HLTH 8-K Webmd Corporation

EXHIBIT 99.1

WebMD CORPORATION

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data, unaudited)

		Three Months Ended						Six Months
								Ended
		March 31,			June 30,			June 30,
		2003			2003			2003
Revenue		$	221,531		$	233,418		$	454,949
Costs and expenses:
	Cost of operations		125,845			135,441			261,286
	Development and engineering		10,917			10,403			21,320
	Sales, marketing, general and administrative		68,108			69,359			137,467
	Depreciation and amortization		26,920			14,944			41,864
	Interest income		5,048			4,985			10,033
	Interest expense		2,815			2,926			5,741
	Other income, net		183			1,118			1,301
Income (loss) from continuing operations before income tax provision			(7,843	)		6,448			(1,395	)
Income tax provision			987			1,001			1,988
Income (loss) from continuing operations			(8,830	)		5,447			(3,383	)
Income (loss) from discontinued operations, net of income taxes			1,472			(31,717	)		(30,245	)
Net loss		$	(7,358	)	$	(26,270	)	$	(33,628	)
Basic income (loss) per common share:
	Income (loss) from continuing operations	$	(0.03	)	$	0.02		$	(0.01	)
	Income (loss) from discontinued operations		0.01			(0.11	)		(0.10	)
Basic net loss per common share		$	(0.02	)	$	(0.09	)	$	(0.11	)
Diluted income (loss) per common share:
	Income (loss) from continuing operations	$	(0.03	)	$	0.02		$	(0.01	)
	Income (loss) from discontinued operations		0.01			(0.10	)		(0.10	)
Diluted net loss per common share		$	(0.02	)	$	(0.08	)	$	(0.11	)
Weighted average shares outstanding used in computing income (loss) per common share:
	Basic		302,892			304,001			303,447
	Diluted		302,892			325,796			303,447

     Effective August 1, 2003, the Company completed the sale of two operating units of its Plastic Technologies segment, Porex Bio Products, Inc. and Porex Medical Products, Inc., in two separate transactions. Beginning in the quarter ended September 30, 2003, the Company’s consolidated financial statements will reflect these operating units as discontinued operations for all prior periods. The above Pro Forma Financial Statements reflect these operating units as discontinued operations for the current and prior periods.

1

WebMD CORPORATION

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data, unaudited)

			Three Months Ended
															Year Ended
			March 31,			June 30,			September 30,			December 31,			December 31,
			2002			2002			2002			2002			2002
Revenue			$	211,961		$	213,255		$	217,004		$	229,476		$	871,696
Costs and expenses:
	Cost of operations			129,681			126,060			123,360			130,643			509,744
	Development and engineering			10,751			11,020			10,869			10,827			43,467
	Sales, marketing, general and administrative			77,156			74,462			66,883			64,923			283,424
	Depreciation and amortization			31,608			31,894			32,073			30,018			125,593
	Restructuring and integration benefit			(3,750	)		—			(2,100	)		—			(5,850	)
	Gain on investments			—			5,866			681			—			6,547
	Interest income			3,113			6,006			5,222			5,249			19,590
	Interest expense			23			2,835			2,819			2,814			8,491
	Other income, net			—			—			2,323			1,521			3,844
Loss from continuing operations before income tax (benefit) provision				(30,395	)		(21,144	)		(8,674	)		(2,979	)		(63,192	)
Income tax (benefit) provision				654			749			(12,103	)		621			(10,079	)
Income (loss) from continuing operations				(31,049	)		(21,893	)		3,429			(3,600	)		(53,113	)
Income (loss) from discontinued operations, net of income taxes				1,447			(316	)		1,109			1,171			3,411
Net income (loss)			$	(29,602	)	$	(22,209	)	$	4,538		$	(2,429	)	$	(49,702	)
Basic income (loss) per common share:
		Income (loss) from continuing operations	$	(0.10	)	$	(0.07	)	$	0.01		$	(0.01	)	$	(0.17	)
		Income (loss) from discontinued operations		0.01			(0.00	)		0.01			0.00			0.01
Net (income) loss per common share			$	(0.09	)	$	(0.07	)	$	0.02		$	(0.01	)	$	(0.16	)
Diluted income (loss) per common share:
		Income (loss) from continuing operations	$	(0.10	)	$	(0.07	)	$	0.01		$	(0.01	)	$	(0.17	)
		Income (loss) from discontinued operations		0.01			(0.00	)		0.00			0.00			0.01
Net income (loss) per common share			$	(0.09	)	$	(0.07	)	$	0.01		$	(0.01	)	$	(0.16	)
Weighted average shares outstanding used in computing income (loss) per common share:
		Basic		311,668			309,462			297,352			298,188			304,168
		Diluted		311,668			309,462			308,537			298,188			304,168

