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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenue | $ | 89,176 | $ | 77,270 | $ | 170,858 | $ | 149,214 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of operations | 32,763 | 28,997 | 64,333 | 57,615 | ||||||||||||
Sales and marketing | 25,460 | 21,929 | 51,290 | 44,799 | ||||||||||||
General and administrative | 14,614 | 15,981 | 28,389 | 31,486 | ||||||||||||
Impairment of auction rate securities | — | — | 27,406 | — | ||||||||||||
Depreciation and amortization | 7,188 | 6,941 | 13,973 | 12,932 | ||||||||||||
Interest income | 2,350 | 3,051 | 5,803 | 5,036 | ||||||||||||
Income (loss) from continuing operations before income tax provision | 11,501 | 6,473 | (8,730 | ) | 7,418 | |||||||||||
Income tax provision | 5,149 | 1,332 | 8,253 | 1,542 | ||||||||||||
Income (loss) from continuing operations | 6,352 | 5,141 | (16,983 | ) | 5,876 | |||||||||||
Income from discontinued operations, net of tax | — | 249 | — | 220 | ||||||||||||
Net income (loss) | $ | 6,352 | $ | 5,390 | $ | (16,983 | ) | $ | 6,096 | |||||||
Basic income (loss) per common share: | ||||||||||||||||
Income (loss) from continuing operations | $ | 0.11 | $ | 0.09 | $ | (0.29 | ) | $ | 0.10 | |||||||
Income from discontinued operations | — | — | — | 0.01 | ||||||||||||
Net Income (loss) | $ | 0.11 | $ | 0.09 | $ | (0.29 | ) | $ | 0.11 | |||||||
Diluted income (loss) per common share: | ||||||||||||||||
Income (loss) from continuing operations | $ | 0.11 | $ | 0.09 | $ | (0.29 | ) | $ | 0.10 | |||||||
Income from discontinued operations | — | — | — | — | ||||||||||||
Net Income (loss) | $ | 0.11 | $ | 0.09 | $ | (0.29 | ) | $ | 0.10 | |||||||
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share: | ||||||||||||||||
Basic | 57,693 | 57,071 | 57,664 | 57,023 | ||||||||||||
Diluted | 59,061 | 59,748 | 57,664 | 59,689 | ||||||||||||
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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenue | ||||||||||||||||
Online Services: | ||||||||||||||||
Advertising and sponsorship | $ | 62,383 | $ | 52,436 | $ | 118,448 | $ | 99,857 | ||||||||
Licensing | 21,866 | 19,799 | 43,789 | 39,914 | ||||||||||||
Content syndication and other | 345 | 653 | 762 | 1,537 | ||||||||||||
Total Online Services | 84,594 | 72,888 | 162,999 | 141,308 | ||||||||||||
Publishing and Other Services | 4,582 | 4,382 | 7,859 | 7,906 | ||||||||||||
$ | 89,176 | $ | 77,270 | $ | 170,858 | $ | 149,214 | |||||||||
Earnings before interest, taxes, depreciation, amortization and other non-cash items (“Adjusted EBITDA”) (a) | ||||||||||||||||
Online Services | $ | 18,800 | $ | 14,042 | $ | 35,331 | $ | 27,034 | ||||||||
Publishing and Other Services | 1,027 | 863 | 273 | 505 | ||||||||||||
19,827 | 14,905 | 35,604 | 27,539 | |||||||||||||
Adjusted EBITDA per basic common share | $ | 0.34 | $ | 0.26 | $ | 0.62 | $ | 0.48 | ||||||||
Adjusted EBITDA per diluted common share (b) | $ | 0.34 | $ | 0.25 | $ | 0.60 | $ | 0.46 | ||||||||
Interest, taxes, depreciation, amortization and other non-cash items (c) | ||||||||||||||||
Interest income | 2,350 | 3,051 | 5,803 | 5,036 | ||||||||||||
Depreciation and amortization | (7,188 | ) | (6,941 | ) | (13,973 | ) | (12,932 | ) | ||||||||
Non-cash advertising | — | — | (1,558 | ) | (2,320 | ) | ||||||||||
Non-cash stock-based compensation | (3,488 | ) | (4,542 | ) | (7,200 | ) | (9,905 | ) | ||||||||
Impairment of auction rate securities investments | — | — | (27,406 | ) | — | |||||||||||
Income tax provision | (5,149 | ) | (1,332 | ) | (8,253 | ) | (1,542 | ) | ||||||||
Income (loss) from continuing operations | 6,352 | 5,141 | (16,983 | ) | 5,876 | |||||||||||
Income from discontinued operations, net of tax | — | 249 | — | 220 | ||||||||||||
Net income (loss) | $ | 6,352 | $ | 5,390 | $ | (16,983 | ) | $ | 6,096 | |||||||
Basic income (loss) per common share: | ||||||||||||||||
