement) of not less than $75.0 million for any fiscal quarter. The Credit Agreement also contains restrictive covenants that limit, among other things, the Company’s and its restricted subsidiaries’ ability to incur additional indebtedness, create, incur or assume liens, consolidate, merge, liquidate or dissolve, pay dividends or make other distributions or other restricted payments, make or hold any investments, enter into certain transactions with affiliates, sell assets other than on terms specified by the Credit Agreement, amend the terms of certain other indebtedness and organizational documents and change their lines of business and fiscal years, in each case, subject to customary exceptions. j2 Global was in compliance with all such covenants. The Credit Agreement also sets forth customary events of default, including, among other things, the failure to make timely payments under the Credit Facility, the failure to satisfy certain covenants, cross-default and cross-acceleration to other material debt for borrowed money, the occurrence of a change of control and specified events of bankruptcy and insolvency.

The Company has capitalized the total of $1.3 million in debt issuance costs, which are being amortized to interest expense over the life of the Credit Facility. As of March 31, 2017, these debt issuance costs, net of amortization, were $0.9 million. The related interest expense was $1.2 million for the three months ended March 31, 2017.

Non-Income Related Taxes

As a provider of cloud services for business, the Company does not provide telecommunications services. Thus, it believesthat its business and its users (by using the Company’s services) are generally not subject to various telecommunication taxes.Moreover, the Company generally does not believe that its business and its users (by using the Company’s services) are subject to other indirect taxes, such as sales, business tax and gross receipt tax. However, several state and municipal taxing authorities have challenged these beliefs and have and may continue to audit and assess the Company’s business and operations with respect to telecommunications and other indirect taxes.

On February 24, 2016, President Obama signed into law H.R. 644, the “Trade Facilitation and Trade Enforcement Act of 2015”, which included a provision to permanently ban state and local authorities from imposing access or discriminatory taxes on the Internet. The new law allows “grandfathered” states and local authorities to continue their existing taxes on Internet access through June 2020.

The Company is currently under audit for indirect taxes in several states and municipalities including New York State, Massachusetts, Ohio, and the City of Los Angeles. The Company currently has no reserves established for these matters, as the Company has determined that the liability is not probable and estimable. However, it is reasonably possible that such a liability could be incurred, which would result in additional expense, which could materially impact our financial results.

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Income Taxes

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate. Each quarter the Company updates its estimated annual effective tax rate and, if the estimate changes, makes a cumulative adjustment. j2 Global’s annual effective tax rate is normally lower than the 35% U.S. federal statutory rate and applicable apportioned state tax rates primarily due to anticipated earnings of the Company’s subsidiaries outside of the U.S. in jurisdictions where the Company’s effective tax rate is lower than in the U.S. The Company’s effective tax rate was 26.7% and 30.3% for the three months ended March 31, 2017 and 2016, respectively. j2 Global does not provide for U.S. income taxes on the undistributed earnings of the Company’s foreign operations because the Company intends to permanently reinvest such earnings in foreign jurisdictions and any determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable. Income before income taxes included income from domestic operations of $0.1 million and $12.3 million for the three months ended March 31, 2017 and 2016, respectively, and income from foreign operations of $35.1 million and $30.7 million for the three months ended March 31, 2017 and 2016, respectively.

As of March 31, 2017 and December 31, 2016, the Company had $47.2 million and $46.5 million, respectively, in liabilities for uncertain income tax positions. Accrued interest and penalties related to unrecognized tax benefits are recognized in income tax expense on the Company’s consolidated statement of income.

Cash paid for income taxes net of refunds received was $6.5 million and $8.9 million for the three months ended March 31, 2017 and 2016, respectively.

Certain taxes are prepaid during the year and, where appropriate, included within prepaid expenses and other current assets on the consolidated balance sheet. The Company’s prepaid taxes were zero at March 31, 2017 and December 31, 2016, respectively.

Income Tax Audits:

The Company is under income tax audit by the U.S. Internal Revenue Service (“IRS”) for its 2012 through 2014 tax years. Additionally, the Company was notified on March 22, 2017 that the IRS will be auditing Everyday Health’s 2014 tax year.

j2 Global is also under income tax audit by the California Franchise Tax Board (the “FTB”) for its tax years 2012 and 2013. The FTB, however, has agreed to suspend its audit for 2012 and 2013 pending the outcome of the IRS audit for such tax years.

The Company is under income tax audit by the New York State Department of Taxation and Finance (“NYS”) for tax years 2011 through 2013. On March 16, 2017, the Company was notified that NYS would be auditing its 2014 tax year.

It is reasonably possible that these audits may conclude in the next 12 months and that the uncertain tax positions the Company has recorded in relation to these tax years may change compared to the liabilities recorded for these periods. If the recorded uncertain tax positions are inadequate to cover the associated tax liabilities, the Company would be required to record additional tax expense in the relevant period, which could be material. If the recorded uncertain tax positions are adequate to cover the associated tax liabilities, the Company would be required to record any excess as a reduction in tax expense in the relevant period, which could be material. However, it is not currently possible to estimate the amount, if any, of such change.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2017

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock Repurchase Program

In February 2012, the Company’s Board of Directors approved a program authorizing the repurchase of up to five million shares of our common stock through February 20, 2013 (the “2012 Program”) which was subsequently extended through February 19, 2018. During the three month period ended March 31, 2017, we repurchased zero shares under this program. Cumulatively at March 31, 2017, 2.1 million shares were repurchased at an aggregate cost of $58.6 million (including an immaterial amount of commission fees).

Periodically, participants in j2 Global’s stock plans surrender to the Company shares of j2 Global stock to pay the exercise price or to satisfy tax withholding obligations arising upon the exercise of stock options or the vesting of restricted stock. During the three month period ended March 31, 2017, the Company purchased 3,692 shares from plan participants for this purpose.

Dividends

The following is a summary of each dividend declared during fiscal year 2017 and 2016:

Declaration Date	Dividend per Common Share		Record Date	Payment Date
February 10, 2016	$	0.3250	February 23, 2016	March 10, 2016
May 5, 2016	$	0.3350	May 18, 2016	June 2, 2016
August 2, 2016	$	0.3450	August 17, 2016	September 1, 2016
November 1, 2016	$	0.3550	November 18, 2016	December 5, 2016
February 9, 2017	$	0.3650	February 22, 2016	March 9, 2017

Future dividends are subject to Board approval.

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Stock Options And Employee Stock Purchase Plan

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Options And Employee Stock Purchase Plan

Stock Options and Employee Stock Purchase Plan

j2 Global’s share-based compensation plans include the Second Amended and Restated 1997 Stock Option Plan (the “1997 Plan”), 2007 Stock Plan (the “2007 Plan”), 2015 Stock Option Plan (the “2015 Plan”) and 2001 Employee Stock Purchase Plan (the “Purchase Plan”). Each plan is described below.

The 1997 Plan terminated in 2007. A total of 12,000,000 shares of j2 Global common stock were authorized to be used for 1997 Plan purposes. An additional 840,000 shares were authorized for issuance upon exercise of options granted outside the 1997 Plan. As of March 31, 2017, 8,998 shares underlying options and zero shares of restricted stock were outstanding under the 1997 Plan, all of which continue to be governed by the 1997 Plan.

The 2007 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units and other share-based awards. 4,500,000 shares of j2 Global common stock are authorized to be used for 2007 Plan purposes. Options under the 2007 Plan may be granted at exercise prices determined by the Board of Directors, provided that the exercise prices shall not be less than the fair market value of j2 Global’s common stock on the date of grant for incentive stock options and not less than 85% of the fair market value of j2 Global’s common stock on the date of grant for non-statutory stock options. As of March 31, 2017, 319,011 shares underlying options and 15,720 shares of restricted stock were outstanding under the 2007 Plan.

The 2015 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units and other share-based awards and is intended as a successor plan to the 2007 Stock Plan since no further grants will be made under the 2007 Stock Plan. 4,200,000 shares of j2 Global common stock are authorized to be used for 2015 Plan purposes. Options under the 2015 Plan may be granted at exercise prices determined by the Board of Directors, provided that the exercise prices shall not be less than the higher of the par value or 100% of the fair market value of j2 Global’s common stock subject to the option on the date the option is granted. As of March 31, 2017, 62,000 shares underlying options and 33,500 shares of restricted stock units were outstanding under the 2015 Plan.

All stock option grants are approved by “outside directors” within the meaning of Internal Revenue Code Section 162(m).

Stock Options

The following table represents stock option activity for the three months ended March 31, 2017:

	Number of Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2017	413,858		$	31.09
Granted	—		—
Exercised	(23,847	)	29.18
Canceled	—		—
Outstanding at March 31, 2017	390,011		$	31.20	3.8	$	20,556,234
Exercisable at March 31, 2017	334,411		$	25.93	3.1	$	19,388,798
Vested and expected to vest at March 31, 2017	378,897		$	30.16	3.6	$	20,364,506

The total intrinsic values of options exercised during the three months ended March 31, 2017 and 2016 were $1.3 million and $1.8 million, respectively.

The Company recognized $0.1 million and $0.1 million of compensation expense related to stock options for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017 and December 31, 2016, unrecognized stock compensation related to non-vested stock options granted under each of the share-based compensation plans approximated $0.6 million and $0.7 million, respectively. Unrecognized stock compensation expense related to non-vested stock options granted under these plans is expected to be recognized ratably over a weighted-average period of 2.8 years (i.e., the remaining requisite service period).

Fair Value Disclosure

j2 Global uses the Black-Scholes option pricing model to calculate the fair value of each option grant. The expected volatility is based on historical volatility of the Company’s common stock. The Company estimates the expected term based upon the historical exercise behavior of our employees. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a term equal to the expected term of the option assumed at the date of grant. The Company uses an annualized dividend yield based upon the per share dividends declared by its Board of Directors. Estimated forfeiture rates were 15.31% and 14.35% as of March 31, 2017 and 2016, respectively.

Restricted Stock and Restricted Stock Units

j2 Global has awarded restricted stock and restricted stock units to its Board of Directors and senior staff pursuant to certain share-based compensation plans. Compensation expense resulting from restricted stock and restricted unit grants is measured at fair value on the date of grant and is recognized as share-based compensation expense over the applicable vesting period. Beginning in fiscal year 2012, vesting periods are approximately one year for awards to members of the Company’s Board of Directors and five years for senior staff (excluding market-based awards discussed below).

Restricted Stock - Awards with Market Conditions

In May 2016, certain key employees were granted market-based restricted stock awards. The market-based awards have vesting conditions that are based on specified stock price targets of the Company’s common stock. Market conditions were factored into the grant date fair value using a Monte Carlo valuation model, which utilized multiple input variables to determine the probability of the Company achieving the specified stock price targets with a 20 day lookback (trading days). Stock-based compensation expense related to an award with a market condition will be recognized over the requisite service period using the graded-vesting method regardless of whether the market condition is satisfied, provided that the requisite service period has been completed. During the three months ended March 31, 2017 and 2016, the Company awarded zero market-based restricted stock awards, respectively.

Restricted stock award activity for the three months ended March 31, 2017 is set forth below:

	Shares		Weighted-Average Grant-Date Fair Value
Nonvested at January 1, 2017	705,015		$	41.40
Granted	15,270		82.69
Vested	(13,031	)	41.02
Canceled	—		—
Nonvested at March 31, 2017	707,254		$	42.30

Restricted stock unit award activity for the three months ended March 31, 2017 is set forth below:

	Number of Shares		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2017	51,950
Granted	7,100
Vested	(7,150	)
Canceled	(2,680	)
Outstanding at March 31, 2017	49,220		2.0	$	4,130,050
Vested and expected to vest at March 31, 2017	35,901		1.8	$	3,012,481

The Company recognized $3.5 million and $2.7 million of compensation expense related to restricted stock and restricted stock units for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017 and December 31, 2016, the Company had unrecognized share-based compensation cost of approximately $35.5 million and $37.9 million, respectively, associated with these awards. This cost is expected to be recognized over a weighted-average period of 3.1 years for awards and 3.6 years for units.

Employee Stock Purchase Plan

The Purchase Plan provides for the issuance of a maximum of two million shares of the Company’s common stock. Under the Purchase Plan, eligible employees can have up to 15% of their earnings withheld, up to certain maximums, to be used to purchase shares of j2 Global common stock at certain plan-defined dates. The price of the j2 Global common stock purchased under the Purchase Plan for the offering periods is equal to 95% of the fair market value of the j2 Global common stock at the end of the offering period. For the three months ended March 31, 2017 and 2016, 837 and 842 shares were purchased under the plan, respectively. Cash received upon the issuance of j2 Global common stock under the Purchase Plan was $67,000 and $58,000 for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, 1,625,689 shares were available under the Purchase Plan for future issuance.

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Earnings Per Share

3 Months Ended

Mar. 31, 2017

Earnings Per Share Reconciliation [Abstract]

Earnings Per Share

Earnings Per Share

The components of basic and diluted earnings per share are as follows (in thousands, except share and per share data):

	Three Months Ended March 31,
	2017			2016
Numerator for basic and diluted net income per common share:
Net income attributable to j2 Global, Inc. common shareholders	$	25,820		$	29,943
Net income available to participating securities (a)	(309		)	(412		)
Net income available to j2 Global, Inc. common shareholders	$	25,511		$	29,531
Denominator:
Weighted-average outstanding shares of common stock	47,463,231			47,966,718
Dilutive effect of:
Equity incentive plans	242,920			232,674
Convertible debt (b)	1,059,880			38,706
Common stock and common stock equivalents	48,766,031			48,238,098
Net income per share:
Basic	$	0.54		$	0.62
Diluted	$	0.52		$	0.61

^(a)  Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid).

^(b)  Represents the incremental shares issuable upon conversion of the Convertible Notes due June 15, 2029 by applying the treasury stock method when the average stock price exceeds the conversion price of the Convertible Notes (see Note 7 - Long Term Debt).

For the three months ended March 31, 2017 and 2016, there were zero options outstanding, respectively, which were excluded from the computation of diluted earnings per share because the exercise prices were greater than the average market price of the common stock.

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Segment and Geographic Information

3 Months Ended

Mar. 31, 2017

Segments, Geographical Areas [Abstract]

Segment and Geographic Information

Segment Information

The Company’s business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. j2 Global’s reportable business segments are: (i) Business Cloud Services and (ii) Digital Media.

Information on reportable segments and reconciliation to consolidated income from operations is as follows (in thousands):

	Three Months Ended March 31,
	2017			2016
Revenues by segment:
Business Cloud Services	$	141,544		$	138,139
Digital Media	113,131			62,409
Elimination of inter-segment revenues	(6		)	(46		)
Total revenues	254,669			200,502
Direct costs by segment(1):
Business Cloud Services	85,244			87,862
Digital Media	116,633			54,676
Direct costs by segment(1):	201,877			142,538
Business Cloud Services operating income(2)	56,300			50,277
Digital Media operating income	(3,502		)	7,733
Segment operating income	52,798			58,010
Global operating costs(2)	4,823			4,672
Income from operations	$	47,975		$	53,338
(1) Direct costs for each segment include cost of revenues and other operating expenses that are directly attributable to the segment, such as employee compensation expense, local sales and marketing expenses, engineering and network operations expense, depreciation and amortization and other administrative expenses.
(2) Global operating costs include general and administrative and other corporate expenses that are managed on a global basis and that are not directly attributable to any particular segment.

