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, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenue | $ | 111,512 | $ | 96,581 | $ | 382,697 | $ | 331,693 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of operations | 38,708 | 29,645 | 138,363 | 117,281 | ||||||||||||
Sales and marketing | 30,585 | 26,387 | 108,316 | 93,645 | ||||||||||||
General and administrative | 22,250 | 23,210 | 89,503 | 104,321 | ||||||||||||
Depreciation and amortization | 7,312 | 7,302 | 28,780 | 28,256 | ||||||||||||
Interest income | 5,916 | 11,397 | 35,300 | 42,035 | ||||||||||||
Interest expense | 4,642 | 4,608 | 18,513 | 18,593 | ||||||||||||
Restructuring | 7,416 | — | 7,416 | — | ||||||||||||
Gain on sale of EBS Master LLC | — | — | 538,024 | — | ||||||||||||
Impairment of auction rate securities | — | — | 60,108 | — | ||||||||||||
Other (expense) income, net | (142 | ) | (1,462 | ) | (5,949 | ) | 3,805 | |||||||||
Income from continuing operations before income tax (benefit) provision | 6,373 | 15,364 | 499,073 | 15,437 | ||||||||||||
Income tax (benefit) provision | (4,372 | ) | (13,145 | ) | 30,251 | (8,741 | ) | |||||||||
Minority interest in WHC | 1,961 | 7,909 | 1,032 | 10,667 | ||||||||||||
Equity in earnings of EBS Master LLC | — | 5,887 | 4,007 | 28,566 | ||||||||||||
Income from continuing operations | 8,784 | 26,487 | 471,797 | 42,077 | ||||||||||||
Income (loss) from discontinued operations, net of tax | 333 | 16,582 | 93,492 | (22,198 | ) | |||||||||||
Net income | $ | 9,117 | $ | 43,069 | $ | 565,289 | $ | 19,879 | ||||||||
Basic income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.06 | $ | 0.15 | $ | 2.70 | $ | 0.24 | ||||||||
Income (loss) from discontinued operations | 0.00 | 0.09 | 0.53 | (0.13 | ) | |||||||||||
Net income | $ | 0.06 | $ | 0.24 | $ | 3.23 | $ | 0.11 | ||||||||
Diluted income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.06 | $ | 0.13 | $ | 2.19 | $ | 0.21 | ||||||||
Income (loss) from discontinued operations | 0.00 | 0.07 | 0.43 | (0.12 | ) | |||||||||||
Net income | $ | 0.06 | $ | 0.20 | $ | 2.62 | $ | 0.09 | ||||||||
Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||||||||||
Basic | 151,199 | 181,280 | 174,928 | 179,330 | ||||||||||||
Diluted | 175,274 | 212,335 | 220,127 | 188,763 | ||||||||||||
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, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenue | ||||||||||||||||
WebMD Online Services: | ||||||||||||||||
Advertising and sponsorship | $ | 85,296 | $ | 70,389 | $ | 275,790 | $ | 229,333 | ||||||||
Licensing | 23,198 | 21,556 | 89,126 | 81,471 | ||||||||||||
Content syndication and other | 280 | 351 | 1,434 | 2,378 | ||||||||||||
Total WebMD Online Services | 108,774 | 92,296 | 366,350 | 313,182 | ||||||||||||
WebMD Publishing and Other Services | 2,758 | 4,346 | 16,427 | 18,772 | ||||||||||||
Inter-segment eliminations | (20 | ) | (61 | ) | (80 | ) | (261 | ) | ||||||||
$ | 111,512 | $ | 96,581 | $ | 382,697 | $ | 331,693 | |||||||||
Earnings before interest, taxes, non-cash | ||||||||||||||||
and other items (“Adjusted EBITDA”) (a) | ||||||||||||||||
WebMD Online Services | $ | 34,148 | $ | 31,612 | $ | 95,435 | $ | 80,594 | ||||||||
WebMD Publishing and Other Services | (338 | ) | 1,460 | 1,147 | 4,103 | |||||||||||
Corporate | (4,534 | ) | (5,628 | ) | (19,845 | ) | (24,502 | ) | ||||||||
