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 | ||||||||
March 31, | ||||||||
2008 | 2007 | |||||||
Revenue | $ | 81,682 | $ | 71,944 | ||||
Costs and expenses: | ||||||||
Cost of operations | 31,570 | 28,618 | ||||||
Sales and marketing | 25,830 | 22,870 | ||||||
General and administrative | 13,775 | 15,505 | ||||||
Impairment of auction rate securities | 27,406 | — | ||||||
Depreciation and amortization | 6,785 | 5,991 | ||||||
Interest income | 3,453 | 1,985 | ||||||
Income (loss) from continuing operations before income tax provision | (20,231 | ) | 945 | |||||
Income tax provision | 3,104 | 210 | ||||||
Income (loss) from continuing operations | (23,335 | ) | 735 | |||||
Loss from discontinued operations, net of tax | — | (29 | ) | |||||
Net income (loss) | $ | (23,335 | ) | $ | 706 | |||
Basic income (loss) per common share: | ||||||||
Income (loss) from continuing operations | $ | (0.40 | ) | $ | 0.01 | |||
Loss from discontinued operations | — | (0.00 | ) | |||||
Net Income (loss) | $ | (0.40 | ) | $ | 0.01 | |||
Diluted income (loss) per common share: | ||||||||
Income (loss) from continuing operations | $ | (0.40 | ) | $ | 0.01 | |||
Loss from discontinued operations | — | (0.00 | ) | |||||
Net Income (loss) | $ | (0.40 | ) | $ | 0.01 | |||
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share: | ||||||||
Basic | 57,636 | 56,976 | ||||||
Diluted | 57,636 | 59,630 | ||||||
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 | ||||||||
March 31, | ||||||||
2008 | 2007 | |||||||
Revenue | ||||||||
Online Services: | ||||||||
Advertising and sponsorship | $ | 56,065 | $ | 47,421 | ||||
Licensing | 21,923 | 20,115 | ||||||
Content syndication and other | 417 | 884 | ||||||
Total Online Services | 78,405 | 68,420 | ||||||
Publishing and Other Services | 3,277 | 3,524 | ||||||
$ | 81,682 | $ | 71,944 | |||||
Earnings (loss) before interest, taxes, depreciation, amortization and other non-cash items (“Adjusted EBITDA”) (a) | ||||||||
Online Services | $ | 16,531 | $ | 12,992 | ||||
Publishing and Other Services | (754 | ) | (358 | ) | ||||
15,777 | 12,634 | |||||||
Adjusted EBITDA per basic common share | $ | 0.27 | $ | 0.22 | ||||
Adjusted EBITDA per diluted common share ( c ) | $ | 0.27 | $ | 0.21 | ||||
Interest, taxes, depreciation, amortization and other non-cash items (b) | ||||||||
Interest income | 3,453 | 1,985 | ||||||
Depreciation and amortization | (6,785 | ) | (5,991 | ) | ||||
Non-cash advertising | (1,558 | ) | (2,320 | ) | ||||
Non-cash stock-based compensation | (3,712 | ) | (5,363 | ) | ||||
Impairment of auction rate securities | (27,406 | ) | — | |||||
Income tax provision | (3,104 | ) | (210 | ) | ||||
Income (loss) from continuing operations | (23,335 | ) | 735 | |||||
Loss from discontinued operations, net of tax | — | (29 | ) | |||||
Net income (loss) | $ | (23,335 | ) | $ | 706 | |||
Basic income (loss) per common share: | ||||||||
Income (loss) from continuing operations | $ | (0.40 | ) | $ | 0.01 | |||
Loss from discontinued operations | — | (0.00 | ) | |||||
Net Income (loss) | $ | (0.40 | ) | $ | 0.01 | |||
Diluted income (loss) per common share: | ||||||||
Income (loss) from continuing operations | $ | (0.40 | ) | $ | 0.01 | |||
Loss from discontinued operations | — | (0.00 | ) | |||||
Net Income (loss) | $ | (0.40 | ) | $ | 0.01 | |||
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share: | ||||||||
Basic | 57,636 | 56,976 | ||||||
Diluted | 57,636 | 59,630 | ||||||
(a) | See Annex A — Explanation of Non-GAAP Financial Measures | |
(b) | Reconciliation of Adjusted EBITDA to net income (loss) | |
(c) | Three months ended March 31, 2008 Adjusted EBITDA per share is calculated based on 59,145 diluted shares. |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
March 31, | December 31, | |||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 159,831 | $ | 213,753 | ||||
Marketable securities | 141,044 | 80,900 | ||||||
Accounts receivable, net | 73,861 | 86,081 | ||||||
Current portion of prepaid advertising | 2,275 | 2,329 | ||||||
Due from HLTH | — | 1,153 | ||||||
Other current assets | 8,837 | 10,840 | ||||||
Total current assets | 385,848 | 395,056 | ||||||
Property and equipment, net | 46,995 | 48,589 | ||||||
Prepaid advertising | 3,017 | 4,521 | ||||||
Goodwill | 221,429 | 221,429 | ||||||
Intangible assets, net | 33,766 | 36,314 | ||||||
Other assets | 10,889 | 12,955 | ||||||
$ | 701,944 | $ | 718,864 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accrued expenses | $ | 16,731 | $ | 26,498 | ||||
Deferred revenue | 88,114 | 76,401 | ||||||
Due to HLTH | 207 | — | ||||||
Total current liabilities | 105,052 | 102,899 | ||||||
Other long-term liabilities | 9,033 | 9,210 | ||||||
Stockholders’ equity | 587,859 | 606,755 | ||||||
$ | 701,944 | $ | 718,864 | |||||
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (23,335 | ) | $ | 706 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Loss from discontinued operations, net of tax | — | 29 | ||||||
Depreciation and amortization | 6,785 | 5,991 | ||||||
Non-cash advertising | 1,558 | 2,320 | ||||||
Non-cash stock-based compensation | 3,712 | 5,363 | ||||||
Deferred income taxes | 2,415 | 78 | ||||||
Impairment of auction rate securities | 27,406 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 12,220 | 2,185 | ||||||
Other assets | (164 | ) | (66 | ) | ||||
Accrued expenses and other long-term liabilities | (8,949 | ) | (11,545 | ) | ||||
Due to HLTH | 1,329 | 228 | ||||||
Deferred revenue | 11,714 | 7,678 | ||||||
Net cash provided by continuing operations | 34,691 | 12,967 | ||||||
Net cash provided by discontinued operations | — | 54 | ||||||
Net cash provided by operating activities | 34,691 | 13,021 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 40,350 | 28,122 | ||||||
Purchases of available-for-sale securities | (127,900 | ) | (48,632 | ) | ||||
Purchases of property and equipment | (2,637 | ) | (4,762 | ) | ||||
Cash received from sale of business, net of fees | 985 | — | ||||||
Net cash used in investing activities | (89,202 | ) | (25,272 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 589 | 4,458 | ||||||
Net cash transfers with HLTH | — | 145,257 | ||||||
Net cash provided by financing activities | 589 | 149,715 | ||||||
Net (decrease) increase in cash and cash equivalents | (53,922 | ) | 137,464 | |||||
Cash and cash equivalents at beginning of period | 213,753 | 44,660 | ||||||
Cash and cash equivalents at end of period | $ | 159,831 | $ | 182,124 | ||||