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j2 Global Reports Record Q4 and Year End 2015 Results and Provides 2016 Outlook

[February 10, 2016]

j2 Global Reports Record Q4 and Year End 2015 Results and Provides 2016 Outlook

j2 Global, Inc. (NASDAQGS:JCOM) today reported financial results for the fourth quarter and year ended December 31, 2015, provided fiscal 2016 financial estimates and announced that its Board of Directors has declared an increased quarterly cash dividend of $0.3250 per share.

FOURTH QUARTER 2015 RESULTS

Quarterly revenues increased 22.6% to a record $204.8 million compared to $167.1 million for Q4 2014.

Quarterly EBITDA₍₃₎ increased 30.2% to a record $100.1 million compared to $76.9 million for Q4 2014.

GAAP earnings per diluted share for the quarter increased 9.1% to a fourth quarter record of $0.72 compared to $0.66 for Q4 2014.

Adjusted Non-GAAP earnings per diluted share₍₁₎₍₂₎ increased 31.6% to a record $1.29 compared to $0.98 for Q4 2014.

Q4 2015 free cash flow₍₄₎ increased 88.7% to $75.1 million compared to $39.8 million for Q4 2014.

j2 ended 2015 with $414 million in cash and investments after deploying $67.1 million during the quarter for acquisitions and the payment of j2's regular quarterly dividend.

Key financial results for the fourth quarter 2015 versus the fourth quarter 2014 are set forth in the following table (in millions, except per share). Reconciliations of Adjusted earnings per diluted share, EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.

	Q4 2015	Q4 2014	% Change
Revenues
Cloud Services	$133.8 million	$113.0 million	18.4%
Digital Media	$69.9 million	$52.9 million	32.1%
IP Licensing	$1.1 million	$1.2 million	(8.3)%
Total:	$204.8 million	$167.1 million	22.6%
Earnings per Diluted Share⁽¹⁾	$0.72	$0.66	9.1%
Adjusted Non-GAAP Earnings per Diluted Share^{(1) (2)}	$1.29	$0.98	31.6%
EBITDA⁽³⁾	$100.1 million	$76.9 million	30.2%
Free Cash Flow⁽⁴⁾	$75.1 million	$39.8 million	88.7%

FULL YEAR 2015 RESULTS

Annual revenues increased 20.3% to a record $720.8 million compared to $599 million for 2014.

Annual EBITDA ₍₃₎ increased 26.9% to a record $333.3 million compared to $262.6 million for 2014.

GAAP earnings per diluted share for the year increased 5.8% to a record $2.73 compared to $2.58 for 2014. 2015 Adjusted Non-GAAP earnings per diluted share₍₅₎₍₆₎ increased 21.9% to a record $4.17 compared to $3.42 for 2014.

Free cash flow₍₄₎ for the year increased 30.1% to a record $223.2 million compared to $171.5 million for 2014.

Key annual financial results for 2015 versus 2014 are set forth in the following table (in millions, except per share). Reconciliations of Adjusted earnings per diluted share, EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.

	2015	2014	% Change
Revenues
Cloud Services	$498.9 million	$425.9 million	17.1%
Digital Media	$216.1 million	$167.6 million	28.9%
IP Licensing	$5.8 million	$5.5 million	5.5%
Total:	$720.8 million	$599 million	20.3%
Earnings per Diluted Share(5)	$2.73	$2.58	5.8%
Adjusted Non-GAAP Earnings per Diluted Share(5) (6)	$4.17	$3.42	21.9%
EBITDA(3)	$333.3 million	$262.6 million	26.9%
Free Cash Flow(4)	$223.2 million	$171.5 million	30.1%

"2015 was an excellent year fueled by strong performance in all operating lines of business," said Hemi Zucker, CEO of j2. "Our Cloud Services segment saw its most significant growth in the Backup and Email Security businesses, growing both organically and through M&A. Most importantly, we continue to realize improved margins on our activities as we integrate acquired businesses into the j2 cost structure. The Media Segment, through a combination of organic growth and strategic acquisitions, has significantly grown revenue and scaled its margins to yield impressive returns."

"For the first time in a quarter, j2 delivered more than $200 million in revenue, $100 million in adjusted EBITDA and more than $75 million in free cash flow. This strong momentum positions us well for success into 2016," said Scott Turicchi, President and CFO of j2 Global Inc.

