CONSENSUS CLOUD SOLUTIONS, INC. Discussion and analysis by management of the financial position and operating results. Forward-looking information (Form 10-Q)



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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 under the heading "Risk Factors" in our information statement, dated
September 23, 2021 (the "Information Statement"), which was filed as Exhibit
99.1 to Amendment No. 3 to Consensus's Registration Statement on Form 10 filed
on September 21, 2021 (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 customer base and average revenue per user;
•Generate sufficient cash flow to make interest and debt payments, 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 Cloud Fax 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;
•Manage certain risks inherent to our business, such as costs associated with
fraudulent activity, system failure or network security breach; effectively
maintain and manage our billing systems; allocate time and resources required to
manage our legal proceedings; or adhere 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 fax 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, access, security, and retention;
•Successfully manage our growth, including but not limited to our operational
and personnel-related resources, and integration of newly acquired businesses;
•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.
•Maintain favorable relationships with critical third-party vendors whose
financial condition will not negatively impact the services they provide; and
•Manage certain risks inherent to our business, such as costs associated with
fraudulent activity, system failure or security breach; effectively maintaining
and managing our billing systems; time and resources required to manage our
legal proceedings; liability for legal and other claims; or adhering to our
internal controls and procedures.

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In addition, other factors that could cause actual results to differ materially
from those anticipated in these forward-looking statements or materially impact
our financial results include the risks associated with new accounting
pronouncements, as well as those associated with natural disasters, public
health crises, pandemics including the COVID-19 outbreak and other catastrophic
events outside of our control, including as to COVID-19 the scope and duration
of the pandemic, actions taken by governmental authorities in response to the
pandemic, and the direct and indirect impact of the pandemic on our customers,
third parties and us.

Overview

Separation and distribution

On October 7, 2021, J2 Global, Inc. completed its previously announced plans to
separate into two leading publicly traded companies: one addressing healthcare
interoperability and comprising the Cloud Fax business, which will do business
as Consensus Cloud Solutions, Inc. ("Consensus"), and one that will continue J2
Global's strategy of building a leading internet platform focused on key
verticals, including technology & gaming, shopping, health, cybersecurity and
martech, which will do business as Ziff Davis. We refer to the transactions that
resulted in the separation of Consensus and Ziff Davis into two separate
publicly traded companies as the "separation and distribution."

Following the separation and distribution, Consensus is a leading provider of
secure information delivery services with a scalable Software-as-a-Service
("SaaS") platform. Consensus serves more than one million customers of all
sizes, from enterprises to individuals, across over 50 countries and multiple
industry verticals including healthcare, education, law and financial services.
Beginning as an online fax company over two decades ago, Consensus has evolved
into a leading global provider of enterprise secure communication solutions.
Consensus is well positioned to capitalize on seismic shifts in how people and
businesses share private documents and information. Its mission is to
democratize secure information interchange across technologies and industries,
and solve the healthcare interoperability challenge. Consensus's communication
and interoperability solutions enable its customers to securely and
cooperatively access, exchange and use information across organizational,
regional and national boundaries.

J2 Cloud Services, LLC, together with its subsidiaries ("J2 Cloud Services" or
the "Company"), is a leading provider of internet services. As of September 30,
2021, J2 Cloud Services, LLC was a wholly-owned subsidiary of J2 Global, Inc.,
now known as Ziff Davis, Inc. ("J2 Global" or the "Parent" or the "Parent
Company"). Pursuant to the separation, J2 Cloud Services became a wholly owned
subsidiary of Consensus. Prior to the separation, J2 Cloud Services sold its B2B
backup business and transferred its cybersecurity and SMB enablement businesses
to entities that remained part of the Parent Company following the separation,
which we refer to as the internal reorganization.