     Effective August 1, 2003, the Company completed the sale of two operating units of its Plastic Technologies segment, Porex Bio Products, Inc. and Porex Medical Products, Inc., in two separate transactions. Beginning in the quarter ended September 30, 2003, the Company’s consolidated financial statements will reflect these operating units as discontinued operations for all prior periods. The above Pro Forma Financial Statements reflect these operating units as discontinued operations for the current and prior periods.

2

WebMD CORPORATION

PRO FORMA CONSOLIDATED SEGMENT INFORMATION

(In thousands, except per share data, unaudited)

		Three Months Ended						Six Months
								Ended
		March 31,			June 30,			June 30,
		2003			2003			2003
Revenue
	Transaction services	$	115,493		$	118,021		$	233,514
	Physician services		72,011			76,797			148,808
	Portal services		22,180			26,538			48,718
	Plastic technologies		17,326			18,596			35,922
	Inter-segment eliminations		(5,479	)		(6,534	)		(12,013	)
		$	221,531		$	233,418		$	454,949
Income (loss) before restructuring, taxes, non-cash and other items Transaction services		$	24,051		$	22,342		$	46,393
	Physician services		6,297			6,359			12,656
	Portal services		4,018			6,192			10,210
	Plastic technologies		4,660			5,507		��	10,167
	Corporate		(12,462	)		(12,381	)		(24,843	)
	Interest income		5,048			4,985			10,033
	Interest expense		(2,815	)		(2,926	)		(5,741	)
		$	28,797		$	30,078		$	58,875
Basic income per common share before restructuring, taxes, non-cash and other items		$	0.10		$	0.10		$	0.19
Diluted income per common share before restructuring, taxes, non-cash and other items		$	0.10		$	0.09		$	0.19
Restructuring, taxes, non-cash and other items
	Depreciation and amortization	$	(26,920	)	$	(14,944	)	$	(41,864	)
	Non-cash content and distribution services and stock compensation		(9,903	)		(9,804	)		(19,707	)
	Income tax provision		(987	)		(1,001	)		(1,988	)
	Other income, net		183			1,118			1,301
Income (loss) from continuing operations			(8,830	)		5,447			(3,383	)
	Income (loss) from discontinued operations, net of income taxes		1,472			(31,717	)		(30,245	)
Net loss		$	(7,358	)	$	(26,270	)	$	(33,628	)

     Effective August 1, 2003, the Company completed the sale of two operating units of its Plastic Technologies segment, Porex Bio Products, Inc. and Porex Medical Products, Inc., in two separate transactions. Beginning in the quarter ended September 30, 2003, the Company’s consolidated financial statements will reflect these operating units as discontinued operations for all prior periods. The above Pro Forma Financial Statements reflect these operating units as discontinued operations for the current and prior periods.

     Basic and diluted income (loss) per common share before restructuring, taxes, non-cash and other items is based on the weighted average shares outstanding used in computing basic and diluted per share amounts of income (loss) from continuing operations.