BUSINESS OUTLOOK

For fiscal 2016, the Company estimates that it will achieve revenues between $830 and $860 million and Adjusted Non-GAAP earnings per diluted share of between $4.70 and $5.00.

Adjusted Non-GAAP earnings per diluted share for 2016 excludes share-based compensation of between $12 and $14 million, amortization of acquired intangibles and the impact of any currently unanticipated items, in each case net of tax.

It is anticipated that the Non-GAAP effective tax rate for 2016 (exclusive of the release of reserves for uncertain tax positions) will increase from 28.4% to between 29% and 31%.

DIVIDEND

j2's Board of Directors has approved a quarterly cash dividend of $0.3250 per common share, a $0.01, or 3.2% increase versus last quarter's dividend and an 11.1% increase versus the dividend paid in Q1 2015. This is j2's eighteenth consecutive quarterly dividend increase since its first quarterly dividend in September, 2011. The dividend will be paid on March 10, 2016 to all shareholders of record as of the close of business on February 23, 2016. 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, 2016 by an additional year. Approximately 2.9 million shares remain available for purchase under the program.

Notes:

	(1)		The estimated GAAP effective tax rate was approximately 16.4% for Q4 2015 and 23.4% for Q4 2014. The estimated Adjusted Non-GAAP effective tax rate was approximately 27.6% for Q4 2015 and 26.4% for Q4 2014.

	(2)		For Q4 2015, Adjusted Non-GAAP earnings per diluted share excludes share-based compensation, amortization of acquired intangibles, certain acquisition-related integration costs, in each case net of tax, totaling $0.60. For Q4 2014, Adjusted Non-GAAP earnings per diluted share excludes share-based compensation, amortization of acquired intangibles, certain acquisition-related integration costs and certain tax consulting fees, in each case net of tax, totaling $0.33. Adjusted Non-GAAP earnings per diluted share amounts are not meant as a substitute for GAAP, but are solely for informational purposes.

	(3)		EBITDA is defined as earnings before interest and other expense, net; income tax expense; depreciation and amortization; and the items used to reconcile EPS to Adjusted Non-GAAP EPS referred to in Note (2) above. EBITDA amounts are not meant as a substitute for GAAP, but are solely for informational purposes.

	(4)		Free cash flow is defined as net cash provided by operating activities, 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.

	(5)		The GAAP effective tax rate was approximately 14.8% for 2015 and 19.2% for 2014. The Adjusted Non-GAAP effective tax rate was approximately 28.4% for 2015 and 26.1% for 2014.

	(6)		For 2015, Adjusted Non-GAAP earnings per diluted share excludes share-based compensation, amortization of acquired intangibles, certain acquisition-related integration costs, certain tax consulting fees and additional tax expense (benefit) from prior years, in each case net of tax, totaling $1.46. For 2014, Adjusted Non-GAAP earnings per diluted share excludes share-based compensation, amortization of acquired intangibles, certain acquisition-related integration costs, certain tax consulting fees and additional tax expense (benefit) from prior years, and adds back the impact of the fair value adjustment to deferred revenues purchased in the Livedrive acquisition, in each case net of tax, totaling $0.86. Adjusted 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, Inc. (NASDAQ: JCOM) provides Internet services through 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 ®, Livedrive®, Onebox ®, and LiveVault®, and operates a messaging network spanning 50 countries on six continents. The Digital Media Division offers technology, gaming and lifestyle content through its digital properties, which include PCMag.com, IGN.com, AskMen.com, Toolbox.com and others. The Digital Media Division also operates NetShelter ® Powered by 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, 2015, j2 had achieved 20 consecutive fiscal years of revenue growth. For more information about j2, 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 2016 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: the Company's ability to grow non-fax revenues, profitability and cash flows; the Company's ability to identify, close and successfully transition acquisitions; subscriber growth and retention; variability of the Company's 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, 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 2014 Annual Report on Form 10-K filed by j2 Global on March 2, 2015, 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 2016 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.

About Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following Adjusted Non-GAAP financial measures: Adjusted Non-GAAP earnings per diluted share, EBITDA and free cash flow. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use these Adjusted Non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these Adjusted Non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to these Adjusted Non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These Adjusted Non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity. We believe these Adjusted Non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

For more information on these Adjusted Non-GAAP financial measures, please see the appropriate GAAP to Adjusted Non-GAAP reconciliation tables included within the attached Exhibit to this release.

j2 GLOBAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)


		DECEMBER 31,			DECEMBER 31,
			2015			2014

ASSETS
	Cash and cash equivalents	$	255,530		$	433,663
	Short-term investments		79,655			96,206
	Accounts receivable,
	net of allowances of $4,261 and $3,685, respectively		114,680			91,699
	Prepaid expenses and other current assets		25,722			22,602
	Deferred income taxes, current		7,218			2,013
	Total current assets		482,805			646,183

	Long-term investments		78,563			60,508
	Property and equipment, net		57,442			38,217
	Goodwill		807,661			635,675
	Other purchased intangibles, net		352,641			311,800
	Other assets		13,756			12,819

	TOTAL ASSETS	$	1,792,868		$	1,705,202


LIABILITIES AND STOCKHOLDERS' EQUITY
	Accounts payable and accrued expenses	$	114,385		$	95,310
	Income taxes payable		5,589			-
	Deferred revenue, current		76,104			63,457
	Capital lease, current		214			258
	Deferred income taxes, current		363			342
	Total current liabilities		196,655			159,367

	Long-term debt		601,186			593,350
	Deferred revenue, non-current		6,538			10,182
	Capital lease, non-current		148			141
	Liability for uncertain tax positions		35,917			37,551
	Deferred income taxes, non-current		43,989			61,960
	Other long-term liabilities		18,227			22,416
	Total liabilities		902,660			884,967

	Commitments and contingencies

	Stockholders' Equity:
	Preferred stock		-			-
	Common stock		479			474
	Additional paid-in capital		292,064			273,304
	Retained earnings		626,789			553,584
	Accumulated other comprehensive loss		(29,124	)		(7,127	)
	Total stockholders' equity		890,208			820,235

	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,792,868		$	1,705,202

j2 GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)


		THREE MONTHS ENDED DECEMBER 31,						TWELVE MONTHS ENDED DECEMBER 31,
			2015			2014			2015		2014

Revenues		$	204,823		$	167,145		$	720,815	$	599,030

Cost of revenues ⁽¹⁾			34,608			28,999			122,958		105,989
	Gross profit		170,215			138,146			597,857		493,041

Operating expenses:
	Sales and marketing ⁽¹⁾		42,189			36,633			159,009		141,967
	Research, development and engineering ⁽¹⁾		8,625			8,228			34,329		30,680
	General and administrative ⁽¹⁾		66,347			39,979			205,137		134,188

	Total operating expenses		117,161			84,840			398,475		306,835

Income from operations			53,054			53,306			199,382		186,206
Interest expense, net			11,005			10,451			42,458		31,204
Other expense (income), net			(384	)		89			5		(165	)
Income before income taxes			42,433			42,766			156,919		155,167
Income tax expense			6,966			10,012			23,283		29,840
Net income		$	35,467		$	32,754		$	133,636	$	125,327
Less extinguishment of Series A Preferred Stock			-			(991	)		-		(991	)
Net income attributable to j2 Global, Inc. common stockholders		$	35,467		$	31,763		$	133,636	$	124,336

Basic net income per common share:
	Net income attributable to j2 Global, Inc. common shareholders	$	0.73		$	0.66		$	2.76	$	2.60

Diluted net income per common share:
	Net income attributable to j2 Global, Inc. common shareholders	$	0.72		$	0.66		$	2.73	$	2.58


Basic weighted average shares outstanding			47,849,748			47,146,503			47,627,853		46,778,015

Diluted weighted average shares outstanding			48,772,061			47,468,841			48,087,760		47,106,538

⁽¹⁾ Includes share-based compensation expense as follows:
Cost of revenues		$	100		$	82		$	373	$	345
Sales and marketing			624			584			2,435		1,944
Research, development and engineering			229			184			863		721
General and administrative			1,898			1,520			8,122		5,898
Total		$	2,851		$	2,370		$	11,793	$	8,908

j2 GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)


