Exhibit 99.2
EMDEON 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 | Years Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Revenue | $ | 327,236 | $ | 307,641 | $ | 1,276,879 | $ | 1,160,351 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of operations | 180,024 | 171,257 | 717,047 | 666,431 | ||||||||||||
Development and engineering | 14,716 | 15,682 | 58,494 | 54,161 | ||||||||||||
Sales, marketing, general and administrative | 85,270 | 78,973 | 333,288 | 324,027 | ||||||||||||
Depreciation and amortization | 18,827 | 16,843 | 71,767 | 57,765 | ||||||||||||
Legal expense | 3,488 | 2,653 | 17,835 | 9,230 | ||||||||||||
Restructuring and integration charge | — | — | — | 4,535 | ||||||||||||
Loss (gain) on investments | 2,723 | — | 6,365 | (457 | ) | |||||||||||
Interest income | 8,149 | 4,211 | 21,531 | 18,717 | ||||||||||||
Interest expense | 4,652 | 4,824 | 16,324 | 19,253 | ||||||||||||
Other expense (income), net | — | — | 3,765 | (121 | ) | |||||||||||
Income before income tax (benefit) provision and minority interest | 25,685 | 21,620 | 73,525 | 44,244 | ||||||||||||
Income tax (benefit) provision | (8,037 | ) | 1,931 | (357 | ) | 4,910 | ||||||||||
Minority interest in WebMD Health Corp., net of tax | 870 | — | 908 | — | ||||||||||||
Net income | $ | 32,852 | $ | 19,689 | $ | 72,974 | $ | 39,334 | ||||||||
Net income per common share: | ||||||||||||||||
Basic and diluted | $ | 0.09 | $ | 0.06 | $ | 0.21 | $ | 0.12 | ||||||||
Weighted-average shares outstanding used in computing net income per common share: | ||||||||||||||||
Basic | 348,261 | 312,745 | 341,747 | 320,080 | ||||||||||||
Diluted | 355,782 | 333,576 | 352,852 | 333,343 | ||||||||||||
EMDEON CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
Three Months Ended | Years Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Revenues | ||||||||||||||||
Emdeon Business Services | $ | 191,102 | $ | 182,126 | $ | 758,851 | $ | 686,585 | ||||||||
Emdeon Practice Services | 77,062 | 76,412 | 304,175 | 296,115 | ||||||||||||
WebMD | 49,104 | 39,139 | 168,238 | 134,317 | ||||||||||||
Porex | 18,461 | 18,556 | 79,124 | 77,099 | ||||||||||||
Inter-segment eliminations | (8,493 | ) | (8,592 | ) | (33,509 | ) | (33,765 | ) | ||||||||
$ | 327,236 | $ | 307,641 | $ | 1,276,879 | $ | 1,160,351 | |||||||||
Earnings before restructuring, interest, taxes, non-cash and other items (“Adjusted EBITDA”) | ||||||||||||||||
Emdeon Business Services | $ | 39,913 | $ | 41,320 | $ | 154,512 | $ | 131,834 | ||||||||
Emdeon Practice Services | 9,166 | 5,555 | 29,378 | 14,533 | ||||||||||||
WebMD (a) | 12,446 | 8,735 | 27,546 | 26,307 | ||||||||||||
Porex | 4,678 | 5,510 | 22,524 | 22,650 | ||||||||||||
Corporate (a) | (13,854 | ) | (13,724 | ) | (50,301 | ) | (51,791 | ) | ||||||||
$ | 52,349 | $ | 47,396 | $ | 183,659 | $ | 143,533 | |||||||||
Adjusted EBITDA per basic common share (b) | $ | 0.15 | $ | 0.15 | $ | 0.54 | $ | 0.45 | ||||||||
Adjusted EBITDA per diluted common share (b) | $ | 0.15 | $ | 0.14 | $ | 0.52 | $ | 0.43 | ||||||||
Restructuring, interest, taxes, non-cash and other items (c) | ||||||||||||||||
Depreciation and amortization | $ | (18,827 | ) | $ | (16,843 | ) | $ | (71,767 | ) | $ | (57,765 | ) | ||||
Amortization of non-cash advertising and distribution services | (3,871 | ) | (3,933 | ) | (10,870 | ) | (18,826 | ) | ||||||||
Non-cash stock-based compensation | (1,252 | ) | (1,734 | ) | (4,739 | ) | (8,975 | ) | ||||||||
Legal expense | (3,488 | ) | (2,653 | ) | (17,835 | ) | (9,230 | ) | ||||||||
(Loss) gain on investments | (2,723 | ) | — | (6,365 | ) | 457 | ||||||||||
Restructuring and integration charge | — | — | — | (4,535 | ) | |||||||||||
Interest income | 8,149 | 4,211 | 21,531 | 18,717 | ||||||||||||
Interest expense | (4,652 | ) | (4,824 | ) | (16,324 | ) | (19,253 | ) | ||||||||
Other (expense) income, net | — | — | (3,765 | ) | 121 | |||||||||||
Minority interest in WebMD Health Corp., net of tax | (870 | ) | — | (908 | ) | — | ||||||||||
Income tax benefit (provision) | 8,037 | (1,931 | ) | 357 | (4,910 | ) | ||||||||||
Net income | $ | 32,852 | $ | 19,689 | $ | 72,974 | $ | 39,334 | ||||||||
Net income per common share: | ||||||||||||||||
Basic and diluted | $ | 0.09 | $ | 0.06 | $ | 0.21 | $ | 0.12 | ||||||||
Weighted-average shares outstanding used in computing net income per common share: | ||||||||||||||||
Basic | 348,261 | 312,745 | 341,747 | 320,080 | ||||||||||||