3

WebMD CORPORATION

PRO FORMA CONSOLIDATED SEGMENT INFORMATION

(In thousands, except per share data, unaudited)

		Three Months Ended
														Year Ended
		March 31,			June 30,			September 30,			December 31,			December 31,
		2002			2002			2002			2002			2002
Revenue
	Transaction services	$	117,927		$	117,204		$	115,026		$	116,653		$	466,810
	Physician services		66,089			66,068			70,581			72,568			275,306
	Portal services		17,134			18,006			19,851			29,305			84,296
	Plastic technologies		15,629			17,120			16,803			16,259			65,811
	Inter-segment eliminations and other, net		(4,818	)		(5,143	)		(5,257	)		(5,309	)		(20,527	)
		$	211,961		$	213,255		$	217,004		$	229,476		$	871,696
Income (loss) before restructuring, taxes, non-cash and other items
	Transaction services	$	17,538		$	18,264		$	24,327		$	25,025		$	85,154
	Physician services		6,252			6,234			7,174			7,025			26,685
	Portal services		(4,837	)		(2,219	)		3,577			9,053			5,574
	Plastic technologies		4,863			5,538			5,125			4,365			19,891
	Corporate		(14,607	)		(12,641	)		(11,493	)		(12,531	)		(51,272	)
	Interest income		3,113			6,006			5,222			5,249			19,590
	Interest expense		(23	)		(2,835	)		(2,819	)		(2,814	)		(8,491	)
		$	12,299		$	18,347		$	31,113		$	35,372		$	97,131
Basic and diluted income per common share before restructuring, taxes, non-cash and other items		$	0.04		$	0.06		$	0.10		$	0.12		$	0.32
Restructuring, taxes, non-cash and other items
	Depreciation and amortization	$	(31,608	)	$	(31,894	)	$	(32,073	)	$	(30,018	)	$	(125,593	)
	Non-cash content and distribution services and stock compensation		(14,836	)		(13,463	)		(12,818	)		(9,854	)		(50,971	)
	Restructuring and integration benefit		3,750			—			2,100			—			5,850
	Gain on investments		—			5,866			681			—			6,547
	Income tax benefit (provision)		(654	)		(749	)		12,103			(621	)		10,079
	Other income, net		—			—			2,323			1,521			3,844
Income (loss) from continuing operations			(31,049	)		(21,893	)		3,429			(3,600	)		(53,113	)
	Income (loss) from discontinued operations, net of income taxes		1,447			(316	)		1,109			1,171			3,411
Net income (loss)		$	(29,602	)	$	(22,209	)	$	4,538		$	(2,429	)	$	(49,702	)

     Effective August 1, 2003, the Company completed the sale of two operating units of its Plastic Technologies segment, Porex Bio Products, Inc. and Porex Medical Products, Inc., in two separate transactions. Beginning in the quarter ended September 30, 2003, the Company’s consolidated financial statements will reflect these operating units as discontinued operations for all prior periods. The above Pro Forma Financial Statements reflect these operating units as discontinued operations for the current and prior periods.

     Basic and diluted income (loss) per common share before restructuring, taxes, non-cash and other items is based on the weighted average shares outstanding used in computing basic and diluted per share amounts of income (loss) from continuing operations.