	March 31, 2017		December 31, 2016
Assets:
Business Cloud Services	$	971,639	$	911,327
Digital Media	1,114,708		1,124,535
Total assets from reportable segments	2,086,347		2,035,862
Corporate	16,205		26,466
Total assets	$	2,102,552	$	2,062,328
	Three Months Ended March 31,
	2017		2016
Capital expenditures:
Business Cloud Services	$	1,456	$	1,121
Digital Media	8,204		3,200
Total from reportable segments	9,660		4,321
Corporate	—		—
Total capital expenditures	$	9,660	$	4,321

	Three Months Ended March 31,
	2017		2016
Depreciation and amortization:
Business Cloud Services	$	16,764	$	17,502
Digital Media	22,558		9,672
Total from reportable segments	39,322		27,174
Corporate	—		—
Total depreciation and amortization	$	39,322	$	27,174

The Company’s Business Cloud Services segment consists of several services which have similar economic characteristics, including the nature of the services and their production processes, the type of customers, as well as the methods used to distribute these services.

j2 Global groups its Business Cloud services into three main categories based on the similarities of these services: Cloud Connect, Cloud Services and Intellectual Property. Cloud Connect consists of our Fax and Voice services. Cloud Services consist of Backup, Email Security, Email Marketing and Web Hosting.

	Three Months Ended March 31, 2017
	Revenue		Depreciation and Amortization		Operating Income
Cloud Connect (Fax/Voice)	$	93,632	$	5,883	$	44,438
Cloud Services	46,714		9,534		12,416
Intellectual Property	1,198		1,347		(554		)
Total	$	141,544	$	16,764	$	56,300

	Three Months Ended March 31, 2016
	Revenue		Depreciation and Amortization		Operating Income
Cloud Connect (Fax/Voice)	$	90,244	$	5,570	$	40,520
Cloud Services	46,719		10,318		10,974
Intellectual Property	1,176		1,614		(1,217		)
Total	$	138,139	$	17,502	$	50,277

j2 Global maintains operations in the U.S., Canada, Ireland, Japan and other countries. Geographic information about the U.S. and all other countries for the reporting periods is presented below. Such information attributes revenues based on jurisdictions where revenues are reported (in thousands).

	Three Months Ended March 31,
	2017		2016
Revenues:
United States	$	185,762	$	137,639
Canada	19,401		18,366
Ireland	17,901		12,549
All other countries	31,605		31,948
	$	254,669	$	200,502

	March 31, 2017		December 31, 2016
Long-lived assets:
United States	$	441,631	$	453,053
All other countries	92,472		93,430
Total	$	534,103	$	546,483

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Unrestricted Subsidiaries Unrestricted Subsidiaries (Notes)

3 Months Ended

Mar. 31, 2017

Unrestricted Subsidiaires [Abstract]

Unrestricted Subsidiaries [Text Block]

Unrestricted Subsidiaries (unaudited)

Reorganization

On August 12, 2016, all of the equity interests in Ziff Davis, LLC, a Delaware limited liability company, and all of the equity interests in Advanced Messaging Technologies, Inc., a Delaware corporation, held by j2 Cloud Services, LLC, a Delaware limited liability company, were distributed to j2 Global, the parent company of j2 Cloud Services, LLC.

Until the reorganization noted above, 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 for any period in which j2 Cloud Services had Unrestricted Subsidiaries. Accordingly, the Company is presenting the following tables.

The financial position of the Unrestricted Subsidiaries as of March 31, 2017 and December 31, 2016 is as follows (in thousands):

	March 31, 2017			December 31, 2016
ASSETS
Cash and cash equivalents	$	46,633		$	17,931
Accounts receivable	133,488			158,730
Prepaid expenses and other current assets	14,464			13,494
Total current assets	194,585			190,155
Property and equipment, net	42,575			38,752
Trade names, net	67,005			69,093
Patent and patent licenses, net	11,964			13,303
Customer relationships, net	89,415			95,855
Goodwill	564,527			563,658
Other purchased intangibles, net	153,723			163,023
Deferred income taxes, non-current	47			482
Other assets	5,408			5,541
Total assets	$	1,129,249		$	1,139,862
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	128,877		$	163,130
Income taxes payable	5,099			4,353
Deferred revenue, current	17,476			13,773
Total current liabilities	151,452			181,256
Long-term debt	642,662			602,662
Deferred income taxes, non-current	11,075			11,816
Other long-term liabilities	1,065			1,454
Total liabilities	806,254			797,188
Additional paid-in capital	318,127			318,160
Retained earnings	7,680			27,004
Accumulated other comprehensive loss	(2,812		)	(2,490		)
Total stockholders’ equity	322,995			342,674
Total liabilities and stockholders’ equity	$	1,129,249		$	1,139,862

The results of operations of the Unrestricted Subsidiaries for the three months ended March 31, 2017 and 2016 is as follows (in thousands):

	Three Months Ended March 31,
	2017			2016
Revenues	$	113,131		$	62,457
Cost of revenues	11,712			5,311
Gross profit	101,419			57,146
Operating expenses:
Sales and marketing	55,327			26,461
Research, development and engineering	5,499			2,482
General and administrative	45,847			22,819
Total operating expenses	106,673			51,762
Income (loss) from operations	(5,254		)	5,384
Interest expense, net	13,611			4,127
Other (income) expense, net	(624		)	172
Income (loss) before income taxes	(18,241		)	1,085
Income tax expense	1,083			580
Net income (loss)	$	(19,324	)	$	505

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Accumulated Other Comprehensive Income Accumulated Other Comprehensive Income (Notes)

3 Months Ended

Mar. 31, 2017

Accumulated Other Comprehensive Income [Abstract]

Comprehensive Income (Loss) Note [Text Block]

Accumulated Other Comprehensive Income

The following table summarizes the changes in accumulated balances of other comprehensive income, net of tax, for the three months ended March 31, 2017 (in thousands):

	Unrealized Gains (Losses) on Investments		Foreign Currency Translation			Total
Beginning balance	$	—	$	(54,649	)	$	(54,649	)
Other comprehensive income before reclassifications	—		3,582			3,582
Amounts reclassified from accumulated other comprehensive income	—		—			—
Net current period other comprehensive income	—		3,582			3,582
Ending balance	$	—	$	(51,067	)	$	(51,067	)

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Condensed Consolidating Financials (Notes)

3 Months Ended

Mar. 31, 2017

Condensed Financial Information [Abstract]

Condensed Financial Statements [Text Block]

Condensed Consolidating Financial Statements

In connection with the June 2014 Convertible Note issuance, j2 Global, Inc. entered into a supplemental indenture related to the Senior Notes, pursuant to which it fully and unconditionally guaranteed, on an unsecured basis, the full and punctual payment of the Senior Notes issued by its wholly owned subsidiary, j2 Cloud Services, LLC. j2 Cloud Services, LLC is subject to restrictions on dividends in its existing indenture with respect to the Senior Notes. While substantially all of the Company’s assets (other than the net cash proceeds from the issuance of the Convertible Notes) are owned directly or indirectly by j2 Cloud Services, LLC, those contractual provisions did not, as of June 30, 2014, meaningfully restrict j2 Cloud Services, LLC’s ability to pay dividends to j2 Global, Inc.

The following condensed consolidating financial statements present, in separate columns, financial information for (i) j2 Global, Inc. (the “Parent”) on a parent-only basis, (ii) j2 Cloud Services, LLC, (iii) the non-guarantor subsidiaries on a combined basis, (iv) the eliminations and reclassifications necessary to arrive at the information for the Company on a consolidated basis, and (v) the Company on a consolidated basis. The condensed consolidating financial statements are presented in accordance with the equity method. Under this method, the investments in subsidiaries are recorded at cost and adjusted for the Company’s share of subsidiaries’ cumulative results of operations, capital contributions, distributions and other equity changes. Intercompany charges (income) between the Parent and subsidiaries are recognized in the condensed consolidating financial statements during the period incurred and the settlement of intercompany balances is reflected in the condensed consolidating statement of cash flows based on the nature of the underlying transactions. Consolidating adjustments include consolidating and eliminating entries for investments in subsidiaries, intercompany activity and balances.

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

March 31, 2017

(Unaudited, in thousands except share and per share data)

BALANCE SHEET	j2 Global, Inc.		j2 Cloud Services		Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
ASSETS
Cash and cash equivalents	$	15,150	$	34,395	$	137,864		$	—		$	187,409
Short-term investments	—		—		65			—			65
Accounts receivable, net	1		10,143		161,919			(1		)	172,062
Prepaid expenses and other current assets	38,296		1,766		22,295			(38,180		)	24,177
Intercompany receivable	679,103		299,743		149,971			(1,128,817		)	—
Total current assets	732,550		346,047		472,114			(1,166,998		)	383,713
Property and equipment, net	—		6,088		63,626			—			69,714
Trade names, net	—		10,439		102,900			—			113,339
Patent and patent licenses, net	—		565		11,988			—			12,553
Customer relationships, net	—		10,810		194,110			—			204,920
Goodwill	—		70,480		1,068,220			—			1,138,700
Other purchased intangibles, net	—		6,944		159,444			—			166,388
Investment in subsidiaries	1,121,423		751,821		(1,073		)	(1,872,171		)	—
Deferred income taxes, non-current	—		32,667		1,752			(27,507		)	6,912
Other assets	—		422		5,891			—			6,313
Total assets	$	1,853,973	$	1,236,283	$	2,078,972		$	(3,066,676	)	$	2,102,552
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	6,697	$	44,117	$	133,294		$	(38,181	)	$	145,927
Income taxes payable	—		94,709		—			(73,110		)	21,599
Deferred revenue, current	—		20,324		65,107			—			85,431
Line of credit	224,123		—		—			—			224,123
Other current liabilities	—		—		34			—			34
Intercompany payable	303,492		—		752,214			(1,055,706		)	—
Total current liabilities	534,312		159,150		950,649			(1,166,997		)	477,114
Long-term debt	357,462		246,811		—			—			604,273

Deferred revenue, non-current	—		822		—			—			822
Liability for uncertain tax positions	—		41,833		5,345			—			47,178
Deferred income taxes, non-current	31,738		—		35,521			(27,507		)	39,752
Other long-term liabilities	1,107		559		1,321			—			2,987
Total liabilities	924,619		449,175		992,836			(1,194,504		)	1,172,126
Commitments and contingencies	—		—		—			—			—
Preferred stock - Series A, $0.01 par value	—		—		—			—			—
Preferred stock - Series B, $0.01 par value	—		—		—			—			—
Common stock, $0.01 par value	475		—		—			—			475
Additional paid-in capital	468,359		89,066		424,399			(669,356		)	312,468
Retained earnings	460,520		697,822		713,024			(1,202,816		)	668,550
Accumulated other comprehensive income (loss)	—		220		(51,287		)	—			(51,067		)
Total stockholders’ equity	929,354		787,108		1,086,136			(1,872,172		)	930,426
Total liabilities and stockholders’ equity	$	1,853,973	$	1,236,283	$	2,078,972		$	(3,066,676	)	$	2,102,552

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2016

(Unaudited, in thousands except share and per share data)

BALANCE SHEET	j2 Global, Inc.		j2 Cloud Services		Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
ASSETS
Cash and cash equivalents	$	23,935	$	22,949	$	77,066		$	—		$	123,950
Short-term investments	—		—		60			—			60
Accounts receivable, net	—		11,464		188,498			(91		)	199,871
Prepaid expenses and other current assets	25,922		2,266		21,246			(25,316		)	24,118
Intercompany receivable	635,740		281,078		166,210			(1,083,028		)	—
Total current assets	685,597		317,757		453,080			(1,108,435		)	347,999
Property and equipment, net	—		6,318		61,776			—			68,094
Trade names, net	—		10,097		105,756			—			115,853
Patent and patent licenses, net	—		601		13,327			—			13,928
Customer relationships, net	—		2,519		205,636			—			208,155
Goodwill	—		58,310		1,064,500			—			1,122,810
Other purchased intangibles, net	—		4,804		168,951			—			173,755
Investment in subsidiaries	1,091,412		730,153		(1,071		)	(1,820,494		)	—
Deferred income taxes, non-current	1,346		26,667		2,171			(24,895		)	5,289
Other assets	—		443		6,002			—			6,445
Total assets	$	1,778,355	$	1,157,669	$	2,080,128		$	(2,953,824	)	$	2,062,328
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	4,545	$	28,179	$	170,754		$	(25,407	)	$	178,071
Income taxes payable	—		82,795		—			(66,042		)	16,753
Deferred revenue, current	—		19,277		61,107			—			80,384
Line of credit	178,817		—		—			—			178,817
Other current liabilities	—		—		64			—			64
Intercompany payable	296,658		11		720,317			(1,016,986		)	—
Total current liabilities	480,020		130,262		952,242			(1,108,435		)	454,089
Long-term debt	355,143		246,604		(1		)	—			601,746
Deferred revenue, non-current	—		1,588		—			—			1,588
Liability for uncertain tax positions	—		41,259		5,278			—			46,537

Deferred income taxes, non-current	28,687		—		36,565			(24,895		)	40,357
Other long-term liabilities	1,040		505		1,930			—			3,475
Total liabilities	864,890		420,218		996,014			(1,133,330		)	1,147,792
Commitments and contingencies	—		—		—			—			—
Preferred stock - Series A, $0.01 par value	—		—		—			—			—
Preferred stock - Series B, $0.01 par value	—		—		—			—			—
Common stock, $0.01 par value	474		—		—			—			474
Additional paid-in capital	464,220		89,066		424,399			(669,356		)	308,329
Retained earnings	448,771		648,233		714,516			(1,151,138		)	660,382
Accumulated other comprehensive income (loss)	—		152		(54,801		)	—			(54,649		)
Total stockholders’ equity	913,465		737,451		1,084,114			(1,820,494		)	914,536
Total liabilities and stockholders’ equity	$	1,778,355	$	1,157,669	$	2,080,128		$	(2,953,824	)	$	2,062,328

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended March 31, 2017

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Revenues:
Total revenues	$	—		$	75,336		$	207,888		$	(28,555	)	$	254,669
Cost of revenues	—			17,227			52,131			(28,548		)	40,810
Gross profit	—			58,109			155,757			(7		)	213,859
Operating expenses:
Sales and marketing	—			10,810			66,674			(7		)	77,477
Research, development and engineering	—			2,950			8,802			—			11,752
General and administrative	4,824			4,771			67,060			—			76,655
Total operating expenses	4,824			18,531			142,536			(7		)	165,884
Income (loss) from operations	(4,824		)	39,578			13,221			—			47,975
Equity earnings in subsidiaries	26,430			17,828			—			(44,258		)	—
Interest (income) expense, net	(5,309		)	5,207			12,512			—			12,410
Other income, net	—			(46		)	369			—			323
Income before income taxes	26,915			52,245			340			(44,258		)	35,242
Income tax expense	1,095			6,489			1,838			—			9,422
Net income	$	25,820		$	45,756		$	(1,498	)	$	(44,258	)	$	25,820