Diluted | 355,782 | 333,576 | 352,852 | 333,343 | ||||||||||||
(a) | Adjusted EBITDA during prior periods, for the Corporate and WebMD segments, has been reclassified to conform to the current period presentation. | |
(b) | Adjusted EBITDA per basic and diluted common share is based on the weighted-average shares outstanding used in computing net income per common share (basic and diluted). | |
(c) | Reconciliation of Adjusted EBITDA to net income. |
EMDEON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 159,510 | $ | 46,019 | ||||
Short-term investments | 267,387 | 61,675 | ||||||
Accounts receivable, net | 233,070 | 204,447 | ||||||
Inventory | 14,251 | 14,367 | ||||||
Prepaid expenses and other current assets | 34,615 | 40,224 | ||||||
Total current assets | 708,833 | 366,732 | ||||||
Marketable debt securities | — | 511,864 | ||||||
Marketable equity securities | 4,481 | 4,017 | ||||||
Property and equipment, net | 116,032 | 89,677 | ||||||
Goodwill | 1,075,549 | 1,010,564 | ||||||
Intangible assets, net | 240,510 | 260,509 | ||||||
Other assets | 50,278 | 48,871 | ||||||
Total Assets | $ | 2,195,683 | $ | 2,292,234 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accounts payable | $ | 11,611 | $ | 17,366 | ||||
Accrued expenses | 186,381 | 198,311 | ||||||
Deferred revenue | 115,840 | 99,543 | ||||||
Total current liabilities | 313,832 | 315,220 | ||||||
Convertible notes | 650,000 | 649,999 | ||||||
Other long-term liabilities | 15,353 | 4,500 | ||||||
Minority interest in WebMD Health Corp. | 43,229 | — | ||||||
Convertible redeemable exchangeable preferred stock | 98,533 | 98,299 | ||||||
Stockholders’ equity | 1,074,736 | 1,224,216 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 2,195,683 | $ | 2,292,234 | ||||
EMDEON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Years Ended | ||||||||
December 31, | ||||||||
2005 | 2004 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 72,974 | $ | 39,334 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 71,767 | 57,765 | ||||||
Minority interest in WebMD Health Corp., net of tax | 908 | — | ||||||
Amortization of debt issuance costs | 2,541 | 2,975 | ||||||
Non-cash advertising and distribution services | 10,870 | 18,826 | ||||||
Non-cash stock-based compensation | 4,739 | 8,975 | ||||||
Bad debt expense | 6,410 | 3,606 | ||||||
Loss (gain) on investments | 6,365 | (457 | ) | |||||
Gain on sale of property and equipment | — | (121 | ) | |||||
Loss on redemption of convertible debt | 1,902 | — | ||||||
Non-cash reversal of income tax valuation allowance | 444 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (30,613 | ) | (16,152 | ) | ||||
Inventory | (224 | ) | (1,077 | ) | ||||
Prepaid expenses and other, net | 2,683 | 3,514 | ||||||
Accounts payable | (6,074 | ) | 5,577 | |||||
Accrued expenses and other long-term liabilities | 7,526 | (43,703 | ) | |||||
Deferred revenue | 9,068 | 10,982 | ||||||
Net cash provided by operating activities | 161,286 | 90,044 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 1,063,606 | 1,408,091 | ||||||
Purchases of available-for-sale securities | (758,687 | ) | (1,308,303 | ) | ||||
Purchases of property and equipment | (62,645 | ) | (38,800 | ) | ||||
Proceeds received from sale of property and equipment | 400 | 417 | ||||||
Cash paid in business combinations, net of cash acquired | (93,742 | ) | (249,557 | ) | ||||
Net cash provided by (used in) investing activities | 148,932 | (188,152 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 48,571 | 38,052 | ||||||
Purchases of treasury stock under repurchase program | (21,246 | ) | (32,110 | ) | ||||
Purchases of treasury stock in Tender Offer | (549,268 | ) | — | |||||
Net proceeds from issuance of convertible debt | 289,875 | — | ||||||
Issuance of WebMD Health Corp. Class A common stock | 123,344 | — | ||||||
Net proceeds from issuance of preferred shares | — | 98,115 | ||||||
Redemption of convertible debt | (86,694 | ) | — | |||||
Payments of notes payable and other | (631 | ) | (602 | ) | ||||
Net cash (used in) provided by financing activities | (196,049 | ) | 103,455 | |||||
Effect of exchange rates on cash | (678 | ) | 1,024 | |||||
Net increase in cash and cash equivalents | 113,491 | 6,371 | ||||||
Cash and cash equivalents at beginning of period | 46,019 | 39,648 | ||||||
Cash and cash equivalents at end of period | $ | 159,510 | $ | 46,019 | ||||