WebMD Health (WBMD) 8-K WebMD Announces Fourth Quarter Financial Results

Exhibit 99.2

WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2007			2006			2007			2006
Revenue	$	96,642		$	79,385		$	331,954		$	248,776
Costs and expenses:
Cost of operations		29,645			27,739			117,281			101,675
Sales and marketing		26,387			23,248			93,645			76,189
General and administrative		14,112			14,407			60,986			52,338
Depreciation and amortization		7,216			5,018			27,233			17,639
Interest income		3,856			962			12,378			5,099
Income from continuing operations before income tax (benefit) provision		23,138			9,935			45,187			6,034
Income tax (benefit) provision		(21,926	)		3,886			(17,255	)		3,883
Income from continuing operations		45,064			6,049			62,442			2,151
Income (loss) from discontinued operations, net of tax		3,232			(91	)		3,442			385
Net income	$	48,296		$	5,958		$	65,884		$	2,536
Basic income (loss) per common share:
Income from continuing operations	$	0.78		$	0.11		$	1.09		$	0.04
Income (loss) from discontinued operations		0.06			(0.00	)		0.06			0.01
Net Income	$	0.84		$	0.11		$	1.15		$	0.05
Diluted income (loss) per common share:
Income from continuing operations	$	0.75		$	0.10		$	1.05		$	0.04
Income (loss) from discontinued operations		0.06			(0.00	)		0.05			0.00
Net Income	$	0.81		$	0.10		$	1.10		$	0.04
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share:
Basic		57,534			56,411			57,184			56,145
Diluted		59,748			58,367			59,743			58,075

WEBMD HEALTH CORP.
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2007			2006			2007			2006
Revenue
Online Services:
Advertising and sponsorship	$	70,389		$	58,113		$	229,333		$	170,626
Licensing		21,556			17,306			81,471			55,621
Content syndication and other		351			703			2,378			3,518
							��
Total Online Services		92,296			76,122			313,182			229,765
Publishing and Other Services		4,346			3,263			18,772			19,011
	$	96,642		$	79,385		$	331,954		$	248,776
Earnings (loss) before interest, taxes, depreciation, amortization and other non-cash items (“Adjusted EBITDA”) (a)
Online Services	$	31,612		$	22,730		$	80,594		$	52,324
Publishing and Other Services		1,460			(321	)		4,103			362
		33,072			22,409			84,697			52,686
Adjusted EBITDA per basic common share	$	0.57		$	0.40		$	1.48		$	0.94
Adjusted EBITDA per diluted common share	$	0.55		$	0.38		$	1.42		$	0.91
Interest, taxes, depreciation, amortization and other non-cash items (b)
Interest income		3,856			962			12,378			5,099
Depreciation and amortization		(7,216	)		(5,018	)		(27,233	)		(17,639	)
Non-cash advertising		(2,775	)		(2,961	)		(5,264	)		(7,415	)
Non-cash stock-based compensation		(3,799	)		(5,457	)		(19,391	)		(26,697	)
Income tax benefit (provision)		21,926			(3,886	)		17,255			(3,883	)
Income from continuing operations		45,064			6,049			62,442			2,151
Income (loss) from discontinued operations, net of tax		3,232			(91	)		3,442			385
Net income	$	48,296		$	5,958		$	65,884		$	2,536
Basic income (loss) per common share:
Income from continuing operations	$	0.78		$	0.11		$	1.09		$	0.04
Income (loss) from discontinued operations		0.06			(0.00	)		0.06			0.01
Net Income	$	0.84		$	0.11		$	1.15		$	0.05
Diluted income (loss) per common share:
Income from continuing operations	$	0.75		$	0.10		$	1.05		$	0.04
Income (loss) from discontinued operations		0.06			(0.00	)		0.05			0.00
Net Income	$	0.81		$	0.10		$	1.10		$	0.04
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share:
Basic		57,534			56,411			57,184			56,145
Diluted		59,748			58,367			59,743			58,075

(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)

	December 31,		December 31,
	2007		2006
ASSETS
Current assets:
Cash and cash equivalents	$	213,753	$	44,660
Short-term investments		80,900		9,490
Accounts receivable, net		86,081		89,652
Current portion of prepaid advertising		2,329		2,656
Due from HLTH		1,153		143,153
Other current assets		10,840		5,312
Assets of discontinued operations		—		48
Total current assets		395,056		294,971
Property and equipment, net		48,589		44,709
Prepaid advertising		4,521		9,459
Goodwill		221,429		225,028
Intangible assets, net		36,314		45,268
Other assets		12,955		530
	$	718,864	$	619,965
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accrued expenses	$	26,498	$	32,846
Deferred revenue		76,401		76,086
Liabilities of discontinued operations		—		1,645
Total current liabilities		102,899		110,577
Deferred tax liability		—		5,367
Other long-term liabilities		9,210		7,912
Stockholders’ equity		606,755		496,109
	$	718,864	$	619,965

WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)

	Year Ended
	December 31,
	2007			2006
Cash flows from operating activities:
Net income	$	65,884		$	2,536
Adjustments to reconcile net income to net cash provided by operating activities:
Income from discontinued operations, net of tax		(3,442	)		(385	)
Depreciation and amortization		27,233			17,639
Non-cash advertising		5,264			7,415
Non-cash stock-based compensation		19,391			26,697
Deferred income taxes		(20,953	)		2,104
Changes in operating assets and liabilities:
Accounts receivable		3,570			(25,430	)
Other assets		1,102			(971	)
Accrued expenses and other long-term liabilities		(7,185	)		6,698
Due to HLTH		(3,278	)		(1,568	)
Deferred revenue		314			17,761
Net cash provided by continuing operations		87,900			52,496
Net cash (used in) provided by discontinued operations		(390	)		305
Net cash provided by operating activities		87,510			52,801
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		212,923			304,184
Purchases of available-for-sale securities		(284,333	)		(229,410	)
Purchases of property and equipment		(18,058	)		(28,452	)
Cash paid in business combinations, net of cash acquired		—			(130,167	)
Net cash used in investing activities		(89,468	)		(83,845	)
Cash flows from financing activities:
Proceeds from issuance of common stock		14,355			5,257
Tax benefit on stock-based awards		1,577			—
Net cash transfers with HLTH		155,119			(5,257	)
Net cash provided by financing activities		171,051			—
Net increase (decrease) in cash and cash equivalents		169,093			(31,044	)
Cash and cash equivalents at beginning of period		44,660			75,704
Cash and cash equivalents at end of period	$	213,753		$	44,660