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 | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Revenue | $ | 131,609 | $ | 108,030 | ||||
Cost of operations | 48,449 | 42,994 | ||||||
Sales and marketing | 32,294 | 28,407 | ||||||
General and administrative | 22,821 | 18,809 | ||||||
Depreciation and amortization | 6,424 | 7,015 | ||||||
Interest income | 16 | 3,409 | ||||||
Interest expense | 3,141 | 5,139 | ||||||
Loss on convertible notes | — | 3,727 | ||||||
Gain (loss) on investments | 14,060 | (28,848 | ) | |||||
Other expense, net | 53 | 298 | ||||||
Income (loss) before income tax provision (benefit) | 32,503 | (23,798 | ) | |||||
Income tax provision (benefit) | 12,958 | (20,008 | ) | |||||
Net income (loss) | $ | 19,545 | $ | (3,790 | ) | |||
Net income (loss) per common share: | ||||||||
Basic | $ | 0.33 | $ | (0.07 | ) | |||
Diluted | $ | 0.32 | $ | (0.07 | ) | |||
Weighted-average shares outstanding used in computing income (loss) per common share: | ||||||||
Basic | 58,184 | 52,191 | ||||||
Diluted | 67,173 | 52,191 | ||||||
WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Revenue | ||||||||
Public portal advertising and sponsorship | $ | 110,363 | $ | 86,257 | ||||
Private portal services | 21,246 | 21,773 | ||||||
$ | 131,609 | $ | 108,030 | |||||
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a) | $ | 37,858 | $ | 25,657 | ||||
Interest, taxes, non-cash and other items (b) | ||||||||
Interest income | 16 | 3,409 | ||||||
Interest expense | (3,141 | ) | (5,139 | ) | ||||
Income tax (provision) benefit | (12,958 | ) | 20,008 | |||||
Depreciation and amortization | (6,424 | ) | (7,015 | ) | ||||
Non-cash stock-based compensation | (9,813 | ) | (7,837 | ) | ||||
Loss on convertible notes | — | (3,727 | ) | |||||
Gain (loss) on investments | 14,060 | (28,848 | ) | |||||
Other expense, net | (53 | ) | (298 | ) | ||||
Net income (loss) | $ | 19,545 | $ | (3,790 | ) | |||
(a) | See Annex A-Explanation of Non-GAAP Financial Measures. | |
(b) | Reconciliation of Adjusted EBITDA to net income (loss). |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
March 31, 2011 | December 31, 2010 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 1,065,383 | $ | 400,501 | ||||
Accounts receivable, net | 128,760 | 134,448 | ||||||
Prepaid expenses and other current assets | 13,389 | 12,161 | ||||||
Deferred tax assets | 22,459 | 23,467 | ||||||
Total current assets | 1,229,991 | 570,577 | ||||||
Property and equipment, net | 59,220 | 61,516 | ||||||
Goodwill | 202,104 | 202,104 | ||||||
Intangible assets, net | 21,970 | 22,626 | ||||||
Deferred tax assets | 67,335 | 71,125 | ||||||
Other assets | 47,584 | 14,254 | ||||||
Total Assets | $ | 1,628,204 | $ | 942,202 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accrued expenses | $ | 46,333 | $ | 53,181 | ||||
Deferred revenue | 96,824 | 97,043 | ||||||
Liabilities of discontinued operations | 17,185 | 17,327 | ||||||
Total current liabilities | 160,342 | 167,551 | ||||||
2.50% convertible notes due 2018 | 400,000 | — | ||||||
2.25% convertible notes due 2016 | 400,000 | — | ||||||
Other long-term liabilities | 22,056 | 21,756 | ||||||
Stockholders’ equity | 645,806 | 752,895 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 1,628,204 | $ | 942,202 | ||||
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 19,545 | $ | (3,790 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 6,424 | 7,015 | ||||||
Non-cash interest, net | 516 | 2,090 | ||||||
Non-cash stock-based compensation | 9,813 | 7,837 | ||||||
Deferred income taxes | 4,798 | (21,463 | ) | |||||
Loss on convertible notes | — | 3,727 | ||||||
(Gain) loss on investments | (14,060 | ) | 28,848 | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 5,688 | (2,429 | ) | |||||
Prepaid expenses and other, net | 622 | (1,829 | ) | |||||
Accrued expenses and other long-term liabilities | (7,642 | ) | (14,224 | ) | ||||
Deferred revenue | (219 | ) | 21,665 | |||||
Net cash provided by continuing operations | 25,485 | 27,447 | ||||||
Net cash used in discontinued operations | (142 | ) | (8,233 | ) | ||||
Net cash provided by operating activities | 25,343 | 19,214 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from sales of available-for-sale securities | — | 4,500 | ||||||
Proceeds received from ARS option | 5,240 | — | ||||||
Purchases of property and equipment | (4,849 | ) | (3,114 | ) | ||||
Finalization of sale price of discontinued operations | — | (1,430 | ) | |||||
Net cash provided by (used in) investing activities | 391 | (44 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options | 10,220 | 28,224 | ||||||
Cash used for withholding taxes due on stock-based awards | (3,172 | ) | (22,449 | ) | ||||
Net proceeds from issuance of the 2.50% Notes and 2.25% Notes | 774,745 | — | ||||||
Repurchases of 31/8% Notes | — | (22,565 | ) | |||||
Purchases of treasury stock | (150,000 | ) | (13,345 | ) | ||||
Excess tax benefit on stock-based awards | 7,355 | 1,413 | ||||||
Net cash provided by (used in) financing activities | 639,148 | (28,722 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 664,882 | (9,552 | ) | |||||
Cash and cash equivalents at beginning of period | 400,501 | 459,766 | ||||||
Cash and cash equivalents at end of period | $ | 1,065,383 | $ | 450,214 | ||||
WEBMD HEALTH CORP.
NET INCOME (LOSS) PER COMMON SHARE
(In thousands, except per share data, unaudited)
NET INCOME (LOSS) PER COMMON SHARE
(In thousands, except per share data, unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Numerator: | ||||||||
Net income (loss) | $ | 19,545 | $ | (3,790 | ) | |||
Effect of participating non-vested restricted stock | (170 | ) | — | |||||
Net income (loss) — Basic | 19,375 | (3,790 | ) | |||||
Interest expense on 2.50% Notes, net of tax | 1,503 | — | ||||||
Interest expense on 2.25% Notes, net of tax | 315 | — | ||||||
Net income (loss) — Diluted | $ | 21,193 | $ | (3,790 | ) | |||
Denominator: | ||||||||
Weighted-average shares — Basic | 58,184 | 52,191 | ||||||
Employee stock options and restricted stock | 2,527 | — | ||||||
2.50% Notes | 5,377 | — | ||||||
2.25% Notes | 1,085 | — | ||||||
Adjusted weighted-average shares after assumed conversions — Diluted | 67,173 | 52,191 | ||||||
Net income (loss) per common share — Basic | $ | 0.33 | $ | (0.07 | ) | |||
Net income (loss) per common share — Diluted | $ | 0.32 | $ | (0.07 | ) | |||