For purposes of this management's discussion and analysis of the results of
operations and financial condition of J2 Cloud Services ("MD&A") section, we use
the terms "the Company," "we," "us" and "our" to refer to J2 Cloud Services.
References in this MD&A section to "Parent" or "Parent Company") refer to J2
Global, Inc., collectively with its consolidated subsidiaries (now known as Ziff
Davis). The financial information and results of operations that are discussed
in this section principally relate to J2 Cloud Services prior to the
consummation of the separation and distribution. Consequently, the discussion in
this section relates to J2 Cloud Services as it was comprised as of September
30, 2021, without giving effect to the internal reorganization and other
transactions that occurred in connection with the separation and distribution,
and the financial information discussed below is derived from the unaudited
condensed consolidated financial statements of J2 Cloud Services. The discussion
in this section therefore includes J2 Cloud Services' B2B backup, cybersecurity
and SMB enablement businesses, which are not a part of Consensus following the
separation, and does not reflect Consensus as it is currently constituted
following the separation as a secure information exchange business with an
emphasis on healthcare interoperability. As a result, the discussion does not
necessarily reflect the financial position, results of operations or cash flows
of Consensus following the separation or what Consensus' financial position,
results of operations and cash flows would have been had Consensus been a
separate, standalone secure information exchange business with an emphasis on
healthcare interoperability during the periods presented. See "The Separation
and the Distribution" in the Information Statement for a discussion of the
internal reorganization and related transactions in connection with the
separation and distribution.

J2 Cloud Services LLC as of September 30, 2021

J2 Cloud Services was a leading provider of cloud services to businesses of all
sizes, from individuals to enterprises, and licenses its intellectual property
("IP") to third parties. J2 Cloud Services provides cloud-based subscription
services to consumers and businesses including cloud fax, backup, voice,
cybersecurity and SMB enablement. J2 Cloud Services generates revenues primarily
from customer subscription and usage fees and from IP licensing fees, and is
driven primarily by subscription revenues that are relatively higher margin,
stable and predictable from quarter to quarter with some seasonal
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weakness in the fourth quarter. In addition to growing our business organically,
on a regular basis J2 Cloud Services acquires businesses to grow its customer
bases, expand and diversify its service offerings, enhance our technologies,
acquire skilled personnel and enter into new markets.

We selectively pursue 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.

Cloud service performance metrics

We use certain metrics to generally assess the operational and financial
performance of our business; these metrics also serve as a baseline for internal
trends and benchmarking against competitors. The average monthly revenue per
customer can be used as an analytical tool in determining the marginal economics
of customer acquisition, which is particularly useful as we continue to focus on
growing our higher-margin businesses. We also use this metric, in conjunction
with the cancel rate, to help provide a directional indicator of Cloud Services
revenue and calculate the lifetime value of customers within each of our
business units.

The following table shows some key operating metrics for our cloud services business for the three and nine months ended. September 30, 2021 and 2020 (in thousands, except for percentages):

                                                       Three Months Ended September 30,             Nine Months Ended September 30,
                                                           2021                   2020                  2021                   2020
Subscription revenues:
Fixed                                               $       152,372           $ 144,525          $       444,537           $ 426,766
Variable                                                     29,639              25,708                   84,079              80,255
Total subscriber revenues                                   182,011             170,233                  528,616             507,021
Other license revenues                                           92                  15                      275                  69
Total revenues                                      $       182,103           $ 170,248          $       528,891           $ 507,090
Percentage of total subscription revenues:
Fixed                                                          83.7   %            84.9  %                  84.1   %            84.2  %
Variable                                                       16.3   %            15.1  %                  15.9   %            15.8  %
Total revenues:
Number-based                                        $        98,665           $  98,000          $       293,307           $ 289,502
Non-number-based                                             83,438              72,248                  235,584             217,588
Total revenues                                      $       182,103           $ 170,248          $       528,891           $ 507,090
Cloud Services Metrics
Average Monthly revenue per Customer ("ARPU") (1)   $         15.53           $   13.98
(2)
Cancel rate (3)                                                 2.1   %             2.1  %



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. The Annual ARPU is computed by taking the beginning and ending base to
total revenue for the quarter. We believe ARPU provides investors an
understanding of the average monthly revenues we recognize associated with each
Cloud Services 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 Services customer base.

2. Cloud Services customers are defined as paying direct inbound dialing numbers for fax and voice services, and direct and reseller accounts for other services.

3.Cancel Rate is defined as cancels of small and medium business and individual
Cloud Services customers with greater than four months of continuous service
(continuous service includes Cloud Services customers administratively canceled
and reactivated within the same calendar month), and enterprise Cloud Services
customers beginning with their first day of service, calculated monthly and
expressed as an average over the three months of the quarter. We
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exclude cancellations by small and medium businesses and individual Cloud
Services customers with less than four months of continuous service because such
customers generally pay by credit or debit card and we therefore count them as
customers for cancel rate purposes once they have finished any free trial
periods and continued through two payment cycles.