4

WebMD CORPORATION

PRO FORMA CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

		March 31,			June 30,
		2003			2003
ASSETS
Current assets:
Cash and cash equivalents		$	243,181		$	455,684
Short-term investments			214,276			216,060
Accounts receivable, net			169,055			171,615
Inventory			9,970			10,872
Current portion of prepaid content and distribution services			25,660			24,944
Assets of discontinued operations			98,983			61,153
Other current assets			17,908			20,686
	Total current assets		779,033			961,014
Marketable debt securities			218,602			268,222
Marketable equity securities			7,407			7,504
Property and equipment, net			68,152			67,610
Prepaid content and distribution services			42,324			37,290
Goodwill			586,205			600,040
Intangible assets, net			52,728			48,005
Other assets			26,137			35,626
	Total assets	$	1,780,588		$	2,025,311
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	9,956		$	12,552
Accrued expenses			203,945			182,608
Deferred revenue			85,365			86,588
Liabilities of discontinued operations			12,473			5,111
	Total current liabilities		311,739			286,859
Convertible subordinated notes			300,000			599,999
Other long-term liabilities			480			520
Stockholders’ equity:
Common stock			38			38
Additional paid-in-capital			11,699,274			11,710,519
Treasury stock			(327,635	)		(345,667	)
Accumulated other comprehensive income			12,934			11,417
Deferred stock compensation			(13,836	)		(9,698	)
Accumulated deficit			(10,202,406	)		(10,228,676	)
	Total stockholders’ equity		1,168,369			1,137,933
Total liabilities and stockholders’ equity		$	1,780,588		$	2,025,311

     Effective August 1, 2003, the Company completed the sale of two operating units of its Plastic Technologies segment, Porex Bio Products, Inc. and Porex Medical Products, Inc., in two separate transactions. Beginning in the quarter ended September 30, 2003, the Company’s consolidated financial statements will reflect these operating units as discontinued operations for all prior periods. The above Pro Forma Financial Statements reflect these operating units as discontinued operations for the current and prior periods.

5

WebMD CORPORATION

PRO FORMA CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

			March 31,			June 30,			September 30,			December 31,
			2002			2002			2002			2002
ASSETS
Current assets:
Cash and cash equivalents			$	222,374		$	168,255		$	162,609		$	175,596
Short-term investments				21,233			7,336			11,880			10,888
Accounts receivable, net				160,077			156,281			154,172			163,244
Inventory				10,776			10,664			10,315			9,976
Federal income tax receivable				—			—			12,887			—
Current portion of prepaid content and distribution services				27,108			26,453			25,799			25,406
Assets of discontinued operations				99,419			98,830			95,810			94,056
Other current assets				17,682			17,374			22,306			25,814
	Total current assets			558,669			485,193			495,778			504,980
Marketable debt securities				157,966			449,450			450,725			449,289
Marketable equity securities				17,603			15,819			14,025			7,427
Property and equipment, net				65,910			71,033			72,604			70,488
Prepaid content and distribution services				67,705			61,473			55,241			48,532
Goodwill				562,183			560,100			564,047			586,043
Intangible assets, net				139,383			117,651			93,500			73,222
Other assets				20,775			27,536			27,518			26,267
	Total assets		$	1,590,194		$	1,788,255		$	1,773,438		$	1,766,248
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	14,470		$	11,049		$	12,163		$	10,063
Accrued expenses				247,742			240,066			227,549			208,342
Deferred revenue				74,332			77,118			73,702			81,179
Liabilities of discontinued operations				13,389			12,190			12,432			12,365
	Total current liabilities			349,933			340,423			325,846			311,949
Convertible subordinated notes				—			300,000			300,000			300,000
Other long-term liabilities				642			531			505			498
Stockholders’ equity:
Common stock				37			37			37			37
Additional paid-in-capital				11,657,622			11,665,342			11,665,791			11,682,443
Treasury stock				(222,582	)		(311,329	)		(326,366	)		(327,542	)
Accumulated other comprehensive income				13,607			16,903			19,569			11,716
Deferred stock compensation				(34,117	)		(26,495	)		(19,325	)		(17,805	)
Accumulated deficit				(10,174,948	)		(10,197,157	)		(10,192,619	)		(10,195,048	)
		��
	Total stockholders’ equity			1,239,619			1,147,301			1,147,087			1,153,801
Total liabilities and stockholders’ equity			$	1,590,194		$	1,788,255		$	1,773,438		$	1,766,248

     Effective August 1, 2003, the Company completed the sale of two operating units of its Plastic Technologies segment, Porex Bio Products, Inc. and Porex Medical Products, Inc., in two separate transactions. Beginning in the quarter ended September 30, 2003, the Company’s consolidated financial statements will reflect these operating units as discontinued operations for all prior periods. The above Pro Forma Financial Statements reflect these operating units as discontinued operations for the current and prior periods.

