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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Revenue: | ||||||||||||||||
Services | $ | 313,766 | $ | 282,729 | $ | 615,346 | $ | 549,307 | ||||||||
Products | 41,115 | 39,827 | 78,654 | 77,183 | ||||||||||||
Total revenue | 354,881 | 322,556 | 694,000 | 626,490 | ||||||||||||
Cost of operations: | ||||||||||||||||
Services | 177,039 | 161,840 | 354,202 | 316,016 | ||||||||||||
Products | 20,107 | 20,110 | 38,211 | 38,097 | ||||||||||||
Total cost of operations | 197,146 | 181,950 | 392,413 | 354,113 | ||||||||||||
Development and engineering | 15,283 | 14,457 | 30,197 | 29,097 | ||||||||||||
Sales, marketing, general and administrative | 90,008 | 83,533 | 178,840 | 165,670 | ||||||||||||
Depreciation and amortization | 19,381 | 17,541 | 38,309 | 34,045 | ||||||||||||
Legal expense | 275 | 4,283 | 817 | 8,443 | ||||||||||||
Advisory expense | 4,104 | — | 4,104 | — | ||||||||||||
Loss (gain) on investments | — | (190 | ) | — | 3,642 | |||||||||||
Loss on redemption of convertible debt | — | 1,902 | — | 1,902 | ||||||||||||
Interest income | 4,435 | 3,936 | 8,854 | 8,257 | ||||||||||||
Interest expense | 4,668 | 3,895 | 9,359 | 8,676 | ||||||||||||
Income before income tax provision and minority interest | 28,451 | 19,121 | 48,815 | 29,159 | ||||||||||||
Income tax provision | 5,434 | 2,955 | 9,996 | 3,144 | ||||||||||||
Minority interest in WebMD Health Corp., net of tax | (164 | ) | — | (793 | ) | — | ||||||||||
Net income | $ | 23,181 | $ | 16,166 | $ | 39,612 | $ | 26,015 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.08 | $ | 0.05 | $ | 0.14 | $ | 0.08 | ||||||||
Diluted | $ | 0.08 | $ | 0.05 | $ | 0.13 | $ | 0.08 | ||||||||
Weighted-average shares outstanding used in computing net income per common share: | ||||||||||||||||
Basic | 285,086 | 337,303 | 286,141 | 331,318 | ||||||||||||
Diluted | 296,722 | 349,624 | 296,107 | 342,656 | ||||||||||||
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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Revenue | ||||||||||||||||
Emdeon Business Services | $ | 206,943 | $ | 191,514 | $ | 408,097 | $ | 377,247 | ||||||||
Emdeon Practice Services | 77,272 | 78,596 | 152,978 | 151,614 | ||||||||||||
WebMD | 56,612 | 40,465 | 106,663 | 74,040 | ||||||||||||
Porex | 22,659 | 20,397 | 43,246 | 40,253 | ||||||||||||
Inter-segment eliminations | (8,605 | ) | (8,416 | ) | (16,984 | ) | (16,664 | ) | ||||||||
$ | 354,881 | $ | 322,556 | $ | 694,000 | $ | 626,490 | |||||||||
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) | ||||||||||||||||
Emdeon Business Services | $ | 49,598 | $ | 40,420 | $ | 92,791 | $ | 78,673 | ||||||||
Emdeon Practice Services | 12,119 | 8,183 | 22,292 | 12,580 | ||||||||||||
WebMD (a) | 9,599 | 2,793 | 16,126 | 6,023 | ||||||||||||
Porex | 7,045 | 6,064 | 12,599 | 11,461 | ||||||||||||
Corporate (a) | (11,628 | ) | (11,742 | ) | (22,902 | ) | (23,747 | ) | ||||||||
$ | 66,733 | $ | 45,718 | $ | 120,906 | $ | 84,990 | |||||||||
Adjusted EBITDA per diluted common share (b) | $ | 0.22 | $ | 0.13 | $ | 0.41 | $ | 0.25 | ||||||||
Interest, taxes, non-cash and other items (c) | ||||||||||||||||
Depreciation and amortization | $ | (19,381 | ) | $ | (17,541 | ) | $ | (38,309 | ) | $ | (34,045 | ) | ||||
Non-cash stock-based compensation (d) | (13,100 | ) | (716 | ) | (25,562 | ) | (2,367 | ) | ||||||||
Non-cash advertising | (1,189 | ) | (2,386 | ) | (2,794 | ) | (5,013 | ) | ||||||||
Legal expense | (275 | ) | (4,283 | ) | (817 | ) | (8,443 | ) | ||||||||
Advisory expense | (4,104 | ) | — | (4,104 | ) | — | ||||||||||
(Loss) gain on investments | — | 190 | — | (3,642 | ) | |||||||||||
Loss on redemption of convertible debt | — | (1,902 | ) | — | (1,902 | ) | ||||||||||
Interest income | 4,435 | 3,936 | 8,854 | 8,257 | ||||||||||||
Interest expense | (4,668 | ) | (3,895 | ) | (9,359 | ) | (8,676 | ) | ||||||||
Income tax provision | (5,434 | ) | (2,955 | ) | (9,996 | ) | (3,144 | ) | ||||||||
Minority interest in WebMD Health Corp., net of tax | 164 | — | 793 | — | ||||||||||||
Net income | $ | 23,181 | $ | 16,166 | $ | 39,612 | $ | 26,015 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.08 | $ | 0.05 | $ | 0.14 | $ | 0.08 | ||||||||