			TWELVE MONTHS ENDED DECEMBER 31,
				2015			2014

Cash flows from operating activities:
		Net income	$	133,636		$	125,327
	Adjustments to reconcile net income to net cash
	provided by operating activities:
		Depreciation and amortization		93,213			62,953
		Accretion and amortization of discount and premium of investments		1,207			1,334
		Amortization of financing costs and discounts		9,105			5,045
		Share-based compensation		11,793			8,908
		Excess tax benefit from share-based compensation		(4,486	)		(5,512	)
		Provision for doubtful accounts		6,872			4,702
		Deferred income taxes, net		(17,083	)		(10,033	)
		Gain on sale of available-for-sale investment		(549	)		(90	)
	Decrease (increase) in:
		Accounts receivable		(18,508	)		(11,078	)
		Prepaid expenses and other current assets		1,461			(3,212	)
		Other assets		(602	)		(42	)
	(Decrease) increase in:
		Accounts payable and accrued expenses		8,757			(5,447	)
		Income taxes payable		3,578			10,797
		Deferred revenue		(3,480	)		(711	)
		Liability for uncertain tax positions		(5,718	)		(6,313	)
		Other long-term liabilities		9,865			603
Net cash provided by operating activities				229,061			177,231

Cash flows from investing activities:
		Maturity of certificate of deposit		65			14,520
		Purchase of certificates of deposit		(62	)		(65	)
		Sales of available-for-sale investments		121,687			110,363
		Purchases of available-for-sale investments		(135,832	)		(138,452	)
		Purchases of property and equipment		(17,297	)		(11,829	)
		Purchases of intangible assets		(1,455	)		(5,336	)
		Acquisition of businesses, net of cash received		(302,809	)		(245,278	)
		Proceeds from sale of assets		-			608
Net cash used in investing activities				(335,703	)		(275,469	)

Cash flows from financing activities:
		Issuance of long-term debt		-			402,500
		Debt issuance costs		-			(11,991	)
		Repurchases of common and restricted stock		(3,674	)		(5,663	)
		Issuance of stock, net of costs		5,218			6,886
		Excess tax benefits from share-based compensation		4,486			5,512
		Dividends paid		(58,827	)		(52,269	)
		Acquisition of business		(14,271	)		(16,512	)
		Other		(296	)		(933	)
Net cash (used in) provided by financing activities				(67,364	)		327,530

Effect of exchange rate changes on cash and cash equivalents				(4,127	)		(3,430	)

Net increase (decrease) in cash and cash equivalents				(178,133	)		225,862
Cash and cash equivalents at beginning of period				433,663			207,801
Cash and cash equivalents at end of period			$	255,530		$	433,663

j2 GLOBAL, INC.
RECONCILIATION OF GAAP TO ADJUSTED NON-GAAP FINANCIAL MEASURES
THREE MONTHS ENDED DECEMBER 31, 2015 AND 2014
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Non-GAAP net income is GAAP net income with the following modifications: (1) elimination of share-based compensation and the associated payroll tax expense; (2) elimination of certain acquisition-related integration costs and the impact of fair value adjustments to deferred revenue purchased in the Livedrive acquisition; (3) elimination of interest costs in excess of the coupon rate associated with the convertible notes; (4) IRS consulting fee; (5) elimination of amortization of patents and intangible assets that we acquired; (6) elimination of additional income tax (expense) benefit from prior years; (7) dilutive effect of the convertible debt; and (8) elimination of income tax provision associated with the noted modifications.

		THREE MONTHS ENDED DECEMBER 31, 2015																	THREE MONTHS ENDED DECEMBER 31, 2014

							(2)						(6)											(2)
							Acquisition-						Additional		(7)									Acquisition-		(4)
					(1)		related		(3)				Tax Expense		Convertible							(1)		related		IRS
					Share-based		Integration		Interest		(5)		(Benefit) from		Debt	Adjusted						Share-based		Integration		Consulting		(5)		Adjusted
		GAAP			Compensation		Costs		Costs		Amortization		Prior Years		Dilution	Non-GAAP			GAAP			Compensation		Costs		Fee		Amortization		Non-GAAP

Revenues		$	204,823		-		-		-		-		-		-	$	204,823		$	167,145		-		336		-		-		$	167,481

Cost of revenues			34,608		(100	)	(327	)	-		(1,314	)	-		-		32,867			28,999		(82	)	-		-		(668	)		28,249

Operating expenses:
	Sales and marketing		42,189		(624	)	(395	)	-		-		-		-		41,170			36,633		(584	)	(25	)	-		-			36,024
	Research, development and engineering		8,625		(229	)	(1	)	-		-		-		-		8,395			8,228		(184	)	(2	)	-		-			8,042
	General and administrative		66,347		(1,898	)	(13,940	)	-		(23,322	)	-		-		27,187			39,979		(1,520	)	(589	)	(650	)	(15,134	)		22,086