Critical accounting conventions 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 2020 Annual
Report on Form 10-K filed with the SEC on March 1, 2021. During the nine months
ended September 30, 2021, there were no significant changes in our critical
accounting policies and estimates.

Results of operations for the three and nine months ended September 30, 2021 and 2020

Assuming a stable or improving economic environment, and, subject to our risk
factors, we expect 2021 revenue to be higher compared to the prior-year. The
main strategic focus of our 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.
We expect acquisitions to remain an important component of our strategy and use
of capital in this business. However, we cannot predict whether our current pace
of acquisitions will remain the same within this business, especially in light
of the current macroeconomic conditions. 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 space but with different business models may impact Cloud Services'
overall profit margins.

Revenues

(in thousands, except percentages)

                              Three Months Ended September 30,         Percentage Change         Nine Months Ended September 30,          Percentage Change
                                  2021                2020                                           2021                2020
Revenues                      $  182,103          $ 170,248                   7%                 $  528,891          $ 507,090                   4%



  Our revenues consist of revenues from "fixed" customer subscription revenues
and "variable" revenues generated from actual usage of our services. Our
revenues in 2021 have increased over the prior comparable nine month period
primarily as a result of revenue attributable to business acquisitions acquired
in and subsequent to the third quarter of 2020 and organic growth; partially
offset by declines in certain areas Cloud Services businesses.

Cost of income

(in thousands, except percentages)

                                         Three Months Ended September
                                                     30,                       Percentage Change         Nine Months Ended September 30,          Percentage Change
                                            2021              2020                                           2021                2020
Cost of revenue                         $  40,707          $ 38,421                   6%                 $  115,860          $ 116,208                   -%
As a percent of revenue                     22%                23%                                            22%                23%



Cost of revenues is primarily comprised of costs associated with data and voice
transmission, numbers, network operations, customer service, software licenses
for resale, online processing fees and equipment depreciation. The increase in
cost of revenues for the three months ended September 30, 2021 was primarily due
to increases in database hosting, processing fees, customer service and network
services costs, partially offset by a decrease in phone operation cost. The
decrease in cost of revenues for the nine months ended September 30, 2021 was
primarily due to a business disposed in and subsequent to the second quarter of
2020 that resulted in a decrease in network services cost.
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Operating Expenses

Sales and Marketing.

(in thousands, except percentages)

                                          Three Months Ended September
                                                      30,                      Percentage Change         Nine Months Ended September 30,        Percentage Change
                                             2021              2020                                          2021               2020
Sales and Marketing                      $  38,413          $ 28,855                  33%                $  110,807          $ 87,231                  27%
As a percent of revenue                      21%                17%                                           21%                17%



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 service
provider. Advertising cost for the three months ended September 30, 2021 was
$22.8 million (primarily consists of $16.4 million of third-party advertising
costs and $5.4 million of personnel costs) compared to the third quarter of 2020
of $17.7 million (primarily consists of $13.1 million of third-party advertising
costs and $3.5 million of personnel costs). Advertising cost for the nine months
ended September 30, 2021 was $65.2 million (primarily consists of $49.1 million
of third-party advertising costs and $14.1 million of personnel costs) compared
to 2020 of $54.5 million (primarily consists of $39.9 million of third-party
advertising costs and $11.1 million of personnel costs). The increase in sales
and marketing expenses for the three and nine months ended September 30, 2021
versus the prior comparable period was primarily due to increased advertising
operations, sales and advertising and product development costs associated with
businesses acquired in and subsequent to the third quarter 2020.

Research, development and engineering.

(in thousands, except percentages)

                                 Three Months Ended September                                    Nine Months Ended September
                                              30,                     Percentage Change                      30,                      Percentage Change
                                     2021              2020                                         2021              2020
Research, Development and        $   8,259          $ 4,886                  69%                $  21,995          $ 16,484                  33%
Engineering
As a percent of revenue               5%                3%                                           4%                3%



Our research, development and engineering costs consist primarily of
personnel-related expenses. The increase in research, development and
engineering costs for the three and nine months ended September 30, 2021 versus
the prior comparable periods was primarily due to an increase in engineering
costs associated with businesses acquired in and subsequent to the third quarter
of 2020.
General and Administrative.

