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)
Preliminary | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2007 | 2006 | |||||||
Revenue: | ||||||||
Services | $ | 97,943 | $ | 252,745 | ||||
Products | 24,082 | 24,449 | ||||||
Total revenue | 122,025 | 277,194 | ||||||
Cost of operations: | ||||||||
Services | 44,514 | 156,359 | ||||||
Products | 9,915 | 10,815 | ||||||
Total cost of operations | 54,429 | 167,174 | ||||||
Development and engineering | 4,574 | 8,864 | ||||||
Sales, marketing, general and administrative | 60,399 | 70,180 | ||||||
Depreciation and amortization | 10,727 | 16,554 | ||||||
Legal expense | 320 | 542 | ||||||
Interest income | 9,674 | 4,418 | ||||||
Interest expense | 4,717 | 4,691 | ||||||
Transition services income | 2,456 | — | ||||||
Other income | 746 | — | ||||||
(Loss) income from continuing operations before income tax provision | (265 | ) | 13,607 | |||||
Income tax provision | 648 | 3,372 | ||||||
Minority interest in WHC income (loss) | 115 | (629 | ) | |||||
Equity in earnings of EBS Master LLC | 7,099 | — | ||||||
Income from continuing operations | 6,071 | 10,864 | ||||||
(Loss) income from discontinued operations, net of tax | (27 | ) | 5,567 | |||||
Net income | $ | 6,044 | $ | 16,431 | ||||
Basic income (loss) per common share: | ||||||||
Income from continuing operations | $ | 0.03 | $ | 0.04 | ||||
(Loss) income from discontinued operations | (0.00 | ) | 0.02 | |||||
Net income | $ | 0.03 | $ | 0.06 | ||||
Diluted income (loss) per common share: | ||||||||
Income from continuing operations | $ | 0.03 | $ | 0.04 | ||||
(Loss) income from discontinued operations | (0.00 | ) | 0.02 | |||||
Net income | $ | 0.03 | $ | 0.06 | ||||
Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||
Basic | 176,011 | 287,195 | ||||||
Diluted | 186,355 | 295,492 | ||||||
EMDEON CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
Preliminary Three Months Ended | ||||||||
March 31, | ||||||||
2007 | 2006 | |||||||
Revenue | ||||||||
Emdeon Business Services | $ | — | $ | 182,851 | ||||
WebMD | 72,962 | 50,051 | ||||||
ViPS | 26,659 | 23,836 | ||||||
Porex | 22,709 | 20,587 | ||||||
Inter-segment eliminations | (305 | ) | (131 | ) | ||||
$ | 122,025 | $ | 277,194 | |||||
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) | ||||||||
Emdeon Business Services | $ | — | $ | 38,207 | ||||
WebMD | 12,607 | 6,527 | ||||||
ViPS | 4,840 | 5,158 | ||||||
Porex | 6,474 | 5,554 | ||||||
Corporate | (6,731 | ) | (11,138 | ) | ||||
$ | 17,190 | $ | 44,308 | |||||
Adjusted EBITDA per diluted common share (a) | $ | 0.09 | $ | 0.15 | ||||
Interest, taxes, non-cash and other items (b) | ||||||||
Depreciation and amortization | $ | (10,727 | ) | $ | (16,554 | ) | ||
Non-cash stock-based compensation | (9,791 | ) | (11,727 | ) | ||||
Non-cash advertising | (2,320 | ) | (1,605 | ) | ||||
Legal expense | (320 | ) | (542 | ) | ||||
Interest income | 9,674 | 4,418 | ||||||
Interest expense | (4,717 | ) | (4,691 | ) | ||||
Income tax provision | (648 | ) | (3,372 | ) | ||||
Minority interest in WHC (income) loss | (115 | ) | 629 | |||||
Equity in earnings of EBS Master LLC | 7,099 | — | ||||||
Other income | 746 | — | ||||||
Income from continuing operations | 6,071 | 10,864 | ||||||
(Loss) income from discontinued operations, net of tax | (27 | ) | 5,567 | |||||
Net income | $ | 6,044 | $ | 16,431 | ||||
Basic income (loss) per common share: | ||||||||
Income from continuing operations | $ | 0.03 | $ | 0.04 | ||||
(Loss) income from discontinued operations | (0.00 | ) | 0.02 | |||||
Net income | $ | 0.03 | $ | 0.06 | ||||
Diluted income (loss) per common share: | ||||||||
Income from continuing operations | $ | 0.03 | $ | 0.04 | ||||
(Loss) income from discontinued operations | (0.00 | ) | 0.02 | |||||
Net income | $ | 0.03 | $ | 0.06 | ||||
Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||
Basic | 176,011 | 287,195 | ||||||
Diluted | 186,355 | 295,492 | ||||||
(a) | Adjusted EBITDA per diluted common share is based on the weighted-average shares outstanding used in computing diluted income per common share. | |
(b) | Reconciliation of Adjusted EBITDA to net income (see Annex A — Explanation of Non-GAAP Financial Measures). |
EMDEON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