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended March 31, 2016

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries		Consolidating Adjustments			j2 Global Consolidated
Revenues:
Total revenues	$	—		$	56,385		$	155,566	$	(11,449	)	$	200,502
Cost of revenues	—			17,489			28,202		(11,403		)	34,288
Gross profit	—			38,896			127,364		(46		)	166,214
Operating expenses:
Sales and marketing	—			10,628			37,530		(46		)	48,112
Research, development and engineering	—			3,289			5,699		—			8,988
General and administrative	4,672			5,471			45,633		—			55,776
Total operating expenses	4,672			19,388			88,862		(46		)	112,876
Income (loss) from operations	(4,672		)	19,508			38,502		—			53,338
Equity earnings in subsidiaries	34,323			27,696			—		(62,019		)	—
Interest expense, net	1,871			5,233			3,129		—			10,233
Other expense (income), net	91			(920		)	955		—			126
Income before income taxes	27,689			42,891			34,418		(62,019		)	42,979
Income tax expense (benefit)	(2,254		)	8,568			6,722		—			13,036
Net income	$	29,943		$	34,323		$	27,696	$	(62,019	)	$	29,943

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

Three Months Ended March 31, 2017

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.		j2 Cloud Services		Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Net income	$	25,820	$	45,756	$	(1,498	)	$	(44,258	)	$	25,820
Other comprehensive income, net of tax:
Foreign currency translation adjustment	—		—		3,582			—			3,582
Change in fair value on available-for-sale investments, net of tax expense (benefit)	—		—		—			—			—
Other comprehensive income, net of tax	—		—		3,582			—			3,582
Comprehensive income	$	25,820	$	45,756	$	2,084		$	(44,258	)	$	29,402

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Three Months Ended March 31, 2016

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services		Non-guarantor Subsidiaries		Consolidating Adjustments			j2 Global Consolidated
Net income	$	29,943		$	34,323	$	27,696	$	(62,019	)	$	29,943
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	—			—		3,415		—			3,415
Change in fair value on available-for-sale investments, net of tax benefit	(2,361		)	—		—		—			(2,361		)
Other comprehensive income (loss), net of tax	(2,361		)	—		3,415		—			1,054
Comprehensive income	$	27,582		$	34,323	$	31,111	$	(62,019	)	$	30,997

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

Three Months Ended March 31, 2017

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries			Consolidating Adjustments		j2 Global Consolidated
Net cash (used in) provided by operating activities	$	(71,295	)	$	20,798		$	101,688		$	—	$	51,191
Cash flows from investing activities:
Purchase of certificates of deposit	—			—			(5		)	—		(5		)
Purchases of property and equipment	—			(479		)	(9,181		)	—		(9,660		)
Acquisition of businesses, net of cash received	—			2			(3,565		)	—		(3,563		)
Purchases of intangible assets	—			(2		)	(140		)	—		(142		)
Net cash used in investing activities	—			(479		)	(12,891		)	—		(13,370		)
Cash flows from financing activities:
Proceeds from line of credit, net	44,981			—			—			—		44,981
Repurchases of common and restricted stock	(314		)	—			—			—		(314		)
Issuance of common stock under employee stock purchase plan	67			—			—			—		67
Exercise of stock options	695			—			—			—		695
Dividends paid	(17,575		)	—			—			—		(17,575		)
Deferred payments for acquisitions	—			(1,035		)	(1,264		)	—		(2,299		)
Other	—			—			(26		)	—		(26		)
Intercompany	34,656			(7,906		)	(26,750		)	—		—
Net cash (used in) provided by financing activities	62,510			(8,941		)	(28,040		)	—		25,529
Effect of exchange rate changes on cash and cash equivalents	—			68			41			—		109
Net change in cash and cash equivalents	(8,785		)	11,446			60,798			—		63,459
Cash and cash equivalents at beginning of period	23,935			22,949			77,066			—		123,950
Cash and cash equivalents at end of period	$	15,150		$	34,395		$	137,864		$	—	$	187,409

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

Three Months Ended March 31, 2016

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries			Consolidating Adjustments		j2 Global Consolidated
Net cash (used in) provided by operating activities	$	5,686		$	(450	)	$	59,288		$	—	$	64,524
Cash flows from investing activities:
Maturity of available-for-sale investments	26,224			—			—			—		26,224
Purchase of available-for-sale investments	(21,402		)	—			—			—		(21,402		)
Purchases of property and equipment	—			(284		)	(4,037		)	—		(4,321		)
Acquisition of businesses, net of cash received	—			—			(47,989		)	—		(47,989		)
Purchases of intangible assets	—			—			(316		)	—		(316		)
Net cash (used in) provided by investing activities	4,822			(284		)	(52,342		)	—		(47,804		)
Cash flows from financing activities:
Repurchases of common stock and restricted stock	(1,786		)	—			—			—		(1,786		)
Issuance of common stock under employee stock purchase plan	58			—			—			—		58
Exercise of stock options	1,312			—			—			—		1,312
Dividends paid	(15,817		)	—			—			—		(15,817		)
Excess tax benefits from share-based compensation	264			—			—			—		264
Deferred payments for acquisitions	—			(528		)	(13,858		)	—		(14,386		)
Other	—			—			(25		)	—		(25		)
Intercompany	(13,327		)	(4,147		)	17,474			—		—
Net cash (used in) provided by financing activities	(29,296		)	(4,675		)	3,591			—		(30,380		)
Effect of exchange rate changes on cash and cash equivalents	(91		)	(30		)	1,006			—		885
Net change in cash and cash equivalents	(18,879		)	(5,439		)	11,543			—		(12,775		)
Cash and cash equivalents at beginning of period	55,516			9,975			190,039			—		255,530
Cash and cash equivalents at end of period	$	36,637		$	4,536		$	201,582		$	—	$	242,755

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Subsequent Events

3 Months Ended

Mar. 31, 2017

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On May 4, 2017, the Company’s Board of Directors approved a quarterly cash dividend of $0.3750 per share of j2 Global common stock payable on June 2, 2017 to all stockholders of record as of the close of business on May 19, 2017.

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Basis Of Presentation (Policy)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Use Of Estimates

Use of Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, including judgments about investment classifications, and the reported amounts of net revenue and expenses during the reporting period. We believe that our most significant estimates are those related to the valuation of assets acquired and liabilities assumed in connection with business combinations, long-lived and intangible asset impairment, contingent consideration, income taxes and contingencies and allowances for doubtful accounts. On an ongoing basis, management evaluates its estimates based on historical experience and on various other factors that the Company believes to be reasonable under the circumstances. Actual results could materially differ from those estimates.

Allowances For Doubtful Accounts

Allowances for Doubtful Accounts

j2 Global reserves for receivables it may not be able to collect. These reserves for the Company’s Business Cloud Services segment are typically driven by the volume of credit card declines and past due invoices and are based on historical experience as well as an evaluation of current market conditions. These reserves for the Company’s Digital Media segment are typically driven by past due invoices based on historical experience. On an ongoing basis, management evaluates the adequacy of these reserves.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

Business Cloud Services

The Company’s Business Cloud Services revenues substantially consist of monthly recurring subscription and usage-based fees, which are primarily paid in advance by credit card. In accordance with GAAP, the Company recognizes revenue when persuasive evidence of an arrangement exists, services have been provided, the sales price is fixed and determinable and collection is probable. The Company defers the portions of monthly, quarterly, semi-annually and annually recurring subscription and usage-based fees collected in advance and recognizes them in the period earned. Additionally, the Company defers and recognizes subscriber activation fees and related direct incremental costs over a subscriber’s estimated useful life.

Along with our numerous proprietary Business Cloud Services solutions, the Company also generates revenues by reselling various third party solutions, primarily through our email security and online backup lines of business.  These third party solutions, along with our proprietary products, allow the Company to offer customers a variety of solutions to better meet their needs.  The Company determines whether reseller revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance for principal-agent considerations and the Company places the most weight on three factors: whether or not the Company (i) is the primary obligor in the arrangement, (ii) has latitude in determining pricing and (iii) bears credit risk.

The Company records revenue on a gross basis with respect to reseller revenue as the Company is the primary obligator in the arrangement, has latitude in determining pricing and bears all credit risk associated with our reseller program partners.

j2 Global’s Business Cloud Services also include patent license revenues generated under license agreements that provide for the payment of contractually determined fully paid-up or royalty-bearing license fees to j2 Global in exchange for the grant of non-exclusive, retroactive and future licenses to our intellectual property, including patented technology. Patent revenues may also consist of revenues generated from the sale of patents. Patent license revenues are recognized when earned over the term of the license agreements. With regard to fully paid-up license arrangements, the Company recognizes as revenue in the period the license agreement is executed the portion of the payment attributable to past use of the intellectual property and amortizes the remaining portion of such payments on a straight-line basis, or pro-rata revenue basis, as appropriate over the life of the licensed patent(s). With regard to royalty-bearing license arrangements, the Company recognizes revenues of license fees earned during the applicable period. With regard to patent sales, the Company recognizes as revenue in the period of the sale the amount of the purchase price over the carrying value of the patent(s) sold.

The Business Cloud Services business also generates revenues by licensing certain technology to third parties. These licensing revenues are recognized when earned in accordance with the terms of the underlying agreement. Generally, revenue is recognized as the third party uses the licensed technology over the period.

Digital Media

The Company’s Digital Media revenues primarily consist of revenues generated from the sale of advertising campaigns that are targeted to the Company’s proprietary websites and to those websites operated by third parties that are part of the Digital Media business’s advertising network. Revenues for these advertising campaigns are recognized as earned, either when an ad is placed for viewing by a visitor to the appropriate web page or when the visitor “clicks through” on the ad, depending upon the terms with the individual advertiser.

Revenues for Digital Media business-to-business operations consist of lead-generation campaigns for IT vendors and are recognized as earned when the Company delivers the qualified leads to the customer.

j2 Global also generates Digital Media revenues through the license of certain assets to clients, for the clients’ use in their own promotional materials or otherwise. Such assets may include logos, editorial reviews, or other copyrighted material. Revenues under such license agreements are recognized when the assets are delivered to the client. Also, Digital Media revenues are generated through the license of certain speed testing technology which is recognized when delivered to the client through providing data services primarily to Internet Service Providers (“ISPs”) and wireless carriers which is recognized as earned over the term of the access period. The Digital Media business also generates other types of revenues, including business listing fees, subscriptions to online publications, and from other sources. Such other revenues are recognized as earned.

The Company determines whether Digital Media revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance for principal-agent considerations and the Company places the most weight on three factors: whether or not the Company (i) is the primary obligor in the arrangement, (ii) has latitude in determining pricing and (iii) bears credit risk.

The Company records revenue on a gross basis with respect to revenue generated (i) by the Company serving online display and video advertising across its owned-and-operated web properties, on third party sites or on unaffiliated advertising networks, (ii) through the Company’s lead-generation business and (iii) through the Company’s Digital Media licensing program. The Company records revenue on a net basis with respect to revenue paid to the Company by certain third-party advertising networks who serve online display and video advertising across the Company’s owned-and-operated web properties and certain third party sites.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value Measurements

j2 Global complies with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic No. 820, Fair Value Measurements and Disclosures (“ASC 820”), in measuring fair value and in disclosing fair value measurements. ASC 820 provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities.

As of March 31, 2017, the carrying value of cash and cash equivalents, short-term investments, accounts receivable, interest receivable, accounts payable, accrued expenses, interest payable, customer deposits and long-term debt are reflected in the financial statements at cost. With the exception of long-term debt, cost approximates fair value due to the short-term nature of such instruments. The fair value of the Company’s outstanding debt was determined using the quoted market prices of debt instruments with similar terms and maturities, if available. As of the same dates, the carrying value of other long-term liabilities approximated fair value as the related interest rates approximate rates currently available to j2 Global.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment are stated at cost. Equipment under capital leases is stated at the present value of the minimum lease payments. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of property and equipment range from 1 to 10 years. Fixtures, which are comprised primarily of leasehold improvements and equipment under capital leases, are amortized on a straight-line basis over their estimated useful lives or for leasehold improvements, the related lease term, if less. The Company has capitalized certain internal use software and website development costs which are included in property and equipment. The estimated useful life of costs capitalized is evaluated for each specific project and ranges from 1 to 5 years.

Debt

Debt Issuance Costs and Debt Discount

j2 Global capitalizes costs incurred with borrowing and issuance of debt securities and records debt issuance costs and discounts as a reduction to the debt amount. These costs and discounts are amortized and included in interest expense over the life of the borrowing or term of the credit facility using the effective interest method.

Business Combinations

Contingent Consideration

j2 Global measures the contingent earn-out liabilities in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy (see Note 5 - Fair Value Measurements). The Company may use various valuation techniques depending on the terms and conditions of the contingent consideration including a Monte-Carlo simulation. This simulation uses a probability distribution for each significant input to produce hundreds or thousands of possible outcomes and the results are analyzed to determine probabilities of different outcomes occurring. Significant increases or decreases to these inputs in isolation would result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and the amount paid will be recorded in earnings. The amount paid that is less than or equal to the liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows. Any amount paid in excess of the liability on the acquisition date is reflected as cash used in operating activities.

j2 Global reviews and re-assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could be materially different from the initial estimates or prior quarterly amounts. Changes in the estimated fair value of our contingent earn-out liabilities are reported in operating income, except for the time component of the present value calculation which is reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income.

Segment Reporting

Segment Reporting

Accounting guidance establishes standards for the way that public business enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. Accounting guidance also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company operates as two segments: (1) Business Cloud Services and (2) Digital Media.

Comparability of Prior Year Financial Data

Reclassifications

Certain prior year reported amounts have been reclassified to conform to the 2017 presentation.

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Business Acquisition (Tables)

3 Months Ended

Mar. 31, 2017

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

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

Assets and Liabilities	Valuation
Other assets	$	61
Trade names	375
Customer relationships	11,954
Other intangibles	2,273
Goodwill	13,005
Deferred revenue	(1,145		)
Total	$	26,523

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Schedule Of Fair Values Of Financial Instruments Measured On Recurring Basis

The following tables present the fair values of the Company’s financial assets or liabilities that are measured at fair value on a recurring basis (in thousands):

March 31, 2017	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market and other funds	$	19,836	$	—	$	—	$	19,836
Certificates of deposit	—		65		—		65
Total assets measured at fair value	$	19,836	$	65	$	—	$	19,901
Liabilities:
Contingent consideration	$	—	$	—	$	17,050	$	17,050
Contingent interest derivative	—		958		—		958
Total liabilities measured at fair value	$	—	$	958	$	17,050	$	18,008
December 31, 2016	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market and other funds	$	7,737	$	—	$	—	$	7,737
Certificates of deposit	—		60		—		60
Total assets measured at fair value	$	7,737	$	60	$	—	$	7,797
Liabilities:
Contingent consideration	$	—	$	—	$	17,450	$	17,450
Contingent interest derivative	—		958		—		958
Total liabilities measured at fair value	$	—	$	958	$	17,450	$	18,408

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following table presents a reconciliation of the Company’s Level 3 financial assets or liabilities that are measured at fair value on a recurring basis (in thousands):

	Level 3			Affected line item in the Statement of Income
Balance as of January 1, 2017	$	17,450
Total fair value adjustments reported in earnings	(400		)	General and administrative
Balance as of March 31, 2017	$	17,050

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

The following table presents a reconciliation of the Company’s derivative instruments (in thousands):

	Amount		Affected line item in the Statement of Income
Derivative Liabilities:
Level 2:
Balance as of January 1, 2017	$	958
Total fair value adjustments reported in earnings	—
Balance as of March 31, 2017	$	958

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Goodwill And Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Changes In Carrying Amounts Of Goodwill

The changes in carrying amounts of goodwill for the three months ended March 31, 2017 are as follows (in thousands):

	Business Cloud Services			Digital Media		Consolidated
Balance as of January 1, 2017	$	559,152		$	563,658	$	1,122,810
Goodwill acquired (Note 3)	13,005			—		13,005
Purchase accounting adjustments (1)	(689		)	759		70
Foreign exchange translation	2,705			110		2,815
Balance as of March 31, 2017	$	574,173		$	564,527	$	1,138,700

⁽¹⁾ Purchase accounting adjustments relate to adjustments to goodwill in connection with prior year business acquisitions (see Note 3 - Business Acquisitions).

