j2 Global Reports Q4 and Year End 2012 Results and Provides 2013 Outlook

  j2 Global Reports Q4 and Year End 2012 Results and Provides 2013 Outlook

  Achieves Record Annual Revenues ($371.4M; 12.5% YoY Increase), EPS ($2.61;
   7.4% YoY Increase), EBITDA ($196.0M; 16.1% YoY Increase), Free Cash Flow
       ($166.0M; 5.4% YoY Increase) and Cancel Rate (2.3% Annual Rate)

 Estimates 2013 Revenues to Increase More Than 34% to Between $500 and $525M

          Quarterly Dividend Increased by 3.3% to $0.2325 Per Share

                       Extends Share Repurchase Program

Business Wire

LOS ANGELES -- February 13, 2013

j2 Global, Inc. (NASDAQGS:JCOM) today reported financial results for the
fourth quarter and year ended December 31, 2012, provided fiscal 2013
financial estimates and announced that its Board of Directors has declared an
increased quarterly cash dividend of $0.2325 per share.

FOURTH QUARTER 2012 RESULTS

Quarterly revenues increased 19.9% to a record $102 million compared to $85.1
million for Q4 2011.

Earnings per diluted share for the quarter increased 4.8% to $0.65 compared to
$0.62 for Q4 2011. Non-GAAP earnings per diluted share^(1)(2) increased 9.4%
to $0.70 compared to $0.64 for Q4 2011.

Quarterly EBITDA^(3) increased 13.4% to a record $52.3 million compared to
$46.1 million for Q4 2011.

Q4 2012 free cash flow^(4) increased 12.7% to $45.2 million compared to $40.1
million for Q4 2011.

Cancel rate^(5)for the quarter continued to decline to an all-time record of
2.2%.

j2 ended the quarter with $344 million in cash and investments after deploying
$173.4 million during the quarter for the acquisition of Ziff Davis, Inc. and
j2's regular quarterly dividend.

Key financial results for fourth quarter 2012 versus fourth quarter 2011 are
set forth in the following table (in millions, except per
share).Reconciliations of non-GAAP earnings per diluted share, EBITDA and
free cash flow to their nearest comparable GAAP financial measures are
attached to this Press Release.

                                                                    
                             Q4 2012         Q4 2011         % Change 
Revenues                      $102 million    $85.1 million   19.9     %
Earnings per Diluted          $      0.65     $     0.62      4.8      %
Share^(1)
Non-GAAP Earnings per         $      0.70     $     0.64      9.4      %
Diluted Share^(1) (2)
EBITDA^(3)                    $52.3 million   $46.1 million   13.4     %
Free Cash Flow^(4)            $45.2 million   $40.1 million   12.7     %
                                                               

FULL YEAR 2012 RESULTS

Annual revenues increased 12.5% to a record $371.4 million compared to $330.2
million for 2011.

Earnings per diluted share for the year increased 7.4% to a record $2.61
compared to $2.43 for 2011. 2012 Non-GAAP earnings per diluted share^(6)(7)
increased 6.3% to a record $2.69 compared to $2.53 for 2011.

Annual EBITDA^(3) increased 16.1% to a record $196.0 million compared to
$168.8 million for 2011.

Free cash flow^(4) for the year increased 5.4% to a record $166.0 million
compared to $157.5 million for 2011.

Annual cancel rate^(5) was an all-time record low of 2.3%.

Key annual financial results for 2012 versus 2011 are set forth in the
following table (in millions, except per share).Reconciliations of non-GAAP
net income per diluted share, EBITDA and free cash flow to their nearest
comparable GAAP financial measures are attached to this Press Release.

