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, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenue | $ | 141,369 | $ | 122,707 | $ | 272,978 | $ | 230,737 | ||||||||
Cost of operations | 51,152 | 45,368 | 99,601 | 88,362 | ||||||||||||
Sales and marketing | 32,270 | 29,425 | 64,564 | 57,832 | ||||||||||||
General and administrative | 22,006 | 20,577 | 44,827 | 39,386 | ||||||||||||
Depreciation and amortization | 6,724 | 6,318 | 13,148 | 13,333 | ||||||||||||
Interest income | 51 | 420 | 67 | 3,829 | ||||||||||||
Interest expense | 5,833 | 3,170 | 8,974 | 8,309 | ||||||||||||
Loss on convertible notes | — | 11,011 | — | 14,738 | ||||||||||||
Gain (loss) on investments | 1,769 | 6,002 | 15,829 | (22,846 | ) | |||||||||||
Other income (expense), net | — | 99 | (53 | ) | (199 | ) | ||||||||||
Income (loss) from continuing operations before income tax provision (benefit) | 25,204 | 13,359 | 57,707 | (10,439 | ) | |||||||||||
Income tax provision (benefit) | 11,003 | 5,675 | 23,961 | (14,333 | ) | |||||||||||
Income from continuing operations | 14,201 | 7,684 | 33,746 | 3,894 | ||||||||||||
Income from discontinued operations, net of tax | 7,394 | — | 7,394 | — | ||||||||||||
Net income | $ | 21,595 | $ | 7,684 | $ | 41,140 | $ | 3,894 | ||||||||
Basic income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.24 | $ | 0.14 | $ | 0.58 | $ | 0.07 | ||||||||
Income from discontinued operations | 0.13 | — | 0.12 | — | ||||||||||||
Net income | $ | 0.37 | $ | 0.14 | $ | 0.70 | $ | 0.07 | ||||||||
Diluted income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.23 | $ | 0.13 | $ | 0.55 | $ | 0.07 | ||||||||
Income from discontinued operations | 0.13 | — | 0.13 | — | ||||||||||||
Net income | $ | 0.36 | $ | 0.13 | $ | 0.68 | $ | 0.07 | ||||||||
Weighted-average shares outstanding used in computing income per common share: | ||||||||||||||||
Basic | 58,096 | 53,521 | 58,140 | 52,856 | ||||||||||||
Diluted | 60,236 | 62,504 | 60,473 | 57,272 | ||||||||||||
WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenue | ||||||||||||||||
Public portal advertising and sponsorship | $ | 121,108 | $ | 100,592 | $ | 231,471 | $ | 186,849 | ||||||||
Private portal services | 20,261 | 22,115 | 41,507 | 43,888 | ||||||||||||
$ | 141,369 | $ | 122,707 | $ | 272,978 | $ | 230,737 | |||||||||
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a) | $ | 45,289 | $ | 34,301 | $ | 83,147 | $ | 59,958 | ||||||||
Interest, taxes, non-cash and other items (b) | ||||||||||||||||
Interest income | 51 | 420 | 67 | 3,829 | ||||||||||||
Interest expense | (5,833 | ) | (3,170 | ) | (8,974 | ) | (8,309 | ) | ||||||||
Income tax (provision) benefit | (11,003 | ) | (5,675 | ) | (23,961 | ) | 14,333 | |||||||||
Depreciation and amortization | (6,724 | ) | (6,318 | ) | (13,148 | ) | (13,333 | ) | ||||||||
Non-cash stock-based compensation | (9,348 | ) | (6,964 | ) | (19,161 | ) | (14,801 | ) | ||||||||
Loss on convertible notes | — | (11,011 | ) | — | (14,738 | ) | ||||||||||
Gain (loss) on investments | 1,769 | 6,002 | 15,829 | (22,846 | ) | |||||||||||
Other income (expense), net | — | 99 | (53 | ) | (199 | ) | ||||||||||
Income from continuing operations | 14,201 | 7,684 | 33,746 | 3,894 | ||||||||||||
Income from discontinued operations, net of tax | 7,394 | — | 7,394 | — | ||||||||||||
Net income | $ | 21,595 | $ | 7,684 | $ | 41,140 | $ | 3,894 | ||||||||
(a) | See Annex A-Explanation of Non-GAAP Financial Measures. | |
(b) | Reconciliation of Adjusted EBITDA to net income. |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
June 30, 2011 | December 31, 2010 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 1,145,061 | $ | 400,501 | ||||
Accounts receivable, net | 115,214 | 134,448 | ||||||
Prepaid expenses and other current assets | 17,913 | 12,161 | ||||||
Deferred tax assets | 21,527 | 23,467 | ||||||
Total current assets | 1,299,715 | 570,577 | ||||||
Property and equipment, net | 58,290 | 61,516 | ||||||
Goodwill | 202,104 | 202,104 | ||||||
Intangible assets, net | 21,313 | 22,626 | ||||||
Deferred tax assets | 63,827 | 71,125 | ||||||
Other assets | 33,420 | 14,254 | ||||||
Total Assets | $ | 1,678,669 | $ | 942,202 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accrued expenses | $ | 56,701 | $ | 53,181 | ||||
Deferred revenue | 95,999 | 97,043 | ||||||
Liabilities of discontinued operations | 4,804 | 17,327 | ||||||
Total current liabilities | 157,504 | 167,551 | ||||||