Schedule Of Intangible Assets With Indefinite Lives

Intangible Assets with Indefinite Lives:

Intangible assets are summarized as of March 31, 2017 and December 31, 2016 as follows (in thousands):

	March 31, 2017		December 31, 2016
Trade name	$	27,379	$	27,379
Other	5,432		5,432
Total	$	32,811	$	32,811

Finite-Lived Intangible Assets By Major Class

Intangible Assets Subject to Amortization:

As of March 31, 2017, intangible assets subject to amortization relate primarily to the following (in thousands):

	Weighted-Average   Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	11.5 years	$	127,893	$	41,933	$	85,960
Patent and patent licenses	6.6 years	65,614		53,061		12,553
Customer relationships (1)	9.5 years	405,167		200,247		204,920
Other purchased intangibles	6.0 years	198,470		37,514		160,956
Total		$	797,144	$	332,755	$	464,389

⁽¹⁾ Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset.

As of December 31, 2016, intangible assets subject to amortization relate primarily to the following (in thousands):

	Weighted-Average Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	11.5 years	$	127,342	$	38,868	$	88,474
Patent and patent licenses	6.6 years	65,605		51,677		13,928
Customer relationships (1)	9.6 years	390,930		182,775		208,155
Other purchased intangibles	6.0 years	195,913		27,590		168,323
Total		$	779,790	$	300,910	$	478,880

⁽¹⁾ Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset.

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Long Term Debt Long Term Debt (Tables)

3 Months Ended

Mar. 31, 2017

Long-term Debt, Unclassified [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

Long-term debt as of March 31, 2017 and December 31, 2016 consists of the following (in thousands):

	March 31, 2017			December 31, 2016
8% Senior Notes	$	247,521		$	247,359
3.25% Convertible Notes	364,141			362,144
Less: Deferred issuance costs	(7,389		)	(7,757		)
Total long-term debt	604,273			601,746
Less: current portion	—			—
Total long-term debt, less current portion	$	604,273		$	601,746

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Stockholders' Equity Dividends Declared (Tables)

3 Months Ended

Mar. 31, 2017

Dividends Declared [Abstract]

Dividends Declared [Table Text Block]

The following is a summary of each dividend declared during fiscal year 2017 and 2016:

Declaration Date	Dividend per Common Share		Record Date	Payment Date
February 10, 2016	$	0.3250	February 23, 2016	March 10, 2016
May 5, 2016	$	0.3350	May 18, 2016	June 2, 2016
August 2, 2016	$	0.3450	August 17, 2016	September 1, 2016
November 1, 2016	$	0.3550	November 18, 2016	December 5, 2016
February 9, 2017	$	0.3650	February 22, 2016	March 9, 2017

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Stock Options And Employee Stock Purchase Plan (Tables)

3 Months Ended

Mar. 31, 2017

Stock Options Activity

The following table represents stock option activity for the three months ended March 31, 2017:

	Number of Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2017	413,858		$	31.09
Granted	—		—
Exercised	(23,847	)	29.18
Canceled	—		—
Outstanding at March 31, 2017	390,011		$	31.20	3.8	$	20,556,234
Exercisable at March 31, 2017	334,411		$	25.93	3.1	$	19,388,798
Vested and expected to vest at March 31, 2017	378,897		$	30.16	3.6	$	20,364,506

Restricted Stock [Member]

Restricted Stock And Restricted Stock Unit Award Activity

Restricted stock award activity for the three months ended March 31, 2017 is set forth below:

	Shares		Weighted-Average Grant-Date Fair Value
Nonvested at January 1, 2017	705,015		$	41.40
Granted	15,270		82.69
Vested	(13,031	)	41.02
Canceled	—		—
Nonvested at March 31, 2017	707,254		$	42.30

Restricted Stock Units (RSUs) [Member]

Restricted Stock And Restricted Stock Unit Award Activity

Restricted stock unit award activity for the three months ended March 31, 2017 is set forth below:

	Number of Shares		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2017	51,950
Granted	7,100
Vested	(7,150	)
Canceled	(2,680	)
Outstanding at March 31, 2017	49,220		2.0	$	4,130,050
Vested and expected to vest at March 31, 2017	35,901		1.8	$	3,012,481

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share Reconciliation [Abstract]

Components Of Basic And Diluted Earnings Per Share

The components of basic and diluted earnings per share are as follows (in thousands, except share and per share data):

	Three Months Ended March 31,
	2017			2016
Numerator for basic and diluted net income per common share:
Net income attributable to j2 Global, Inc. common shareholders	$	25,820		$	29,943
Net income available to participating securities (a)	(309		)	(412		)
Net income available to j2 Global, Inc. common shareholders	$	25,511		$	29,531
Denominator:
Weighted-average outstanding shares of common stock	47,463,231			47,966,718
Dilutive effect of:
Equity incentive plans	242,920			232,674
Convertible debt (b)	1,059,880			38,706
Common stock and common stock equivalents	48,766,031			48,238,098
Net income per share:
Basic	$	0.54		$	0.62
Diluted	$	0.52		$	0.61

^(a)  Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid).

^(b)  Represents the incremental shares issuable upon conversion of the Convertible Notes due June 15, 2029 by applying the treasury stock method when the average stock price exceeds the conversion price of the Convertible Notes (see Note 7 - Long Term Debt).

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Segment and Geographic Information (Tables)

3 Months Ended

Mar. 31, 2017

Segment Reporting Information [Line Items]

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

Information on reportable segments and reconciliation to consolidated income from operations is as follows (in thousands):

	Three Months Ended March 31,
	2017			2016
Revenues by segment:
Business Cloud Services	$	141,544		$	138,139
Digital Media	113,131			62,409
Elimination of inter-segment revenues	(6		)	(46		)
Total revenues	254,669			200,502
Direct costs by segment(1):
Business Cloud Services	85,244			87,862
Digital Media	116,633			54,676
Direct costs by segment(1):	201,877			142,538
Business Cloud Services operating income(2)	56,300			50,277
Digital Media operating income	(3,502		)	7,733
Segment operating income	52,798			58,010
Global operating costs(2)	4,823			4,672
Income from operations	$	47,975		$	53,338
(1) Direct costs for each segment include cost of revenues and other operating expenses that are directly attributable to the segment, such as employee compensation expense, local sales and marketing expenses, engineering and network operations expense, depreciation and amortization and other administrative expenses.
(2) Global operating costs include general and administrative and other corporate expenses that are managed on a global basis and that are not directly attributable to any particular segment.

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	March 31, 2017		December 31, 2016
Assets:
Business Cloud Services	$	971,639	$	911,327
Digital Media	1,114,708		1,124,535
Total assets from reportable segments	2,086,347		2,035,862
Corporate	16,205		26,466
Total assets	$	2,102,552	$	2,062,328
	Three Months Ended March 31,
	2017		2016
Capital expenditures:
Business Cloud Services	$	1,456	$	1,121
Digital Media	8,204		3,200
Total from reportable segments	9,660		4,321
Corporate	—		—
Total capital expenditures	$	9,660	$	4,321

	Three Months Ended March 31,
	2017		2016
Depreciation and amortization:
Business Cloud Services	$	16,764	$	17,502
Digital Media	22,558		9,672
Total from reportable segments	39,322		27,174
Corporate	—		—
Total depreciation and amortization	$	39,322	$	27,174

The Company’s Business Cloud Services segment consists of several services which have similar economic characteristics, including the nature of the services and their production processes, the type of customers, as well as the methods used to distribute these services.

j2 Global groups its Business Cloud services into three main categories based on the similarities of these services: Cloud Connect, Cloud Services and Intellectual Property. Cloud Connect consists of our Fax and Voice services. Cloud Services consist of Backup, Email Security, Email Marketing and Web Hosting.

	Three Months Ended March 31, 2017
	Revenue		Depreciation and Amortization		Operating Income
Cloud Connect (Fax/Voice)	$	93,632	$	5,883	$	44,438
Cloud Services	46,714		9,534		12,416
Intellectual Property	1,198		1,347		(554		)
Total	$	141,544	$	16,764	$	56,300

	Three Months Ended March 31, 2016
	Revenue		Depreciation and Amortization		Operating Income
Cloud Connect (Fax/Voice)	$	90,244	$	5,570	$	40,520
Cloud Services	46,719		10,318		10,974
Intellectual Property	1,176		1,614		(1,217		)
Total	$	138,139	$	17,502	$	50,277

Summary On Revenues And Long-Lived Assets By Geographic Areas

j2 Global maintains operations in the U.S., Canada, Ireland, Japan and other countries. Geographic information about the U.S. and all other countries for the reporting periods is presented below. Such information attributes revenues based on jurisdictions where revenues are reported (in thousands).

	Three Months Ended March 31,
	2017		2016
Revenues:
United States	$	185,762	$	137,639
Canada	19,401		18,366
Ireland	17,901		12,549
All other countries	31,605		31,948
	$	254,669	$	200,502

	March 31, 2017		December 31, 2016
Long-lived assets:
United States	$	441,631	$	453,053
All other countries	92,472		93,430
Total	$	534,103	$	546,483

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Unrestricted Subsidiaries (Tables)

3 Months Ended

Mar. 31, 2017

Unrestricted Subsidiaires [Abstract]

Schedule of Unrestricted Subsidiaries Financial Information [Table Text Block]

The financial position of the Unrestricted Subsidiaries as of March 31, 2017 and December 31, 2016 is as follows (in thousands):

	March 31, 2017			December 31, 2016
ASSETS
Cash and cash equivalents	$	46,633		$	17,931
Accounts receivable	133,488			158,730
Prepaid expenses and other current assets	14,464			13,494
Total current assets	194,585			190,155
Property and equipment, net	42,575			38,752
Trade names, net	67,005			69,093
Patent and patent licenses, net	11,964			13,303
Customer relationships, net	89,415			95,855
Goodwill	564,527			563,658
Other purchased intangibles, net	153,723			163,023
Deferred income taxes, non-current	47			482
Other assets	5,408			5,541
Total assets	$	1,129,249		$	1,139,862
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	128,877		$	163,130
Income taxes payable	5,099			4,353
Deferred revenue, current	17,476			13,773
Total current liabilities	151,452			181,256
Long-term debt	642,662			602,662
Deferred income taxes, non-current	11,075			11,816
Other long-term liabilities	1,065			1,454
Total liabilities	806,254			797,188
Additional paid-in capital	318,127			318,160
Retained earnings	7,680			27,004
Accumulated other comprehensive loss	(2,812		)	(2,490		)
Total stockholders’ equity	322,995			342,674
Total liabilities and stockholders’ equity	$	1,129,249		$	1,139,862

The results of operations of the Unrestricted Subsidiaries for the three months ended March 31, 2017 and 2016 is as follows (in thousands):

	Three Months Ended March 31,
	2017			2016
Revenues	$	113,131		$	62,457
Cost of revenues	11,712			5,311
Gross profit	101,419			57,146
Operating expenses:
Sales and marketing	55,327			26,461
Research, development and engineering	5,499			2,482
General and administrative	45,847			22,819
Total operating expenses	106,673			51,762
Income (loss) from operations	(5,254		)	5,384
Interest expense, net	13,611			4,127
Other (income) expense, net	(624		)	172
Income (loss) before income taxes	(18,241		)	1,085
Income tax expense	1,083			580
Net income (loss)	$	(19,324	)	$	505

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2017

Accumulated Other Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table summarizes the changes in accumulated balances of other comprehensive income, net of tax, for the three months ended March 31, 2017 (in thousands):

	Unrealized Gains (Losses) on Investments		Foreign Currency Translation			Total
Beginning balance	$	—	$	(54,649	)	$	(54,649	)
Other comprehensive income before reclassifications	—		3,582			3,582
Amounts reclassified from accumulated other comprehensive income	—		—			—
Net current period other comprehensive income	—		3,582			3,582
Ending balance	$	—	$	(51,067	)	$	(51,067	)

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Condensed Consolidating Financials (Tables)

3 Months Ended

Mar. 31, 2017

Condensed Financial Statements, Captions [Line Items]

Condensed Balance Sheet [Table Text Block]

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

March 31, 2017

(Unaudited, in thousands except share and per share data)

BALANCE SHEET	j2 Global, Inc.		j2 Cloud Services		Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
ASSETS
Cash and cash equivalents	$	15,150	$	34,395	$	137,864		$	—		$	187,409
Short-term investments	—		—		65			—			65
Accounts receivable, net	1		10,143		161,919			(1		)	172,062
Prepaid expenses and other current assets	38,296		1,766		22,295			(38,180		)	24,177
Intercompany receivable	679,103		299,743		149,971			(1,128,817		)	—
Total current assets	732,550		346,047		472,114			(1,166,998		)	383,713
Property and equipment, net	—		6,088		63,626			—			69,714
Trade names, net	—		10,439		102,900			—			113,339
Patent and patent licenses, net	—		565		11,988			—			12,553
Customer relationships, net	—		10,810		194,110			—			204,920
Goodwill	—		70,480		1,068,220			—			1,138,700
Other purchased intangibles, net	—		6,944		159,444			—			166,388
Investment in subsidiaries	1,121,423		751,821		(1,073		)	(1,872,171		)	—
Deferred income taxes, non-current	—		32,667		1,752			(27,507		)	6,912
Other assets	—		422		5,891			—			6,313
Total assets	$	1,853,973	$	1,236,283	$	2,078,972		$	(3,066,676	)	$	2,102,552
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	6,697	$	44,117	$	133,294		$	(38,181	)	$	145,927
Income taxes payable	—		94,709		—			(73,110		)	21,599
Deferred revenue, current	—		20,324		65,107			—			85,431
Line of credit	224,123		—		—			—			224,123
Other current liabilities	—		—		34			—			34
Intercompany payable	303,492		—		752,214			(1,055,706		)	—
Total current liabilities	534,312		159,150		950,649			(1,166,997		)	477,114
Long-term debt	357,462		246,811		—			—			604,273