                                                                
                               2012             2011            % Change
Revenues                        $371.4 million   $330.2 million   12.5 %
Earnings per Diluted            $     2.61       $     2.43       7.4  %
Share^(6)
Non-GAAP Earnings per Diluted   $     2.69       $     2.53       6.3  %
Share^(6) (7)
EBITDA^(3)                      $196.0 million   $168.8 million   16.1 %
Free Cash Flow^(4)              $166.0 million   $157.5 million   5.4  %
                                                                   

“I am proud of our accomplishments during 2012 and enthusiastic about the
prospects for our business going forward,” said Hemi Zucker, CEO of j2 Global.
“We grew our cloud services business by more than 9% and decreased our cancel
rate to the lowest in the Company’s history, underscoring the value we deliver
to our customers. We continue to pursue larger acquisitions for our cloud
business. During 2012 we also established our digital media business with the
acquisition of Ziff Davis and in 2013 have grown that business with our
purchase of IGN, positioning us for additional acquisitions in the digital
media space as well.”

BUSINESS OUTLOOK

For fiscal 2013, the Company estimates that it will achieve revenues between
$500 and $525 million and non-GAAP earnings per diluted share of between $2.65
and $2.85.

Non-GAAP earnings per diluted share for 2013 excludes acquisition-related
integration costs of approximately $4 million, share-based compensation of
between $11 and $12 million and the impact of any currently unanticipated
items.

It is anticipated that the normalized tax rate for 2013 (exclusive of the
release of reserves for uncertain tax positions) will be between 25% and 27%.

DIVIDEND

j2’s Board of Directors has approved a quarterly cash dividend of $0.2325 per
common share, a 3.3% increase versus last quarter's dividend and a 10.7%
increase versus the dividend paid in Q1 2012. This is j2’s sixth consecutive
quarterly dividend increase and represents a 16.25% increase versus its first
quarterly dividend in September, 2011. The dividend will be paid on March 4,
2013 to all shareholders of record as of the close of business on February 25,
2013. Future dividends will be subject to Board approval.

EXTENSION OF SHARE REPURCHASE PROGRAM

The Company has extended its one-year five million share repurchase program
set to expire February 20, 2013 by an additional year. Approximately 2.9
million shares remain available for purchase under the program.

Notes:

      The estimated GAAP effective tax rate was approximately 19.6% for Q4
(1)  2012 and 24.3% for Q4 2011. The estimated Non-GAAP effective tax rate
      was approximately 19.8% for Q4 2012 and 24.7% for Q4 2011.
      
      For Q4 2012, Non-GAAP earnings per diluted share excludes share-based
      compensation and related payroll taxes and certain acquisition-related
      integration costs, in each case net of tax, totaling $0.05. For Q4 2011,
      Non-GAAP earnings per diluted share excludes share-based compensation
(2)   and related payroll taxes, certain acquisition-related integration costs
      and gain on sale of auction rate securities, in each case net of tax,
      totaling $0.02. Non-GAAP earnings per diluted share amounts are not
      meant as a substitute for GAAP, but are solely for informational
      purposes.
      
      EBITDA is defined as net income plus fixed charges, income taxes,
      depreciation and amortization, share-based compensation, foreign
      currency gains and losses and certain acquisition-related integration
(3)   costs. EBITDA for Q4 and fiscal 2012 under the Indenture Agreement
      relating to the Company’s outstanding bonds excludes $4.1 million from
      Unrestricted Subsidiaries. EBITDA amounts are not meant as a substitute
      for GAAP, but are solely for informational purposes.
      
      Free cash flow is defined as net cash provided by operating activities,
(4)   less purchases of property, plant and equipment, plus excess tax benefit
      from share-based compensation. Free cash flow amounts are not meant as a
      substitute for GAAP, but are solely for informational purposes.
      
      Cancel rate is defined as cancels related to individual customer DIDs
      with greater than 4 months of continuous service (continuous service
      includes customer DIDs administratively cancelled and reactivated within
(5)   the same calendar month), and DIDs related to enterprise customers
      beginning with their first day of service. For the quarter, calculated
      monthly and expressed here as an average over the three months of the
      quarter. For the year, expressed as an average over the four quarters of
      the year.
      
