WebMD Health (WBMD) 8-K WebMD Announces First Quarter Financial Results

Exhibit 99.2

WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)

	Three Months Ended
	March 31,
	2010			2009
Revenue	$	108,030		$	90,264
Cost of operations		42,994			36,565
Sales and marketing		28,407			27,561
General and administrative		18,809			21,848
Depreciation and amortization		7,015			7,103
Interest income		3,409			2,262
Interest expense		5,139			6,536
(Loss) gain on convertible notes		(3,727	)		6,647
Loss on auction rate securities		28,848			—
Other expense, net		298			269
Loss from continuing operations before income tax benefit		(23,798	)		(709	)
Income tax benefit		20,008			1,217
Consolidated (loss) income from continuing operations		(3,790	)		508
Consolidated income from discontinued operations, net of tax		—			517
Consolidated net (loss) income inclusive of noncontrolling interest		(3,790	)		1,025
Income attributable to noncontrolling interest		—			(610	)
Net (loss) income attributable to Company stockholders	$	(3,790	)	$	415
Amounts attributable to Company stockholders:
Loss from continuing operations	$	(3,790	)	$	(194	)
Income from discontinued operations		—			609
Net (loss) income attributable to Company stockholders	$	(3,790	)	$	415
Basic and diluted (loss) income per common share:
Loss from continuing operations	$	(0.07	)	$	(0.00	)
Income from discontinued operations		—			0.01
Net (loss) income attributable to Company stockholders	$	(0.07	)	$	0.01
Weighted-average shares outstanding used in computing income per common share:
Basic and diluted		52,191			45,217

WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, except per share data, unaudited)

	Three Months Ended
	March 31,
	2010			2009
Revenue
Public portal advertising and sponsorship	$	86,257		$	67,289
Private portal services		21,773			22,975
	$	108,030		$	90,264
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	25,657		$	15,261
Interest, taxes, non-cash and other items (b)
Interest income		3,409			2,262
Interest expense		(5,139	)		(6,536	)
Income tax benefit		20,008			1,217
Depreciation and amortization		(7,015	)		(7,103	)
Non-cash stock-based compensation		(7,837	)		(9,154	)
Non-cash advertising		—			(1,753	)
(Loss) gain on convertible notes		(3,727	)		6,647
Loss on auction rate securities		(28,848	)		—
Other expense, net		(298	)		(333	)
Consolidated (loss) income from continuing operations		(3,790	)		508
Consolidated income from discontinued operations, net of tax		—			517
Consolidated net (loss) income inclusive of noncontrolling interest		(3,790	)		1,025
Income attributable to noncontrolling interest		—			(610	)
Net (loss) income attributable to Company stockholders	$	(3,790	)	$	415

(a)	See Annex A-Explanation of Non-GAAP Financial Measures.
(b)	Reconciliation of Adjusted EBITDA to consolidated income from continuing operations.

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WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)

	March 31, 2010		December 31, 2009
Assets
Cash and cash equivalents	$	450,214	$	459,766
Accounts receivable, net		120,584		118,155
Prepaid expenses and other current assets		15,697		11,419
Investments		357,342		9,932
Total current assets		943,837		599,272
Investments		—		338,446
Property and equipment, net		49,369		52,194
Goodwill		202,104		202,104
Intangible assets, net		24,943		26,020
Deferred tax asset		75,477		50,789
Other assets		18,567		19,723
Total Assets	$	1,314,297	$	1,288,548
Liabilities and Equity
Accrued expenses	$	48,173	$	63,721
Deferred revenue		120,139		98,474
1.75% convertible notes		264,583		264,583
Deferred tax liability		6,731		12,955
Liabilities of discontinued operations		25,965		34,197
Total current liabilities		465,591		473,930
31/8% convertible notes, net of discount of $12,151 at March 31, 2010 and $22,641 at December 31, 2009		134,915		227,659
Other long-term liabilities		21,931		22,191
Stockholders’ equity		691,860		564,768
Total Liabilities and Equity	$	1,314,297	$	1,288,548

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WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)

	Three Months Ended
	March 31,
	2010			2009
Cash flows from operating activities:
Consolidated net (loss) income inclusive of noncontrolling interest	$	(3,790	)	$	1,025
Adjustments to reconcile consolidated net (loss) income inclusive of noncontrolling interest to net cash provided by (used in) operating activities:
Consolidated income from discontinued operations, net of tax		—			(517	)
Depreciation and amortization		7,015			7,103
Non-cash interest		2,090			2,799
Non-cash advertising		—			1,753
Non-cash stock-based compensation		7,837			9,154
Deferred income taxes		(21,463	)		(2,604	)
Loss (gain) on convertible notes		3,727			(6,647	)
Loss on auction rate securities		28,848			—
Changes in operating assets and liabilities:
Accounts receivable		(2,429	)		2,247
Prepaid expenses and other, net		(1,829	)		(1,224	)
Accrued expenses and other long-term liabilities		(14,224	)		(20,741	)
Deferred revenue		21,665			4,961
Net cash provided by (used in) continuing operations		27,447			(2,691	)
Net cash (used in) provided by discontinued operations		(8,233	)		2,001
Net cash provided by (used in) operating activities		19,214			(690	)
Cash flows from investing activities:
Proceeds from sales of available-for-sale securities		4,500			600
Purchases of property and equipment		(3,114	)		(5,309	)
Finalization of sale price of discontinued operations		(1,430	)		250
Net cash used in continuing operations		(44	)		(4,459	)
Net cash used in discontinued operations		—			(829	)
Net cash used in investing activities		(44	)		(5,288	)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of cash used for employee withholding taxes		5,775			7,041
Repurchases of convertible notes		(22,565	)		(78,183	)
Purchase of treasury stock under repurchase program		(6,527	)		—
Payment for shares tendered in 2009, delivered in 2010		(6,818	)		—
Tax benefit on stock-based awards		1,413			—
Net cash used in financing activities		(28,722	)		(71,142	)
Effect of exchange rates on cash		—			(245	)
Net decrease in cash and cash equivalents		(9,552	)		(77,365	)
Cash and cash equivalents at beginning of period		459,766			629,848
Cash and cash equivalents at end of period	$	450,214		$	552,483

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