Income (loss) from continuing operations | $ | 0.11 | $ | 0.09 | $ | (0.29 | ) | $ | 0.10 | |||||||
Income from discontinued operations | — | — | — | 0.01 | ||||||||||||
Net income (loss) | $ | 0.11 | $ | 0.09 | $ | (0.29 | ) | $ | 0.11 | |||||||
Diluted income (loss) per common share: | ||||||||||||||||
Income (loss) from continuing operations | $ | 0.11 | $ | 0.09 | $ | (0.29 | ) | $ | 0.10 | |||||||
Income from discontinued operations | — | — | — | — | ||||||||||||
Net income (loss) | $ | 0.11 | $ | 0.09 | $ | (0.29 | ) | $ | 0.10 | |||||||
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share: | ||||||||||||||||
Basic | 57,693 | 57,071 | 57,664 | 57,023 | ||||||||||||
Diluted | 59,061 | 59,748 | 57,664 | 59,689 | ||||||||||||
(a) | See Annex A — Explanation of Non-GAAP Financial Measures | |
(b) | Six months ended June 30, 2008 Adjusted EBITDA per share is calculated based on 59,103 diluted shares | |
(c) | Reconciliation of Adjusted EBITDA to income (loss) from continuing operations |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
June 30, | December 31, | |||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 186,490 | $ | 213,753 | ||||
Short-term investments | 138,753 | 80,900 | ||||||
Accounts receivable, net | 68,865 | 86,081 | ||||||
Current portion of prepaid advertising | 2,275 | 2,329 | ||||||
Due from HLTH | — | 1,153 | ||||||
Other current assets | 9,259 | 10,840 | ||||||
Total current assets | 405,642 | 395,056 | ||||||
Property and equipment, net | 46,554 | 48,589 | ||||||
Prepaid advertising | 3,017 | 4,521 | ||||||
Goodwill | 221,281 | 221,429 | ||||||
Intangible assets, net | 31,323 | 36,314 | ||||||
Other assets | 7,317 | 12,955 | ||||||
$ | 715,134 | $ | 718,864 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accrued expenses | $ | 20,203 | $ | 26,498 | ||||
Deferred revenue | 87,401 | 76,401 | ||||||
Due to HLTH | 72 | — | ||||||
Total current liabilities | 107,676 | 102,899 | ||||||
Other long-term liabilities | 8,890 | 9,210 | ||||||
Stockholders’ equity | 598,568 | 606,755 | ||||||
$ | 715,134 | $ | 718,864 | |||||
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Six Months Ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: | ||||||||
Net (loss) income | $ | (16,983 | ) | $ | 6,096 | |||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
Income from discontinued operations, net of tax | — | (220 | ) | |||||
Depreciation and amortization | 13,973 | 12,932 | ||||||
Non-cash advertising | 1,558 | 2,320 | ||||||
Non-cash stock-based compensation | 7,200 | 9,905 | ||||||
Deferred income taxes | 6,667 | 577 | ||||||
Impairment of auction rate securities | 27,406 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 17,216 | 7,719 | ||||||
Other assets | (1,394 | ) | 74 | |||||
Accrued expenses and other long-term liabilities | (5,131 | ) | (7,271 | ) | ||||
Due to HLTH | 1,246 | 2,136 | ||||||
Deferred revenue | 11,000 | 10,576 | ||||||
Net cash provided by continuing operations | 62,758 | 44,844 | ||||||
Net cash provided by discontinued operations | — | 48 | ||||||
Net cash provided by operating activities | 62,758 | 44,892 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 41,300 | 95,256 | ||||||
Purchases of available-for-sale securities | (127,900 | ) | (112,667 | ) | ||||
Purchases of property and equipment | (6,946 | ) | (9,764 | ) | ||||
Cash received from sale of business and business combinations, net of fees | 1,133 | — | ||||||
Net cash used in investing activities | (92,413 | ) | (27,175 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 2,392 | 5,723 | ||||||
Net cash transfers with HLTH | — | 145,257 | ||||||
Net cash provided by financing activities | 2,392 | 150,980 | ||||||
Net (decrease) increase in cash and cash equivalents | (27,263 | ) | 168,697 | |||||
Cash and cash equivalents at beginning of period | 213,753 | 44,660 | ||||||
Cash and cash equivalents at end of period | $ | 186,490 | $ | 213,357 | ||||