      The GAAP effective tax rate was approximately 21.5% for 2012 and 16.3%
(6)   for 2011. The Non-GAAP effective tax rate was approximately 23.8% for
      2012 and 25% for 2011.
      
      For 2012, Non-GAAP earnings per diluted share excludes share-based
      compensation and related payroll taxes, domestic production activities
      tax deduction from prior years, certain acquisition-related integration
      costs, and gain on sale of investments, in each case net of tax,
      totaling $0.08. For 2011, Non-GAAP earnings per diluted share excludes a
      change in estimate regarding its remaining service obligations to its
(7)   annual eFax® subscribers, share-based compensation and related payroll
      taxes, certain acquisition-related integration costs, the sale of a
      trade name, the reversal of uncertain income tax positions due to
      expired statutes of limitations and gain on sale of auction rate
      securities, in each case net of tax, totaling $0.10. Non-GAAP earnings
      per diluted share amounts are not meant as a substitute for GAAP, but
      are solely for informational purposes.
      

About j2 Global

j2 Global (JCOM) provides Internet services through its two divisions:
Business Cloud Services and Digital Media. The Business Cloud Services
Division offers Internet fax, virtual phone, hosted email, email marketing,
online backup, unified communications and CRM solutions. It markets its
services principally under the brand names eFax®, eVoice®, FuseMail®,
Campaigner®, KeepItSafe® and Onebox® and operates a messaging network spanning
49 countries on six continents. The Digital Media Division consists of Ziff
Davis Inc., which offers technology, gaming and lifestyle content through its
digital properties which include PCMag.com, IGN.com, AskMen.com, Toolbox.com
and others. Ziff Davis properties reach over 53 million global unique visitors
per month. Ziff Davis also operates BuyerBase, an advanced digital ad
targeting platform and Ziff Davis B2B, a leading provider of research to
enterprise buyers and leads to IT vendors. As of December 31, 2012, j2 Global
had achieved 17 consecutive fiscal years of revenue growth. For more
information about j2 Global, please visit www.j2global.com.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of
1995: Certain statements in this Press Release are “forward-looking
statements” within the meaning of The Private Securities Litigation Reform Act
of 1995, particularly those contained in Hemi Zucker’s quote and the “Business
Outlook” portion regarding the Company's expected fiscal 2013 financial
performance. These forward-looking statements are based on management's
current expectations or beliefs and are subject to numerous assumptions, risks
and uncertainties that could cause actual results to differ materially from
those described in the forward-looking statements. These factors and
uncertainties include, among other items: ability to identify and close large
acquisitions in the cloud business space and additional acquisitions in the
digital media space, subscriber growth and retention; variability of revenue
based on changing conditions in particular industries and the economy
generally; protection of the Company's proprietary technology or infringement
by the Company of intellectual property of others; the risk of adverse changes
in the U.S. or international regulatory environments surrounding messaging and
communications, including but not limited to the imposition or increase of
taxes or regulatory-related fees; and the numerous other factors set forth in
j2 Global's filings with the Securities and Exchange Commission (“SEC”). For a
more detailed description of the risk factors and uncertainties affecting j2
Global, refer to the 2011 Annual Report on Form 10-K filed by j2 Global on
February 28, 2012, and the other reports filed by j2 Global from time-to-time
with the SEC, each of which is available at www.sec.gov. The forward-looking
statements provided in this press release and particularly those contained in
Hemi Zucker’s quote and the “Business Outlook” portion regarding the Company's
expected fiscal 2013 financial performance are based on limited information
available to the Company at this time, which is subject to change. Although
management's expectations may change after the date of this press release, the
Company undertakes no obligation to revise or update these statements.



j2 GLOBAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
                                                             
                                                                  
                                                 DECEMBER 31,     DECEMBER 31,
                                                 2012             2011
                                                                  
ASSETS
Cash and cash equivalents                        $  218,680       $ 139,359
Short-term investments                              105,054         38,513
Accounts receivable, net of allowances of           37,285          19,071
$3,213 and $3,404, respectively
Prepaid expenses and other current assets           15,388          14,311
Deferred income taxes                              1,092         1,643    
Total current assets                                377,499         212,897
                                                                  