6

WebMD CORPORATION

PRO FORMA CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

					Three Months			Six Months
					Ended			Ended
					March 31,			June 30,
					2003			2003
Cash flows from operating activities:
	Net loss				$	(7,358	)	$	(33,628	)
	Adjustments to reconcile net loss to net cash provided by operating activities:
		Loss (income) from discontinued operations				(1,472	)		30,245
		Depreciation and amortization				26,920			41,864
		Amortization of debt issuance costs				375			774
		Non-cash content and distribution services				6,146			12,149
		Non-cash stock-based compensation				3,757			7,558
		Gain on investments				(183	)		(183	)
		Changes in operating assets and liabilities:
			Accounts receivable			(5,781	)		(5,743	)
			Inventory			6			(896	)
			Prepaid content and distribution services			(191	)		(445	)
			Other assets			9,653			4,946
			Accounts payable			(134	)		1,930
			Accrued expenses			(4,399	)		(26,283	)
			Deferred revenue			4,112			478
				Net cash provided by continuing operations		31,451			32,766
				Net cash provided by discontinued operations		2,499			4,553
				Net cash provided by operating activities		33,950			37,319
Cash flows from investing activities:
	Proceeds from maturities and sales of available-for-sale securities					801			2,631
	Proceeds from maturities and redemptions of held-to-maturity securities					101,919			102,919
	Purchases of available-for-sale securities					(1,164	)		(6,730	)
	Purchases of held-to-maturity securities					(75,119	)		(124,931	)
	Purchases of property and equipment					(3,706	)		(8,861	)
	Cash paid in business combinations, net of cash acquired					(344	)		(14,701	)
	Other changes in equity of discontinued operations					(3,347	)		(4,596	)
				Net cash provided (used) by continuing operations		19,040			(54,269	)
				Net cash provided by discontinued operations		3,031			3,886
				Net cash provided by (used in) investing activities		22,071			(50,383	)
Cash flows from financing activities:
	Proceeds from issuance of common stock					17,025			28,578
	Purchases of treasury stock					(93	)		(18,125	)
	Payment of notes payable and other					(15	)		(25	)
	Net proceeds from issuance of convertible debt					—			290,500
				Net cash provided by continuing operations		16,917			300,928
				Net cash used by discontinued operations		(4	)		(6,538	)
				Net cash provided by financing activities		16,913			294,390
	Effect of exchange rates on cash					177			663
	Net increase in cash and cash equivalents					73,111			281,989
	Changes in cash attributable to discontinued operations					(5,526	)		(1,901	)
	Cash and cash equivalents — beginning of period					175,596			175,596
	Cash and cash equivalents — end of period				$	243,181		$	455,684

    Effective August 1, 2003, the Company completed the sale of two operating units of its Plastic Technologies segment, Porex Bio Products, Inc. and Porex Medical Products, Inc., in two separate transactions. Beginning in the quarter ended September 30, 2003, the Company’s consolidated financial statements will reflect these operating units as discontinued operations for all prior periods. The above Pro Forma Financial Statements reflect these operating units as discontinued operations for the current and prior periods.

