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 | Years Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Revenue: | ||||||||||||||||
Services | $ | 122,135 | $ | 205,743 | $ | 430,930 | $ | 998,016 | ||||||||
Products | 23,680 | 23,120 | 96,185 | 95,487 | ||||||||||||
Total revenue | 145,815 | 228,863 | 527,115 | 1,093,503 | ||||||||||||
Cost of operations: | ||||||||||||||||
Services | 43,696 | 107,393 | 174,552 | 578,544 | ||||||||||||
Products | 9,302 | 9,163 | 38,003 | 40,502 | ||||||||||||
Total cost of operations | 52,998 | 116,556 | 212,555 | 619,046 | ||||||||||||
Development and engineering | 4,505 | 6,485 | 18,055 | 33,649 | ||||||||||||
Sales, marketing, general and administrative | 58,542 | 71,412 | 234,633 | 288,015 | ||||||||||||
Depreciation and amortization | 11,796 | 10,010 | 46,023 | 61,968 | ||||||||||||
Interest income | 11,397 | 16,889 | 42,035 | 32,339 | ||||||||||||
Interest expense | 4,610 | 4,697 | 18,519 | 18,779 | ||||||||||||
Gain on sale of EBS | — | 352,297 | 399 | 352,297 | ||||||||||||
Other (expense) income, net | (1,804 | ) | 1,446 | 3,064 | (4,252 | ) | ||||||||||
Income from continuing operations before income tax (benefit) provision | 22,957 | 390,335 | 42,828 | 452,430 | ||||||||||||
Income tax (benefit) provision | (20,554 | ) | 37,193 | (13,598 | ) | 52,316 | ||||||||||
Minority interest in WHC | 7,909 | 929 | 10,667 | 405 | ||||||||||||
Equity in earnings of EBS Master LLC | 5,887 | 763 | 28,566 | 763 | ||||||||||||
Income from continuing operations | 41,489 | 352,976 | 74,325 | 400,472 | ||||||||||||
Income (loss) from discontinued operations, net of tax | 1,580 | 798 | (54,446 | ) | 371,445 | |||||||||||
Net income | $ | 43,069 | $ | 353,774 | $ | 19,879 | $ | 771,917 | ||||||||
Basic income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.23 | $ | 1.38 | $ | 0.42 | $ | 1.44 | ||||||||
Income (loss) from discontinued operations | 0.01 | 0.00 | (0.31 | ) | 1.33 | |||||||||||
Net income | $ | 0.24 | $ | 1.38 | $ | 0.11 | $ | 2.77 | ||||||||
Diluted income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.19 | $ | 1.16 | $ | 0.38 | $ | 1.26 | ||||||||
Income (loss) from discontinued operations | 0.01 | 0.00 | (0.26 | ) | 1.12 | |||||||||||
Net income | $ | 0.20 | $ | 1.16 | $ | 0.12 | $ | 2.38 | ||||||||
Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||||||||||
Basic | 181,280 | 256,688 | 179,330 | 279,234 | ||||||||||||
Diluted | 231,609 | 308,295 | 211,505 | 331,642 | ||||||||||||
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 | Years Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Revenue | ||||||||||||||||
Emdeon Business Services | $ | — | $ | 103,116 | $ | — | $ | 661,090 | ||||||||
WebMD | 96,642 | 79,385 | 331,954 | 248,776 | ||||||||||||
ViPS | 26,232 | 25,349 | 103,083 | 98,874 | ||||||||||||
Porex | 23,002 | 21,158 | 92,581 | 85,702 | ||||||||||||
Inter-segment eliminations | (61 | ) | (145 | ) | (503 | ) | (939 | ) | ||||||||
$ | 145,815 | $ | 228,863 | $ | 527,115 | $ | 1,093,503 | |||||||||
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) | ||||||||||||||||
Emdeon Business Services | $ | — | $ | 25,392 | $ | — | $ | 152,911 | ||||||||
WebMD | 33,072 | 22,409 | 84,697 | 52,686 | ||||||||||||
ViPS | 6,269 | 5,012 | 21,012 | 20,529 | ||||||||||||
