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, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenue | $ | 100,367 | $ | 86,034 | $ | 271,185 | $ | 235,112 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of operations | 35,323 | 30,021 | 99,656 | 87,636 | ||||||||||||
Sales and marketing | 26,439 | 22,459 | 77,729 | 67,258 | ||||||||||||
General and administrative | 22,929 | 25,718 | 67,254 | 81,111 | ||||||||||||
Depreciation and amortization | 7,265 | 7,390 | 21,468 | 20,954 | ||||||||||||
Interest income | 9,386 | 10,864 | 29,384 | 30,638 | ||||||||||||
Interest expense | 4,636 | 4,660 | 13,871 | 13,985 | ||||||||||||
Gain on sale of EBS Master LLC | — | — | 538,024 | — | ||||||||||||
Impairment of auction rate securities | — | — | 60,108 | — | ||||||||||||
Other (expense) income, net | (997 | ) | 989 | (5,807 | ) | 5,267 | ||||||||||
Income from continuing operations before income tax provision | 12,164 | 7,639 | 492,700 | 73 | ||||||||||||
Income tax provision | 7,679 | 2,977 | 34,623 | 4,404 | ||||||||||||
Minority interest in WHC income (loss) | 1,845 | 1,800 | (929 | ) | 2,758 | |||||||||||
Equity in earnings of EBS Master LLC | — | 8,005 | 4,007 | 22,679 | ||||||||||||
Income from continuing operations | 2,640 | 10,867 | 463,013 | 15,590 | ||||||||||||
Income (loss) from discontinued operations, net of tax | 93,241 | 5,704 | 93,159 | (38,780 | ) | |||||||||||
Net income (loss) | $ | 95,881 | $ | 16,571 | $ | 556,172 | $ | (23,190 | ) | |||||||
Basic income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.01 | $ | 0.06 | $ | 2.53 | $ | 0.09 | ||||||||
Income (loss) from discontinued operations | 0.51 | 0.03 | 0.51 | (0.22 | ) | |||||||||||
Net income (loss) | $ | 0.52 | $ | 0.09 | $ | 3.04 | $ | (0.13 | ) | |||||||
Diluted income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.01 | $ | 0.06 | $ | 2.06 | $ | 0.08 | ||||||||
Income (loss) from discontinued operations | 0.50 | 0.03 | 0.41 | (0.21 | ) | |||||||||||
Net income (loss) | $ | 0.51 | $ | 0.09 | $ | 2.47 | $ | (0.13 | ) | |||||||
Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||||||||||
Basic | 183,716 | 179,811 | 182,838 | 178,681 | ||||||||||||
Diluted | 187,527 | 188,071 | 228,653 | 188,486 | ||||||||||||
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, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenue | ||||||||||||||||
WebMD Online Services: | ||||||||||||||||
Advertising and sponsorship | $ | 72,046 | $ | 59,087 | $ | 190,494 | $ | 158,944 | ||||||||
Licensing | 22,139 | 20,001 | 65,928 | 59,915 | ||||||||||||
Content syndication and other | 392 | 490 | 1,154 | 2,027 | ||||||||||||
Total WebMD Online Services | 94,577 | 79,578 | 257,576 | 220,886 | ||||||||||||
WebMD Publishing and Other Services | 5,810 | 6,520 | 13,669 | 14,426 | ||||||||||||
Inter-segment eliminations | (20 | ) | (64 | ) | (60 | ) | (200 | ) | ||||||||
$ | 100,367 | $ | 86,034 | $ | 271,185 | $ | 235,112 | |||||||||
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a) | ||||||||||||||||
WebMD Online Services | $ | 25,956 | $ | 21,948 | $ | 61,287 | $ | 48,982 | ||||||||
WebMD Publishing and Other Services | 1,212 | 2,138 | 1,485 | 2,643 | ||||||||||||
Corporate | (4,679 | ) | (5,811 | ) | (15,311 | ) | (18,874 | ) | ||||||||
