HLTH 8-K Webmd Reports Fourth Quarter Results

EXHIBIT 99.2

WebMD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

	Three Months Ended					Years Ended
	December 31,					December 31,
	2003		2002			2003			2002
	(Unaudited)		(Unaudited)			(Unaudited)			(Audited)
Revenue	$	258,396	$	229,476		$	963,980		$	871,696
Costs and expenses:
Cost of operations		154,383		130,643			564,939			509,744
Development and engineering		10,331		10,827			42,985			43,467
Sales, marketing, general and administrative		72,565		64,923			282,482			283,424
Depreciation, amortization and other		9,473		30,018			62,434			125,593
Legal expense		3,466		—			3,959			—
Restructuring and integration benefit		—		—			—			(5,850	)
(Gain) loss on investments		1,563		—			(1,659	)		(6,547	)
Interest income		6,467		5,249			22,901			19,590
Interest expense		4,770		2,814			15,214			8,491
Other income, net		3,100		1,521			4,218			3,844
Income (loss) from continuing operations before income tax provision (benefit)		11,412		(2,979	)		20,745			(63,192	)
Income tax provision (benefit)		879		621			4,140			(10,079	)
Income (loss) from continuing operations		10,533		(3,600	)		16,605			(53,113	)
Income (loss) from discontinued operations, net of income taxes		—		1,171			(33,611	)		3,411
Net income (loss)	$	10,533	$	(2,429	)	$	(17,006	)	$	(49,702	)
Basic income (loss) per common share:
Income (loss) from continuing operations	$	0.03	$	(0.01	)	$	0.05		$	(0.17	)
Income (loss) from discontinued operations		—		0.00			(0.11	)		0.01
Net income (loss)	$	0.03	$	(0.01	)	$	(0.06	)	$	(0.16	)
Diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.03	$	(0.01	)	$	0.05		$	(0.17	)
Income (loss) from discontinued operations		—		0.00			(0.10	)		0.01
Net income (loss)	$	0.03	$	(0.01	)	$	(0.05	)	$	(0.16	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		307,069		298,188			304,858			304,168
Diluted		324,058		298,188			325,811			304,168

WebMD CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data)

	Three Months Ended						Years Ended
	December 31,						December 31,
	2003			2002			2003			2002
	(Unaudited)			(Unaudited)			(Unaudited)			(Audited)
Revenues
Transaction services	$	140,238		$	116,653		$	505,729		$	466,810
Physician services		78,345			72,568			302,640			275,306
Portal services		30,783			29,305			110,665			84,296
Plastic technologies(a)		16,925			16,259			71,940			65,811
Inter-segment eliminations		(7,895	)		(5,309	)		(26,994	)		(20,527	)
	$	258,396		$	229,476		$	963,980		$	871,696
Income (loss) before restructuring, taxes, non-cash and other items
Transaction services	$	26,058		$	25,025		$	94,218		$	85,154
Physician services		4,582			7,025			20,924			26,685
Portal services		5,976			9,053			24,898			5,574
Plastic technologies(a)		4,675			4,365			20,532			19,891
Corporate		(12,599	)		(12,531	)		(50,251	)		(51,272	)
Interest income		6,467			5,249			22,901			19,590
Interest expense		(4,770	)		(2,814	)		(15,214	)		(8,491	)
	$	30,389		$	35,372		$	118,008		$	97,131
Basic income per common share before restructuring,
taxes, non-cash and other items(b)	$	0.10		$	0.12		$	0.39		$	0.32
Diluted income per common share before restructuring, taxes,
non-cash and other items(b)	$	0.09		$	0.12		$	0.36		$	0.32
Restructuring, taxes, non-cash and other items(c)
Depreciation, amortization and other	$	(9,473	)	$	(30,018	)	$	(62,434	)	$	(125,593	)
Amortization of prepaid content and services (included in cost of operations)		(425	)		(2,588	)		(2,356	)		(4,765	)
Amortization of prepaid content and services (included in sales, marketing, general and administrative)		(5,650	)		(3,560	)		(21,942	)		(20,941	)
Non-cash stock compensation (included in sales, marketing, general and administrative)		(1,500	)		(3,706	)		(12,449	)		(25,265	)
Restructuring and integration benefit		—			—			—			5,850
Legal expense		(3,466	)		—			(3,959	)		—
Gain (loss) on investments		(1,563	)		—			1,659			6,547
Income tax (provision) benefit		(879	)		(621	)		(4,140	)		10,079
Other income, net		3,100			1,521			4,218			3,844
Income (loss) from continuing operations		10,533			(3,600	)		16,605			(53,113	)
Income (loss) from discontinued operations, net of income taxes		—			1,171			(33,611	)		3,411
Net income (loss)	$	10,533		$	(2,429	)	$	(17,006	)	$	(49,702	)
Basic income (loss) per common share:
Income (loss) from continuing operations	$	0.03		$	(0.01	)	$	0.05		$	(0.17	)
Income (loss) from discontinued operations		—			0.00			(0.11	)		0.01
Net income (loss)	$	0.03		$	(0.01	)	$	(0.06	)	$	(0.16	)
Diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.03		$	(0.01	)	$	0.05		$	(0.17	)
Income (loss) from discontinued operations		—			0.00			(0.10	)		0.01
Net income (loss)	$	0.03		$	(0.01	)	$	(0.05	)	$	(0.16	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		307,069			298,188			304,858			304,168
Diluted		324,058			298,188			325,811			304,168