Long-term investments                               19,841          43,077
Property and equipment, net                         19,599          14,438
Goodwill                                            407,825         279,016
Other purchased intangibles, net                    165,316         98,067
Deferred income taxes                               1,852           3,160
Other assets                                       3,238         516      
                                                                  
TOTAL ASSETS                                     $  995,170      $ 651,171  
                                                                  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses            $  39,874        $ 24,070
Income taxes payable                                3,037           1,510
Deferred revenue                                    30,493          26,695
Liability for uncertain tax positions              5,523         5,523    
Total current liabilities                           78,927          57,798
                                                                  
Long-term debt                                      245,194         —
Liability for uncertain tax positions               32,155          24,554
Deferred income taxes                               32,393          12,102
Mandatorily redeemable financial instrument         8,740           —
Other long-term liabilities                        3,166         2,342    
Total liabilities                                   400,575         96,796
                                                                  
Commitments and contingencies                       —               —
                                                                  
Stockholders' Equity:
Preferred stock                                     —               —
Common stock                                        451             554
Additional paid-in capital                          169,592         197,374
Treasury stock                                      —               (112,671 )
Retained earnings                                   424,740         472,595
Accumulated other comprehensive loss               (88     )      (3,477   )
Total j2 Global, Inc. stockholder's equity          594,695         554,375
Noncontrolling interest                            (100    )      —        
Total stockholders' equity                         594,595       554,375  
                                                                  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $  995,170      $ 651,171  
                                                                             
                                                                             

                                                 
                                                   
j2 GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                                                
                                                                      
                   THREE MONTHS ENDED DECEMBER       TWELVE MONTHS ENDED DECEMBER
                   31,                               31,
                   2012             2011             2012             2011
                                                                      
Revenues             102,033          85,072           371,396          330,159
                                                                      
Cost of
revenues
(including
share-based
compensation
of $211 and
$844 for the
three and
twelve months       18,659         14,661          67,013         60,613
of 2012,
respectively,
and $246 and
$982 for the
three and
twelve months
of 2011,
respectively)
Gross profit        83,374         70,411          304,383        269,546
                                                                      
Operating
expenses:
                                                                        
Sales and
marketing
(including
share-based
compensation
of $426 and
$1,543 for the
three and
twelve months        18,915           14,137           62,825           59,066
of 2012,
respectively,
and $382 and
$1,431 for the
three and
twelve months
of 2011,
respectively)
                                                                        
Research,
development
and
engineering
(including
share-based
compensation
of $115 and
$459 for the
three and            4,826            3,659            18,624           16,373
twelve months
of 2012,
respectively,
and $110 and
$477 for the
three and
twelve months
of 2011,
respectively)
                                                                        
General and
administrative
(including
share-based
compensation
of $1,529 and
$6,286 for the
three and
twelve months        17,385           14,120           60,772           58,157
of 2012,
respectively,
and $1,571 and
$6,103 for the
three and
twelve months
of 2011,
respectively)
                                                                   
Total
operating           41,126         31,916          142,221        133,596
expenses
                                                                      
Income from          42,248           38,495           162,162          135,950
operations
Interest and
other income        (4,583     )    904             (7,240     )    1,166
(expense), net
Income before        37,665           39,399           154,922          137,116
income taxes
Provision for       7,379          9,580           33,259         22,350
income taxes
Net income           30,286           29,819           121,663          114,766
Less net
income
attributable        83             —               83             —
to
noncontrolling
interest
Net income
attributable
to j2 Global,      $ 30,203        $ 29,819         $ 121,580       $ 114,766
Inc. common
stockholders
                                                                      
Basic net
income per
common share:
Net income
attributable
to j2 Global,      $ 0.66          $ 0.63           $ 2.63          $ 2.46
Inc. common
stockholders
                                                                      