Interest expense (income), net			11,005		-		-		(2,567	)	-		-		-		8,438			10,451		-		(2,124	)	-		-			8,327
Other expense (income), net			(384	)	-		-		-		-		-		-		(384	)		89		-		-		-		-			89

Income tax provision⁽⁸⁾			6,966		1,009		5,085		1,168		6,055		3,770		-		24,053			10,012		789		1,123		176		4,959			17,059
															-
Net income		$	35,467		1,842		9,578		1,399		18,581		(3,770	)	-	$	63,097		$	32,754		1,581		1,953		474		10,843		$	47,605

Extinguishment of Series A Preferred Stock			-		-		-		-		-		-		-		-			(991	)	-		991		-		-			-

Net income attributable to j2 Global, Inc.
common stockholders		$	35,467		1,842		9,578		1,399		18,581		(3,770	)	-	$	63,097		$	31,763		1,581		2,944		474		10,843		$	47,605

Net income per share attributable to
j2 Global, Inc. common stockholders*:
	Basic	$	0.73		0.04		0.20		0.03		0.39		(0.08	)	0.00	$	1.30		$	0.66		0.03		0.06		0.01		0.23		$	0.99
	Diluted	$	0.72		0.04		0.20		0.03		0.39		(0.08	)	0.01	$	1.29		$	0.66		0.03		0.06		0.01		0.23		$	0.98

* The reconciliation of net income per share from GAAP to adjusted non-GAAP may not foot since each is calculated independently.

The Company discloses adjusted non-GAAP Earnings Per Share ("EPS") as supplemental non-GAAP financial performance measure, as it believes it is a useful metric by which to compare the performance of its business from period to period. The Company also understands that this adjusted 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 adjusted non-GAAP financial measure provides useful information to investors.

Adjusted 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 adjusted non-GAAP measure is not based on any comprehensive set of accounting rules or principles. This adjusted 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.
RECONCILIATION OF GAAP TO ADJUSTED NON-GAAP FINANCIAL MEASURES
TWELVE MONTHS ENDED DECEMBER 31, 2015 AND 2014
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Non-GAAP net income is GAAP net income with the following modifications: (1) elimination of share-based compensation and the associated payroll tax expense; (2) elimination of certain acquisition-related integration costs and the impact of fair value adjustments to deferred revenue purchased in the Livedrive acquisition; (3) elimination of interest costs in excess of the coupon rate associated with the convertible notes; (4) IRS consulting fee; (5) elimination of amortization of patents and intangible assets that we acquired; (6) elimination of additional income tax (expense) benefit from prior years; (7) dilutive effect of the convertible debt; and (8) elimination of income tax provision associated with the noted modifications.

		TWELVE MONTHS ENDED DECEMBER 31, 2015																	TWELVE MONTHS ENDED DECEMBER 31, 2014

						(2)								(6)										(2)						(6)
						Acquisition-				(4)				Additional		(7)								Acquisition-		(4)				Additional
				(1)		related		(3)		IRS				Income Tax		Convertible						(1)		related		IRS				Income Tax
				Share-based		Integration		Interest		Consulting		(5)		Benefit from		Debt	Adjusted					Share-based		Integration		Consulting		(5)		Benefit from		Adjusted
		GAAP		Compensation		Costs		Costs		Fee		Amortization		Prior Years		Dilution	Non-GAAP		GAAP			Compensation		Costs		Fee		Amortization		Prior Years		Non-GAAP

Revenues		$	720,815	-		-		-		-		-		-		-	$	720,815	$	599,030		-		2,075		-		-		-		$	601,105

Cost of revenues			122,958	(373	)	(327	)	-		-		(3,376	)	-		-		118,882		105,989		(345	)	(57	)	-		(2,462	)	-			103,125

Operating expenses:
	Sales and marketing		159,009	(2,435	)	(1,110	)	-		-		-		-		-		155,464		141,967		(1,944	)	(125	)	-		-		-			139,898
	Research, development and engineering		34,329	(863	)	(81	)	-		-		-		-		-		33,385		30,680		(721	)	(34	)	-		-		-			29,925
	General and administrative		205,137	(8,122	)	(23,930	)	-		204		(73,902	)	(3,651	)	-		95,736		134,188		(5,898	)	(144	)	(1,423	)	(47,247	)	(713	)		78,763