Porex | 6,812 | 6,242 | 27,074 | 24,974 | ||||||||||||
Corporate | (5,844 | ) | (9,781 | ) | (25,111 | ) | (43,414 | ) | ||||||||
$ | 40,309 | $ | 49,274 | $ | 107,672 | $ | 207,686 | |||||||||
Adjusted EBITDA per diluted common share (a) | $ | 0.17 | $ | 0.16 | $ | 0.51 | $ | 0.63 | ||||||||
Interest, taxes, non-cash and other items (b) | ||||||||||||||||
Depreciation and amortization | $ | (11,796 | ) | $ | (10,010 | ) | $ | (46,023 | ) | $ | (61,968 | ) | ||||
Non-cash stock-based compensation | (6,840 | ) | (9,720 | ) | (34,703 | ) | (44,955 | ) | ||||||||
Non-cash advertising | (2,775 | ) | (2,960 | ) | (5,264 | ) | (7,414 | ) | ||||||||
Interest income | 11,397 | 16,889 | 42,035 | 32,339 | ||||||||||||
Interest expense | (4,610 | ) | (4,697 | ) | (18,519 | ) | (18,779 | ) | ||||||||
Income tax benefit (provision) | 20,554 | (37,193 | ) | 13,598 | (52,316 | ) | ||||||||||
Minority interest in WHC | (7,909 | ) | (929 | ) | (10,667 | ) | (405 | ) | ||||||||
Equity in earnings of EBS Master LLC | 5,887 | 763 | 28,566 | 763 | ||||||||||||
Gain on sale of EBS | — | 352,297 | 399 | 352,297 | ||||||||||||
Other expense, net | (2,728 | ) | (738 | ) | (2,769 | ) | (6,776 | ) | ||||||||
Income from continuing operations | 41,489 | 352,976 | 74,325 | 400,472 | ||||||||||||
Income (loss) from discontinued operations, net of tax | 1,580 | 798 | (54,446 | ) | 371,445 | |||||||||||
Net income | $ | 43,069 | $ | 353,774 | $ | 19,879 | $ | 771,917 | ||||||||
Basic income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.23 | $ | 1.38 | $ | 0.42 | $ | 1.44 | ||||||||
Income (loss) from discontinued operations | 0.01 | 0.00 | (0.31 | ) | 1.33 | |||||||||||
Net income | $ | 0.24 | $ | 1.38 | $ | 0.11 | $ | 2.77 | ||||||||
Diluted income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.19 | $ | 1.16 | $ | 0.38 | $ | 1.26 | ||||||||
Income (loss) from discontinued operations | 0.01 | 0.00 | (0.26 | ) | 1.12 | |||||||||||
Net income | $ | 0.20 | $ | 1.16 | $ | 0.12 | $ | 2.38 | ||||||||
Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||||||||||
Basic | 181,280 | 256,688 | 179,330 | 279,234 | ||||||||||||
Diluted | 231,609 | 308,295 | 211,505 | 331,642 | ||||||||||||
(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 (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)
December 31, | ||||||||
2007 | 2006 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 536,879 | $ | 614,691 | ||||
Short-term investments | 290,858 | 34,140 | ||||||
Accounts receivable, net | 116,243 | 121,608 | ||||||
Inventory | 11,772 | 9,922 | ||||||
Due from EBS Master LLC | 1,224 | 30,716 | ||||||
Prepaid expenses and other current assets | 74,794 | 31,871 | ||||||
Total current assets | 1,031,770 | 842,948 | ||||||
Marketable equity securities | 2,383 | 2,633 | ||||||
Property and equipment, net | 74,750 | 72,040 | ||||||
Goodwill | 331,859 | 337,669 | ||||||
Intangible assets, net | 109,001 | 129,473 | ||||||
Investment in EBS Master LLC | 25,261 | 1,521 | ||||||
Other assets | 35,541 | 65,659 | ||||||
Total Assets | $ | 1,610,565 | $ | 1,451,943 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accounts payable | $ | 3,280 | $ | 3,996 | ||||
Accrued expenses | 61,427 | 113,175 | ||||||
Deferred revenue | 87,384 | 85,793 | ||||||
Liabilities of discontinued operations | 55,563 | 1,645 | ||||||
