Exhibit 99.2
WEBMD HEALTH CORP.
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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue | $ | 122,707 | $ | 98,631 | $ | 230,737 | $ | 188,895 | ||||||||
Cost of operations | 45,368 | 39,229 | 88,362 | 75,794 | ||||||||||||
Sales and marketing | 29,425 | 26,797 | 57,832 | 54,358 | ||||||||||||
General and administrative | 20,577 | 22,003 | 39,386 | 43,851 | ||||||||||||
Depreciation and amortization | 6,318 | 6,956 | 13,333 | 14,059 | ||||||||||||
Interest income | 420 | 1,958 | 3,829 | 4,220 | ||||||||||||
Interest expense | 3,170 | 5,781 | 8,309 | 12,317 | ||||||||||||
(Loss) gain on convertible notes | (11,011 | ) | 3,473 | (14,738 | ) | 10,120 | ||||||||||
Gain (loss) on investments | 6,002 | — | (22,846 | ) | — | |||||||||||
Other income (expense), net | 99 | (552 | ) | (199 | ) | (821 | ) | |||||||||
Income (loss) from continuing operations before income tax provision (benefit) | 13,359 | 2,744 | (10,439 | ) | 2,035 | |||||||||||
Income tax provision (benefit) | 5,675 | 750 | (14,333 | ) | (467 | ) | ||||||||||
Consolidated income from continuing operations | 7,684 | 1,994 | 3,894 | 2,502 | ||||||||||||
Consolidated loss from discontinued operations, net of tax | — | (13,284 | ) | — | (12,767 | ) | ||||||||||
Consolidated net income (loss) inclusive of noncontrolling interest | 7,684 | (11,290 | ) | 3,894 | (10,265 | ) | ||||||||||
Income attributable to noncontrolling interest | — | (387 | ) | — | (997 | ) | ||||||||||
Net income (loss) attributable to Company stockholders | $ | 7,684 | $ | (11,677 | ) | $ | 3,894 | $ | (11,262 | ) | ||||||
Amounts attributable to Company stockholders: | ||||||||||||||||
Income from continuing operations | $ | 7,684 | $ | 703 | $ | 3,894 | $ | 509 | ||||||||
Loss from discontinued operations | — | (12,380 | ) | — | (11,771 | ) | ||||||||||
Net income (loss) attributable to Company stockholders | $ | 7,684 | $ | (11,677 | ) | $ | 3,894 | $ | (11,262 | ) | ||||||
Basic income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.14 | $ | 0.02 | $ | 0.07 | $ | 0.01 | ||||||||
Loss from discontinued operations | — | (0.28 | ) | — | (0.26 | ) | ||||||||||
Net income (loss) attributable to Company stockholders | $ | 0.14 | $ | (0.26 | ) | $ | 0.07 | $ | (0.25 | ) | ||||||
Diluted income (loss) per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.13 | $ | 0.01 | $ | 0.07 | $ | 0.01 | ||||||||
Loss from discontinued operations | — | (0.26 | ) | — | (0.25 | ) | ||||||||||
Net income (loss) attributable to Company stockholders | $ | 0.13 | $ | (0.25 | ) | $ | 0.07 | $ | (0.24 | ) | ||||||
Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||||||||||
Basic | 53,521 | 45,599 | 52,856 | 45,408 | ||||||||||||
Diluted | 62,504 | 46,733 | 57,272 | 46,446 | ||||||||||||
WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, except per share data, unaudited)
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, except per share data, unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue | ||||||||||||||||
Public portal advertising and sponsorship | $ | 100,592 | $ | 75,992 | $ | 186,849 | $ | 143,281 | ||||||||
Private portal services | 22,115 | 22,639 | 43,888 | 45,614 | ||||||||||||
$ | 122,707 | $ | 98,631 | $ | 230,737 | $ | 188,895 | |||||||||
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a) | $ | 34,301 | $ | 20,021 | $ | 59,958 | $ | 35,282 | ||||||||
Interest, taxes, non-cash and other items (b) | ||||||||||||||||
Interest income | 420 | 1,958 | 3,829 | 4,220 | ||||||||||||
Interest expense | (3,170 | ) | (5,781 | ) | (8,309 | ) | (12,317 | ) | ||||||||
Income tax (provision) benefit | (5,675 | ) | (750 | ) | 14,333 | 467 | ||||||||||
Depreciation and amortization | (6,318 | ) | (6,956 | ) | (13,333 | ) | (14,059 | ) | ||||||||
Non-cash stock-based compensation | (6,964 | ) | (9,412 | ) | (14,801 | ) | (18,566 | ) | ||||||||
Non-cash advertising | — | — | — | (1,753 | ) | |||||||||||
(Loss) gain on convertible notes | (11,011 | ) | 3,473 | (14,738 | ) | 10,120 | ||||||||||
Gain (loss) on investments | 6,002 | — | (22,846 | ) | — | |||||||||||
Other income (expense), net | 99 | (559 | ) | (199 | ) | (892 | ) | |||||||||
Consolidated income from continuing operations | 7,684 | 1,994 | 3,894 | 2,502 | ||||||||||||
Consolidated loss from discontinued operations, net of tax | — | (13,284 | ) | — | (12,767 | ) | ||||||||||