Deferred revenue, non-current	—		822		—			—			822
Liability for uncertain tax positions	—		41,833		5,345			—			47,178
Deferred income taxes, non-current	31,738		—		35,521			(27,507		)	39,752
Other long-term liabilities	1,107		559		1,321			—			2,987
Total liabilities	924,619		449,175		992,836			(1,194,504		)	1,172,126
Commitments and contingencies	—		—		—			—			—
Preferred stock - Series A, $0.01 par value	—		—		—			—			—
Preferred stock - Series B, $0.01 par value	—		—		—			—			—
Common stock, $0.01 par value	475		—		—			—			475
Additional paid-in capital	468,359		89,066		424,399			(669,356		)	312,468
Retained earnings	460,520		697,822		713,024			(1,202,816		)	668,550
Accumulated other comprehensive income (loss)	—		220		(51,287		)	—			(51,067		)
Total stockholders’ equity	929,354		787,108		1,086,136			(1,872,172		)	930,426
Total liabilities and stockholders’ equity	$	1,853,973	$	1,236,283	$	2,078,972		$	(3,066,676	)	$	2,102,552

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2016

(Unaudited, in thousands except share and per share data)

BALANCE SHEET	j2 Global, Inc.		j2 Cloud Services		Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
ASSETS
Cash and cash equivalents	$	23,935	$	22,949	$	77,066		$	—		$	123,950
Short-term investments	—		—		60			—			60
Accounts receivable, net	—		11,464		188,498			(91		)	199,871
Prepaid expenses and other current assets	25,922		2,266		21,246			(25,316		)	24,118
Intercompany receivable	635,740		281,078		166,210			(1,083,028		)	—
Total current assets	685,597		317,757		453,080			(1,108,435		)	347,999
Property and equipment, net	—		6,318		61,776			—			68,094
Trade names, net	—		10,097		105,756			—			115,853
Patent and patent licenses, net	—		601		13,327			—			13,928
Customer relationships, net	—		2,519		205,636			—			208,155
Goodwill	—		58,310		1,064,500			—			1,122,810
Other purchased intangibles, net	—		4,804		168,951			—			173,755
Investment in subsidiaries	1,091,412		730,153		(1,071		)	(1,820,494		)	—
Deferred income taxes, non-current	1,346		26,667		2,171			(24,895		)	5,289
Other assets	—		443		6,002			—			6,445
Total assets	$	1,778,355	$	1,157,669	$	2,080,128		$	(2,953,824	)	$	2,062,328
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	4,545	$	28,179	$	170,754		$	(25,407	)	$	178,071
Income taxes payable	—		82,795		—			(66,042		)	16,753
Deferred revenue, current	—		19,277		61,107			—			80,384
Line of credit	178,817		—		—			—			178,817
Other current liabilities	—		—		64			—			64
Intercompany payable	296,658		11		720,317			(1,016,986		)	—
Total current liabilities	480,020		130,262		952,242			(1,108,435		)	454,089
Long-term debt	355,143		246,604		(1		)	—			601,746
Deferred revenue, non-current	—		1,588		—			—			1,588
Liability for uncertain tax positions	—		41,259		5,278			—			46,537

Deferred income taxes, non-current	28,687		—		36,565			(24,895		)	40,357
Other long-term liabilities	1,040		505		1,930			—			3,475
Total liabilities	864,890		420,218		996,014			(1,133,330		)	1,147,792
Commitments and contingencies	—		—		—			—			—
Preferred stock - Series A, $0.01 par value	—		—		—			—			—
Preferred stock - Series B, $0.01 par value	—		—		—			—			—
Common stock, $0.01 par value	474		—		—			—			474
Additional paid-in capital	464,220		89,066		424,399			(669,356		)	308,329
Retained earnings	448,771		648,233		714,516			(1,151,138		)	660,382
Accumulated other comprehensive income (loss)	—		152		(54,801		)	—			(54,649		)
Total stockholders’ equity	913,465		737,451		1,084,114			(1,820,494		)	914,536
Total liabilities and stockholders’ equity	$	1,778,355	$	1,157,669	$	2,080,128		$	(2,953,824	)	$	2,062,328

Condensed Income Statement [Table Text Block]

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended March 31, 2017

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Revenues:
Total revenues	$	—		$	75,336		$	207,888		$	(28,555	)	$	254,669
Cost of revenues	—			17,227			52,131			(28,548		)	40,810
Gross profit	—			58,109			155,757			(7		)	213,859
Operating expenses:
Sales and marketing	—			10,810			66,674			(7		)	77,477
Research, development and engineering	—			2,950			8,802			—			11,752
General and administrative	4,824			4,771			67,060			—			76,655
Total operating expenses	4,824			18,531			142,536			(7		)	165,884
Income (loss) from operations	(4,824		)	39,578			13,221			—			47,975
Equity earnings in subsidiaries	26,430			17,828			—			(44,258		)	—
Interest (income) expense, net	(5,309		)	5,207			12,512			—			12,410
Other income, net	—			(46		)	369			—			323
Income before income taxes	26,915			52,245			340			(44,258		)	35,242
Income tax expense	1,095			6,489			1,838			—			9,422
Net income	$	25,820		$	45,756		$	(1,498	)	$	(44,258	)	$	25,820

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended March 31, 2016

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries		Consolidating Adjustments			j2 Global Consolidated
Revenues:
Total revenues	$	—		$	56,385		$	155,566	$	(11,449	)	$	200,502
Cost of revenues	—			17,489			28,202		(11,403		)	34,288
Gross profit	—			38,896			127,364		(46		)	166,214
Operating expenses:
Sales and marketing	—			10,628			37,530		(46		)	48,112
Research, development and engineering	—			3,289			5,699		—			8,988
General and administrative	4,672			5,471			45,633		—			55,776
Total operating expenses	4,672			19,388			88,862		(46		)	112,876
Income (loss) from operations	(4,672		)	19,508			38,502		—			53,338
Equity earnings in subsidiaries	34,323			27,696			—		(62,019		)	—
Interest expense, net	1,871			5,233			3,129		—			10,233
Other expense (income), net	91			(920		)	955		—			126
Income before income taxes	27,689			42,891			34,418		(62,019		)	42,979
Income tax expense (benefit)	(2,254		)	8,568			6,722		—			13,036
Net income	$	29,943		$	34,323		$	27,696	$	(62,019	)	$	29,943

Condensed Comprehensive Income Statement [Table Text Block]

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

Three Months Ended March 31, 2017

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.		j2 Cloud Services		Non-guarantor Subsidiaries			Consolidating Adjustments			j2 Global Consolidated
Net income	$	25,820	$	45,756	$	(1,498	)	$	(44,258	)	$	25,820
Other comprehensive income, net of tax:
Foreign currency translation adjustment	—		—		3,582			—			3,582
Change in fair value on available-for-sale investments, net of tax expense (benefit)	—		—		—			—			—
Other comprehensive income, net of tax	—		—		3,582			—			3,582
Comprehensive income	$	25,820	$	45,756	$	2,084		$	(44,258	)	$	29,402

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Three Months Ended March 31, 2016

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services		Non-guarantor Subsidiaries		Consolidating Adjustments			j2 Global Consolidated
Net income	$	29,943		$	34,323	$	27,696	$	(62,019	)	$	29,943
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	—			—		3,415		—			3,415
Change in fair value on available-for-sale investments, net of tax benefit	(2,361		)	—		—		—			(2,361		)
Other comprehensive income (loss), net of tax	(2,361		)	—		3,415		—			1,054
Comprehensive income	$	27,582		$	34,323	$	31,111	$	(62,019	)	$	30,997

Condensed Cash Flow Statement [Table Text Block]

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

Three Months Ended March 31, 2017

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries			Consolidating Adjustments		j2 Global Consolidated
Net cash (used in) provided by operating activities	$	(71,295	)	$	20,798		$	101,688		$	—	$	51,191
Cash flows from investing activities:
Purchase of certificates of deposit	—			—			(5		)	—		(5		)
Purchases of property and equipment	—			(479		)	(9,181		)	—		(9,660		)
Acquisition of businesses, net of cash received	—			2			(3,565		)	—		(3,563		)
Purchases of intangible assets	—			(2		)	(140		)	—		(142		)
Net cash used in investing activities	—			(479		)	(12,891		)	—		(13,370		)
Cash flows from financing activities:
Proceeds from line of credit, net	44,981			—			—			—		44,981
Repurchases of common and restricted stock	(314		)	—			—			—		(314		)
Issuance of common stock under employee stock purchase plan	67			—			—			—		67
Exercise of stock options	695			—			—			—		695
Dividends paid	(17,575		)	—			—			—		(17,575		)
Deferred payments for acquisitions	—			(1,035		)	(1,264		)	—		(2,299		)
Other	—			—			(26		)	—		(26		)
Intercompany	34,656			(7,906		)	(26,750		)	—		—
Net cash (used in) provided by financing activities	62,510			(8,941		)	(28,040		)	—		25,529
Effect of exchange rate changes on cash and cash equivalents	—			68			41			—		109
Net change in cash and cash equivalents	(8,785		)	11,446			60,798			—		63,459
Cash and cash equivalents at beginning of period	23,935			22,949			77,066			—		123,950
Cash and cash equivalents at end of period	$	15,150		$	34,395		$	137,864		$	—	$	187,409

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

Three Months Ended March 31, 2016

(Unaudited, in thousands except share and per share data)

	j2 Global, Inc.			j2 Cloud Services			Non-guarantor Subsidiaries			Consolidating Adjustments		j2 Global Consolidated
Net cash (used in) provided by operating activities	$	5,686		$	(450	)	$	59,288		$	—	$	64,524
Cash flows from investing activities:
Maturity of available-for-sale investments	26,224			—			—			—		26,224
Purchase of available-for-sale investments	(21,402		)	—			—			—		(21,402		)
Purchases of property and equipment	—			(284		)	(4,037		)	—		(4,321		)
Acquisition of businesses, net of cash received	—			—			(47,989		)	—		(47,989		)
Purchases of intangible assets	—			—			(316		)	—		(316		)
Net cash (used in) provided by investing activities	4,822			(284		)	(52,342		)	—		(47,804		)
Cash flows from financing activities:
Repurchases of common stock and restricted stock	(1,786		)	—			—			—		(1,786		)
Issuance of common stock under employee stock purchase plan	58			—			—			—		58
Exercise of stock options	1,312			—			—			—		1,312
Dividends paid	(15,817		)	—			—			—		(15,817		)
Excess tax benefits from share-based compensation	264			—			—			—		264
Deferred payments for acquisitions	—			(528		)	(13,858		)	—		(14,386		)
Other	—			—			(25		)	—		(25		)
Intercompany	(13,327		)	(4,147		)	17,474			—		—
Net cash (used in) provided by financing activities	(29,296		)	(4,675		)	3,591			—		(30,380		)
Effect of exchange rate changes on cash and cash equivalents	(91		)	(30		)	1,006			—		885
Net change in cash and cash equivalents	(18,879		)	(5,439		)	11,543			—		(12,775		)
Cash and cash equivalents at beginning of period	55,516			9,975			190,039			—		255,530
Cash and cash equivalents at end of period	$	36,637		$	4,536		$	201,582		$	—	$	242,755

XML

Basis Of Presentation (Details)	3 Months Ended
	Mar. 31, 2017
Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	1 year
Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Property, Plant and Equipment, Other Types [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	1 year
Property, Plant and Equipment, Other Types [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years

XML

Recent Accounting Pronouncements (Details) $ in Millions	Mar. 31, 2017 USD ($)
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Operating Leases, Future Minimum Payments Due	$ 71.8

XML

Business Acquisition (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($)
Total consideration of transaction, net of cash acquired	$ 26,523
Goodwill, Purchase Accounting Adjustments	70
Goodwill, Acquired During Period	13,005
Business Acquisition, Purchase Price Allocation, Goodwill, Expected Tax Deductible Amount	13,000
Business Cloud Services Segment [Member]
Goodwill, Purchase Accounting Adjustments	(689)
Goodwill, Acquired During Period	13,005
Digital Media Segment [Member]
Goodwill, Purchase Accounting Adjustments	759
Goodwill, Acquired During Period	$ 0

XML

Business Acquisition (Allocation of Aggregate Purchase Price) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($)
Business Acquisition [Line Items]
Business Acquisition Purchase Price Allocation Current Noncurrent Assets Prepaid Expense and Other Assets	$ 61
Goodwill, Acquired During Period	13,005
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue	(1,145)
Total consideration of transaction, net of cash acquired	26,523
Trade Names [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	375
Customer Relationships [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	11,954
Other Intangible Assets [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 2,273

XML

Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Fair Value	$ 803,800	$ 792,200
Business Combination, Contingent Consideration, Liability	17,050	17,450
Other Payments to Acquire Businesses	20,000
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	400
Ookla [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	40,000
Business Combination, Contingent Consideration, Liability	17,000	17,000
Other Payments to Acquire Businesses	17,000
Payments to Employees	3,000
Salesify [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	17,000
Business Combination, Contingent Consideration, Liability	$ 200	$ 600

XML

Fair Value Measurements (Schedule Of Fair Values Of Financial Instruments Measured On Recurring Basis) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Total assets	$ 19,901	$ 7,797
Business Combination, Contingent Consideration, Liability	17,050	17,450
Derivative Liability	958	958
Financial Liabilities Fair Value Disclosure	18,008	18,408
Money Market Funds [Member]
Cash	19,836	7,737
Certificates of Deposit [Member]
Investments	65	60
Level 1 [Member]
Total assets	19,836	7,737
Business Combination, Contingent Consideration, Liability	0	0
Derivative Liability	0	0
Financial Liabilities Fair Value Disclosure	0	0
Level 1 [Member] | Money Market Funds [Member]
Cash	19,836	7,737
Level 1 [Member] | Certificates of Deposit [Member]
Investments	0	0
Level 2 [Member]
Total assets	65	60
Business Combination, Contingent Consideration, Liability	0	0
Derivative Liability	958	958
Financial Liabilities Fair Value Disclosure	958	958
Level 2 [Member] | Money Market Funds [Member]
Cash	0	0
Level 2 [Member] | Certificates of Deposit [Member]
Investments	65	60
Level 3 [Member]
Total assets	0	0
Business Combination, Contingent Consideration, Liability	17,050	17,450
Derivative Liability	0	0
Financial Liabilities Fair Value Disclosure	17,050	17,450
Level 3 [Member] | Money Market Funds [Member]
Cash	0	0
Level 3 [Member] | Certificates of Deposit [Member]
Investments	$ 0	$ 0

XML

Fair Value Measurements (Schedule Of Changes In Fair Value Of Level 3 Financial Assets) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Other Payments to Acquire Businesses	$ (20,000)
Business Combination, Contingent Consideration, Liability	17,050	$ 17,450
Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease)	(400)
Business Combination, Contingent Consideration, Liability	$ 17,050	$ 17,450

XML

Fair Value Measurements (Derivative Summary) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability	$ 958	$ 958
Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability	958	$ 958
Embedded Derivative, Gain (Loss) on Embedded Derivative, Net	$ 0

XML

Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 30.9	$ 21.1
Estimated future amortization expense in year 2017	137.3
Estimated future amortization expense in year 2018	97.4
Estimated future amortization expense in year 2019	68.3
Estimated future amortization expense in year 2020	37.0
Estimated future amortization expense in year 2021	29.8
Estimated future amortization expense thereafter	$ 125.4
Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets minimum useful life (years)	1 year
Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets minimum useful life (years)	20 years

