Exhibit 99.2
WebMD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Revenue | $ | 322,556 | $ | 281,881 | $ | 626,490 | $ | 553,095 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of operations | 181,950 | 163,961 | 354,113 | 326,603 | ||||||||||||
Development and engineering | 14,457 | 12,991 | 29,097 | 24,087 | ||||||||||||
Sales, marketing, general and administrative | 83,533 | 83,298 | 165,670 | 160,292 | ||||||||||||
Depreciation and amortization | 17,541 | 13,148 | 34,045 | 25,733 | ||||||||||||
Legal expense | 4,283 | 2,215 | 8,443 | 4,252 | ||||||||||||
Interest income | 3,936 | 4,511 | 8,257 | 9,994 | ||||||||||||
Interest expense | 3,895 | 4,838 | 8,676 | 9,586 | ||||||||||||
Other expense (income), net | 1,712 | (447 | ) | 5,544 | (484 | ) | ||||||||||
Income before income tax provision | 19,121 | 6,388 | 29,159 | 13,020 | ||||||||||||
Income tax provision | 2,955 | 613 | 3,144 | 1,544 | ||||||||||||
Net income | $ | 16,166 | $ | 5,775 | $ | 26,015 | $ | 11,476 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.05 | $ | 0.02 | $ | 0.08 | $ | 0.04 | ||||||||
Diluted | $ | 0.05 | $ | 0.02 | $ | 0.08 | $ | 0.03 | ||||||||
Weighted-average shares outstanding used in computing net income per common share: | ||||||||||||||||
Basic | 337,303 | 322,919 | 331,318 | 316,965 | ||||||||||||
Diluted | 349,624 | 337,763 | 342,656 | 332,582 | ||||||||||||
WebMD CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Revenues | ||||||||||||||||
Emdeon Business Services | $ | 191,514 | $ | 166,037 | $ | 377,247 | $ | 329,816 | ||||||||
Emdeon Practice Services | 78,596 | 71,773 | 151,614 | 142,779 | ||||||||||||
WebMD Health | 40,465 | 31,852 | 74,040 | 58,161 | ||||||||||||
Porex | 20,397 | 20,737 | 40,253 | 39,158 | ||||||||||||
Inter-segment eliminations | (8,416 | ) | (8,518 | ) | (16,664 | ) | (16,819 | ) | ||||||||
$ | 322,556 | $ | 281,881 | $ | 626,490 | $ | 553,095 | |||||||||
Income before taxes, non-cash and other items | ||||||||||||||||
Emdeon Business Services | $ | 40,420 | $ | 28,914 | $ | 78,673 | $ | 58,764 | ||||||||
Emdeon Practice Services | 8,183 | 1,771 | 12,580 | 3,122 | ||||||||||||
WebMD Health | 4,350 | 7,626 | 9,201 | 12,168 | ||||||||||||
Porex | 6,064 | 6,275 | 11,461 | 11,317 | ||||||||||||
Corporate | (13,299 | ) | (14,228 | ) | (26,925 | ) | (27,533 | ) | ||||||||
Interest income | 3,936 | 4,511 | 8,257 | 9,994 | ||||||||||||
Interest expense | (3,895 | ) | (4,838 | ) | (8,676 | ) | (9,586 | ) | ||||||||
$ | 45,759 | $ | 30,031 | $ | 84,571 | $ | 58,246 | |||||||||
Basic income per common share before taxes, non-cash and other items (a) | $ | 0.14 | $ | 0.09 | $ | 0.26 | $ | 0.18 | ||||||||
Diluted income per common share before taxes, non-cash and other items (a) | $ | 0.13 | $ | 0.09 | $ | 0.25 | $ | 0.18 | ||||||||
Taxes, non-cash and other items (b) | ||||||||||||||||
Depreciation and amortization | (17,541 | ) | (13,148 | ) | (34,045 | ) | (25,733 | ) | ||||||||
Non-cash advertising and distribution services and stock compensation | (3,102 | ) | (8,727 | ) | (7,380 | ) | (15,725 | ) | ||||||||
Legal expense | (4,283 | ) | (2,215 | ) | (8,443 | ) | (4,252 | ) | ||||||||
Income tax provision | (2,955 | ) | (613 | ) | (3,144 | ) | (1,544 | ) | ||||||||
Other income (expense), net | (1,712 | ) | 447 | (5,544 | ) | 484 | ||||||||||
Net income | $ | 16,166 | $ | 5,775 | $ | 26,015 | $ | 11,476 | ||||||||
Net income per common share | ||||||||||||||||
Basic | $ | 0.05 | $ | 0.02 | $ | 0.08 | $ | 0.04 | ||||||||
Diluted | $ | 0.05 | $ | 0.02 | $ | 0.08 | $ | 0.03 | ||||||||
Weighted-average shares outstanding used in computing income per common share: | ||||||||||||||||