$ | 22,489 | $ | 18,275 | $ | 47,461 | $ | 32,751 | |||||||||
Adjusted EBITDA per diluted common share (b) | $ | 0.12 | $ | 0.10 | $ | 0.21 | $ | 0.17 | ||||||||
Interest, taxes, non-cash and other items (c) | ||||||||||||||||
Interest income | $ | 9,386 | $ | 10,864 | $ | 29,384 | $ | 30,638 | ||||||||
Interest expense | (4,636 | ) | (4,660 | ) | (13,871 | ) | (13,985 | ) | ||||||||
Income tax provision | (7,679 | ) | (2,977 | ) | (34,623 | ) | (4,404 | ) | ||||||||
Depreciation and amortization | (7,265 | ) | (7,390 | ) | (21,468 | ) | (20,954 | ) | ||||||||
Non-cash stock-based compensation | (6,531 | ) | (9,285 | ) | (18,974 | ) | (26,246 | ) | ||||||||
Non-cash advertising | (178 | ) | (169 | ) | (1,736 | ) | (2,489 | ) | ||||||||
Minority interest in WHC (income) loss | (1,845 | ) | (1,800 | ) | 929 | (2,758 | ) | |||||||||
Equity in earnings of EBS Master LLC | — | 8,005 | 4,007 | 22,679 | ||||||||||||
Gain on sale of EBS Master LLC | — | — | 538,024 | — | ||||||||||||
Impairment of auction rate securities | — | — | (60,108 | ) | — | |||||||||||
Other (expense) income, net | (1,101 | ) | 4 | (6,012 | ) | 358 | ||||||||||
Income from continuing operations | 2,640 | 10,867 | 463,013 | 15,590 | ||||||||||||
Income (loss) from discontinued operations, net of tax | 93,241 | 5,704 | 93,159 | (38,780 | ) | |||||||||||
Net income (loss) | $ | 95,881 | $ | 16,571 | $ | 556,172 | $ | (23,190 | ) | |||||||
Basic income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.01 | $ | 0.06 | $ | 2.53 | $ | 0.09 | ||||||||
Income (loss) from discontinued operations | 0.51 | 0.03 | 0.51 | (0.22 | ) | |||||||||||
Net income (loss) | $ | 0.52 | $ | 0.09 | $ | 3.04 | $ | (0.13 | ) | |||||||
Diluted income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.01 | $ | 0.06 | $ | 2.06 | $ | 0.08 | ||||||||
Income (loss) from discontinued operations | 0.50 | 0.03 | 0.41 | (0.21 | ) | |||||||||||
Net income (loss) | $ | 0.51 | $ | 0.09 | $ | 2.47 | $ | (0.13 | ) | |||||||
Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||||||||||
Basic | 183,716 | 179,811 | 182,838 | 178,681 | ||||||||||||
Diluted | 187,527 | 188,071 | 228,653 | 188,486 | ||||||||||||
(a) | See Annex A-Explanation of Non-GAAP Financial Measures. | |
(b) | Adjusted EBITDA per diluted common share is based on the weighted-average shares outstanding used in computing diluted income (loss) per common share. | |
(c) | Reconciliation of Adjusted EBITDA to income from continuing operations. |
HLTH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
September 30, 2008 | December 31, 2007 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 1,380,179 | $ | 536,879 | ||||
Short-term investments | 284,789 | 290,858 | ||||||
Accounts receivable, net | 78,148 | 86,081 | ||||||
Due from EBS Master LLC | — | 1,224 | ||||||
Prepaid expenses and other current assets | 27,190 | 71,090 | ||||||
Assets of discontinued operations | 119,891 | 262,964 | ||||||
Total current assets | 1,890,197 | 1,249,096 | ||||||
Marketable equity securities | 2,175 | 2,383 | ||||||
Property and equipment, net | 51,766 | 49,554 | ||||||
Goodwill | 211,414 | 217,323 | ||||||
Intangible assets, net | 28,917 | 36,314 | ||||||
Investment in EBS Master LLC | — | 25,261 | ||||||
Other assets | 36,534 | 71,466 | ||||||