XML

Goodwill And Intangible Assets (Changes In Carrying Amounts Of Goodwill And Other Intangible Assets) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($)
Goodwill [Line Items]
Balance as of January 1, 2017	$ 1,122,810
Goodwill, Acquired During Period	13,005
Goodwill, Purchase Accounting Adjustments	70
Foreign Exchange Translation	2,815
Balance as of March 31, 2017	1,138,700
Business Cloud Services Segment [Member]
Goodwill [Line Items]
Balance as of January 1, 2017	559,152
Goodwill, Acquired During Period	13,005
Goodwill, Purchase Accounting Adjustments	(689)
Foreign Exchange Translation	2,705
Balance as of March 31, 2017	574,173
Digital Media Segment [Member]
Goodwill [Line Items]
Balance as of January 1, 2017	563,658
Goodwill, Acquired During Period	0
Goodwill, Purchase Accounting Adjustments	759
Foreign Exchange Translation	110
Balance as of March 31, 2017	$ 564,527

XML

Goodwill And Intangible Assets (Indefinite Intangible Assets) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Intangible assets	$ 32,811	$ 32,811
Trade Names [Member]
Intangible assets	27,379	27,379
Other Intangible Assets [Member]
Intangible assets	$ 5,432	$ 5,432

XML

Goodwill And Intangible Assets (Schedule Of Intangible Assets Subject To Amortization) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Historical Cost	$ 797,144	$ 779,790
Accumulated Amortization	(332,755)	(300,910)
Net	$ 464,389	$ 478,880
Trade Names [Member]
Weighted-Average Amortization Period, years	11 years 6 months	11 years 6 months
Historical Cost	$ 127,893	$ 127,342
Accumulated Amortization	(41,933)	(38,868)
Net	$ 85,960	$ 88,474
Patents And Patent Licenses [Member]
Weighted-Average Amortization Period, years	6 years 7 months 6 days	6 years 7 months 6 days
Historical Cost	$ 65,614	$ 65,605
Accumulated Amortization	(53,061)	(51,677)
Net	$ 12,553	$ 13,928
Customer Relationships [Member]
Weighted-Average Amortization Period, years	9 years 6 months	9 years 7 months 6 days
Historical Cost	$ 405,167	$ 390,930
Accumulated Amortization	(200,247)	(182,775)
Net	$ 204,920	$ 208,155
Other Purchased Intangibles [Member]
Weighted-Average Amortization Period, years	6 years	6 years
Historical Cost	$ 198,470	$ 195,913
Accumulated Amortization	(37,514)	(27,590)
Net	$ 160,956	$ 168,323

XML

Long Term Debt Long Term Debt (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Debt Instrument [Line Items]
Long-term debt	$ 604,273		$ 601,746
Allocated Share-based Compensation Expense	3,614	$ 2,809
Unamortized Debt Issuance Expense	(7,389)		(7,757)
Long-term Debt, Current Maturities	0		0
Total long-term debt, less current portion	604,273		601,746
Long-term Debt, Fair Value	$ 803,800		792,200
Senior Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Issuance Date	Jul. 26, 2012
Debt Instrument, Face Amount	$ 250,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%
Debt Instrument, Maturity Date	Aug. 01, 2020
Proceeds from Debt, Net of Issuance Costs	$ 245,000
Debt Instrument, Unamortized Discount	$ 5,000
Debt Instrument, Frequency of Periodic Payment	semi-annually
Debt Instrument, Call Date, Earliest	Aug. 01, 2016
Long-term debt	$ 247,521		247,359
Long-term Debt, Fair Value	$ 259,400		275,400
Convertible Debt Securities [Member]
Debt Instrument [Line Items]
Debt Instrument, Issuance Date	Jun. 10, 2014
Debt Instrument, Face Amount	$ 402,500
Debt Instrument, Interest Rate, Stated Percentage	3.25%
Debt Instrument, Maturity Date	Jun. 15, 2029
Debt Instrument, Unamortized Discount	$ 59,000
Debt Instrument, Convertible, Remaining Discount Amortization Period	4 years 2 months 16 days
Debt Instrument, Frequency of Periodic Payment	semiannually
Debt Instrument, Convertible, Carrying Amount of Equity Component	$ 37,700
Long-term debt	364,141		362,144
Long-term Debt, Fair Value	$ 544,400		$ 516,800

XML

Commitments And Contingencies Commitments And Contingencies (Details)
$ in Millions

3 Months Ended

Mar. 31, 2017

USD ($)

Line of Credit Facility [Line Items]

Line of Credit Facility, Covenant Terms

The Credit Agreement contains financial maintenance covenants, including maintenance of (i) a maximum total leverage ratio as of the last date of any fiscal quarter not to exceed 3.25:1.00; and (ii) a minimum Consolidated EBITDA (as defined in the Credit Agreement) of not less than $75.0 million for any fiscal quarter. The Credit Agreement also contains restrictive covenants that limit, among other things, the Company’s and its restricted subsidiaries’ ability to incur additional indebtedness, create, incur or assume liens, consolidate, merge, liquidate or dissolve, pay dividends or make other distributions or other restricted payments, make or hold any investments, enter into certain transactions with affiliates, sell assets other than on terms specified by the Credit Agreement, amend the terms of certain other indebtedness and organizational documents and change their lines of business and fiscal years, in each case, subject to customary exceptions.

Debt Issuance Costs, Line of Credit Arrangements, Gross

$ 1.3

Debt Issuance Costs, Line of Credit Arrangements, Net

0.9

Line of Credit Facility, Maximum Borrowing Capacity

225.0

Line of Credit [Member]

Line of Credit Facility [Line Items]

Debt Instrument, Face Amount

180.0

Line of Credit Facility, Fair Value of Amount Outstanding

225.0

Interest Expense

$ 1.2

XML

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2016
Income Taxes [Line Items]
U.S. federal statutory rate	35.00%
Effective income tax rate	26.70%	30.30%
Income before income taxes, domestic operations	$ 0.1	$ 12.3
Income before income taxes, foreign operations	35.1	30.7
Liabilities for uncertain income tax positions	47.2						$ 46.5
Cash paid for income taxes	6.5	$ 8.9
Prepaid tax payments	$ 0.0
California Franchise Tax Board [Member]
Income Taxes [Line Items]
Income Tax Examination, Year under Examination				2013	2012
Internal Revenue Service (IRS) [Member]
Income Taxes [Line Items]
Income Tax Examination, Year under Examination			2014	2013	2012
New York State Division of Taxation and Finance [Member]
Income Taxes [Line Items]
Income Tax Examination, Year under Examination			2014	2013	2012	2011
EVDY [Member] | Internal Revenue Service (IRS) [Member]
Income Taxes [Line Items]
Income Tax Examination, Year under Examination			2014

XML

Stockholders' Equity (Details) $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($) shares
Class of Stock [Line Items]
Stock Repurchased	2,100,000
Treasury Stock, Value, Acquired, Cost Method | $	$ 58.6
Shares Paid for Tax Withholding for Share Based Compensation	3,692
2012 Repurchase Program [Member]
Class of Stock [Line Items]
Maximum number of shares authorized to be repurchased	5,000,000
Stock Repurchased	0

XML

Stockholders' Equity Dividends Declared (Details) - $ / shares	Feb. 09, 2017	Nov. 01, 2016	Aug. 02, 2016	May 05, 2016	Feb. 10, 2016
Dividends Payable [Line Items]
Dividend, declaration date	Feb. 09, 2017	Nov. 01, 2016	Aug. 02, 2016	May 05, 2016	Feb. 10, 2016
Dividend amount to be paid, per common share	$ 0.3650	$ 0.3550	$ 0.3450	$ 0.3350	$ 0.3250
Dividend, date of record	Feb. 22, 2016	Nov. 18, 2016	Aug. 17, 2016	May 18, 2016	Feb. 23, 2016
Dividend, date to be paid	Mar. 09, 2017	Dec. 05, 2016	Sep. 01, 2016	Jun. 02, 2016	Mar. 10, 2016

XML

Stock Options And Employee Stock Purchase Plan (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Estimated Forfeiture Rate	15.31%	14.35%
Allocated Share-based Compensation Expense	$ 3,614,000	$ 2,809,000
Number of options outstanding	390,011		413,858
Cash received upon the issuance of common stock	$ 67,000	58,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value	1,300,000	1,800,000
Stock Options [Member]
Allocated Share-based Compensation Expense	100,000	100,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	$ 600,000		$ 700,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 9 months 15 days
Restricted (Performance) Stock [Member]
Shares, Granted	0
Restricted Stock And Restricted Stock Unit (RSU) [Member]
Allocated Share-based Compensation Expense	$ 3,500,000	$ 2,700,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	$ 35,500,000		$ 37,900,000
Restricted Stock [Member]
Shares, Granted	15,270
Number of stocks outstanding	707,254		705,015
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	3 years 1 month 10 days
Restricted Stock Units (RSUs) [Member]
Shares, Granted	7,100
Number of stocks outstanding	49,220		51,950
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	3 years 7 months 10 days
1997 Stock Option Plan [Member]
Additional shares authorized for issuance	840,000
Maximum issuance of common stock	12,000,000
1997 Stock Option Plan [Member] | Stock Options [Member]
Number of options outstanding	8,998
1997 Stock Option Plan [Member] | Restricted Stock [Member]
Number of stocks outstanding	0
2007 Stock Plan [Member]
Number of options outstanding	319,011
Number of stocks outstanding	15,720
Maximum issuance of common stock	4,500,000
2015 Stock Option Plan [Member]
Number of options outstanding	62,000
Number of stocks outstanding	33,500
Maximum issuance of common stock	4,200,000
2001 Employee Stock Purchase Plan [Member] | Common Stock [Member]
Market value of common stock on the date of grant for incentive stock options	95.00%
Maximum earnings withheld by the employees	15.00%
Number of shares purchased under the plan	837	842
Cash received upon the issuance of common stock	$ 67,000	$ 58,000
Number of shares available for issuance	1,625,689
Minimum [Member]
Market value of common stock on the date of grant for incentive stock options	85.00%

XML

Stock Options And Employee Stock Purchase Plan (Stock Options) (Details)	3 Months Ended
	Mar. 31, 2017 USD ($) $ / shares shares
Number of Shares, Outstanding Beginning of Period | shares	413,858
Number of options granted | shares	0
Number of Shares, Exercised | shares	(23,847)
Number of Shares, Canceled | shares	0
Number of Shares, Outstanding Ending of Period | shares	390,011
Number of Shares, Exercisable | shares	334,411
Number of Shares, Vested and expected to vest | shares	378,897
Weighted-Average Exercise Price, Outstanding Beginning of Period | $ / shares	$ 31.09
Weighted-Average Exercise Price, Granted | $ / shares	0.00
Weighted-Average Exercise Price, Exercised | $ / shares	29.18
Weighted-Average Exercise Price, Canceled | $ / shares	0.00
Weighted-Average Exercise Price, Outstanding Ending of Period | $ / shares	31.20
Weighted-Average Exercise Price, Exercisable | $ / shares	25.93
Weighted-Average Exercise Price, Vested and expected to vest | $ / shares	$ 30.16
Weighted-Average Remaining Contractual Term, Outstanding (in years)	3 years 9 months 4 days
Weighted-Average Remaining Contractual Term, Exercisable (in years)	3 years 1 month 2 days
Weighted-Average Remaining Contractual Term, Vested and expected to vest (in years)	3 years 7 months 17 days
Aggregate Intrinsic Value, Outstanding | $	$ 20,556,234
Aggregate Intrinsic Value, Exercisable | $	19,388,798
Aggregate Intrinsic Value, Vested and expected to vest | $	$ 20,364,506

XML

Stock Options And Employee Stock Purchase Plan (Restricted Stock) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Compensation cost recognized	$ 3,614,000	$ 2,809,000
Allocated Share-based Compensation Expense	3,614,000	2,809,000
Restricted Stock And Restricted Stock Unit (RSU) [Member]
Compensation cost recognized	3,500,000	2,700,000
Allocated Share-based Compensation Expense	3,500,000	$ 2,700,000
Unrecognized compensation cost related to non-vested awards granted	$ 35,500,000		$ 37,900,000
Restricted Stock [Member]
Nonvested at January 1, 2017	705,015
Shares, Granted	15,270
Shares, Vested	(13,031)
Shares, Canceled	0
Nonvested at March 31, 2017	707,254
Weighted-Average Grant-Date Fair Value, Nonvested at January 1, 2017	$ 41.40
Weighted-Average Grant-Date Fair Value, Granted	82.69
Weighted-Average Grant-Date Fair Value, Vested	41.02
Weighted-Average Grant-Date Fair Value, Canceled	0.00
Weighted-Average Grant-Date Fair Value, Nonvested at March 31, 2017	$ 42.30
Weighted-average period to recognize compensation cost (in years)	3 years 1 month 10 days
Restricted Stock Units (RSUs) [Member]
Nonvested at January 1, 2017	51,950
Shares, Granted	7,100
Shares, Vested	(7,150)
Shares, Canceled	(2,680)
Nonvested at March 31, 2017	49,220
Share Based Compensation Equity Awards Other Than Options Expected To Vest Shares	35,901
Weighted-average period to recognize compensation cost (in years)	3 years 7 months 10 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms	2 years 15 days
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Expected To Vest Weighted Average Remaining Contractual Term	1 year 9 months 4 days
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Expected To Vest Intrinsic Value	$ 3,012,481
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Outstanding, Aggregate Intrinsic Value	$ 4,130,050

XML

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share Reconciliation [Abstract]
Net Income (Loss) Attributable to Parent	$ 25,820	$ 29,943
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic	309	412
Net earnings available to common shareholders	$ 25,511	$ 29,531
Weighted-average outstanding shares of common stock - basic	47,463,231	47,966,718
Dilutive effect of equity incentive plans	242,920	232,674
Incremental Common Shares Attributable to Dilutive Effect of Contingently Issuable Shares	1,059,880	38,706
Weighted-average outstanding shares of common stock - diluted	48,766,031	48,238,098
Basic	$ 0.54	$ 0.62
Diluted	$ 0.52	$ 0.61
Share options excluded from the computation of diluted earnings per share	0

XML

Segment and Geographic Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Total revenues	$ 254,669	$ 200,502
United States	534,103		$ 546,483
Total long-lived assets	534,103		546,483
UNITED STATES
Total revenues	185,762	137,639
United States	441,631		453,053
Total long-lived assets	441,631		453,053
CANADA
Total revenues	19,401	18,366
IRELAND
Total revenues	17,901	12,549
All Other Countries [Member]
Total revenues	31,605	$ 31,948
United States	92,472		93,430
Total long-lived assets	$ 92,472		$ 93,430