Basic | 337,303 | 322,919 | 331,318 | 316,965 | ||||||||||||
Diluted | 349,624 | 337,763 | 342,656 | 332,582 | ||||||||||||
(a) | 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 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)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 35,930 | $ | 46,019 | ||||
Short-term investments | 152,005 | 61,675 | ||||||
Accounts receivable, net | 220,817 | 204,447 | ||||||
Inventory | 13,430 | 13,978 | ||||||
Prepaid expenses and other current assets | 39,724 | 40,613 | ||||||
Total current assets | 461,906 | 366,732 | ||||||
Marketable debt securities | 323,182 | 511,864 | ||||||
Marketable equity securities | 4,094 | 4,017 | ||||||
Property and equipment, net | 112,118 | 89,677 | ||||||
Goodwill | 1,028,592 | 1,010,564 | ||||||
Intangible assets, net | 253,249 | 260,509 | ||||||
Other assets | 44,822 | 48,871 | ||||||
$ | 2,227,963 | $ | 2,292,234 | |||||
Liabilities and Stockholders’ Equity | ||||||||
Accounts payable | $ | 11,167 | $ | 17,366 | ||||
Accrued expenses | 151,993 | 201,528 | ||||||
Deferred revenue | 114,227 | 99,543 | ||||||
Total current liabilities | 277,387 | 318,437 | ||||||
Convertible subordinated notes | 350,000 | 649,999 | ||||||
Other long-term liabilities | 5,334 | 1,283 | ||||||
Convertible redeemable exchangeable preferred stock | 98,416 | 98,299 | ||||||
Stockholders’ equity | 1,496,826 | 1,224,216 | ||||||
$ | 2,227,963 | $ | 2,292,234 | |||||
WebMD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Six Months Ended | ||||||||
June 30, | ||||||||
2005 | 2004 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 26,015 | $ | 11,476 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 34,045 | 25,733 | ||||||
Amortization of debt issuance costs | 1,333 | 1,498 | ||||||
Non-cash advertising and distribution services | 5,013 | 11,284 | ||||||
Non-cash stock based compensation | 2,367 | 4,441 | ||||||
Bad debt expense | 3,722 | 2,914 | ||||||
Loss (gain) on investments | 3,642 | (363 | ) | |||||
Gain on sale of property and equipment | — | (121 | ) | |||||
Loss on redemption of convertible debt | 1,902 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (18,350 | ) | (1,724 | ) | ||||
Inventory | 547 | 206 | ||||||
Accounts payable | (5,881 | ) | (900 | ) | ||||
Accrued expenses | (2,450 | ) | (19,179 | ) | ||||
Deferred revenue | 9,501 | 6,320 | ||||||
Prepaid expenses and other, net | 1,294 | (937 | ) | |||||
Net cash provided by operating activities | 62,700 | 40,648 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 190,673 | 1,011,914 | ||||||
Purchases of available-for-sale securities | (94,350 | ) | (1,103,876 | ) | ||||
Purchases of property and equipment | (38,717 | ) | (12,047 | ) | ||||
Proceeds received from sale of property and equipment | 400 | 417 | ||||||
Cash paid in business combinations, net of cash acquired | (74,110 | ) | (58,060 | ) | ||||
Net cash used in investing activities | (16,104 | ) | (161,652 | ) | ||||
Cash flows from financing activities: | ||||||||
Redemption of convertible debt | (86,694 | ) | — | |||||
Proceeds from issuance of common stock | 31,437 | 25,011 | ||||||
Net proceeds from issuance of preferred stock | — | 98,115 | ||||||
Payments of notes payable and other | (304 | ) | (257 | ) | ||||
Purchases of treasury shares | — | (4,877 | ) | |||||
Net cash (used in) provided by financing activities | (55,561 | ) | 117,992 | |||||
Effect of exchange rates on cash | (1,124 | ) | (200 | ) | ||||
Net decrease in cash and cash equivalents | (10,089 | ) | (3,212 | ) | ||||
Cash and cash equivalents at beginning of period | 46,019 | 39,648 | ||||||
Cash and cash equivalents at end of period | $ | 35,930 | $ | 36,436 | ||||