Preliminary | ||||||||
March 31, 2007 | December 31, 2006 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 668,558 | $ | 614,691 | ||||
Short-term investments | 32,386 | 34,140 | ||||||
Accounts receivable, net | 120,999 | 121,608 | ||||||
Inventory | 10,478 | 9,922 | ||||||
Due from EBS Master LLC | 325 | 30,716 | ||||||
Prepaid expenses and other current assets | 53,452 | 31,871 | ||||||
Total current assets | 886,198 | 842,948 | ||||||
Marketable equity securities | 2,543 | 2,633 | ||||||
Property and equipment, net | 73,147 | 72,040 | ||||||
Goodwill | 337,677 | 337,669 | ||||||
Intangible assets, net | 123,369 | 129,473 | ||||||
Investment in EBS Master LLC | 9,534 | 1,521 | ||||||
Other assets | 40,033 | 65,659 | ||||||
Total Assets | $ | 1,472,501 | $ | 1,451,943 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accounts payable | $ | 2,970 | $ | 3,996 | ||||
Accrued expenses | 49,611 | 113,175 | ||||||
Deferred revenue | 95,117 | 87,438 | ||||||
Total current liabilities | 147,698 | 204,609 | ||||||
Convertible notes | 650,000 | 650,000 | ||||||
Other long-term liabilities | 21,446 | 14,420 | ||||||
Minority interest in WebMD Health Corp. (WHC) | 106,944 | 102,294 | ||||||
Convertible redeemable exchangeable preferred stock | 98,826 | 98,768 | ||||||
Stockholders’ equity | 447,587 | 381,852 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 1,472,501 | $ | 1,451,943 | ||||
EMDEON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Preliminary | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2007 | 2006 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 6,044 | $ | 16,431 | ||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
Loss (income) from discontinued operations, net of tax | 27 | (5,567 | ) | |||||
Depreciation and amortization | 10,727 | 16,554 | ||||||
Minority interest in WHC income (loss) | 115 | (629 | ) | |||||
Equity in earnings of EBS Master LLC | (7,099 | ) | — | |||||
Amortization of debt issuance costs | 721 | 728 | ||||||
Non-cash advertising | 2,320 | 1,605 | ||||||
Non-cash stock-based compensation | 9,791 | 11,727 | ||||||
EBS working capital adjustment | (399 | ) | — | |||||
Reversal of income tax valuation allowance applied to goodwill | 250 | 1,669 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 1,418 | (2,666 | ) | |||||
Inventory | (505 | ) | 241 | |||||
Prepaid expenses and other, net | 324 | (951 | ) | |||||
Accounts payable | (1,027 | ) | (117 | ) | ||||
Accrued expenses and other long-term liabilities | (47,684 | ) | (4,407 | ) | ||||
Deferred revenue | 7,679 | 10,951 | ||||||
Net cash (used in) provided by continuing operations | (17,298 | ) | 45,569 | |||||
Net cash provided by discontinued operations | — | 1,192 | ||||||
Net cash (used in) provided by operating activities | (17,298 | ) | 46,761 | |||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 67,922 | 166,228 | ||||||
Purchases of available-for-sale securities | (65,932 | ) | (137,815 | ) | ||||
Purchases of property and equipment | (5,627 | ) | (13,248 | ) | ||||
Cash paid in business combinations, net of cash acquired | — | (27,328 | ) | |||||
Proceeds from the sale of EBS | 2,898 | — | ||||||
Proceeds from advances to EBS Master LLC | 19,691 | — | ||||||
Other changes in equity of discontinued operations | — | 1,588 | ||||||
Net cash provided by (used in) continuing operations | 18,952 | (10,575 | ) | |||||
Net cash used in discontinued operations | — | (2,508 | ) | |||||
Net cash provided by (used in) investing activities | 18,952 | (13,083 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of Emdeon and WebMD Health common stock | 63,404 | 10,565 | ||||||
Purchases of treasury stock under repurchase program | (11,322 | ) | (66,633 | ) | ||||
Payments of notes payable and other | (53 | ) | (94 | ) | ||||
Net cash provided by (used in) financing activities | 52,029 | (56,162 | ) | |||||
Effect of exchange rates on cash | 184 | 119 | ||||||
Net increase (decrease) in cash and cash equivalents | 53,867 | (22,365 | ) | |||||
Change in cash attributable to discontinued operations | — | 1,316 | ||||||
Cash and cash equivalents at beginning of period | 614,691 | 155,616 | ||||||
Cash and cash equivalents at end of period | $ | 668,558 | $ | 134,567 | ||||