Exhibit 99.2
HLTH 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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (Restated) | (Restated) | |||||||||||||||
| Revenue: | ||||||||||||||||
| Services | $ | 108,804 | $ | 274,158 | $ | 308,876 | $ | 792,509 | ||||||||
| Products | 24,504 | 25,574 | 75,751 | 76,048 | ||||||||||||
| Total revenue | 133,308 | 299,732 | 384,627 | 868,557 | ||||||||||||
| Cost of operations: | ||||||||||||||||
| Services | 43,737 | 158,967 | 132,380 | 472,951 | ||||||||||||
| Products | 9,603 | 10,743 | 30,290 | 32,974 | ||||||||||||
| Total cost of operations | 53,340 | 169,710 | 162,670 | 505,925 | ||||||||||||
| Development and engineering | 4,209 | 9,243 | 13,550 | 27,164 | ||||||||||||
| Sales, marketing, general and administrative | 57,352 | 74,390 | 176,091 | 216,603 | ||||||||||||
| Depreciation and amortization | 11,826 | 18,189 | 34,231 | 51,964 | ||||||||||||
| Legal expense | 373 | 1,023 | 1,164 | 1,840 | ||||||||||||
| Interest income | 10,864 | 6,599 | 30,638 | 15,450 | ||||||||||||
| Interest expense | 4,573 | 4,723 | 13,909 | 14,082 | ||||||||||||
| Transition services income, net | 985 | 340 | 4,909 | 340 | ||||||||||||
| Other income (expense) | 377 | (2,126 | ) | 1,522 | (4,198 | ) | ||||||||||
| Income from continuing operations before income tax provision | 13,861 | 27,267 | 20,081 | 62,571 | ||||||||||||
| Income tax provision | 3,935 | 4,779 | 6,956 | 15,123 | ||||||||||||
| Minority interest in WHC income (loss) | 1,800 | 69 | 2,758 | (524 | ) | |||||||||||
| Equity in earnings of EBS Master LLC | 8,005 | — | 22,679 | — | ||||||||||||
| Income from continuing operations | 16,131 | 22,419 | 33,046 | 47,972 | ||||||||||||
| Income (loss) from discontinued operations, net of tax | 440 | 358,048 | (56,236 | ) | 370,171 | |||||||||||
| Net income (loss) | $ | 16,571 | $ | 380,467 | $ | (23,190 | ) | $ | 418,143 | |||||||
| Basic income (loss) per common share: | ||||||||||||||||
| Income from continuing operations | $ | 0.09 | $ | 0.08 | $ | 0.19 | $ | 0.17 | ||||||||
| Income (loss) from discontinued operations | 0.00 | 1.24 | (0.32 | ) | 1.29 | |||||||||||
| Net income (loss) | $ | 0.09 | $ | 1.32 | $ | (0.13 | ) | $ | 1.46 | |||||||
| Diluted income (loss) per common share: | ||||||||||||||||
| Income from continuing operations | $ | 0.08 | $ | 0.07 | $ | 0.17 | $ | 0.16 | ||||||||
| Income (loss) from discontinued operations | 0.01 | 1.20 | (0.30 | ) | 1.25 | |||||||||||
| Net income (loss) | $ | 0.09 | $ | 1.27 | $ | (0.13 | ) | $ | 1.41 | |||||||
| Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||||||||||
| Basic | 179,811 | 287,967 | 178,681 | 286,749 | ||||||||||||
| Diluted | 188,071 | 300,012 | 188,486 | 297,409 | ||||||||||||
HLTH CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (Restated) | (Restated) | |||||||||||||||
Revenue | ||||||||||||||||
| Emdeon Business Services | $ | — | $ | 187,266 | $ | — | $ | 557,975 | ||||||||
| WebMD | 87,198 | 66,645 | 238,639 | 173,308 | ||||||||||||
| ViPS | 24,307 | 24,843 | 76,851 | 73,524 | ||||||||||||
| Porex | 21,867 | 21,298 | 69,579 | 64,544 | ||||||||||||
| Inter-segment eliminations | (64 | ) | (320 | ) | (442 | ) | (794 | ) | ||||||||
| $ | 133,308 | $ | 299,732 | $ | 384,627 | $ | 868,557 | |||||||||
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) | ||||||||||||||||
| Emdeon Business Services | $ | — | $ | 44,547 | $ | — | $ | 127,519 | ||||||||
| WebMD | 24,077 | 14,633 | 51,839 | 30,759 | ||||||||||||
| ViPS | 4,809 | 5,302 | 14,743 | 15,517 | ||||||||||||
| Porex | 6,445 | 6,133 | 20,262 | 18,732 | ||||||||||||
| Corporate | (6,053 | ) | (11,000 | ) | (19,267 | ) | (33,633 | ) | ||||||||
