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, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Revenue | $ | 87,198 | $ | 66,645 | $ | 238,639 | $ | 173,308 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of operations | 31,130 | 26,945 | 90,749 | 77,371 | ||||||||||||
Sales and marketing | 22,459 | 20,472 | 67,258 | 52,941 | ||||||||||||
General and administrative | 15,388 | 13,476 | 46,874 | 37,931 | ||||||||||||
Depreciation and amortization | 7,086 | 5,085 | 20,021 | 12,627 | ||||||||||||
Interest income | 3,486 | 1,221 | 8,522 | 4,137 | ||||||||||||
Income (loss) before income tax provision | 14,621 | 1,888 | 22,259 | (3,425 | ) | |||||||||||
Income tax provision (benefit) | 3,129 | 1,398 | 4,671 | (3 | ) | |||||||||||
Net income (loss) | $ | 11,492 | $ | 490 | $ | 17,588 | $ | (3,422 | ) | |||||||
Net income (loss) per common share: | ||||||||||||||||
Basic | $ | 0.20 | $ | 0.01 | $ | 0.31 | $ | (0.06 | ) | |||||||
Diluted | $ | 0.19 | $ | 0.01 | $ | 0.29 | $ | (0.06 | ) | |||||||
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share: | ||||||||||||||||
Basic | 57,154 | 56,059 | 57,067 | 56,056 | ||||||||||||
Diluted | 59,848 | 58,122 | 59,742 | 56,056 | ||||||||||||
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, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Revenue | ||||||||||||||||
Online Services: | ||||||||||||||||
Advertising and sponsorship | $ | 59,087 | $ | 43,534 | $ | 158,944 | $ | 112,513 | ||||||||
Licensing | 20,001 | 14,569 | 59,915 | 38,315 | ||||||||||||
Content syndication and other | 490 | 843 | 2,027 | 2,815 | ||||||||||||
Total Online Services | 79,578 | 58,946 | 220,886 | 153,643 | ||||||||||||
Publishing and Other Services | 7,620 | 7,699 | 17,753 | 19,665 | ||||||||||||
$ | 87,198 | $ | 66,645 | $ | 238,639 | $ | 173,308 | |||||||||
Earnings before interest, taxes, depreciation, amortization and other non-cash items (“Adjusted EBITDA”) (a) | ||||||||||||||||
Online Services | $ | 21,948 | $ | 12,727 | $ | 48,982 | $ | 29,594 | ||||||||
Publishing and Other Services | 2,129 | 1,906 | 2,857 | 1,165 | ||||||||||||
24,077 | 14,633 | 51,839 | 30,759 | |||||||||||||
Adjusted EBITDA per basic common share | $ | 0.42 | $ | 0.26 | $ | 0.91 | $ | 0.55 | ||||||||
Adjusted EBITDA per diluted common share (c) | $ | 0.40 | $ | 0.25 | $ | 0.87 | $ | 0.53 | ||||||||
Interest, taxes, depreciation, amortization and other non-cash items (b) | ||||||||||||||||
Interest income | 3,486 | 1,221 | 8,522 | 4,137 | ||||||||||||
Depreciation and amortization | (7,086 | ) | (5,085 | ) | (20,021 | ) | (12,627 | ) | ||||||||
Non-cash advertising | (169 | ) | (1,660 | ) | (2,489 | ) | (4,454 | ) | ||||||||
Non-cash stock-based compensation | (5,687 | ) | (7,221 | ) | (15,592 | ) | (21,240 | ) | ||||||||
Income tax (provision) benefit | (3,129 | ) | (1,398 | ) | (4,671 | ) | 3 | |||||||||
Net income (loss) | $ | 11,492 | $ | 490 | $ | 17,588 | $ | (3,422 | ) | |||||||
Net income (loss) per common share: | ||||||||||||||||
Basic | $ | 0.20 | $ | 0.01 | $ | 0.31 | $ | (0.06 | ) | |||||||
Diluted | $ | 0.19 | $ | 0.01 | $ | 0.29 | $ | (0.06 | ) | |||||||
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share: | ||||||||||||||||
Basic | 57,154 | 56,059 | 57,067 | 56,056 | ||||||||||||
Diluted | 59,848 | 58,122 | 59,742 | 56,056 | ||||||||||||
(a) | See Annex A — Explanation of Non-GAAP Financial Measures | |
(b) | Reconciliation of Adjusted EBITDA to net income | |
(c) | Three and nine months ended September 30, 2006 Adjusted EBITDA per share is calculated based on 58,122 and 57,977 diluted shares, respectively |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
September 30, | December 31, | |||||||||||
2007 | 2006 | |||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 177,714 | $ | 44,660 | ||||||||
Short-term investments | 99,900 | 9,490 | ||||||||||
Accounts receivable, net | 75,003 | 89,652 | ||||||||||
Current portion of prepaid advertising | 3,150 | 2,656 | ||||||||||
Due from HLTH | — | 143,153 | ||||||||||
Other current assets | 5,903 | 5,360 | ||||||||||
Total current assets | 361,670 | 294,971 | ||||||||||
Property and equipment, net | 48,116 | 44,709 | ||||||||||
Prepaid advertising | 6,476 | 9,459 | ||||||||||
Goodwill | 221,271 | 225,028 | ||||||||||
Intangible assets, net | 39,515 | 45,268 | ||||||||||
Other assets | 544 | 530 | ||||||||||
$ | 677,592 | $ | 619,965 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accrued expenses | $ | 25,038 | $ | 32,846 | ||||||||
Deferred revenue | 80,938 | 77,731 | ||||||||||
Due to HLTH | 7,375 | — | ||||||||||
Total current liabilities | 113,351 | 110,577 | ||||||||||
Deferred tax liability | 7,342 | 5,367 | ||||||||||
Other long-term liabilities | 9,439 | 7,912 | ||||||||||
Stockholders’ equity | 547,460 | 496,109 | ||||||||||
$ | 677,592 | $ | 619,965 | |||||||||
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Nine Months Ended | ||||||||
September 30, | ||||||||
2007 | 2006 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 17,588 | $ | (3,422 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 20,021 | 12,627 | ||||||
Non-cash advertising | 2,489 | 4,454 | ||||||
Non-cash stock-based compensation | 15,592 | 21,240 | ||||||
Deferred income taxes | 1,975 | (911 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 14,648 | (8,311 | ) | |||||
Other assets | (506 | ) | (4,461 | ) | ||||
Accrued expenses and other long-term liabilities | (7,463 | ) | (544 | ) | ||||
Due to HLTH | 5,223 | 8,213 | ||||||
Deferred revenue | 3,207 | 14,517 | ||||||
Net cash provided by operating activities | 72,774 | 43,402 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 123,885 | 261,000 | ||||||
Purchases of available-for-sale securities | (214,295 | ) | (222,000 | ) | ||||
Purchases of property and equipment | (13,574 | ) | (17,500 | ) | ||||
Cash paid in business combinations, net of cash acquired | — | (96,091 | ) | |||||
Net cash used in investing activities | (103,984 | ) | (74,591 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 8,490 | 649 | ||||||
Tax benefit on stock-based awards | 655 | — | ||||||
Net cash transfers with HLTH | 155,119 | — | ||||||
Net cash provided by financing activities | 164,264 | 649 | ||||||
Net increase (decrease) in cash and cash equivalents | 133,054 | (30,540 | ) | |||||
Cash and cash equivalents at beginning of period | 44,660 | 75,704 | ||||||
Cash and cash equivalents at end of period | $ | 177,714 | $ | 45,164 | ||||