$ | 29,276 | $ | 27,444 | $ | 76,737 | $ | 60,195 | |||||||||
Adjusted EBITDA per diluted common share (b) | $ | 0.17 | $ | 0.13 | $ | 0.35 | $ | 0.32 | ||||||||
Interest, taxes, non-cash and other items (c) | ||||||||||||||||
Interest income | 5,916 | 11,397 | 35,300 | 42,035 | ||||||||||||
Interest expense | (4,642 | ) | (4,608 | ) | (18,513 | ) | (18,593 | ) | ||||||||
Income tax benefit (provision) | 4,372 | 13,145 | (30,251 | ) | 8,741 | |||||||||||
Depreciation and amortization | (7,312 | ) | (7,302 | ) | (28,780 | ) | (28,256 | ) | ||||||||
Non-cash stock-based compensation | (5,816 | ) | (6,406 | ) | (24,790 | ) | (32,652 | ) | ||||||||
Non-cash advertising | (3,361 | ) | (2,775 | ) | (5,097 | ) | (5,264 | ) | ||||||||
Minority interest in WHC | (1,961 | ) | (7,909 | ) | (1,032 | ) | (10,667 | ) | ||||||||
Restructuring | (7,416 | ) | — | (7,416 | ) | — | ||||||||||
Equity in earnings of EBS Master LLC | — | 5,887 | 4,007 | 28,566 | ||||||||||||
Gain on sale of EBS Master LLC | — | — | 538,024 | — | ||||||||||||
Impairment of auction rate securities | — | — | (60,108 | ) | — | |||||||||||
Other expense, net | (272 | ) | (2,386 | ) | (6,284 | ) | (2,028 | ) | ||||||||
Income from continuing operations | 8,784 | 26,487 | 471,797 | 42,077 | ||||||||||||
Income (loss) from discontinued operations, net of tax | 333 | 16,582 | 93,492 | (22,198 | ) | |||||||||||
Net income | $ | 9,117 | $ | 43,069 | $ | 565,289 | $ | 19,879 | ||||||||
Basic income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.06 | $ | 0.15 | $ | 2.70 | $ | 0.24 | ||||||||
Income (loss) from discontinued operations | 0.00 | 0.09 | 0.53 | (0.13 | ) | |||||||||||
Net income | $ | 0.06 | $ | 0.24 | $ | 3.23 | $ | 0.11 | ||||||||
Diluted income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.06 | $ | 0.13 | $ | 2.19 | $ | 0.21 | ||||||||
Income (loss) from discontinued operations | 0.00 | 0.07 | 0.43 | (0.12 | ) | |||||||||||
Net income | $ | 0.06 | $ | 0.20 | $ | 2.62 | $ | 0.09 | ||||||||
Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||||||||||
Basic | 151,199 | 181,280 | 174,928 | 179,330 | ||||||||||||
Diluted | 175,274 | 212,335 | 220,127 | 188,763 | ||||||||||||
(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)
December 31, | ||||||||
2008 | 2007 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 629,848 | $ | 536,879 | ||||
Short-term investments | 371 | 290,858 | ||||||
Accounts receivable, net | 94,140 | 86,081 | ||||||
Due from EBS Master LLC | — | 1,224 | ||||||
Prepaid expenses and other current assets | 40,811 | 71,090 | ||||||
Assets of discontinued operations | 118,775 | 262,964 | ||||||
Total current assets | 883,945 | 1,249,096 | ||||||
Investments | 288,049 | 2,383 | ||||||
Property and equipment, net | 56,731 | 49,554 | ||||||
Goodwill | 213,148 | 217,323 | ||||||
Intangible assets, net | 32,690 | 36,314 | ||||||
Investment in EBS Master LLC | — | 25,261 | ||||||
Other assets | 24,465 | 71,466 | ||||||
Total Assets | $ | 1,499,028 | $ | 1,651,397 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accrued expenses | $ | 54,708 | $ | 49,598 | ||||
Deferred revenue | 80,489 | 76,401 | ||||||
Liabilities of discontinued operations | 98,212 | 123,131 | ||||||
Total current liabilities | 233,409 | 249,130 | ||||||
Convertible notes | 650,000 | 650,000 | ||||||
