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,
	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)

	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)

	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)

	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)

	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	)