Interest expense (income), net			42,458	-		-		(7,982	)	-		-		(472	)	-		34,004		31,204		-		(4,082	)	-		-		-			27,122
Other expense (income), net			5	-		-		-		-		-		-		-		5		(165	)	-		-		-		-		-			(165	)

Income tax provision⁽⁸⁾			23,283	3,380		8,880		2,471		(47	)	21,672		20,681		-		80,320		29,840		3,115		2,148		369		16,092		6,435			57,999

Net income		$	133,636	8,413		16,568		5,511		(157	)	55,606		(16,558	)	-	$	203,019	$	125,327		5,793		4,369		1,054		33,617		(5,722	)	$	164,438

Extinguishment of Series A Preferred Stock			-	-		-		-		-		-		-		-		-		(991	)	-		991		-		-		-			-

Net income attributable to j2 Global, Inc.
common stockholders		$	133,636	8,413		16,568		5,511		(157	)	55,606		(16,558	)	-	$	203,019	$	124,336		5,793		5,360		1,054		33,617		(5,722	)	$	164,438

Net income per share attributable to
j2 Global, Inc. common stockholders*:
	Basic	$	2.76	0.18		0.35		0.12		(0.00	)	1.17		(0.35	)	0.00	$	4.19	$	2.60		0.13		0.12		0.02		0.72		(0.12	)	$	3.44
	Diluted	$	2.73	0.18		0.35		0.12		(0.00	)	1.16		(0.35	)	0.01	$	4.17	$	2.58		0.13		0.12		0.02		0.71		(0.12	)	$	3.42

* The reconciliation of net income per share from GAAP to adjusted non-GAAP may not foot since each is calculated independently.

j2 GLOBAL, INC.
NET INCOME TO EBITDA RECONCILIATION
THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2015 AND 2014
(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 31,					TWELVE MONTHS ENDED DECEMBER 31,
		2015			2014		2015			2014

Net income	$	35,467		$	32,754	$	133,636		$	125,327
Plus:
Other expense (income), net		(384	)		89		5			(165	)
Interest expense, net		11,005			10,451		42,458			31,204
Income tax expense		6,966			10,012		23,283			29,840
Depreciation and amortization		29,578			19,646		93,213			62,953
Reconciliation of GAAP to adjusted non-GAAP financial measures:
Share-based compensation and the associated payroll tax expense		2,851			2,370		11,793			8,908
Acquisition-related integration costs		14,663			952		25,448			2,435
Additional indirect tax expense from prior years		-			-		3,651			713
Fees associated with prior year audits		-			650		(204	)		1,423
EBITDA	$	100,146		$	76,924	$	333,283		$	262,638

EBITDA as calculated above represents earnings before interest and other expense, net, income tax expense, depreciation and amortization and the items used to reconcile GAAP to adjusted non-GAAP financial measures, including (1) share-based compensation, (2) certain acquisition-related integration costs and (3) additional indirect tax expense from prior years. 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 adjusted 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
2015
Net cash provided by operating activities	$	45,716		$	51,894		$	50,963		$	80,488		$	229,061
Less: Purchases of property and equipment		(2,401	)		(4,554	)		(4,972	)		(5,370	)		(17,297	)
Add: Excess tax benefit from share-based compensation		334			1,770			2,437			(55	)		4,486
Add: IRS settlement*		-			5,753			1,164			-			6,917
Free cash flows	$	43,649		$	54,863		$	49,592		$	75,063		$	223,167

* Free cash flows of $54.9 million and $49.6 million for Q2 2015 and Q3 2015, respectively, were before the effect of payments associated with taxes for prior periods under audit.


	Q1			Q2			Q3			Q4			YTD
2014
Net cash provided by operating activities	$	37,294		$	54,512		$	40,315		$	45,110		$	177,231
Less: Purchases of property and equipment		(2,936	)		(1,087	)		(3,124	)		(4,074	)		(11,221	)
Add: Excess tax benefit from share-based compensation		4,082			721			1,925			(1,216	)		5,512
Free cash flows	$	38,440		$	54,146		$	39,116		$	39,820		$	171,522

The Company discloses 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 does not reflect all of the amounts associated with the Company's results of operations determined in accordance with GAAP.

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