Consolidated net income (loss) inclusive of noncontrolling interest | 7,684 | (11,290 | ) | 3,894 | (10,265 | ) | ||||||||||
Income attributable to noncontrolling interest | — | (387 | ) | — | (997 | ) | ||||||||||
Net income (loss) attributable to Company stockholders | $ | 7,684 | $ | (11,677 | ) | $ | 3,894 | $ | (11,262 | ) | ||||||
(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)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
June 30, 2010 | December 31, 2009 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 534,705 | $ | 459,766 | ||||
Accounts receivable, net | 104,907 | 118,155 | ||||||
Prepaid expenses and other current assets | 14,197 | 11,419 | ||||||
Investments | — | 9,932 | ||||||
Deferred tax asset | 30,011 | — | ||||||
Total current assets | 683,820 | 599,272 | ||||||
Investments | — | 338,446 | ||||||
Property and equipment, net | 51,953 | 52,194 | ||||||
Goodwill | 202,104 | 202,104 | ||||||
Intangible assets, net | 24,166 | 26,020 | ||||||
Deferred tax asset | 82,119 | 50,789 | ||||||
Other assets | 18,074 | 19,723 | ||||||
Total Assets | $ | 1,062,236 | $ | 1,288,548 | ||||
Liabilities and Equity | ||||||||
Accrued expenses | $ | 52,426 | $ | 63,721 | ||||
Deferred revenue | 113,070 | 98,474 | ||||||
1.75% convertible notes | — | 264,583 | ||||||
Deferred tax liability | — | 12,955 | ||||||
Liabilities of discontinued operations | 19,655 | 34,197 | ||||||
Total current liabilities | 185,151 | 473,930 | ||||||
3⅛% convertible notes, net of discount of $9,083 at June 30, 2010 and $22,641 at December 31, 2009 | 112,414 | 227,659 | ||||||
Other long-term liabilities | 22,220 | 22,191 | ||||||
Stockholders’ equity | 742,451 | 564,768 | ||||||
Total Liabilities and Equity | $ | 1,062,236 | $ | 1,288,548 | ||||
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WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
Cash flows from operating activities: | ||||||||
Consolidated net income (loss) inclusive of noncontrolling interest | $ | 3,894 | $ | (10,265 | ) | |||
Adjustments to reconcile consolidated net income (loss) inclusive of noncontrolling interest to net cash provided by operating activities: | ||||||||
Consolidated loss from discontinued operations, net of tax | — | 12,767 | ||||||
Depreciation and amortization | 13,333 | 14,059 | ||||||
Non-cash interest, net | 3,885 | 5,310 | ||||||
Non-cash advertising | — | 1,753 | ||||||
Non-cash stock-based compensation | 14,801 | 18,566 | ||||||
Deferred income taxes | (27,729 | ) | (2,363 | ) | ||||
Loss (gain) on convertible notes | 14,738 | (10,120 | ) | |||||
Loss on investments | 22,846 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 13,248 | 14,408 | ||||||
Prepaid expenses and other, net | (2,144 | ) | (3,775 | ) | ||||
Accrued expenses and other long-term liabilities | (4,801 | ) | (9,544 | ) | ||||
Deferred revenue | 14,596 | 6,648 | ||||||
Net cash provided by continuing operations | 66,667 | 37,444 | ||||||
Net cash (used in) provided by discontinued operations | (15,501 | ) | 5,509 | |||||
Net cash provided by operating activities | 51,166 | 42,953 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from sales of available-for-sale securities | 362,206 | 1,100 | ||||||
Purchases of property and equipment | (9,719 | ) | (10,955 | ) | ||||
Finalization of sale price of discontinued operations | (1,430 | ) | 250 | |||||
Net cash provided by (used in) continuing operations | 351,057 | (9,605 | ) | |||||
Net cash used in discontinued operations | — | (2,356 | ) | |||||
Net cash provided by (used in) investing activities | 351,057 | (11,961 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock, net of cash used for employee withholding taxes | 8,386 | 18,194 | ||||||
Repurchases of convertible notes | (81,362 | ) | (123,857 | ) | ||||
Purchase of treasury stock under repurchase program | (14,914 | ) | — | |||||
Payment for shares tendered in 2009, delivered in 2010 | (6,818 | ) | — | |||||
Purchase of treasury stock in tender offer | (242,795 | ) | — | |||||
Tax benefit on stock-based awards | 10,219 | — | ||||||
Net cash used in financing activities | (327,284 | ) | (105,663 | ) | ||||
Effect of exchange rates on cash | — | 70 | ||||||
Net increase (decrease) in cash and cash equivalents | 74,939 | (74,601 | ) | |||||
Cash and cash equivalents at beginning of period | 459,766 | 629,848 | ||||||
Cash and cash equivalents at end of period | $ | 534,705 | $ | 555,247 | ||||
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