Diluted net
income per
common share:
Net income
attributable
to j2 Global,      $ 0.65          $ 0.62           $ 2.61          $ 2.43
Inc. common
stockholders
                                                                      
                                                                      
Basic weighted
average shares      45,071,204     46,692,364      45,459,712     45,799,615
outstanding
                                                                      
Diluted
weighted            45,423,502     46,989,376      45,781,658     46,384,848
average shares
outstanding
                                                                        
                                                                        

                                                              
                                                                   
j2 GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(UNAUDITED, IN THOUSANDS)
                                                                   
                                                                   
                                              TWELVE MONTHS ENDED DECEMBER 31,
                                              2012                 2011
                                                                   
Cash flows from operating activities:
Net income                                    $  121,663           $ 114,766
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization                    22,164              19,756
Accretion and amortization of discount           1,603               941
and premium of investments
Amortization of financing costs and              249                 —
discounts
Share-based compensation                         9,083               8,968
Excess tax benefit from share-based              (961      )         (13,561 )
compensation
Provision for doubtful accounts                  4,289               6,900
Deferred income taxes                            1,150               6,822
Gain on sale of available-for-sale               (266      )         (552    )
investment
Decrease (increase) in:
Accounts receivable                              (5,417    )         (9,509  )
Prepaid expenses and other current assets        (2,028    )         4,261
Other assets                                     (189      )         321
(Decrease) increase in:
Accounts payable and accrued expenses            5,138               847
Income taxes payable                             4,188               9,679
Deferred revenue                                 1,612               8,664
Liability for uncertain tax positions            7,601               (7,786  )
Other liabilities                               32                231     
Net cash provided by operating activities       169,911           150,748 
                                                                   
Cash flows from investing activities:
Maturity of certificate of deposit               8,000               —
Purchase of certificates of deposit              (34,673   )         (8,000  )
Sales of available-for-sale investments          138,709             29,777
Purchases of available-for-sale                  (151,989  )         (82,879 )
investments
Purchases of property and equipment              (4,905    )         (6,840  )
Purchases of intangible assets                   (6,295    )         (4,312  )
Acquisition of businesses, net of cash          (198,341  )        (3,926  )
received
Net cash used in investing activities           (249,494  )        (76,180 )
                                                                   
Cash flows from financing activities:
Issuance of long-term debt                       245,000             —
Debt issuance costs                              (1,384    )         —
Repurchases of common stock and                  (60,282   )         (1,281  )
restricted stock
Issuance of common stock under employee          157                 142
stock purchase plan
Exercise of stock options                        5,646               7,090
Excess tax benefit from share-based              961                 13,561
compensation
Mandatorily redeemable financial                 8,557               —
instrument
Dividends paid                                  (40,263   )        (19,174 )
Net cash provided by financing activities       158,392           338     
                                                                   
Effect of exchange rate changes on cash         512               (299    )
and cash equivalents
                                                                   
Net increase in cash and cash equivalents        79,321              74,607
Cash and cash equivalents at beginning of       139,359           64,752  
period
Cash and cash equivalents at end of           $  218,680          $ 139,359 
period
                                                                             
                                                                             

                                                                        
                                                                        
j2 GLOBAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
THREE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                                                                                                     
                                                                                                                                 
Non-GAAP net income are GAAP net income with the following modifications: (1) elimination of share-based compensation expense and the
associated payroll taxes; (2) elimination of certain acquisition and related exit costs; (3) elimination of gain on sale of certain
investments and (4) elimination of income tax provision associated with share-based compensation and associated payroll taxes, certain
acquisition and related exit costs and gain on sale of certain investment.
                                                                                                                                 
                                                                                                                                 
                                                                                                                                 
