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 | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Revenue | $ | 66,645 | $ | 45,094 | $ | 173,308 | $ | 119,834 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of operations | 26,945 | 18,020 | 77,371 | 51,531 | ||||||||||||
Sales and marketing | 20,472 | 13,534 | 52,941 | 36,663 | ||||||||||||
General and administrative | 13,476 | 6,582 | 37,931 | 21,787 | ||||||||||||
Depreciation and amortization | 5,085 | 2,733 | 12,627 | 7,985 | ||||||||||||
Interest income | 1,221 | 10 | 4,137 | 10 | ||||||||||||
Income (loss) before income tax provision | 1,888 | 4,235 | (3,425 | ) | 1,878 | |||||||||||
Income tax provision | 896 | 112 | 908 | 264 | ||||||||||||
Net income (loss) | $ | 992 | $ | 4,123 | $ | (4,333 | ) | $ | 1,614 | |||||||
Net income (loss) per common share: | ||||||||||||||||
Basic | $ | 0.02 | $ | 0.09 | $ | (0.08 | ) | $ | 0.03 | |||||||
Diluted | $ | 0.02 | $ | 0.09 | $ | (0.08 | ) | $ | 0.03 | |||||||
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share: | ||||||||||||||||
Basic | 56,059 | 48,273 | 56,056 | 48,158 | ||||||||||||
Diluted | 58,122 | 48,302 | 56,056 | 48,167 | ||||||||||||
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 | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Revenue | ||||||||||||||||
Online Services: | ||||||||||||||||
Advertising and sponsorship | $ | 43,534 | $ | 28,054 | $ | 112,513 | $ | 77,497 | ||||||||
Licensing | 14,569 | 9,053 | 38,315 | 23,097 | ||||||||||||
Content syndication and other | 843 | 2,124 | 2,815 | 6,697 | ||||||||||||
Total Online Services | 58,946 | 39,231 | 153,643 | 107,291 | ||||||||||||
Publishing and Other Services | 7,699 | 5,863 | 19,665 | 12,543 | ||||||||||||
$ | 66,645 | $ | 45,094 | $ | 173,308 | $ | 119,834 | |||||||||
Earnings before interest, taxes, depreciation, amortization and other non-cash items (“Adjusted EBITDA”) | ||||||||||||||||
Online Services | $ | 12,727 | $ | 7,795 | $ | 29,594 | $ | 15,588 | ||||||||
Publishing and Other Services | 1,906 | 1,282 | 1,165 | 367 | ||||||||||||
14,633 | �� | 9,077 | 30,759 | 15,955 | ||||||||||||
Adjusted EBITDA per diluted common share (a) | $ | 0.25 | $ | 0.19 | $ | 0.55 | $ | 0.33 | ||||||||
Interest, taxes, depreciation, amortization and other non-cash items (b) | ||||||||||||||||
Interest income | 1,221 | 10 | 4,137 | 10 | ||||||||||||
Depreciation and amortization | (5,085 | ) | (2,733 | ) | (12,627 | ) | (7,985 | ) | ||||||||
Non-cash advertising | (1,660 | ) | (1,707 | ) | (4,454 | ) | (5,121 | ) | ||||||||
Non-cash stock-based compensation | (7,221 | ) | (412 | ) | (21,240 | ) | (981 | ) | ||||||||
Income tax provision | (896 | ) | (112 | ) | (908 | ) | (264 | ) | ||||||||
Net income (loss) | $ | 992 | $ | 4,123 | $ | (4,333 | ) | $ | 1,614 | |||||||
Net income (loss) per common share: | ||||||||||||||||
Basic | $ | 0.02 | $ | 0.09 | $ | (0.08 | ) | $ | 0.03 | |||||||
Diluted | $ | 0.02 | $ | 0.09 | $ | (0.08 | ) | $ | 0.03 | |||||||
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share: | ||||||||||||||||
Basic | 56,059 | 48,273 | 56,056 | 48,158 | ||||||||||||
Diluted | 58,122 | 48,302 | 56,056 | 48,167 | ||||||||||||
(a) | Three and nine months ended September 30, 2006 Adjusted EBITDA per diluted common share is calculated based on 58,122 and 57,977 diluted shares, respectively. Three and nine months ended September 30, 2005 Adjusted EBITDA per diluted common share is calculated based on 48,302 and 48,167 diluted shares, respectively. | |
(b) | Reconciliation of Adjusted EBITDA to net income (loss) (see Annex A — Explanation of Non-GAAP Financial Measures). |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
September 30, | December 31, | |||||||
2006 | 2005 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 45,164 | $ | 75,704 | ||||
Short-term investments | 39,922 | 78,073 | ||||||
Accounts receivable, net | 71,009 | 57,245 | ||||||
Current portion of prepaid advertising | 4,725 | 7,424 | ||||||
Other current assets | 8,578 | 3,977 | ||||||
Total current assets | 169,398 | 222,423 | ||||||
Property and equipment, net | 37,449 | 21,014 | ||||||
Prepaid advertising | 10,350 | 12,104 | ||||||
Goodwill | 174,311 | 100,669 | ||||||
Intangible assets, net | 38,900 | 20,503 | ||||||
Other assets | 257 | 176 | ||||||
$ | 430,665 | $ | 376,889 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accrued expenses | $ | 24,912 | $ | 30,400 | ||||
Deferred revenue | 69,380 | 36,495 | ||||||
Due to Emdeon | 11,866 | 3,672 | ||||||
Total current liabilities | 106,158 | 70,567 | ||||||
Other long-term liabilities | 7,907 | 7,010 | ||||||
Stockholders’ equity | 316,600 | 299,312 | ||||||
$ | 430,665 | $ | 376,889 | |||||
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Nine Months Ended | ||||||||
September 30, | ||||||||
2006 | 2005 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (4,333 | ) | $ | 1,614 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | �� | |||||||
Depreciation and amortization | 12,627 | 7,985 | ||||||
Non-cash advertising | 4,454 | 5,121 | ||||||
Non-cash stock-based compensation | 21,240 | 981 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (7,661 | ) | (1,490 | ) | ||||
Other assets | (5,111 | ) | 1,185 | |||||
Accrued expenses and other long-term liabilities | (544 | ) | 2,798 | |||||
Due to Emdeon | 8,213 | — | ||||||
Deferred revenue | 14,517 | 778 | ||||||
Net cash provided by operating activities | 43,402 | 18,972 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 261,000 | — | ||||||
Purchases of available-for-sale securities | (222,000 | ) | — | |||||
Purchases of property and equipment | (17,500 | ) | (15,587 | ) | ||||
Cash paid in business combinations, net of cash acquired | (96,091 | ) | (30,819 | ) | ||||
Net cash used in investing activities | (74,591 | ) | (46,406 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 649 | — | ||||||
Net cash transfers from Emdeon | — | 65,090 | ||||||
Net cash provided by financing activities | 649 | 65,090 | ||||||
Net increase (decrease) in cash and cash equivalents | (30,540 | ) | 37,656 | |||||
Cash and cash equivalents at beginning of period | 75,704 | 3,456 | ||||||
Cash and cash equivalents at end of period | $ | 45,164 | $ | 41,112 | ||||