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, | |||||||||||||||
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)
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)
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)
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 | ||||