                   THREE MONTHS ENDED DECEMBER 31, 2012                     THREE MONTHS ENDED DECEMBER 31, 2011
                                                                                                                                 
                                               (2)                                                    (2)           (3)
                                (1)            Acquisition                             (1)            Acquisition   Gain on
                                Share-based    and Exit                                Share-based    and Exit      Sale of
                   GAAP         Compensation   Costs         Non-GAAP       GAAP       Compensation   Costs         Investment   Non-GAAP
                                                                                                                                 
Cost of              18,659     (211     )     —               18,448         14,661   (246     )     167           —              14,582
revenues
                                                                                                                                 
Operating
expenses:
Sales and            18,915     (426     )     —               18,489         14,137   (382     )     —             —              13,755
marketing
Research,
development          4,826      (115     )     —               4,711          3,659    (110     )     379           —              3,928
and
engineering
General and          17,385     (1,535   )     (585    )       15,265         14,120   (1,572   )     —             —              12,548
administrative
                                                                                                                                 
Interest and
other income         (4,583 )   —              —               (4,583 )       904      —              —             (554    )      350
(expense)
                                                                                                                                 
Income tax
provision ^        $ 7,379      548            115           $ 8,042        $ 9,580    717            (133    )     (122    )      10,042
(4)
                                                                                                                                 
Net income
attributable
to j2 Global,
Inc.
common             $ 30,203     1,739          470           $ 32,412       $ 29,819   1,593          (413    )     (432    )    $ 30,567
stockholders
                                                                                                                                 
Net income per
share
attributable
to j2 Global,
Inc. common
stockholders*:
Basic              $ 0.66       0.04           0.01          $ 0.71         $ 0.63     0.03           (0.01   )     (0.01   )    $ 0.64
Diluted            $ 0.65       0.04           0.01          $ 0.70         $ 0.62     0.03           (0.01   )     (0.01   )    $ 0.64
                                                                                                                                 
                                                                                                                                 
                                                                                                                                 
* The reconciliation of Net income per share from GAAP to Non-GAAP may not foot since each is calculated independently.
                                                                        
The Company discloses non-GAAP Earnings Per Share (EPS) as supplemental non-GAAP financial performance measure, as it believes it is
useful metric by which to compare the performance of its business from period to period. The Company also understands that this non-GAAP
measure is broadly used by analysts, rating agencies and investors in assessing the Company's performance. Accordingly, the Company
believes that the presentation of this non-GAAP financial measure provides useful information to investors.
                                                                        
Non-GAAP EPS is not in accordance with, or an alternative to, Net income per share and may be different from non-GAAP measures with
similar or even identical names used by other companies. In addition, this non-GAAP measure is not based on any comprehensive set of
accounting rules or principles. This non-GAAP measure has limitations in that they do not reflect all of the amounts associated with the
Company's results of operations determined in accordance with GAAP.
                                                                                                                                 
                                                                                                                                 



j2 GLOBAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                                                                                                                                                                 
                                                                                                                                                                                                  
Non-GAAP net income are GAAP net income with the following modifications: (1) elimination of the impact to revenues resulting from a change in estimate of deferred revenue; (2) elimination of share-based
compensation expense and the associated payroll taxes; (3) elimination of certain acquisition and related exit costs; (4) elimination of gain on sale of certain investment; (5) elimination of additional
income tax benefit from prior years; (6) elimination of a change to our liability of uncertain tax position due to expiration of statues of limitations; (7) elimination of taxes related to trade name
sale and (8) elimination of income tax provision associated with the change in estimate of deferred revenue, share-based compensation and associated payroll taxes, certain acquisition and related exit
costs and gain on sale of certain investment.
                                                                                                                                                                                                  
                                                                                                                                                                                                  
                                                                                                                                                                                                  