Total Assets | $ | 2,221,003 | $ | 1,651,397 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accrued expenses | $ | 44,305 | $ | 49,598 | ||||
Deferred revenue | 81,740 | 76,401 | ||||||
Liabilities of discontinued operations | 100,464 | 123,131 | ||||||
Total current liabilities | 226,509 | 249,130 | ||||||
Convertible notes | 650,000 | 650,000 | ||||||
Other long-term liabilities | 21,184 | 21,137 | ||||||
Minority interest in WHC | 139,250 | 131,353 | ||||||
Stockholders’ equity | 1,184,060 | 599,777 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 2,221,003 | $ | 1,651,397 | ||||
HLTH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Nine Months Ended | ||||||||
September 30, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 556,172 | $ | (23,190 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
(Income) loss from discontinued operations, net of tax | (93,159 | ) | 38,780 | |||||
Depreciation and amortization | 21,468 | 20,954 | ||||||
Minority interest in WHC (loss) income | (929 | ) | 2,758 | |||||
Equity in earnings of EBS Master LLC | (4,007 | ) | (22,679 | ) | ||||
Amortization of debt issuance costs | 2,248 | 2,179 | ||||||
Non-cash advertising | 1,736 | 2,489 | ||||||
Non-cash stock-based compensation | 18,974 | 26,246 | ||||||
Deferred income taxes | 11,934 | 3,710 | ||||||
Gain on sale of EBS Master LLC and 2006 EBS Sale | (538,024 | ) | (399 | ) | ||||
Impairment of auction rate securities | 60,108 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 7,932 | 14,835 | ||||||
Prepaid expenses and other, net | 4,174 | (198 | ) | |||||
Accrued expenses and other long-term liabilities | (3,639 | ) | (45,878 | ) | ||||
Deferred revenue | 5,340 | 3,253 | ||||||
Net cash provided by continuing operations | 50,328 | 22,860 | ||||||
Net cash provided by discontinued operations | 28,497 | 24,366 | ||||||
Net cash provided by operating activities | 78,825 | 47,226 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 117,539 | 356,492 | ||||||
Purchases of available-for-sale securities | (177,150 | ) | (694,522 | ) | ||||
Purchases of property and equipment | (15,115 | ) | (14,427 | ) | ||||
Proceeds related to the sales of ViPS, EBS, EPS and ACS/ACP, net of expenses | 821,706 | 14,565 | ||||||
Decreases in net advances to EBS Master LLC | 1,224 | 19,921 | ||||||
Other | 148 | — | ||||||
Net cash provided by (used in) continuing operations | 748,352 | (317,971 | ) | |||||
Net cash used in discontinued operations | (4,265 | ) | (3,785 | ) | ||||
Net cash provided by (used in ) investing activities | 744,087 | (321,756 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of HLTH and WHC common stock | 20,725 | 114,077 | ||||||
Purchases of treasury stock under repurchase program | — | (47,120 | ) | |||||
Other | 343 | (18 | ) | |||||
Net cash provided by continuing operations | 21,068 | 66,939 | ||||||
Net cash used in discontinued operations | (76 | ) | (130 | ) | ||||
Net cash provided by financing activities | 20,992 | 66,809 | ||||||
Effect of exchange rates on cash | (604 | ) | 1,042 | |||||
Net increase (decrease) in cash and cash equivalents | 843,300 | (206,679 | ) | |||||
Cash and cash equivalents at beginning of period | 536,879 | 614,691 | ||||||
Cash and cash equivalents at end of period | $ | 1,380,179 | $ | 408,012 | ||||