| $ | 29,278 | $ | 59,615 | $ | 67,577 | $ | 158,894 | |||||||||
Adjusted EBITDA per diluted common share (a) | $ | 0.16 | $ | 0.20 | $ | 0.36 | $ | 0.53 | ||||||||
Interest, taxes, non-cash and other items (b) | ||||||||||||||||
| Depreciation and amortization | $ | (11,826 | ) | $ | (18,189 | ) | $ | (34,231 | ) | $ | (51,964 | ) | ||||
| Non-cash stock-based compensation | (9,717 | ) | (11,226 | ) | (27,863 | ) | (35,235 | ) | ||||||||
| Non-cash advertising | (169 | ) | (1,660 | ) | (2,489 | ) | (4,454 | ) | ||||||||
| Legal expense | (373 | ) | (1,023 | ) | (1,164 | ) | (1,840 | ) | ||||||||
| Interest income | 10,864 | 6,599 | 30,638 | 15,450 | ||||||||||||
| Interest expense | (4,573 | ) | (4,723 | ) | (13,909 | ) | (14,082 | ) | ||||||||
| Income tax provision | (3,935 | ) | (4,779 | ) | (6,956 | ) | (15,123 | ) | ||||||||
| Minority interest in WHC (income) loss | (1,800 | ) | (69 | ) | (2,758 | ) | 524 | |||||||||
| Equity in earnings of EBS Master LLC | 8,005 | — | 22,679 | — | ||||||||||||
| Other income (expense) | 377 | (2,126 | ) | 1,522 | (4,198 | ) | ||||||||||
| Income from continuing operations | 16,131 | 22,419 | 33,046 | 47,972 | ||||||||||||
| Income (loss) from discontinued operations, net of tax | 440 | 358,048 | (56,236 | ) | 370,171 | |||||||||||
| Net income (loss) | $ | 16,571 | $ | 380,467 | $ | (23,190 | ) | $ | 418,143 | |||||||
| Basic income (loss) per common share: | ||||||||||||||||
| Income from continuing operations | $ | 0.09 | $ | 0.08 | $ | 0.19 | $ | 0.17 | ||||||||
| Income (loss) from discontinued operations | 0.00 | 1.24 | (0.32 | ) | 1.29 | |||||||||||
| Net income (loss) | $ | 0.09 | $ | 1.32 | $ | (0.13 | ) | $ | 1.46 | |||||||
| Diluted income (loss) per common share: | ||||||||||||||||
| Income from continuing operations | $ | 0.08 | $ | 0.07 | $ | 0.17 | $ | 0.16 | ||||||||
| Income (loss) from discontinued operations | 0.01 | 1.20 | (0.30 | ) | 1.25 | |||||||||||
| Net income (loss) | $ | 0.09 | $ | 1.27 | $ | (0.13 | ) | $ | 1.41 | |||||||
| Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||||||||||
| Basic | 179,811 | 287,967 | 178,681 | 286,749 | ||||||||||||
| Diluted | 188,071 | 300,012 | 188,486 | 297,409 | ||||||||||||
| (a) | Adjusted EBITDA per diluted common share is based on the weighted-average shares outstanding used in computing diluted income (loss) per common share. | |
| (b) | Reconciliation of Adjusted EBITDA to net income (loss) (see Annex A — Explanation of Non-GAAP Financial Measures). |
HLTH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
| September 30, 2007 | December 31, 2006 | |||||||
Assets | ||||||||
| Cash and cash equivalents | $ | 412,330 | $ | 614,691 | ||||
| Short-term investments | 372,128 | 34,140 | ||||||
| Accounts receivable, net | 104,014 | 121,608 | ||||||
| Inventory | 10,199 | 9,922 | ||||||
| Due from EBS Master LLC | 95 | 30,716 | ||||||
| Prepaid expenses and other current assets | 54,804 | 31,871 | ||||||
| Total current assets | 953,570 | 842,948 | ||||||
| Marketable equity securities | 2,634 | 2,633 | ||||||
| Property and equipment, net | 74,644 | 72,040 | ||||||
| Goodwill | 332,689 | 337,669 | ||||||
| Intangible assets, net | 115,083 | 129,473 | ||||||
| Investment in EBS Master LLC | 23,169 | 1,521 | ||||||
| Other assets | 36,203 | 65,659 | ||||||
| Total Assets | $ | 1,537,992 | $ | 1,451,943 | ||||
Liabilities and Stockholders’ Equity | ||||||||
| Accounts payable | $ | 2,815 | $ | 3,996 | ||||
| Accrued expenses | 56,483 | 113,175 | ||||||
| Deferred revenue | 91,837 | 87,438 | ||||||
| Liabilities of discontinued operations | 48,434 | — | ||||||
