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, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Revenue | $ | 80,573 | $ | 49,104 | $ | 253,881 | $ | 168,938 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of operations | 29,016 | 19,007 | 106,387 | 70,538 | ||||||||||||
Sales and marketing | 23,248 | 15,093 | 76,189 | 51,756 | ||||||||||||
General and administrative | 14,407 | 7,763 | 52,338 | 29,550 | ||||||||||||
Depreciation and amortization | 5,020 | 2,668 | 17,647 | 10,653 | ||||||||||||
Interest income | 962 | 1,780 | 5,099 | 1,790 | ||||||||||||
Income before income tax provision | 9,844 | 6,353 | 6,419 | 8,231 | ||||||||||||
Income tax provision | 965 | 222 | 1,873 | 486 | ||||||||||||
Net income | $ | 8,879 | $ | 6,131 | $ | 4,546 | $ | 7,745 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.16 | $ | 0.11 | $ | 0.08 | $ | 0.15 | ||||||||
Diluted | $ | 0.15 | $ | 0.11 | $ | 0.08 | $ | 0.15 | ||||||||
Weighted-average shares outstanding used in computing basic and diluted net income per common share: | ||||||||||||||||
Basic | 56,411 | 56,054 | 56,145 | 50,132 | ||||||||||||
Diluted | 58,367 | 57,627 | 58,075 | 50,532 | ||||||||||||
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, | |||||||||||||||
2006 | 2005 | 2006 | 2005 (c) | |||||||||||||
Revenue | ||||||||||||||||
Online Services: | ||||||||||||||||
Advertising and sponsorship | $ | 58,113 | $ | 32,480 | $ | 170,626 | $ | 109,977 | ||||||||
Licensing | 17,306 | 11,016 | 55,621 | 34,113 | ||||||||||||
Content syndication and other | 703 | 1,513 | 3,518 | 8,210 | ||||||||||||
Total Online Services | 76,122 | 45,009 | 229,765 | 152,300 | ||||||||||||
Publishing and Other Services | 4,451 | 4,095 | 24,116 | 16,638 | ||||||||||||
$ | 80,573 | $ | 49,104 | $ | 253,881 | $ | 168,938 | |||||||||
Earnings (loss) before interest, taxes, depreciation, amortization and other non-cash items (“Adjusted EBITDA”)(a) | ||||||||||||||||
Online Services | $ | 22,730 | $ | 12,725 | $ | 52,324 | $ | 28,313 | ||||||||
Publishing and Other Services | (410 | ) | (279 | ) | 755 | 88 | ||||||||||
22,320 | 12,446 | 53,079 | 28,401 | |||||||||||||
Adjusted EBITDA per basic common share | $ | 0.40 | $ | 0.22 | $ | 0.95 | $ | 0.57 | ||||||||
Adjusted EBITDA per diluted common share | $ | 0.38 | $ | 0.22 | $ | 0.91 | $ | 0.56 | ||||||||
Interest, taxes, depreciation, amortization and other non-cash items (b) | ||||||||||||||||
Interest income | 962 | 1,780 | 5,099 | 1,790 | ||||||||||||
Depreciation and amortization | (5,020 | ) | (2,668 | ) | (17,647 | ) | (10,653 | ) | ||||||||
Non-cash advertising | (2,961 | ) | (3,871 | ) | (7,415 | ) | (8,992 | ) | ||||||||
Non-cash stock-based compensation | (5,457 | ) | (1,334 | ) | (26,697 | ) | (2,315 | ) | ||||||||
Income tax provision | (965 | ) | (222 | ) | (1,873 | ) | (486 | ) | ||||||||
Net income | $ | 8,879 | $ | 6,131 | $ | 4,546 | $ | 7,745 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.16 | $ | 0.11 | $ | 0.08 | $ | 0.15 | ||||||||
Diluted | $ | 0.15 | $ | 0.11 | $ | 0.08 | $ | 0.15 | ||||||||
Weighted-average shares outstanding used in computing basic and diluted net income per common share: | ||||||||||||||||
Basic | 56,411 | 56,054 | 56,145 | 50,132 | ||||||||||||
Diluted | 58,367 | 57,627 | 58,075 | 50,532 | ||||||||||||
(a) | See Annex A — Explanation of Non-GAAP Financial Measures | |
(b) | Reconciliation of Adjusted EBITDA to net income | |
(c) | 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, | |||||||
2006 | 2005 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 44,660 | $ | 75,704 | ||||
Short-term investments | 9,490 | 78,073 | ||||||
Accounts receivable, net | 89,652 | 57,245 | ||||||
Current portion of prepaid advertising | 2,656 | 7,424 | ||||||
Due from Emdeon | 143,153 | — | ||||||
Other current assets | 5,360 | 3,977 | ||||||
Total current assets | 294,971 | 222,423 | ||||||
Property and equipment, net | 44,709 | 21,014 | ||||||
Prepaid advertising | 9,459 | 12,104 | ||||||
Goodwill | 225,028 | 100,669 | ||||||
Intangible assets, net | 45,268 | 20,503 | ||||||
Other assets | 530 | 176 | ||||||
$ | 619,965 | $ | 376,889 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accrued expenses | $ | 32,846 | $ | 30,400 | ||||
Deferred revenue | 77,731 | 36,495 | ||||||
Due to Emdeon | — | 3,672 | ||||||
Total current liabilities | 110,577 | 70,567 | ||||||
Other long-term liabilities | 7,912 | 7,010 | ||||||
Stockholders’ equity | 501,476 | 299,312 | ||||||
$ | 619,965 | $ | 376,889 | |||||
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Year Ended | ||||||||
December 31, | ||||||||
2006 | 2005 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 4,546 | $ | 7,745 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 17,647 | 10,653 | ||||||
Non-cash advertising | 7,414 | 8,992 | ||||||
Non-cash stock-based compensation | 26,697 | 2,315 | ||||||
Reversal of income tax valuation allowance applied to goodwill | 94 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (25,430 | ) | (13,974 | ) | ||||
Other assets | (800 | ) | (567 | ) | ||||
Accrued expenses and other long-term liabilities | 6,699 | 10,721 | ||||||
Due (from) to Emdeon | (1,568 | ) | 3,672 | |||||
Deferred revenue | 17,502 | (952 | ) | |||||
Net cash provided by operating activities | 52,801 | 28,605 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 304,184 | 87,450 | ||||||
Purchases of available-for-sale securities | (229,410 | ) | (165,178 | ) | ||||
Purchases of property and equipment | (28,452 | ) | (18,126 | ) | ||||
Cash paid in business combinations, net of cash acquired | (130,167 | ) | (50,752 | ) | ||||
Net cash used in investing activities | (83,845 | ) | (146,606 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 5,257 | 125,392 | ||||||
Net cash transfers with Emdeon | (5,257 | ) | 64,857 | |||||
Net cash provided by financing activities | — | 190,249 | ||||||
Net (decrease) increase in cash and cash equivalents | (31,044 | ) | 72,248 | |||||
Cash and cash equivalents at beginning of period | 75,704 | 3,456 | ||||||
Cash and cash equivalents at end of period | $ | 44,660 | $ | 75,704 | ||||