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,
	2005		2004
Revenue	$	303,934	$	271,214
Costs and expenses:
Cost of operations		172,163		162,642
Development and engineering		14,640		11,096
Sales, marketing, general and administrative		82,137		76,994
Depreciation and amortization		16,504		12,585
Legal expense		4,160		2,037
Loss on investments		3,832		84
Interest income		4,321		5,483
Interest expense		4,781		4,748
Other income, net		—		121
Income before income tax provision		10,038		6,632
Income tax provision		189		931
Net income	$	9,849	$	5,701
Net income per common share:
Basic	$	0.03	$	0.02
Diluted	$	0.03	$	0.02
Weighted-average shares outstanding used in computing net income per common share:
Basic		325,334		311,011
Diluted		335,689		327,402

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

	Three Months Ended
	March 31,
	2005			2004
Revenues
WebMD Business Services	$	185,733		$	163,779
WebMD Practice Services		73,018			71,006
WebMD Health		33,575			26,309
Porex		19,856			18,421
Inter-segment eliminations		(8,248	)		(8,301	)
	$	303,934		$	271,214
Income before taxes, non-cash and other items
WebMD Business Services	$	38,253		$	29,850
WebMD Practice Services		4,397			1,351
WebMD Health		4,851			4,542
Porex		5,397			5,042
Corporate		(13,626	)		(13,305	)
Interest income		4,321			5,483
Interest expense		(4,781	)		(4,748	)
		38,812			28,215
Basic income per common share before taxes, non-cash and other items (a)	$	0.12		$	0.09
Diluted income per common share before taxes, non-cash and other items (a)	$	0.12		$	0.09
Taxes, non-cash and other items (b)
Depreciation and amortization		(16,504	)		(12,585	)
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)		(2,627	)		(5,038	)
Non-cash stock compensation (included in sales, marketing, general and administrative)		(1,651	)		(1,705	)
Legal expense		(4,160	)		(2,037	)
Loss on investments		(3,832	)		(84	)
Income tax provision		(189	)		(931	)
Other income, net		—			121
Net income	$	9,849		$	5,701
Net income per common share:
Basic	$	0.03		$	0.02
Diluted	$	0.03		$	0.02
Weighted-average shares outstanding used in computing net income per common share:
Basic		325,334			311,011
Diluted		335,689			327,402

(a)	Basic and diluted income per common share before taxes, non-cash and other items are based on the weighted-average shares outstanding used in computing basic and diluted income per common share.
(b)	Reconciliation of income before taxes, non-cash and other items to net income.

WebMD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)

	March 31,		December 31,
	2005		2004
Assets
Cash and cash equivalents	$	42,754	$	46,019
Short-term investments		130,690		61,675
Accounts receivable, net		231,450		214,437
Inventory		13,844		13,978
Prepaid expenses and other current assets		38,421		40,613
Total current assets		457,159		376,722
Marketable debt securities		396,220		511,864
Marketable equity securities		3,331		4,017
Property and equipment, net		93,778		89,677
Goodwill		1,030,948		1,010,564
Intangible assets, net		263,074		260,509
Other assets		45,815		48,871
	$	2,290,325	$	2,302,224
Liabilities and Stockholders’ Equity
Accounts payable	$	8,423	$	17,366
Accrued expenses		161,588		201,528
Deferred revenue		122,866		109,533
Total current liabilities		292,877		328,427
Convertible subordinated notes		649,999		649,999
Other long-term liabilities		1,236		1,283
Convertible redeemable exchangeable preferred stock		98,357		98,299
Stockholders’ equity		1,247,856		1,224,216
	$	2,290,325	$	2,302,224

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

	Three Months Ended
	March 31,
	2005			2004
Cash flows from operating activities:
Net income	$	9,849		$	5,701
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		16,504			12,585
Amortization of debt issuance costs		726			746
Non-cash content and distribution services		2,627			5,293
Non-cash stock-based compensation		1,651			1,705
Bad debt expense		2,283			1,472
Loss on investments		3,832			84
Gain on sale of property and equipment		—			(121	)
Changes in operating assets and liabilities:
Accounts receivable		(17,554	)		(2,778	)
Inventory		134			202
Prepaid expenses and other, net		2,931			6,337
Accounts payable		(8,631	)		(1,548	)
Accrued expenses		(106	)		(3,177	)
Deferred revenue		8,711			3,155
Net cash provided by operating activities		22,957			29,656
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		45,846			464,352
Purchases of available-for-sale securities		(2,550	)		(285,351	)
Purchases of property and equipment		(11,892	)		(6,568	)
Proceeds received from sale of property and equipment		400			417
Cash paid in business combinations, net of cash acquired		(70,775	)		(70	)
Net cash (used in) provided by investing activities		(38,971	)		172,780
Cash flows from financing activities:
Proceeds from issuance of common stock		13,170			10,885
Net proceeds from issuance of preferred shares		—			98,115
Payments of notes payable and other		(63	)		(95	)
Purchases of treasury stock		—			(4,877	)
Net cash provided by financing activities		13,107			104,028
Effect of exchange rates on cash		(358	)		(194	)
Net (decrease) increase in cash and cash equivalents		(3,265	)		306,270
Cash and cash equivalents at beginning of period		46,019			39,648
Cash and cash equivalents at end of period	$	42,754		$	345,918