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 | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Revenue | $ | 49,104 | $ | 39,097 | $ | 168,938 | $ | 134,148 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of operations | 19,007 | 14,606 | 70,538 | 52,377 | ||||||||||||
Sales and marketing | 15,093 | 12,032 | 51,756 | 47,358 | ||||||||||||
General and administrative | 7,763 | 6,616 | 29,550 | 22,122 | ||||||||||||
Depreciation and amortization | 2,668 | 1,858 | 10,653 | 5,620 | ||||||||||||
Interest income | 1,780 | — | 1,790 | — | ||||||||||||
Income before income tax provision | 6,353 | 3,985 | 8,231 | 6,671 | ||||||||||||
Income tax provision | 222 | 58 | 486 | 210 | ||||||||||||
Net income | $ | 6,131 | $ | 3,927 | $ | 7,745 | $ | 6,461 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.11 | $ | 0.08 | $ | 0.15 | $ | 0.13 | ||||||||
Diluted | $ | 0.11 | $ | 0.08 | $ | 0.15 | $ | 0.13 | ||||||||
Weighted-average shares outstanding used in computing net income per common share: | ||||||||||||||||
Basic | 56,054 | 48,100 | 50,132 | 48,100 | ||||||||||||
Diluted | 57,627 | 48,100 | 50,532 | 48,100 | ||||||||||||
WEBMD HEALTH CORP.
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2005 | 2004 | 2005 (b) | 2004 | |||||||||||||
Revenues | ||||||||||||||||
Online Services: | ||||||||||||||||
Advertising and sponsorship | $ | 32,480 | $ | 25,998 | $ | 109,977 | $ | 83,828 | ||||||||
Licensing | 11,016 | 5,629 | 34,113 | 15,841 | ||||||||||||
Content syndication and other | 1,513 | 5,538 | 8,210 | 20,618 | ||||||||||||
Total Online Services | 45,009 | 37,165 | 152,300 | 120,287 | ||||||||||||
Publishing and Other Services | 4,095 | 1,932 | 16,638 | 13,861 | ||||||||||||
$ | 49,104 | $ | 39,097 | $ | 168,938 | $ | 134,148 | |||||||||
Earnings before interest, taxes, depreciation, amortization and other non-cash items (“Adjusted EBITDA”) | ||||||||||||||||
Online Services | $ | 12,725 | $ | 9,583 | $ | 28,313 | $ | 24,902 | ||||||||
Publishing and Other Services | (279 | ) | (878 | ) | 88 | 1,285 | ||||||||||
12,446 | 8,705 | 28,401 | 26,187 | |||||||||||||
Adjusted EBITDA per basic common share | $ | 0.22 | $ | 0.18 | $ | 0.57 | $ | 0.54 | ||||||||
Adjusted EBITDA per diluted common share | $ | 0.22 | $ | 0.18 | $ | 0.56 | $ | 0.54 | ||||||||
Interest, taxes, depreciation, amortization and other non-cash items (a) | ||||||||||||||||
Interest income | 1,780 | — | 1,790 | — | ||||||||||||
Depreciation and amortization | (2,668 | ) | (1,858 | ) | (10,653 | ) | (5,620 | ) | ||||||||
Non-cash advertising and distribution services (included in cost of operations) | (45 | ) | (196 | ) | (336 | ) | (901 | ) | ||||||||
Non-cash advertising and distribution services (included in sales and marketing) | (3,826 | ) | (2,112 | ) | (8,656 | ) | (11,246 | ) | ||||||||
Non-cash stock-based compensation | (1,334 | ) | (554 | ) | (2,315 | ) | (1,749 | ) | ||||||||
Income tax provision | (222 | ) | (58 | ) | (486 | ) | (210 | ) | ||||||||
Net income | $ | 6,131 | $ | 3,927 | $ | 7,745 | $ | 6,461 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.11 | $ | 0.08 | $ | 0.15 | $ | 0.13 | ||||||||
Diluted | $ | 0.11 | $ | 0.08 | $ | 0.15 | $ | 0.13 | ||||||||
Weighted-average shares outstanding used in computing net income per common share: | ||||||||||||||||
Basic | 56,054 | 48,100 | 50,132 | 48,100 | ||||||||||||
Diluted | 57,627 | 48,100 | 50,532 | 48,100 | ||||||||||||
(a) | Reconciliation of Adjusted EBITDA to net income | |
(b) | The year ended December 31, 2005 results include a $3,150 charge primarily related to severance expense incurred during the quarter ended June 30, 2005. |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 75,704 | $ | 3,456 | ||||
Short-term investments | 78,073 | — | ||||||
Accounts receivable, net | 57,245 | 38,453 | ||||||
Current portion of prepaid advertising | 7,424 | 10,350 | ||||||
Other current assets | 3,977 | 2,619 | ||||||
Total current assets | 222,423 | 54,878 | ||||||
Property and equipment, net | 21,014 | 6,316 | ||||||
Prepaid advertising | 12,104 | 20,047 | ||||||
Goodwill | 100,669 | 52,614 | ||||||
Intangible assets, net | 20,503 | 12,065 | ||||||
Other assets | 176 | 576 | ||||||
$ | 376,889 | $ | 146,496 | |||||
LIABILITIES, STOCKHOLDERS’ EQUITY AND OWNER’S NET INVESTMENT | ||||||||
Current liabilities: | ||||||||
Accrued expenses | $ | 34,072 | $ | 15,874 | ||||
Deferred revenue | 36,495 | 29,885 | ||||||
Total current liabilities | 70,567 | 45,759 | ||||||
Other long-term liabilities | 7,010 | — | ||||||
Stockholders’ equity | 299,312 | — | ||||||
Owner’s net investment | — | 100,737 | ||||||
$ | 376,889 | $ | 146,496 | |||||
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Year Ended | ||||||||
December 31, | ||||||||
2005 | 2004 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 7,745 | $ | 6,461 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 10,653 | 5,620 | ||||||
Non-cash advertising and distribution services | 8,992 | 12,147 | ||||||
Non-cash stock-based compensation | 2,315 | 1,749 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (13,974 | ) | (17,125 | ) | ||||
Other assets | (567 | ) | 1,456 | |||||
Accrued expenses | 3,711 | 2,952 | ||||||
Due to Emdeon | 3,672 | — | ||||||
Deferred revenue | (952 | ) | 4,878 | |||||
Other long-term liabilities | 7,010 | — | ||||||
Net cash provided by operating activities | 28,605 | 18,138 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 87,450 | — | ||||||
Purchases of available-for-sale securities | (165,178 | ) | — | |||||
Purchases of property and equipment | (18,126 | ) | (4,321 | ) | ||||
Cash paid in business combinations, net of cash acquired | (50,752 | ) | (22,421 | ) | ||||
Net cash used in investing activities | (146,606 | ) | (26,742 | ) | ||||
Cash flows from financing activities: | ||||||||
Net proceeds from initial public offering | 125,392 | — | ||||||
Net cash transfers from Emdeon | 64,857 | 11,702 | ||||||
Net cash provided by financing activities | 190,249 | 11,702 | ||||||
Net increase in cash and cash equivalents | 72,248 | 3,098 | ||||||
Cash and cash equivalents at beginning of period | 3,456 | 358 | ||||||
Cash and cash equivalents at end of period | $ | 75,704 | $ | 3,456 | ||||