7

WebMD CORPORATION

PRO FORMA CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

					Three Months			Six Months			Nine Months			Year
					Ended			Ended			Ended			Ended
					March 31,			June 30,			September 30,			December 31,
					2002			2002			2002			2002
Cash flows from operating activities:
	Net loss				$	(29,602	)	$	(51,811	)	$	(47,273	)	$	(49,702	)
	Adjustments to reconcile net loss to net cash provided by operating activities:
		Income from discontinued operations				(1,447	)		(1,131	)		(2,240	)		(3,411	)
		Depreciation and amortization				31,608			63,502			95,575			125,593
		Amortization of debt issuance costs				—			374			740			1,109
		Non-cash content and distribution services				7,260			13,409			19,558			25,706
		Non-cash stock-based compensation				7,576			14,890			21,559			25,265
		Gain on investments				—			(5,866	)		(6,547	)		(6,547	)
		Changes in operating assets and liabilities:
			Accounts receivable			(901	)		2,901			5,226			(2,631	)
			Inventory			(1,672	)		958			711			(872	)
			Federal income tax receivable			—			—			(12,887	)		—
			Prepaid content and distribution services			(1,649	)		(938	)		(201	)		753
			Other assets			1,059			(1,094	)		(8,001	)		(4,416	)
			Accounts payable			(2,682	)		(4,005	)		(3,220	)		(7,541	)
			Accrued expenses			9,934			803			(10,216	)		(32,651	)
			Deferred revenue			8,393			10,871			6,822			12,530
				Net cash provided by continuing operations		27,877			42,863			59,606			83,185
				Net cash provided by discontinued operations		741			3,648			5,809			9,912
				Net cash provided by operating activities		28,618			46,511			65,415			93,097
Cash flows from investing activities:
	Proceeds from maturities and sales of available-for-sale securities					79,248			101,826			106,108			108,991
	Proceeds from maturities and redemptions of held-to-maturity securities					1,055			1,055			59,095			59,095
	Purchases of available-for-sale securities					—			(201,565	)		(206,983	)		(207,833	)
	Purchases of held-to-maturity securities					(156,714	)		(246,072	)		(300,970	)		(300,970	)
	Purchases of property and equipment					(5,173	)		(13,225	)		(20,737	)		(26,267	)
	Cash paid in business combinations, net of cash acquired					(1,142	)		(2,924	)		(9,929	)		(33,471	)
	Other changes in equity of discontinued operations					4,066			3,140			7,511			10,369
				Net cash used by continuing operations		(78,660	)		(357,765	)		(365,905	)		(390,086	)
				Net cash used by discontinued operations		(4,646	)		(4,285	)		(9,184	)		(12,577	)
				Net cash used in investing activities		(83,306	)		(362,050	)		(375,089	)		(402,663	)
Cash flows from financing activities:
	Proceeds from issuance of common stock					5,351			13,369			14,313			28,765
	Purchases of treasury stock					—			(88,747	)		(103,784	)		(104,960	)
	Payment of notes payable and other					(586	)		(2,877	)		(2,899	)		(2,904	)
	Net proceeds from issuance of convertible debt					—			292,000			292,000			292,000
	Redemption of Series B Preferred Stock					(10,000	)		(10,000	)		(10,000	)		(10,000	)
				Net cash (used) provided by continuing operations		(5,235	)		203,745			189,630			202,901
				Net cash used by discontinued operations		(59	)		(1,144	)		(1,147	)		(1,150	)
				Net cash (used in) provided by financing activities		(5,294	)		202,601			188,483			201,751
Effect of exchange rates on cash						(121	)		899			765			1,083
Net decrease in cash and cash equivalents						(60,103	)		(112,039	)		(120,426	)		(106,732	)
Changes in cash attributable to discontinued operations						3,964			1,781			4,522			3,815
Cash and cash equivalents — beginning of period						278,513			278,513			278,513			278,513
Cash and cash equivalents — end of period					$	222,374		$	168,255		$	162,609		$	175,596

     Effective August 1, 2003, the Company completed the sale of two operating units of its Plastic Technologies segment, Porex Bio Products, Inc. and Porex Medical Products, Inc., in two separate transactions. Beginning in the quarter ended September 30, 2003, the Company’s consolidated financial statements will reflect these operating units as discontinued operations for all prior periods. The above Pro Forma Financial Statements reflect these operating units as discontinued operations for the current and prior periods.

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