HLTH 8-K Webmd Reports First Quarter Results

EXHIBIT 99.2

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

	Three Months Ended
	March 31,
	2004		2003
Revenue	$	271,214	$	221,531
Costs and expenses:
Cost of operations		162,642		125,845
Development and engineering		11,096		10,917
Sales, marketing, general and administrative		76,994		68,108
Depreciation, amortization and other		12,585		26,920
Legal expense		2,037		—
Interest income		5,483		5,048
Interest expense		4,748		2,815
Other income, net		37		183
Income (loss) from continuing operations before income tax provision		6,632		(7,843	)
Income tax provision		931		987
Income (loss) from continuing operations		5,701		(8,830	)
Income from discontinued operations, net of income taxes		—		1,472
Net income (loss)	$	5,701	$	(7,358	)
Basic income (loss) per common share:
Income (loss) from continuing operations	$	0.02	$	(0.03	)
Income from discontinued operations		—		0.01
Net income (loss)	$	0.02	$	(0.02	)
Diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.02	$	(0.03	)
Income from discontinued operations		—		0.01
Net income (loss)	$	0.02	$	(0.02	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		309,491		302,892
Diluted		327,402		302,892

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

	Three Months Ended
	March 31,
	2004			2003
Revenues
Transaction services	$	163,779		$	115,493
Physician services		71,006			72,011
Portal services		26,309			22,180
Plastic technologies (a)		18,421			17,326
Inter-segment eliminations		(8,301	)		(5,479	)
	$	271,214		$	221,531
Income (loss) before taxes, non-cash and other items
Transaction services	$	29,850		$	24,051
Physician services		1,351			6,297
Portal services		4,542			4,018
Plastic technologies (a)		5,042			4,660
Corporate		(13,305	)		(12,462	)
Interest income		5,483			5,048
Interest expense		(4,748	)		(2,815	)
	$	28,215		$	28,797
Basic income per common share before taxes, non-cash and other items (b)	$	0.09		$	0.10
Diluted income per common share before taxes, non-cash and other items (b)	$	0.09		$	0.10
Taxes, non-cash and other items (c)
Depreciation, amortization and other	$	(12,585	)	$	(26,920	)
Amortization of prepaid content and services (included in cost of operations)		(255	)		—
Amortization of prepaid content and services (included in sales, marketing, general and administrative)		(5,038	)		(6,146	)
Non-cash stock compensation (included in sales, marketing, general and administrative)		(1,705	)		(3,757	)
Legal expense		(2,037	)		—
Income tax provision		(931	)		(987	)
Other income, net		37			183
Income (loss) from continuing operations		5,701			(8,830	)
Income from discontinued operations, net of income taxes		—			1,472
Net income (loss)	$	5,701		$	(7,358	)
Basic income (loss) per common share:
Income (loss) from continuing operations	$	0.02		$	(0.03	)
Income from discontinued operations		—			0.01
Net income (loss)	$	0.02		$	(0.02	)
Diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.02		$	(0.03	)
Income from discontinued operations		—			0.01
Net income (loss)	$	0.02		$	(0.02	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		309,491			302,892
Diluted		327,402			302,892

(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 prior period.
(b)	Basic and diluted income per common share before 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 taxes, non-cash and other items to income (loss) from continuing operations.

WebMD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	March 31,		December 31,
	2004		2003
	(Unaudited)		(Audited)
Assets
Cash and cash equivalents	$	442,518	$	63,298
Short-term investments		2,637		207,383
Accounts receivable, net		182,479		181,173
Inventory		11,957		12,158
Current portion of prepaid content and distribution services		16,342		18,116
Other current assets		21,863		25,973
Total current assets		677,796		508,101
Marketable debt securities		401,234		451,290
Marketable equity securities		4,051		4,744
Property and equipment, net		76,318		77,278
Prepaid content and distribution services		28,155		31,992
Goodwill		844,501		844,448
Intangible assets, net		178,201		184,130
Other assets		33,140		33,323
	$	2,243,396	$	2,135,306
Liabilities and Stockholders’ Equity
Accounts payable	$	8,843	$	10,390
Accrued expenses		205,282		208,430
Deferred revenue		89,878		86,708
Total current liabilities		304,003		305,528
Convertible subordinated notes		649,999		649,999
Other long-term liabilities		1,056		1,182
Convertible redeemable exchangeable preferred stock		98,123		—
Stockholders’ equity		1,190,215		1,178,597
	$	2,243,396	$	2,135,306

WebMD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)

	Three Months Ended
	March 31,
	2004			2003
Cash flows from operating activities:
Net income (loss)	$	5,701		$	(7,358	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Income from discontinued operations		—			(1,472	)
Depreciation, amortization and other		12,585			26,920
Amortization of debt issuance costs		746			375
Non-cash content and distribution services		5,293			6,146
Non-cash stock-based compensation		1,705			3,757
Loss (gain) on investments		84			(183	)
Gain on sale of property and equipment		(121	)		—
Changes in operating assets and liabilities:
Accounts receivable		(1,306	)		(5,781	)
Inventory		201			6
Prepaid content and distribution services		318			(191	)
Accounts payable		(1,548	)		(134	)
Accrued expenses		(3,177	)		(4,399	)
Deferred revenue		3,155			4,112
Other, net		6,020			9,653
Net cash provided by continuing operations		29,656			31,451
Net cash provided by discontinued operations		—			2,499
Net cash provided by operating activities		29,656			33,950
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		276,551			801
Proceeds from maturities and redemptions of held-to-maturity securities		—			101,919
Purchases of available-for-sale securities		(24,600	)		(1,164	)
Purchases of held-to-maturity securities		—			(75,119	)
Purchases of property and equipment		(6,568	)		(3,706	)
Proceeds received from sale of property and equipment		417			—
Cash paid in business combinations, net of cash acquired		(70	)		(344	)
Other changes in equity of discontinued operations		—			(3,347	)
Net cash provided by continuing operations		245,730			19,040
Net cash provided by discontinued operations		—			3,031
Net cash provided by investing activities		245,730			22,071
Cash flows from financing activities:
Proceeds from issuance of common stock		10,885			17,025
Net proceeds from issuance of preferred shares		98,115			—
Payments of notes payable and other		(95	)		(15	)
Purchases of treasury shares		(4,877	)		(93	)
Net cash provided by continuing operations		104,028			16,917
Net cash used in discontinued operations		—			(4	)
Net cash provided by financing activities		104,028			16,913
Effect of exchange rates on cash		(194	)		177
Net increase in cash and cash equivalents		379,220			73,111
Changes in cash attributable to discontinued operations		—			(5,526	)
Cash and cash equivalents at beginning of period		63,298			175,596
Cash and cash equivalents at end of period	$	442,518		$	243,181