Diluted | $ | 0.08 | $ | 0.05 | $ | 0.13 | $ | 0.08 | ||||||||
Weighted-average shares outstanding used in computing net income per common share: | ||||||||||||||||
Basic | 285,086 | 337,303 | 286,141 | 331,318 | ||||||||||||
Diluted | 296,722 | 349,624 | 296,107 | 342,656 | ||||||||||||
(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 diluted common share is based on the weighted-average shares outstanding used in computing diluted net income per common share. | |
(c) | Reconciliation of Adjusted EBITDA to net income (see Annex A — Explanation of Non-GAAP Financial Measures). | |
(d) | Reflects the adoption of SFAS 123R effective January 1, 2006. |
EMDEON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, | December 31, | |||||||
2006 | 2005 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 92,210 | $ | 159,510 | ||||
Short-term investments | 296,750 | 267,387 | ||||||
Accounts receivable, net | 239,024 | 233,070 | ||||||
Inventory | 14,486 | 14,251 | ||||||
Prepaid expenses and other current assets | 36,079 | 34,615 | ||||||
Total current assets | 678,549 | 708,833 | ||||||
Marketable equity securities | 2,944 | 4,481 | ||||||
Property and equipment, net | 126,376 | 116,032 | ||||||
Goodwill | 1,110,521 | 1,075,549 | ||||||
Intangible assets, net | 238,213 | 240,510 | ||||||
Other assets | 47,837 | 50,278 | ||||||
Total Assets | $ | 2,204,440 | $ | 2,195,683 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accounts payable | $ | 15,135 | $ | 11,611 | ||||
Accrued expenses | 158,249 | 186,381 | ||||||
Deferred revenue | 125,811 | 115,840 | ||||||
Total current liabilities | 299,195 | 313,832 | ||||||
Convertible notes | 650,000 | 650,000 | ||||||
Other long-term liabilities | 15,946 | 15,353 | ||||||
Minority interest in WebMD Health Corp. | 53,811 | 43,229 | ||||||
Convertible redeemable exchangeable preferred stock | 98,650 | 98,533 | ||||||
Stockholders’ equity | 1,086,838 | 1,074,736 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 2,204,440 | $ | 2,195,683 | ||||
EMDEON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Six Months Ended | ||||||||
June 30, | ||||||||
2006 | 2005 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 39,612 | $ | 26,015 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 38,309 | 34,045 | ||||||
Minority interest in WebMD Health Corp., net of tax | (793 | ) | — | |||||
Amortization of debt issuance costs | 1,461 | 1,333 | ||||||
Non-cash advertising | 2,794 | 5,013 | ||||||
Non-cash stock-based compensation | 25,562 | 2,367 | ||||||
Bad debt expense | 1,645 | 3,722 | ||||||
Loss on investments | — | 3,642 | ||||||
Loss on redemption of convertible debt | — | 1,902 | ||||||
Reversal of income tax valuation allowance applied to goodwill | 5,215 | 2,146 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (4,719 | ) | (18,350 | ) | ||||
Inventory | (179 | ) | 186 | |||||
Prepaid expenses and other, net | (3,659 | ) | 1,655 | |||||
Accounts payable | 3,479 | (5,881 | ) | |||||
Accrued expenses and other long-term liabilities | 222 | (4,596 | ) | |||||
Deferred revenue | 6,272 | 9,501 | ||||||
Net cash provided by operating activities | 115,221 | 62,700 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 398,870 | 190,673 | ||||||
Purchases of available-for-sale securities | (426,470 | ) | (94,350 | ) | ||||
Purchases of property and equipment | (28,971 | ) | (38,717 | ) | ||||
Proceeds received from sale of property and equipment | — | 400 | ||||||
Cash paid in business combinations, net of cash acquired | (84,846 | ) | (74,110 | ) | ||||
Net cash used in investing activities | (141,417 | ) | (16,104 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 30,433 | 31,437 | ||||||
Purchases of treasury stock | (71,843 | ) | — | |||||
Redemption of convertible debt | — | (86,694 | ) | |||||
Payments of notes payable and other | (173 | ) | (304 | ) | ||||
Net cash used in financing activities | (41,583 | ) | (55,561 | ) | ||||
Effect of exchange rates on cash | 479 | (1,124 | ) | |||||
Net decrease in cash and cash equivalents | (67,300 | ) | (10,089 | ) | ||||
Cash and cash equivalents at beginning of period | 159,510 | 46,019 | ||||||
Cash and cash equivalents at end of period | $ | 92,210 | $ | 35,930 | ||||