2.25% convertible notes due 2016 | 400,000 | — | ||||||
2.50% convertible notes due 2018 | 400,000 | — | ||||||
Other long-term liabilities | 22,401 | 21,756 | ||||||
Stockholders’ equity | 698,764 | 752,895 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 1,678,669 | $ | 942,202 | ||||
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Six Months Ended | ||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 41,140 | $ | 3,894 | ||||
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||||||||
Income from discontinued operations, net of tax | (7,394 | ) | — | |||||
Depreciation and amortization | 13,148 | 13,333 | ||||||
Non-cash interest, net | 1,599 | 3,885 | ||||||
Non-cash stock-based compensation | 19,161 | 14,801 | ||||||
Deferred income taxes | 4,423 | (27,729 | ) | |||||
Loss on convertible notes | — | 14,738 | ||||||
(Gain) loss on investments | (15,829 | ) | 22,846 | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 19,234 | 13,248 | ||||||
Prepaid expenses and other, net | (2,103 | ) | (2,144 | ) | ||||
Accrued expenses and other long-term liabilities | 4,765 | (4,801 | ) | |||||
Deferred revenue | (1,044 | ) | 14,596 | |||||
Net cash provided by continuing operations | 77,100 | 66,667 | ||||||
Net cash used in discontinued operations | (136 | ) | (15,501 | ) | ||||
Net cash provided by operating activities | 76,964 | 51,166 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from sales of available-for-sale securities | — | 361,852 | ||||||
Proceeds received from ARS option | 16,561 | 354 | ||||||
Purchases of property and equipment | (9,557 | ) | (9,719 | ) | ||||
Finalization of sale price of discontinued operations | — | (1,430 | ) | |||||
Net cash provided by investing activities | 7,004 | 351,057 | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options | 25,053 | 48,114 | ||||||
Cash used for withholding taxes due on stock-based awards | (6,632 | ) | (39,728 | ) | ||||
Net proceeds from issuance of the 2.50% Notes and 2.25% Notes | 774,745 | — | ||||||
Repurchases of 1.75% Notes and 3 1/8% Notes | — | (81,362 | ) | |||||
Purchases of treasury stock | (150,417 | ) | (264,527 | ) | ||||
Excess tax benefit on stock-based awards | 17,843 | 10,219 | ||||||
Net cash provided by (used in) financing activities | 660,592 | (327,284 | ) | |||||
Net increase in cash and cash equivalents | 744,560 | 74,939 | ||||||
Cash and cash equivalents at beginning of period | 400,501 | 459,766 | ||||||
Cash and cash equivalents at end of period | $ | 1,145,061 | $ | 534,705 | ||||
WEBMD HEALTH CORP.
NET INCOME PER COMMON SHARE
(In thousands, except per share data, unaudited)
NET INCOME PER COMMON SHARE
(In thousands, except per share data, unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Numerator: | ||||||||||||||||
Income from continuing operations | $ | 14,201 | $ | 7,684 | $ | 33,746 | $ | 3,894 | ||||||||
Effect of participating non-vested restricted stock | (91 | ) | (88 | ) | (255 | ) | (50 | ) | ||||||||
Income from continuing operations- Basic | 14,110 | 7,596 | 33,491 | 3,844 | ||||||||||||
Interest expense on 1.75% Notes, net of tax | — | 592 | — | — | ||||||||||||
Income from continuing operations- Diluted | $ | 14,110 | $ | 8,188 | $ | 33,491 | $ | 3,844 | ||||||||
Income from discontinued operations, net of tax | $ | 7,394 | $ | — | $ | 7,394 | $ | — | ||||||||
Effect of participating non-vested restricted stock | (47 | ) | — | (56 | ) | — | ||||||||||
Income from discontinued operations, net of tax — Basic and Diluted | $ | 7,347 | $ | — | $ | 7,338 | $ | — | ||||||||
Denominator: | ||||||||||||||||
Weighted-average shares — Basic | 58,096 | 53,521 | 58,140 | 52,856 | ||||||||||||
Employee stock options and restricted stock | 2,140 | 3,848 | 2,333 | 4,416 | ||||||||||||
1.75% Notes | — | 5,135 | — | — | ||||||||||||
Adjusted weighted-average shares after assumed conversions — Diluted | 60,236 | 62,504 | 60,473 | 57,272 | ||||||||||||
Basic income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.24 | $ | 0.14 | $ | 0.58 | $ | 0.07 | ||||||||
Income from discontinued operations | 0.13 | — | 0.12 | — | ||||||||||||
Net income | $ | 0.37 | $ | 0.14 | $ | 0.70 | $ | 0.07 | ||||||||
Diluted income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.23 | $ | 0.13 | $ | 0.55 | $ | 0.07 | ||||||||
Income from discontinued operations | 0.13 | — | 0.13 | — | ||||||||||||
Net income | $ | 0.36 | $ | 0.13 | $ | 0.68 | $ | 0.07 | ||||||||