| Total current liabilities | 199,569 | 204,609 | ||||||
| Convertible notes | 650,000 | 650,000 | ||||||
| Other long-term liabilities | 33,881 | 24,179 | ||||||
| Minority interest in WebMD Health Corp. (WHC) | 119,785 | 101,860 | ||||||
| Convertible redeemable exchangeable preferred stock | — | 98,768 | ||||||
| Stockholders’ equity | 534,757 | 372,527 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 1,537,992 | $ | 1,451,943 | ||||
HLTH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2007 | 2006 | |||||||
| (Restated) | ||||||||
Cash flows from operating activities: | ||||||||
| Net (loss) income | $ | (23,190 | ) | $ | 418,143 | |||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
| Loss (income) from discontinued operations, net of tax | 56,236 | (370,171 | ) | |||||
| Depreciation and amortization | 34,231 | 51,964 | ||||||
| Minority interest in WHC income (loss) | 2,758 | (524 | ) | |||||
| Equity in earnings of EBS Master LLC | (22,679 | ) | — | |||||
| Amortization of debt issuance costs | 2,179 | 2,190 | ||||||
| Non-cash advertising | 2,489 | 4,454 | ||||||
| Non-cash stock-based compensation | 27,863 | 35,235 | ||||||
| Deferred income taxes | 2,345 | 3,041 | ||||||
| EBS working capital adjustment | (399 | ) | — | |||||
| Reversal of income tax valuation allowance applied to goodwill | 1,676 | 5,307 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 18,042 | (18,760 | ) | |||||
| Inventory | (88 | ) | 601 | |||||
| Prepaid expenses and other, net | (1,783 | ) | (9,701 | ) | ||||
| Accounts payable | (1,181 | ) | 825 | |||||
| Accrued expenses and other long-term liabilities | (46,333 | ) | 3,284 | |||||
| Deferred revenue | 4,399 | 9,926 | ||||||
| Net cash provided by continuing operations | 56,565 | 135,814 | ||||||
| Net cash (used in) provided by discontinued operations | (9,339 | ) | 25,985 | |||||
| Net cash provided by operating activities | 47,226 | 161,799 | ||||||
Cash flows from investing activities: | ||||||||
| Proceeds from maturities and sales of available-for-sale securities | 356,492 | 831,145 | ||||||
| Purchases of available-for-sale securities | (694,522 | ) | (632,955 | ) | ||||
| Purchases of property and equipment | (18,112 | ) | (38,231 | ) | ||||
| Cash paid in business combinations, net of cash acquired | (100 | ) | (119,635 | ) | ||||
| Proceeds from the sale of EBS, net | 2,898 | — | ||||||
| Proceeds from advances to EBS Master LLC | 19,921 | — | ||||||
| Proceeds from the sale of discontinued operations | 11,667 | 524,245 | ||||||
| Other changes in equity of discontinued operations | — | 28,279 | ||||||
| Net cash (used in) provided by continuing operations | (321,756 | ) | 592,848 | |||||
| Net cash used in discontinued operations | — | (26,010 | ) | |||||
| Net cash (used in) provided by investing activities | (321,756 | ) | 566,838 | |||||
Cash flows from financing activities: | ||||||||
| Proceeds from issuance of HLTH and WHC common stock | 114,077 | 62,768 | ||||||
| Tax benefit on stock-based awards | 4,318 | — | ||||||
| Purchases of treasury stock under repurchase program | (47,120 | ) | (71,843 | ) | ||||
| Payments of notes payable and other | (148 | ) | (359 | ) | ||||
| Net cash provided by (used in) financing activities | 71,127 | (9,434 | ) | |||||
| Effect of exchange rates on cash | 1,042 | 616 | ||||||
| Net (decrease) increase in cash and cash equivalents | (202,361 | ) | 719,819 | |||||
| Change in cash of discontinued operations | — | 25 | ||||||
| Cash and cash equivalents at beginning of period | 614,691 | 155,616 | ||||||
| Cash and cash equivalents at end of period | $ | 412,330 | $ | 875,460 | ||||