Total current liabilities | 207,654 | 204,609 | ||||||
Convertible notes | 650,000 | 650,000 | ||||||
Other long-term liabilities | 21,781 | 24,179 | ||||||
Minority interest in WHC | 131,353 | 101,860 | ||||||
Convertible redeemable exchangeable preferred stock | — | 98,768 | ||||||
Stockholders’ equity | 599,777 | 372,527 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 1,610,565 | $ | 1,451,943 | ||||
HLTH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Years Ended | ||||||||
December 31, | ||||||||
2007 | 2006 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 19,879 | $ | 771,917 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Loss (income) from discontinued operations, net of tax | 54,446 | (371,445 | ) | |||||
Depreciation and amortization | 46,023 | 61,968 | ||||||
Minority interest in WHC | 10,667 | 405 | ||||||
Equity in earnings of EBS Master LLC | (28,566 | ) | (763 | ) | ||||
Amortization of debt issuance costs | 2,916 | 2,906 | ||||||
Non-cash advertising | 5,264 | 7,414 | ||||||
Non-cash stock-based compensation | 34,703 | 44,955 | ||||||
Deferred income taxes | (18,228 | ) | 26,893 | |||||
Gain on sale of EBS | (399 | ) | (352,297 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 5,928 | (43,807 | ) | |||||
Inventory | (1,611 | ) | 190 | |||||
Prepaid expenses and other, net | 4,559 | (12,302 | ) | |||||
Accounts payable | (716 | ) | 162 | |||||
Accrued expenses and other long-term liabilities | (42,888 | ) | 20,621 | |||||
Deferred revenue | 1,590 | 15,913 | ||||||
Net cash provided by continuing operations | 93,567 | 172,730 | ||||||
Net cash (used in) provided by discontinued operations | (18,174 | ) | 26,290 | |||||
Net cash provided by operating activities | 75,393 | 199,020 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 670,326 | 928,284 | ||||||
Purchases of available-for-sale securities | (927,038 | ) | (686,815 | ) | ||||
Purchases of property and equipment | (23,694 | ) | (54,885 | ) | ||||
Cash paid in business combinations, net of cash acquired | (100 | ) | (152,772 | ) | ||||
Proceeds from the sale of EBS, net | 2,898 | 1,199,872 | ||||||
Proceeds from advances to EBS Master LLC | 18,792 | (20,016 | ) | |||||
Proceeds from the sale of discontinued operations | 11,667 | 522,604 | ||||||
Other changes in equity of discontinued operations | — | 28,279 | ||||||
Net cash (used in) provided by continuing operations | (247,149 | ) | 1,764,551 | |||||
Net cash used in discontinued operations | — | (26,010 | ) | |||||
Net cash (used in) provided by investing activities | (247,149 | ) | 1,738,541 | |||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of HLTH and WHC common stock | 133,033 | 156,078 | ||||||
Tax benefit on stock-based awards | 6,601 | — | ||||||
Purchases of treasury stock under repurchase program | (47,102 | ) | (83,167 | ) | ||||
Purchases of treasury stock in tender offer | — | (1,552,120 | ) | |||||
Payments of notes payable and other | (195 | ) | (437 | ) | ||||
Net cash provided by (used in) financing activities | 92,337 | (1,479,646 | ) | |||||
Effect of exchange rates on cash | 1,607 | 1,135 | ||||||
Net (decrease) increase in cash and cash equivalents | (77,812 | ) | 459,050 | |||||
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 | $ | 536,879 | $ | 614,691 | ||||