(in thousands, except percentages)

                                            Three Months Ended September
                                                        30,                       Percentage Change         Nine Months Ended September 30,          Percentage Change
                                               2021              2020                                           2021                2020
General and Administrative                 $  37,262          $ 35,579                   5%                 $  104,610          $ 106,850                  (2)%
As a percent of revenue                        20%                21%                                            20%                21%



Our general and administrative costs consist primarily of personnel-related
expenses, depreciation and amortization, 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 September 30, 2021
versus prior comparable period was primarily due to an increase in salary and
related costs and professional fees. The decrease in general and administrative
expense for the nine months ended September 30, 2021 versus prior comparable
period was primarily due to a decrease in depreciation and amortization expenses
related to disposed businesses in and subsequent to the third quarter of 2020.

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Good will depreciation on business.

(in thousands, except percentages)

                                                                                                             Nine Months Ended September
                                     Three Months Ended September 30,             Percentage Change                      30,                       Percentage Change
                                          2021                   2020                                           2021               2020
Goodwill impairment on business  $               -            $      -                   n/a                $   32,629          $     -                   n/a
As a percent of revenue                    -%                     -%                                             6%                 -%



During the second quarter of 2021, we received an offer to purchase the B2B
Backup business. Management has determined that the fair value of the business
less cost to sell is lower than its carrying amount. As a result, we recorded a
goodwill impairment on business of $32.6 million and zero for the nine months
ended September 30, 2021 and 2020, respectively.

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 and nine months ended September 30, 2021 and
2020 (in thousands):
                                            Three Months Ended September 30,               Nine Months Ended September 30,
                                                2021                   2020                    2021                   2020
Cost of revenues                        $             104          $      134          $             348          $      407
Operating expenses:
Sales and marketing                                   991                 904                      1,285               1,329
Research, development and engineering                 212                 186                        642                 606
General and administrative                            145                 165                      2,095               2,264
Total                                   $           1,452          $    1,389          $           4,370          $    4,606


Non-operating income and expenses

Interest expense, net. Our interest expense, net is generated primarily from
interest expense due to previously outstanding debt and partially offset by
interest earned on cash and cash equivalents and notes receivable. Interest
expense, net was zero and $(10.2) million for the three months ended
September 30, 2021 and 2020, respectively, and $(0.2) million and $(30.6)
million for the nine months ended September 30, 2021 and 2020, respectively.
Interest expense, net decreased over the prior comparable period due to the
Company redeeming all of its outstanding $650 million 6% Senior Notes in 2020.

(Loss) gain on sale of businesses. Loss on sale of businesses was $24.6 million
during the three months ended September 30, 2021 and a gain of $17.1 million for
the three months ended September 30, 2020. Loss on the sale of business was
$21.8 million for the nine months ended September 30, 2021 and a gain of $17.1
million for the nine months ended September 30, 2020. Our loss on the sale of
business during the third quarter of 2021 was related to the sale of the B2B
Back-up business. The loss on the sale of businesses during the nine months
ended September 30, 2021 was due to the loss on the sale of the B2B Back-up
business, partially offset by a gain on the sale of certain Voice assets in the
United Kingdom in the first quarter of 2021 with a subsequent adjustment in the
second quarter of 2021. See Note 5 - Dispositions from the footnotes to our
Condensed Consolidated Financial Statements for additional information.

Other income, net. Our other income, net is generated primarily from
miscellaneous items and gains or losses on currency exchange. Other income, net
was $0.9 million and $14.9 million for the three months ended September 30, 2021
and 2020, respectively, $1.4 million and $16.2 million for the nine months ended
September 30, 2021 and 2020, respectively. Other income, net decreased over
prior comparable period due to changes on currency exchange.
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Income taxes

J2 Cloud Services is included in the federal consolidated and state combined
income tax returns with the Parent and its other subsidiaries. For purposes of
these financial statements, the Company's taxes were determined using the
separate return method as if the Company had file separate tax returns. 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 $6.5 million and $25.4 million for the
three months ended September 30, 2021 and 2020, respectively, $20.3 million and
$49.7 million for the nine months ended September 30, 2021 and 2020,
respectively. Our effective tax rate was 19.3% and 30.1% for the three months
ended September 30, 2021 and 2020, respectively, and 16.6% and 27.2% for the
nine months ended September 30, 2021 and 2020,

The decrease in our effective tax rate for the closed quarter
September 30, 2021 was mainly due to the following:

1.a reduction in the tax charge during fiscal year 2021 due to the recognition of a current tax benefit linked to the sale of business-to-business back-up business units; and

2.a reduction in the tax charge due to a discreet tax charge recognized in 2020 related to the sale of the Voice business in Australia and New Zealand without a comparable event in 2021; partially offset by

3.an increase in our effective income tax rate during 2021 for U.S. state and
local taxes due to a greater portion of our income being subject to tax in the
U.S.