(a)	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 reflect these operating units as discontinued operations for all prior periods. The above segment information reflects these operating units as discontinued operations for the current and prior periods.
(b)	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 income (loss) per common share.
(c)	Reconciliation of income (loss) before restructuring, taxes, non-cash and other items to income (loss) from continuing operations.

WebMD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	December 31,		December 31,
	2003		2002
	(Unaudited)		(Audited)
Assets
Cash and cash equivalents	$	63,298	$	175,596
Short-term investments		207,383		10,888
Accounts receivable, net		181,173		163,244
Inventory		12,158		9,976
Current portion of prepaid content and distribution services		18,116		25,406
Assets of discontinued operations		—		94,056
Other current assets		25,973		25,814
Total current assets		508,101		504,980
Marketable debt securities		451,290		449,289
Marketable equity securities		4,744		7,427
Property and equipment, net		77,278		70,488
Prepaid content and distribution services		31,992		48,532
Goodwill		844,448		586,043
Intangible assets, net		184,130		73,222
Other assets		33,323		26,267
	$	2,135,306	$	1,766,248
Liabilities and Stockholders’ Equity
Accounts payable	$	10,390	$	10,063
Accrued expenses		208,430		208,342
Deferred revenue		86,708		81,179
Liabilities of discontinued operations		—		12,365
Total current liabilities		305,528		311,949
Convertible subordinated notes		649,999		300,000
Other long-term liabilities		1,182		498
Stockholders’ equity		1,178,597		1,153,801
	$	2,135,306	$	1,766,248

WebMD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

	Years Ended
	December 31,
	2003			2002
	(Unaudited)			(Audited)
Cash flows from operating activities:
Net loss	$	(17,006	)	$	(49,702	)
Adjustments to reconcile net loss to net cash provided by operating activities:
(Income) loss from discontinued operations		33,611			(3,411	)
Depreciation, amortization and other		62,434			125,593
Amortization of debt issuance costs		2,246			1,109
Non-cash content and distribution services		24,298			25,706
Non-cash stock based compensation		12,449			25,265
Gain on investments		(1,659	)		(6,547	)
Gain on sale of fixed assets		(3,100	)		—
Changes in operating assets and liabilities:
Accounts receivable		5,515			(2,631	)
Inventory		(2,176	)		(872	)
Prepaid content and distribution services		(467	)		753
Accounts payable		(651	)		(7,541	)
Accrued expenses		(42,419	)		(32,651	)
Deferred revenue		(225	)		12,530
Other assets		4,259			(4,416	)
Net cash provided by continuing operations		77,109			83,185
Net cash provided by discontinued operations		5,130			9,912
Net cash provided by operating activities		82,239			93,097
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		247,294			108,991
Proceeds from maturities and redemptions of held-to-maturity securities		157,919			59,095
Purchases of available-for-sale securities		(8,254	)		(207,833	)
Purchases of held-to-maturity securities		(590,113	)		(300,970	)
Purchases of property and equipment		(18,385	)		(26,267	)
Proceeds received from sale of fixed assets		9,779			—
Proceeds received from sale of discontinued operations		46,500			—
Cash paid in business combinations, net of cash acquired		(400,491	)		(33,471	)
Other changes in equity of discontinued operations		1,754			10,369
Net cash used in continuing operations		(553,997	)		(390,086	)
Net cash used in discontinued operations		(2,529	)		(12,577	)
Net cash used in investing activities		(556,526	)		(402,663	)
Cash flows from financing activities:
Proceeds from issuance of common stock		44,719			28,765
Payments of notes payable and other		(361	)		(2,904	)
Redemption of Series B Preferred Stock		—			(10,000	)
Purchase of treasury shares		(20,316	)		(104,960	)
Net proceeds from issuance of convertible debt		339,125			292,000
Net cash provided by continuing operations		363,167			202,901
Net cash used in discontinued operations		(6,546	)		(1,150	)
Net cash provided by financing activities		356,621			201,751
Effect of exchange rates on cash		1,423			1,083
Net decrease in cash and cash equivalents		(116,243	)		(106,732	)
Changes in cash attributable to discontinued operations		3,945			3,815
Cash and cash equivalents at beginning of period		175,596			278,513
Cash and cash equivalents at end of period	$	63,298		$	175,596