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Segment Information Reportable Segment Information (Reconciliation of Total Segment Operating Income to Consolidated Operating Income) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
Total revenues	$ 254,669	$ 200,502
Direct Costs By Segment	201,877	142,538
Income (loss) from operations	47,975	53,338
Global Operating Costs	4,823	4,672
Depreciation, Depletion and Amortization, Nonproduction	39,322	27,174
Business Cloud Services Segment [Member]
Segment Reporting Information [Line Items]
Total revenues	141,544	138,139
Direct Costs By Segment	85,244	87,862
Income (loss) from operations	56,300	50,277
Depreciation, Depletion and Amortization, Nonproduction	16,764	17,502
Business Cloud Services Segment [Member] | Cloud Connect [Member]
Segment Reporting Information [Line Items]
Total revenues	93,632	90,244
Income (loss) from operations	44,438	40,520
Depreciation, Depletion and Amortization, Nonproduction	5,883	5,570
Business Cloud Services Segment [Member] | Cloud Services [Member]
Segment Reporting Information [Line Items]
Total revenues	46,714	46,719
Income (loss) from operations	12,416	10,974
Depreciation, Depletion and Amortization, Nonproduction	9,534	10,318
Business Cloud Services Segment [Member] | Intellectual Property [Member]
Segment Reporting Information [Line Items]
Total revenues	1,198	1,176
Income (loss) from operations	(554)	(1,217)
Depreciation, Depletion and Amortization, Nonproduction	1,347	1,614
Digital Media Segment [Member]
Segment Reporting Information [Line Items]
Total revenues	113,131	62,409
Direct Costs By Segment	116,633	54,676
Income (loss) from operations	(3,502)	7,733
Depreciation, Depletion and Amortization, Nonproduction	22,558	9,672
Intersegment Elimination [Member]
Segment Reporting Information [Line Items]
Total revenues	(6)	(46)
Operating Segments [Member]
Segment Reporting Information [Line Items]
Income (loss) from operations	52,798	58,010
Depreciation, Depletion and Amortization, Nonproduction	$ 39,322	$ 27,174

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Segment Information Reportable Segment Information (Total Assets, Capital Expenditures, Depreciation And Amortization) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total assets	$ 2,102,552		$ 2,062,328
Property, Plant and Equipment, Additions	9,660	$ 4,321
Depreciation, Depletion and Amortization, Nonproduction	39,322	27,174
Business Cloud Services Segment [Member]
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total assets	971,639		911,327
Property, Plant and Equipment, Additions	1,456	1,121
Depreciation, Depletion and Amortization, Nonproduction	16,764	17,502
Digital Media Segment [Member]
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total assets	1,114,708		1,124,535
Property, Plant and Equipment, Additions	8,204	3,200
Depreciation, Depletion and Amortization, Nonproduction	22,558	9,672
Operating Segments [Member]
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total assets	2,086,347		2,035,862
Property, Plant and Equipment, Additions	9,660	4,321
Depreciation, Depletion and Amortization, Nonproduction	39,322	27,174
Corporate [Member]
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total assets	16,205		$ 26,466
Property, Plant and Equipment, Additions	0	0
Depreciation, Depletion and Amortization, Nonproduction	$ 0	$ 0

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Unrestricted Subsidiaries (Financial Position) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Dec. 31, 2015
Cash and cash equivalents	$ 187,409	$ 242,755	$ 123,950	$ 255,530
Accounts receivable	172,062		199,871
Prepaid expenses and other current assets	24,177		24,118
Total current assets	383,713		347,999
Property and equipment, net	69,714		68,094
Trade names, net	113,339		115,853
Patent and patent licenses, net	12,553		13,928
Customer Relationships, Net	204,920		208,155
Goodwill	1,138,700		1,122,810
Other purchased intangibles, net	166,388		173,755
Deferred tax assets, non-current	6,912		5,289
Other assets	6,313		6,445
Total assets	2,102,552		2,062,328
Accounts payable and accrued expenses	145,927		178,071
Income taxes payable	21,599		16,753
Deferred revenue, current	85,431		80,384
Total current liabilities	477,114		454,089
Net Income (Loss) Attributable to Parent	25,820	29,943
Deferred income taxes, non-current	39,752		40,357
Other long-term liabilities	2,987		3,475
Total liabilities	1,172,126		1,147,792
Commitments and contingencies	0		0
Common Stock, Value, Issued	475		474
Additional paid-in capital	312,468		308,329
Retained earnings (accumulated deficit)	668,550		660,382
Accumulated Other Comprehensive Income (Loss), Net of Tax	(51,067)		(54,649)
Stockholders' Equity Attributable to Parent	930,426		914,536
Total liabilities and stockholders’ equity	2,102,552		2,062,328
Unrestricted Subsidiaries [Member]
Cash and cash equivalents	46,633		17,931
Accounts receivable	133,488		158,730
Prepaid expenses and other current assets	14,464		13,494
Total current assets	194,585		190,155
Property and equipment, net	42,575		38,752
Trade names, net	67,005		69,093
Patent and patent licenses, net	11,964		13,303
Customer Relationships, Net	89,415		95,855
Goodwill	564,527		563,658
Other purchased intangibles, net	153,723		163,023
Deferred tax assets, non-current	47		482
Other assets	5,408		5,541
Total assets	1,129,249		1,139,862
Accounts payable and accrued expenses	128,877		163,130
Income taxes payable	5,099		4,353
Deferred revenue, current	17,476		13,773
Total current liabilities	151,452		181,256
Net Income (Loss) Attributable to Parent	(19,324)	$ 505
Notes Payable, Related Parties, Noncurrent	642,662		602,662
Deferred income taxes, non-current	11,075		11,816
Other long-term liabilities	1,065		1,454
Total liabilities	806,254		797,188
Additional paid-in capital	318,127		318,160
Retained earnings (accumulated deficit)	7,680		27,004
Accumulated Other Comprehensive Income (Loss), Net of Tax	(2,812)		(2,490)
Stockholders' Equity Attributable to Parent	322,995		342,674
Total liabilities and stockholders’ equity	$ 1,129,249		$ 1,139,862

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Unrestricted Subsidiaries (Results of Operations) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Total revenues	$ 254,669	$ 200,502
Cost of revenues	40,810	34,288
Gross profit	213,859	166,214
Selling and Marketing Expense	77,477	48,112
Research and Development Expense	11,752	8,988
General and Administrative Expense	76,655	55,776
Total operating expenses	165,884	112,876
Income (loss) from operations	47,975	53,338
Interest expense, net	12,410	10,233
Other expense, net	323	126
Income (loss) before income taxes	35,242	42,979
Income tax expense	9,422	13,036
Net Income (Loss) Attributable to Parent	25,820	29,943
Unrestricted Subsidiaries [Member]
Total revenues	113,131	62,457
Cost of revenues	11,712	5,311
Gross profit	101,419	57,146
Selling and Marketing Expense	55,327	26,461
Research and Development Expense	5,499	2,482
General and Administrative Expense	45,847	22,819
Total operating expenses	106,673	51,762
Income (loss) from operations	(5,254)	5,384
Interest expense, net	13,611	4,127
Other expense, net	(624)	172
Income (loss) before income taxes	(18,241)	1,085
Income tax expense	1,083	580
Net Income (Loss) Attributable to Parent	$ (19,324)	$ 505

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Accumulated Other Comprehensive Income Roll Forward (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) Roll Forward [Line Items]
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Net of Tax	$ 0
Other Comprehensive Income Loss Reclassification Adjustments Total Net of Tax	0
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	0		$ 0
Unrealized gain on available-for-sale investments, net of tax (benefit)	0
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax	3,582
Other Comprehensive Income Loss Arising During Period Total Net of Tax	3,582
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax	0
Foreign currency translation adjustment	3,582	$ 3,415
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance	(54,649)
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance	(51,067)
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	0	(2,361)
Other Comprehensive Income (Loss), Net of Tax	3,582	$ 1,054
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax	$ (51,067)		$ (54,649)

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Condensed Consolidating Financials Condensed Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
ASSETS
Cash and cash equivalents	$ 187,409	$ 123,950	$ 242,755	$ 255,530
Short-term investments	65	60
Accounts receivable, net of allowances of $8,137 and $7,988, respectively	172,062	199,871
Prepaid expenses and other current assets	24,177	24,118
Due from Affiliate, Current	0	0
Total current assets	383,713	347,999
Property and equipment, net	69,714	68,094
Trade names, net	113,339	115,853
Patent and patent licenses, net	12,553	13,928
Customer Relationships, Net	204,920	208,155
Goodwill	1,138,700	1,122,810
Other purchased intangibles, net	166,388	173,755
Investments in and Advances to Affiliates, Amount of Equity	0	0
Deferred tax assets, non-current	6,912	5,289
Other assets	6,313	6,445
Total assets	2,102,552	2,062,328
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	145,927	178,071
Income taxes payable	21,599	16,753
Deferred revenue, current	85,431	80,384
Line of credit	224,123	178,817
Other current liabilities	34	64
Due to Affiliate, Current	0	0
Total current liabilities	477,114	454,089
Long-term debt	604,273	601,746
Liability for uncertain tax positions	47,178	46,537
Deferred income taxes, non-current	39,752	40,357
Deferred revenue, non-current	822	1,588
Other long-term liabilities	2,987	3,475
Total liabilities	1,172,126	1,147,792
Commitments and contingencies	0	0
Common Stock, Value, Issued	475	474
Additional paid-in capital	312,468	308,329
Retained earnings (accumulated deficit)	668,550	660,382
Accumulated Other Comprehensive Income (Loss), Net of Tax	(51,067)	(54,649)
Stockholders' Equity Attributable to Parent	930,426	914,536
Total liabilities and stockholders’ equity	2,102,552	2,062,328
Series A Preferred Stock [Member]
LIABILITIES AND STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value	0	0
j2 Global, Inc. [Member]
ASSETS
Cash and cash equivalents	15,150	23,935	36,637	55,516
Short-term investments	0	0
Accounts receivable, net of allowances of $8,137 and $7,988, respectively	1	0
Prepaid expenses and other current assets	38,296	25,922
Due from Affiliate, Current	679,103	635,740
Total current assets	732,550	685,597
Property and equipment, net	0	0
Trade names, net	0	0
Patent and patent licenses, net	0	0
Customer Relationships, Net	0	0
Goodwill	0	0
Other purchased intangibles, net	0	0
Investments in and Advances to Affiliates, Amount of Equity	1,121,423	1,091,412
Deferred tax assets, non-current	0	1,346
Other assets	0	0
Total assets	1,853,973	1,778,355
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	6,697	4,545
Income taxes payable	0	0
Deferred revenue, current	0	0
Line of credit	224,123	178,817
Other current liabilities	0	0
Due to Affiliate, Current	303,492	296,658
Total current liabilities	534,312	480,020
Long-term debt	357,462	355,143
Liability for uncertain tax positions	0	0
Deferred income taxes, non-current	31,738	28,687
Deferred revenue, non-current	0	0
Other long-term liabilities	1,107	1,040
Total liabilities	924,619	864,890
Commitments and contingencies	0	0
Preferred stock, $0.01 par value	0	0
Common Stock, Value, Issued	475	474
Additional paid-in capital	468,359	464,220
Retained earnings (accumulated deficit)	460,520	448,771
Accumulated Other Comprehensive Income (Loss), Net of Tax	0	0
Stockholders' Equity Attributable to Parent	929,354	913,465
Total liabilities and stockholders’ equity	1,853,973	1,778,355
j2 Cloud Services, LLC [Member]
ASSETS
Cash and cash equivalents	34,395	22,949	4,536	9,975
Short-term investments	0	0
Accounts receivable, net of allowances of $8,137 and $7,988, respectively	10,143	11,464
Prepaid expenses and other current assets	1,766	2,266
Due from Affiliate, Current	299,743	281,078
Total current assets	346,047	317,757
Property and equipment, net	6,088	6,318
Trade names, net	10,439	10,097
Patent and patent licenses, net	565	601
Customer Relationships, Net	10,810	2,519
Goodwill	70,480	58,310
Other purchased intangibles, net	6,944	4,804
Investments in and Advances to Affiliates, Amount of Equity	751,821	730,153
Deferred tax assets, non-current	32,667	26,667
Other assets	422	443
Total assets	1,236,283	1,157,669
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	44,117	28,179
Income taxes payable	94,709	82,795
Deferred revenue, current	20,324	19,277
Line of credit	0	0
Other current liabilities	0	0
Due to Affiliate, Current	0	11
Total current liabilities	159,150	130,262
Long-term debt	246,811	246,604
Liability for uncertain tax positions	41,833	41,259
Deferred income taxes, non-current	0	0
Deferred revenue, non-current	822	1,588
Other long-term liabilities	559	505
Total liabilities	449,175	420,218
Commitments and contingencies	0	0
Preferred stock, $0.01 par value	0	0
Common Stock, Value, Issued	0	0
Additional paid-in capital	89,066	89,066
Retained earnings (accumulated deficit)	697,822	648,233
Accumulated Other Comprehensive Income (Loss), Net of Tax	220	152
Stockholders' Equity Attributable to Parent	787,108	737,451
Total liabilities and stockholders’ equity	1,236,283	1,157,669
Non-Guarantor Subsidiaries [Member]
ASSETS
Cash and cash equivalents	137,864	77,066	201,582	190,039
Short-term investments	65	60
Accounts receivable, net of allowances of $8,137 and $7,988, respectively	161,919	188,498
Prepaid expenses and other current assets	22,295	21,246
Due from Affiliate, Current	149,971	166,210
Total current assets	472,114	453,080
Property and equipment, net	63,626	61,776
Trade names, net	102,900	105,756
Patent and patent licenses, net	11,988	13,327
Customer Relationships, Net	194,110	205,636
Goodwill	1,068,220	1,064,500
Other purchased intangibles, net	159,444	168,951
Investments in and Advances to Affiliates, Amount of Equity	(1,073)	(1,071)
Deferred tax assets, non-current	1,752	2,171
Other assets	5,891	6,002
Total assets	2,078,972	2,080,128
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	133,294	170,754
Income taxes payable	0	0
Deferred revenue, current	65,107	61,107
Line of credit	0	0
Other current liabilities	34	64
Due to Affiliate, Current	752,214	720,317
Total current liabilities	950,649	952,242
Long-term debt	0	(1)
Liability for uncertain tax positions	5,345	5,278
Deferred income taxes, non-current	35,521	36,565
Deferred revenue, non-current	0	0
Other long-term liabilities	1,321	1,930
Total liabilities	992,836	996,014
Commitments and contingencies	0	0
Preferred stock, $0.01 par value	0	0
Common Stock, Value, Issued	0	0
Additional paid-in capital	424,399	424,399
Retained earnings (accumulated deficit)	713,024	714,516
Accumulated Other Comprehensive Income (Loss), Net of Tax	(51,287)	(54,801)
Stockholders' Equity Attributable to Parent	1,086,136	1,084,114
Total liabilities and stockholders’ equity	2,078,972	2,080,128
Consolidation, Eliminations [Member]
ASSETS
Cash and cash equivalents	0	0	$ 0	$ 0
Short-term investments	0	0
Accounts receivable, net of allowances of $8,137 and $7,988, respectively	(1)	(91)
Prepaid expenses and other current assets	(38,180)	(25,316)
Due from Affiliate, Current	(1,128,817)	(1,083,028)
Total current assets	(1,166,998)	(1,108,435)
Property and equipment, net	0	0
Trade names, net	0	0
Patent and patent licenses, net	0	0
Customer Relationships, Net	0	0
Goodwill	0	0
Other purchased intangibles, net	0	0
Investments in and Advances to Affiliates, Amount of Equity	(1,872,171)	(1,820,494)
Deferred tax assets, non-current	(27,507)	(24,895)
Other assets	0	0
Total assets	(3,066,676)	(2,953,824)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	(38,181)	(25,407)
Income taxes payable	(73,110)	(66,042)
Deferred revenue, current	0	0
Line of credit	0	0
Other current liabilities	0	0
Due to Affiliate, Current	(1,055,706)	(1,016,986)
Total current liabilities	(1,166,997)	(1,108,435)
Long-term debt	0	0
Liability for uncertain tax positions	0	0
Deferred income taxes, non-current	(27,507)	(24,895)
Deferred revenue, non-current	0	0
Other long-term liabilities	0	0
Total liabilities	(1,194,504)	(1,133,330)
Commitments and contingencies	0	0
Preferred stock, $0.01 par value	0	0
Common Stock, Value, Issued	0	0
Additional paid-in capital	(669,356)	(669,356)
Retained earnings (accumulated deficit)	(1,202,816)	(1,151,138)
Accumulated Other Comprehensive Income (Loss), Net of Tax	0	0
Stockholders' Equity Attributable to Parent	(1,872,172)	(1,820,494)
Total liabilities and stockholders’ equity	$ (3,066,676)	$ (2,953,824)

