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

Exhibit 99.2

WEBMD HEALTH CORP.
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)

	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.

2 

WEBMD HEALTH CORP.
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

3 

WEBMD HEALTH CORP.
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

4