Other long-term liabilities | 22,664 | 21,137 | ||||||
Minority interest in WHC | 134,223 | 131,353 | ||||||
Stockholders’ equity | 458,732 | 599,777 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 1,499,028 | $ | 1,651,397 | ||||
HLTH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Years Ended December 31, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 565,289 | $ | 19,879 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
(Income) loss from discontinued operations, net of tax | (93,492 | ) | 22,198 | |||||
Depreciation and amortization | 28,780 | 28,256 | ||||||
Minority interest in WHC | 1,032 | 10,667 | ||||||
Equity in earnings of EBS Master LLC | (4,007 | ) | (28,566 | ) | ||||
Non-cash interest expense, net | 1,944 | 2,916 | ||||||
Non-cash advertising | 5,097 | 5,264 | ||||||
Non-cash stock-based compensation | 24,790 | 32,652 | ||||||
Deferred income taxes | 10,617 | (10,136 | ) | |||||
Gain on sale of EBS Master LLC | (538,024 | ) | — | |||||
Gain on 2006 EBS Sale | — | (399 | ) | |||||
Impairment of auction rate securities | 60,108 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (8,059 | ) | 3,840 | |||||
Prepaid expenses and other, net | 1,892 | 5,329 | ||||||
Accrued expenses and other long-term liabilities | 5,908 | (44,318 | ) | |||||
Deferred revenue | 4,088 | 314 | ||||||
Net cash provided by continuing operations | 65,963 | 47,896 | ||||||
Net cash provided by discontinued operations | 31,151 | 27,497 | ||||||
Net cash provided by operating activities | 97,114 | 75,393 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 118,339 | 670,326 | ||||||
Purchases of available-for-sale securities | (177,150 | ) | (927,038 | ) | ||||
Purchases of property and equipment | (24,335 | ) | (19,053 | ) | ||||
Purchase of investment in preferred stock | (6,471 | ) | — | |||||
Cash paid in business combinations, net of cash acquired | (2,633 | ) | — | |||||
Purchase of minority interest in subsidiary | (12,818 | ) | — | |||||
Proceeds related to the sale of EBS Master LLC | 574,617 | — | ||||||
Proceeds from the sale of discontinued operations | 247,491 | 11,667 | ||||||
Proceeds from the 2006 EBS Sale, net | — | 2,898 | ||||||
Proceeds from advances to EBS MasterLLC | 1,224 | 18,792 | ||||||
Net cash provided by (used in) continuing operations | 718,264 | (242,408 | ) | |||||
Net cash used in discontinued operations | (4,782 | ) | (4,741 | ) | ||||
Net cash provided by (used in) investing activities | 713,482 | (247,149 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of HLTH and WHC common stock | 21,683 | 133,054 | ||||||
Tax benefit on stock-based awards | 748 | 6,601 | ||||||
Purchases of treasury stock under repurchase program | — | (47,123 | ) | |||||
Purchases of treasury stock in tender offer | (737,324 | ) | — | |||||
Other | (700 | ) | (20 | ) | ||||
Net cash (used in) provided by continuing operations | (715,593 | ) | 92,512 | |||||
Net cash used in discontinued operations | (76 | ) | (175 | ) | ||||
Net cash (used in) provided by financing activities | (715,669 | ) | 92,337 | |||||
Effect of exchange rates on cash | (1,958 | ) | 1,607 | |||||
Net increase (decrease) in cash and cash equivalents | 92,969 | (77,812 | ) | |||||
Cash and cash equivalents at beginning of period | 536,879 | 614,691 | ||||||
Cash and cash equivalents at end of period | $ | 629,848 | $ | 536,879 | ||||