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Condensed Consolidating Financials Condensed Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Total revenues	$ 254,669	$ 200,502
Interest expense, net	12,410	10,233
Other expense, net	323	126
Income tax expense	9,422	13,036
Cost of revenues	40,810	34,288
Gross profit	213,859	166,214
Operating expenses:
Selling and Marketing Expense	77,477	48,112
Research and Development Expense	11,752	8,988
General and Administrative Expense	76,655	55,776
Total operating expenses	165,884	112,876
Income (loss) from operations	47,975	53,338
Income (Loss) from Subsidiaries, before Tax	0	0
Income (loss) before income taxes	35,242	42,979
Net Income (Loss) Attributable to Parent	25,820	29,943
j2 Global, Inc. [Member]
Total revenues	0	0
Interest expense, net	(5,309)	1,871
Other expense, net	0	91
Income tax expense	1,095	(2,254)
Cost of revenues	0	0
Gross profit	0	0
Operating expenses:
Selling and Marketing Expense	0	0
Research and Development Expense	0	0
General and Administrative Expense	4,824	4,672
Total operating expenses	4,824	4,672
Income (loss) from operations	(4,824)	(4,672)
Income (Loss) from Subsidiaries, before Tax	26,430	34,323
Income (loss) before income taxes	26,915	27,689
Net Income (Loss) Attributable to Parent	25,820	29,943
j2 Cloud Services, LLC [Member]
Total revenues	75,336	56,385
Interest expense, net	5,207	5,233
Other expense, net	(46)	(920)
Income tax expense	6,489	8,568
Cost of revenues	17,227	17,489
Gross profit	58,109	38,896
Operating expenses:
Selling and Marketing Expense	10,810	10,628
Research and Development Expense	2,950	3,289
General and Administrative Expense	4,771	5,471
Total operating expenses	18,531	19,388
Income (loss) from operations	39,578	19,508
Income (Loss) from Subsidiaries, before Tax	17,828	27,696
Income (loss) before income taxes	52,245	42,891
Net Income (Loss) Attributable to Parent	45,756	34,323
Non-Guarantor Subsidiaries [Member]
Total revenues	207,888	155,566
Interest expense, net	12,512	3,129
Other expense, net	369	955
Income tax expense	1,838	6,722
Cost of revenues	52,131	28,202
Gross profit	155,757	127,364
Operating expenses:
Selling and Marketing Expense	66,674	37,530
Research and Development Expense	8,802	5,699
General and Administrative Expense	67,060	45,633
Total operating expenses	142,536	88,862
Income (loss) from operations	13,221	38,502
Income (Loss) from Subsidiaries, before Tax	0	0
Income (loss) before income taxes	340	34,418
Net Income (Loss) Attributable to Parent	(1,498)	27,696
Consolidation, Eliminations [Member]
Total revenues	(28,555)	(11,449)
Interest expense, net	0	0
Other expense, net	0	0
Income tax expense	0	0
Cost of revenues	(28,548)	(11,403)
Gross profit	(7)	(46)
Operating expenses:
Selling and Marketing Expense	(7)	(46)
Research and Development Expense	0	0
General and Administrative Expense	0	0
Total operating expenses	(7)	(46)
Income (loss) from operations	0	0
Income (Loss) from Subsidiaries, before Tax	(44,258)	(62,019)
Income (loss) before income taxes	(44,258)	(62,019)
Net Income (Loss) Attributable to Parent	$ (44,258)	$ (62,019)

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Condensed Consolidating Financials Condensed Comprehensive Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Other Comprehensive Income (Loss), Net of Tax	$ 3,582	$ 1,054
Net Income (Loss) Attributable to Parent	25,820	29,943
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	29,402	30,997
Total revenues	254,669	200,502
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	3,582	3,415
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	0	(2,361)
j2 Global, Inc. [Member]
Other Comprehensive Income (Loss), Net of Tax	0	(2,361)
Net Income (Loss) Attributable to Parent	25,820	29,943
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	25,820	27,582
Total revenues	0	0
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	0	0
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	0	(2,361)
j2 Cloud Services, LLC [Member]
Other Comprehensive Income (Loss), Net of Tax	0	0
Net Income (Loss) Attributable to Parent	45,756	34,323
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	45,756	34,323
Total revenues	75,336	56,385
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	0	0
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	0	0
Non-Guarantor Subsidiaries [Member]
Other Comprehensive Income (Loss), Net of Tax	3,582	3,415
Net Income (Loss) Attributable to Parent	(1,498)	27,696
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	2,084	31,111
Total revenues	207,888	155,566
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	3,582	3,415
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	0	0
Consolidation, Eliminations [Member]
Other Comprehensive Income (Loss), Net of Tax	0	0
Net Income (Loss) Attributable to Parent	(44,258)	(62,019)
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	(44,258)	(62,019)
Total revenues	(28,555)	(11,449)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	0	0
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	$ 0	$ 0

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Condensed Consolidating Financials Condensed Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Dec. 31, 2015
Net Income (Loss) Attributable to Parent	$ 25,820	$ 29,943
Depreciation and amortization	39,323	27,174
Accretion (Amortization) of Discounts and Premiums, Investments	0	331
Amortization of financing costs and discounts	2,853	2,370
Share-based Compensation	3,614	2,809
Excess Tax Benefit from Share-based Compensation, Operating Activities	0	(264)
Provision for doubtful accounts	2,640	2,825
Deferred income taxes	(2,361)	(3,101)
(Gain) loss on sale of available-for-sale investments	0	(182)
Decrease (increase) in:
Increase (Decrease) in Accounts Receivable	25,110	15,773
Increase (Decrease) in Prepaid Expense and Other Assets	(291)	370
Increase (Decrease) in Other Operating Assets	162	(715)
(Decrease) increase in:
Accounts payable and accrued expenses	(53,166)	(23,797)
Income taxes payable	4,795	6,360
Deferred revenue	2,384	1,250
Liability for uncertain tax positions	573	1,742
Other	(265)	1,272
Net Cash Provided by (Used in) Operating Activities	51,191	64,524
Cash flows from investing activities:
Sales of available-for-sale investments	0	26,224
Payments to Acquire Available-for-sale Securities	0	(21,402)
Payments to Acquire Property, Plant, and Equipment	(9,660)	(4,321)
Payments to Acquire Businesses, Net of Cash Acquired	(3,563)	(47,989)
Payments to Acquire Intangible Assets	(142)	(316)
Net Cash Provided by (Used in) Investing Activities	(13,370)	(47,804)
Cash flows from financing activities:
Proceeds from Lines of Credit	44,981	0
Payments for Repurchase of Common Stock	(314)	(1,786)
Issuance of common stock under employee stock purchase plan	67	58
Exercise of stock options	695	1,312
Payments of Dividends	(17,575)	(15,817)
Excess tax benefits from share-based compensation	0	264
Deferred payments for acquisitions	(2,299)	(14,386)
Proceeds from (Payments for) Other Financing Activities	(26)	(25)
Intercompany	0	0
Net Cash Provided by (Used in) Financing Activities	25,529	(30,380)
Effect of exchange rate changes on cash and cash equivalents	109	885
Cash and Cash Equivalents, Period Increase (Decrease)	63,459	(12,775)
Cash and cash equivalents	187,409	242,755	$ 123,950	$ 255,530
Payments to Acquire Other Investments	(5)	0
j2 Global, Inc. [Member]
Net Income (Loss) Attributable to Parent	25,820	29,943
(Decrease) increase in:
Net Cash Provided by (Used in) Operating Activities	(71,295)	5,686
Cash flows from investing activities:
Sales of available-for-sale investments		26,224
Payments to Acquire Available-for-sale Securities		(21,402)
Payments to Acquire Property, Plant, and Equipment	0	0
Payments to Acquire Businesses, Net of Cash Acquired	0	0
Payments to Acquire Intangible Assets	0	0
Net Cash Provided by (Used in) Investing Activities	0	4,822
Cash flows from financing activities:
Proceeds from Lines of Credit	44,981
Payments for Repurchase of Common Stock	(314)	(1,786)
Issuance of common stock under employee stock purchase plan	67	58
Exercise of stock options	695	1,312
Payments of Dividends	(17,575)	(15,817)
Excess tax benefits from share-based compensation		264
Deferred payments for acquisitions	0	0
Proceeds from (Payments for) Other Financing Activities	0	0
Intercompany	34,656	(13,327)
Net Cash Provided by (Used in) Financing Activities	62,510	(29,296)
Effect of exchange rate changes on cash and cash equivalents	0	(91)
Cash and Cash Equivalents, Period Increase (Decrease)	(8,785)	(18,879)
Cash and cash equivalents	15,150	36,637	23,935	55,516
Payments to Acquire Other Investments	0
j2 Cloud Services, LLC [Member]
Net Income (Loss) Attributable to Parent	45,756	34,323
(Decrease) increase in:
Net Cash Provided by (Used in) Operating Activities	20,798	(450)
Cash flows from investing activities:
Sales of available-for-sale investments		0
Payments to Acquire Available-for-sale Securities		0
Payments to Acquire Property, Plant, and Equipment	(479)	(284)
Payments to Acquire Businesses, Net of Cash Acquired	2	0
Payments to Acquire Intangible Assets	(2)	0
Net Cash Provided by (Used in) Investing Activities	(479)	(284)
Cash flows from financing activities:
Proceeds from Lines of Credit	0
Payments for Repurchase of Common Stock	0	0
Issuance of common stock under employee stock purchase plan	0	0
Exercise of stock options	0	0
Payments of Dividends	0	0
Excess tax benefits from share-based compensation		0
Deferred payments for acquisitions	(1,035)	(528)
Proceeds from (Payments for) Other Financing Activities	0	0
Intercompany	(7,906)	(4,147)
Net Cash Provided by (Used in) Financing Activities	(8,941)	(4,675)
Effect of exchange rate changes on cash and cash equivalents	68	(30)
Cash and Cash Equivalents, Period Increase (Decrease)	11,446	(5,439)
Cash and cash equivalents	34,395	4,536	22,949	9,975
Payments to Acquire Other Investments	0
Non-Guarantor Subsidiaries [Member]
Net Income (Loss) Attributable to Parent	(1,498)	27,696
(Decrease) increase in:
Net Cash Provided by (Used in) Operating Activities	101,688	59,288
Cash flows from investing activities:
Sales of available-for-sale investments		0
Payments to Acquire Available-for-sale Securities		0
Payments to Acquire Property, Plant, and Equipment	(9,181)	(4,037)
Payments to Acquire Businesses, Net of Cash Acquired	(3,565)	(47,989)
Payments to Acquire Intangible Assets	(140)	(316)
Net Cash Provided by (Used in) Investing Activities	(12,891)	(52,342)
Cash flows from financing activities:
Proceeds from Lines of Credit	0
Payments for Repurchase of Common Stock	0	0
Issuance of common stock under employee stock purchase plan	0	0
Exercise of stock options	0	0
Payments of Dividends	0	0
Excess tax benefits from share-based compensation		0
Deferred payments for acquisitions	(1,264)	(13,858)
Proceeds from (Payments for) Other Financing Activities	(26)	(25)
Intercompany	(26,750)	17,474
Net Cash Provided by (Used in) Financing Activities	(28,040)	3,591
Effect of exchange rate changes on cash and cash equivalents	41	1,006
Cash and Cash Equivalents, Period Increase (Decrease)	60,798	11,543
Cash and cash equivalents	137,864	201,582	77,066	190,039
Payments to Acquire Other Investments	(5)
Consolidation, Eliminations [Member]
Net Income (Loss) Attributable to Parent	(44,258)	(62,019)
(Decrease) increase in:
Net Cash Provided by (Used in) Operating Activities	0	0
Cash flows from investing activities:
Sales of available-for-sale investments		0
Payments to Acquire Available-for-sale Securities		0
Payments to Acquire Property, Plant, and Equipment	0	0
Payments to Acquire Businesses, Net of Cash Acquired	0	0
Payments to Acquire Intangible Assets	0	0
Net Cash Provided by (Used in) Investing Activities	0	0
Cash flows from financing activities:
Proceeds from Lines of Credit	0
Payments for Repurchase of Common Stock	0	0
Issuance of common stock under employee stock purchase plan	0	0
Exercise of stock options	0	0
Payments of Dividends	0	0
Excess tax benefits from share-based compensation		0
Deferred payments for acquisitions	0	0
Proceeds from (Payments for) Other Financing Activities	0	0
Intercompany	0	0
Net Cash Provided by (Used in) Financing Activities	0	0
Effect of exchange rate changes on cash and cash equivalents	0	0
Cash and Cash Equivalents, Period Increase (Decrease)	0	0
Cash and cash equivalents	0	$ 0	$ 0	$ 0
Payments to Acquire Other Investments	$ 0

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Subsequent Events (Details) - $ / shares	May 04, 2017	Feb. 09, 2017	Nov. 01, 2016	Aug. 02, 2016	May 05, 2016	Feb. 10, 2016
Subsequent Event [Line Items]
Dividends declared date		Feb. 09, 2017	Nov. 01, 2016	Aug. 02, 2016	May 05, 2016	Feb. 10, 2016
Dividend amount to be paid, per common share		$ 0.3650	$ 0.3550	$ 0.3450	$ 0.3350	$ 0.3250
Date dividend is payable		Mar. 09, 2017	Dec. 05, 2016	Sep. 01, 2016	Jun. 02, 2016	Mar. 10, 2016
Date shareholders must be on record for dividend		Feb. 22, 2016	Nov. 18, 2016	Aug. 17, 2016	May 18, 2016	Feb. 23, 2016
Subsequent Event [Member] | Dividend Declared [Member]
Subsequent Event [Line Items]
Dividends declared date	May 04, 2017
Dividend amount to be paid, per common share	$ 0.3750
Date dividend is payable	Jun. 02, 2017
Date shareholders must be on record for dividend	May 19, 2017