                    TWELVE MONTHS ENDED DECEMBER 31, 2012                                                TWELVE MONTHS ENDED DECEMBER 31, 2011
                                                                            (5)                                      (1)
                                                 (3)           (4)          Additional                               Change in                  (3)           (4)          (6)         (7)
                                  (2)            Acquisition   Gain on      Income Tax                               Estimate    (2)            Acquisition   Gain on      Uncertain   Trade
                                                                                                                     of
                                  Share-based    and Exit      Sale of      Benefit                                  Deferred    Share-based    and Exit      Sale of      Tax         Name
                                                                            from
                    GAAP          Compensation   Costs         Investment   Prior        Non-GAAP       GAAP        Revenue     Compensation   Costs         Investment   Position    Sale       Non-GAAP
                                                                            Years
                                                                                                                                                                                                  
Revenues:           $ 371,396     —              —             —            —            $ 371,396       $ 330,159   $ 10,325    —              —             —            —           —          $ 340,484
                                                                                                                                                                                                  
Cost of revenues      67,013      (844      )    (6      )     —            —              66,163          60,613      —         (988      )    (199     )    —            —           —            59,426
                                                                                                                                                                                                  
Operating
expenses:
   Sales and          62,825      (1,543    )    (90     )     —            —              61,192          59,066      —         (1,437    )    (764     )    —            —           —            56,865
   marketing
   Research,
   development        18,624      (459      )    (5      )     —            —              18,160          16,373      —         (482      )    (352     )    —            —           —            15,539
   and
   engineering
   General and        60,772      (6,382    )    (633    )     —            —              53,757          58,157      —         (6,264    )    (1,421   )    —            —           —            50,472
   administrative
                                                                                                                                                                                                  
Interest and
other income          (7,240  )   —              —             (180    )    —              (7,420  )       1,166       —         —              —             (554    )    —           —            612
(expense)
                                                                                                                                                                                                  
Income tax            33,259      2,823          149           (43     )    3,066          39,254          22,350      2,707     2,823          717           (122    )    15,128      (3,892 )     39,711
provision ^ (8)
                                                                                                                                                                                                  
Net income
attributable to
j2 Global, Inc.     $ 121,580     6,405          585           (137    )    (3,066  )    $ 125,367       $ 114,766     7,618     6,348          2,019         (432    )    (15,128 )   3,892      $ 119,083
common
stockholders
                                                                                                                                                                                                  

Net income per
share
attributable to
j2 Global, Inc.
common
stockholders*:
   Basic            $ 2.63        0.14           0.02          (0.01   )    (0.07   )    $ 2.71          $ 2.46        0.16      0.14           0.04          (0.01   )    (0.32   )   0.08       $ 2.56
   Diluted          $ 2.61        0.14           0.02          (0.01   )    (0.07   )    $ 2.69          $ 2.43        0.16      0.14           0.04          (0.01   )    (0.32   )   0.08       $ 2.53
                                                                                                                                                                                                  
                                                                                                                                                                                                  
                                                                                                                                                                                                  
* The reconciliation of Net income per share from GAAP to Non-GAAP may not foot since each is calculated independently.
                                                                                                                                                                                                  
The Company discloses non-GAAP Earnings Per Share (EPS) as supplemental non-GAAP financial performance measure, as it believes it is useful metric by which to compare the performance of its business from
period to period. The Company also understands that this non-GAAP measure is broadly used by analysts, rating agencies and investors in assessing the Company's performance. Accordingly, the Company
believes that the presentation of this non-GAAP financial measure provides useful information to investors.
                                                                                                                                                                                                  
Non-GAAP EPS is not in accordance with, or an alternative to, Net income per share and may be different from non-GAAP measures with similar or even identical names used by other companies. In addition,
this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. This non-GAAP measure has limitations in that they do not reflect all of the amounts associated with the
Company's results of operations determined in accordance with GAAP.




j2 GLOBAL, INC.
NET INCOME TO EBITDA RECONCILIATION
THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(UNAUDITED, IN THOUSANDS)
                                                             
                                                                   
                                                                   
The following table sets forth a reconciliation of EBITDA to net income, the
most directly comparable GAAP financial measure.
                                                                   