The decrease in our effective tax rate for the nine-month period ended
September 30, 2021 was mainly due to the following:

1.a reduction in the tax charge during the year 2021 due to the recognition of a tax benefit linked to the sale of certain business units; and

2.a decrease in tax expense due to discrete tax benefits related to a reduction
in our net reserve for uncertain tax positions with no similar events for the
nine months ended September 30, 2020; partially offset by

3.an increase in our effective income tax rate during 2021 for U.S. state and
local taxes due to a greater portion of our income being subject to tax in the
U.S.

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.

Liquidity and capital resources

Cash and cash equivalents

At September 30, 2021, we had cash and cash equivalents of $297.8 million
compared to $128.2 million at December 31, 2020. The increase in cash and cash
equivalents resulted primarily from cash provided from operations, the proceeds
from the sale of businesses and contributions from J2 Global; partially offset
by cash used in business acquisitions and the purchases of property and
equipment (including capitalized labor). As of September 30, 2021, cash and cash
equivalents held within domestic and foreign jurisdictions were $158.3 million
and $139.5 million, respectively.

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On October 7, 2020, the Parent issued $750 million aggregate principal amount of
4.625% Senior Notes due 2030. A portion of the proceeds were used to fund the
redemption of the outstanding aggregate principal amount of the 6.0% Senior
Notes due 2025 previously issued by J2 Cloud Services, LLC and to pay the
redemption premium due in respect of such redemption and accrued and unpaid
interest. The Parent used the remainder of the net proceeds for general
corporate purposes including acquisitions.

TO September 30, 2021, we expect that our existing cash and cash equivalents and cash generated from operations will be sufficient to meet our expected needs for working capital, capital expenditures and share buybacks, if any, for at least the 12 next months.

Liquidity and capital resources after the demerger

Subsequent to the separation and distribution, Consensus will no longer
participate in the corporate-wide cash management arrangements with J2 Global.
Consensus's ability to fund its operations and capital needs depends upon its
ability to generate ongoing cash from operations and to access the capital
markets.

In connection with the planned separation and distribution, Consensus issued
$305 million of 6.0% senior notes due 2026 (the "2026 notes") and $500 million
of 6.5% senior notes due 2028 (the "2028 notes" and, together with the 2026
notes, the "notes"). Consensus distributed $269.6 million of the net proceeds
from the offering of the 2026 notes to J2 Global in connection with the
separation. Consensus agreed to issue the 2028 notes to J2 Global, which agreed
to exchange the 2028 notes with lenders under its credit agreement (or their
affiliates) in exchange for extinguishment of a similar amount indebtedness
under such credit agreement.

The 2026 notes mature on October 15, 2026 and the 2028 notes will mature on
October 15, 2028. The notes require us to pay interest semi-annually in cash in
arrears on April 15 and October 15, commencing April 15, 2022. The notes are
fully and unconditionally guaranteed, jointly and severally, on an unsecured
basis by each of Consensus's existing and future domestic restricted
subsidiaries other than insignificant subsidiaries or subsidiaries designated as
unrestricted subsidiaries pursuant to the terms of the notes.

The notes and the related guarantees will be Consensus's and the guarantors'
general unsecured senior obligations and will be subordinated to any of
Consensus's and the guarantors' future secured debt to the extent of the assets
securing that secured debt. In addition, the notes will be structurally
subordinated to all of the liabilities of Consensus subsidiaries that are not
guaranteeing the notes, to the extent of the assets of those subsidiaries.

The 2026 notes will be redeemable on or after October 15, 2023 at a redemption
price of 103.000% for the 12 month period commencing October 15, 2023, 101.500%
for the 12 month period commencing October 15, 2024 and 100.000% for the 12
month period commencing October 15, 2025. In addition, Consensus may redeem (i)
up to 40% of the 2026 notes before October 15, 2023 with the net cash proceeds
from certain equity offerings at the redemption price that will be specified for
such notes or (ii) some or all of the 2026 notes at a redemption price of 100%
of the principal amount, plus accrued and unpaid interest, to the redemption
date, plus an applicable "make-whole" premium. The 2028 notes will be redeemable
on or after October 15, 2026 at a redemption price of 101.625% for the 12 month
period commencing October 15, 2026 and 100.000% for the 12 month period
commencing October 15, 2027.

