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Discontinued Operations and Dispositions | 12 Months Ended
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Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations and Dispositions | Discontinued Operations and Dispositions Consensus Spin-Off As further described in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies, on October 7, 2021, the Separation of the cloud fax business was completed. No gain or loss was recorded on the Separation in the Consolidated Statements of Operations. On October 7, 2021, Consensus paid Ziff Davis approximately $259.1 million of cash in a distribution that is anticipated to be tax-free provided certain requirements are met, and issued $500.0 million of senior notes due 2028 to Ziff Davis, which Ziff Davis then exchanged such notes with the lenders under the Credit Agreement and Credit Agreement Amendments by and among the subsidiaries of Ziff Davis party thereto as guarantors, Citicorp North America Inc. and MUFG Union Bank, N.A. and MUFG Union Bank, N.A., as administrative agent for the lenders, in exchange for extinguishment of indebtedness outstanding under the Bridge Loan Facility. Refer to Note 10 - Debt for additional details. Such lenders or their affiliates agreed to resell the 2028 notes to qualified institutional buyers in the United States pursuant to Rule 144A. The Company incurred a net loss on extinguishment of debt principal outstanding on the Bridge Loan Facility of approximately $8.8 million, which is recorded within ‘Gain (loss) on debt extinguishment, net’ component of ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statements of Operations for the year ended December 31, 2021 (see note 10 - Debt). The divestiture of the cloud fax business was determined to qualify for US Federal tax-free treatment under certain sections of the Internal Revenue Code. The accounting requirements for reporting the Company’s cloud fax business as a discontinued operation were met when the Separation was completed as the Separation constituted a strategic shift that would have a major effect on the Company’s operations and financial results. Accordingly, the consolidated financial statements reflect the results of the cloud fax business as a discontinued operation for the years ended December 31, 2021 and 2020. The Consolidated Balance Sheets and Consolidated Statements of Operations report discontinued operations separate from continuing operations. The Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows, including Note 19 - Supplemental Cash Flow Information, and Consolidated Statements of Stockholders’ Equity combine continuing and discontinued operations. The key components of cash flows from discontinued operations were as follows (in thousands):
| Year ended December 31,
| 2021 |  | 2020
Capital expenditures | $ | 15,252 |  |  | $ | 16,237 |
Depreciation and amortization | $ | 9,010 |  |  | $ | 22,759 |
Loss on debt extinguishment | $ | 8,750 |  |  | $ | 37,969 |
Amortization of financing costs and discounts | $ | — |  |  | $ | 1,171 |
Foreign currency remeasurement gain | $ | — |  |  | $ | 31,537 |
Deferred taxes | $ | 8,015 |  |  | $ | 5,534 |
In preparation for and executing the Separation, the Company incurred $11.6 million, net of reimbursement from Consensus, in transaction-related costs including legal and accounting fees during the year ended December 31, 2021, which were recorded in ‘General and administrative expenses’ component of ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statement of Operations. These transaction costs primarily related to professional fees associated with preparation of regulatory filings and transaction execution and separation activities within finance, tax and legal functions. In connection with the Separation, Ziff Davis and Consensus entered into several agreements that govern the relationship of the parties following the Separation, which are further discussed in Note 21 - Related Party Transactions. Further, certain of the Company’s management and members of its board of directors resigned from the Company as of the Distribution Date and joined Consensus. The Company made an accounting policy election not to allocate interest to discontinued operations. Interest expense included in discontinued operations relates to the 6.0% Senior Notes (as defined in Note 10 - Debt) issued by J2 Cloud Services, LLC and the Bridge Loan Facility (as defined in Note 10 - Debt), which was required to be repaid as part of the Separation. During the year ended December 31, 2022, the Company recorded $1.7 million in income tax expense within ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statement of Operations related to the finalization of state tax returns related to the Separation. The key components of income from discontinued operations were as follows (in thousands):
| Year ended December 31,
| 2022 |  | 2021 |  | 2020
Revenues | $ | — |  |  | $ | 270,248 |  |  | $ | 330,764 |
Cost of revenues | — |  |  | (44,306) |  |  | (53,379) |
Sales and marketing | — |  |  | (40,980) |  |  | (47,116) |
Research, development and engineering | — |  |  | (5,814) |  |  | (7,146) |
General and administrative | — |  |  | (39,279) |  |  | (26,852) |
Interest expense and other | — |  |  | (13,856) |  |  | (44,220) |
Income before income taxes | — |  |  | 126,013 |  |  | 152,051 |
Income tax expense | (1,709) |  |  | (30,694) |  |  | (30,043) |
(Loss) income from discontinued operations, net of income taxes | $ | (1,709) |  |  | $ | 95,319 |  |  | $ | 122,008 |
B2B Back-up and Voice Asset Sales The Company completed the following dispositions that did not meet the criteria for discontinued operations. During the year ended December 31, 2021, the Company committed to a plan to sell certain Voice assets in the United Kingdom as they were determined to be non-core assets. Such assets were recorded within the Cybersecurity and Martech reportable segment. On February 9, 2021, in a cash transaction, the Company sold the Voice assets. The total gain recognized on the sale of these Voice assets was $2.8 million, which is presented in ‘(Loss) gain on sale of businesses’ on the Consolidated Statement of Operations in the year ended December 31, 2021. During the year ended December 31, 2021, the Company committed to a plan to sell its B2B Backup business as it was determined to be a non-core business. The B2B Backup business met the held for sale criteria, and accordingly, the assets and liabilities were presented as held for sale on the Consolidated Statement Balance Sheets at March 31, 2021 and June 30, 2021. The business was recorded within the Cybersecurity and Martech reportable segment. During the second quarter of 2021, the Company received an offer to purchase the B2B Backup business and management determined that the fair value of the business less cost to sell was lower than its carrying amount. As a result, the Company recorded an impairment to goodwill of $32.6 million during the year ended December 31, 2021, which is presented in ‘Goodwill impairment on business” on the Consolidated Statement of Operations. Refer to Note 9 - Goodwill and Intangible Assets. On September 17, 2021, in a cash transaction, the Company sold the B2B Backup business. The total loss recognized on the sale of the B2B Backup business was $24.6 million, which is presented in ‘(Loss) gain on sale of businesses’ on the Consolidated Statement of Operations in the year ended December 31, 2021. During the second quarter of 2020, the Company committed to a plan to sell certain Voice assets in Australia and New Zealand as they were determined to be non-core assets. Such assets were recorded within the Cybersecurity and Martech reportable segment. On August 31, 2020, in a cash transaction, the Company sold these Voice assets for a gain of $17.1 million which was recorded in gain on sale of businesses on the Consolidated Statement of Operations in the year ended December 31, 2020.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI https://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 + Details
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