                     THREE MONTHS ENDED DECEMBER    TWELVE MONTHS ENDED
                     31,                            DECEMBER 31,
                     2012          2011            2012           2011
                                                                   
Net income           $  30,286     $  29,819        $  121,663     $  114,766
Fixed charges           5,197         41               9,045          147
Provision for           7,379         9,580            33,259         22,350
income taxes
Depreciation and
amortization and        8,901         7,170            31,284         28,750
other non-cash
items ^ (1)
Non-recurring           519           (556    )        785            2,778
(gains) losses
                                                                
EBITDA               $  52,282     $  46,054        $  196,036     $  168,791
                                                                   
^(1) Other non-cash items currently represent share-based compensation.
                                                                   
                                                                   
                                                                   
EBITDA as calculated above represents earnings before fixed charges, taxes,
depreciation and amortization and all other non-cash items and all
non-recurring gains and losses. EBITDA is defined in the Indenture Agreement
as Consolidated Net Income of the Company and its Restricted Subsidiaries
before fixed charges, taxes, depreciation and amortization and all other
non-cash items and all non-recurring gains and losses. The EBITDA calculations
above for the three months and the twelve months ended December 31, 2012
include $4.1 million related to Unrestricted Subsidiaries that are excluded
from EBITDA as defined in the Indenture Agreement. We disclose EBITDA as a
supplemental non-GAAP financial performance measure, as we believe it is a
useful metric by which to compare the performance of our business from period
to period. We understand that measures similar to EBITDA are broadly used by
analysts, rating agencies and investors in assessing our performance.
Accordingly, we believe that the presentation of EBITDA provides useful
information to investors.
                                                                   
EBITDA is not in accordance with, or an alternative to, Net income, and may be
different from non-GAAP measures used by other companies. In addition, EBITDA
is not based on any comprehensive set of accounting rules or principles. This
non-GAAP measure has limitations in that it does not reflect all of the
amounts associated with the company’s results of operations determined in
accordance with GAAP.




j2 GLOBAL, INC.
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)
                                                             
                                                                   
               Q1           Q2           Q3           Q4           YTD
2012
Net cash
provided by    $ 38,942     $ 46,382     $ 38,193     $ 46,394     $ 169,911
operating
activities
Less:
Purchases of     (1,159 )     (1,631 )     (956   )     (1,159 )     (4,905  )
property and
equipment
Add: Excess
tax benefit
(deficit)       286       821       (91    )   (55    )   961     
from
share-based
compensation
Free cash      $ 38,069   $ 45,572   $ 37,146   $ 45,180   $ 165,967 
flows
                                                                   
                                                                   
2011
Net cash
provided by    $ 38,153     $ 42,398     $ 28,682     $ 41,515     $ 150,748
operating
activities
Less:
Purchases of     (625   )     (1,860 )     (2,590 )     (1,769 )     (6,844  )
property and
equipment
Add: Excess
tax benefit
from            679       1,443     11,124    315       13,561  
share-based
compensation
Free cash      $ 38,207   $ 41,981   $ 37,216   $ 40,061   $ 157,465 
flows

                                                                   
The Company discloses non-GAAP Free Cash Flows as supplemental non-GAAP
financial performance measure, as it believes it is a useful metrics by which
to compare the performance of its business from period to period. The Company
also understands that this non-GAAP measure is broadly used by analysts,
rating agencies and investors in assessing the Company's performance.
Accordingly, the Company believes that the presentation of this non-GAAP
financial measure provides useful information to investors.

Free Cash Flows is not in accordance with, or an alternative to, Cash Flows
from Operating Activities, and may be different from non-GAAP measures with
similar or even identical names used by other companies. In addition, the
non-GAAP measure is not based on any comprehensive set of accounting rules or
principles. This non-GAAP measure has limitations in that it do not reflect
all of the amounts associated with the Company's results of operations
determined in accordance with GAAP.


Contact:

j2 Global, Inc.
Laura Hinson
800-577-1790
press@j2.com
 
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