The terms of the notes restrict, subject to qualifications and exceptions,
Consensus's ability and the ability of certain of its subsidiaries to incur
additional indebtedness, create liens, engage in sale-leaseback transactions,
pay dividends or make distributions in respect of capital stock, purchase or
redeem capital stock, make investments, repay subordinated indebtedness or
certain other restricted payments, sell assets, permit restrictions on the
ability of its restricted subsidiaries to pay dividends or make other payments
or transfers to Consensus, enter into transactions with affiliates; or effect a
consolidation or merger.

Upon a change of control, as defined in the notes, Consensus will be required to
make an offer to purchase the notes. The purchase price will equal 101% of the
principal amount of the notes on the date of purchase plus accrued and unpaid
interest.

Consensus believes that its financing arrangements, future cash from operations
and access to capital markets will provide adequate resources to fund our future
cash flow needs.

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Cash flow

Our primary sources of liquidity are cash flows generated from operations,
together with cash and cash equivalents. Net cash provided by operating
activities was $196.4 million and $160.3 million for the nine months ended
September 30, 2021 and 2020, respectively. Our operating cash flows resulted
primarily from cash received from our customers offset by cash payments we made
to third parties for their services and employee compensation. The increase in
our net cash provided by operating activities in 2021 compared to 2020 was
attributable to additional income after considering noncash items; partially
offset by cash outflows associated with prepaid expenses, operating lease
liabilities, accounts payable and accrued expenses, higher income tax payments
and cash outflows associated with uncertain tax positions. Our cash and cash
equivalents were $297.8 million and $128.2 million at September 30, 2021 and
December 31, 2020, respectively.

Net cash used in investing activities was $37.8 million and $29.3 million for
the nine months ended September 30, 2021 and 2020, respectively. For the nine
months ended September 30, 2021 and 2020, net cash used in investing activities
was primarily due to business acquisitions and capital expenditures associated
with the purchase of property and equipment (including capitalized labor);
partially offset by proceeds from the sale of businesses. The increase in our
net cash used in investing activities in 2021 compared to 2020 was primarily due
to additional cash used for business acquisitions; partially offset by proceeds
from the sale of businesses.

Net cash provided by (used in) financing activities was $14.4 million and
$(83.7) million for the nine months ended September 30, 2021 and 2020,
respectively. For the nine months ended September 30, 2021, net cash provided by
financing activities was primarily due to contributions from Parent; partially
offset by deferred payments for acquisitions. The change in net cash provided by
financing activities in 2021 compared to 2020 was primarily attributable to a
change in the distribution to Parent.

Obligations and contractual commitments

The following table summarizes our contractual obligations and commitments at
September 30, 2021:

                                                                           Payment Due by Period (in thousands)
Contractual Obligations              2021              2022              2023             2024             2025            Thereafter            Total

Operating leases (a)              $  2,137          $  7,501          $ 6,163          $ 5,746          $ 5,538          $    28,877          $ 55,962

Telecom services and
co-location facilities (b)             708             1,712              456               42                -                    -             2,918
Holdback payment (c)                 3,369            11,113                -                -                -                    -            14,482

Self-Insurance (d)                   5,860             1,527                -                -                -                    -             7,387
Other (e)                              210               420                -                -                -                    -               630
Total                             $ 12,284          $ 22,273          $ 6,619          $ 5,788          $ 5,538          $    28,877          $ 81,379



(a)These amounts represent undiscounted future minimum rental commitments under
noncancellable operating leases.
(b)These amounts represent service commitments to various telecommunication
providers.
(c)These amounts represent the holdback amounts in connection with certain
business acquisitions.
(d)These amounts represent health and dental insurance plans in connection to
self-insurance.
(e)These amounts represent certain consulting and Board of Directors fee
arrangements.

As of September 30, 2021, our liability for uncertain tax positions was $50.9
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 the taxing authorities.

We have not presented contingent consideration associated with acquisitions in
the table above due to the uncertainty of the amounts and the timing of cash
settlements.

Off-balance sheet provisions

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

                                      -41-

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