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

Exhibit 99.2

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

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2008		2007			2008			2007
Revenue	$	100,387	$	86,098		$	271,245		$	235,312
Costs and expenses:
Cost of operations		35,323		30,021			99,656			87,636
Sales and marketing		26,439		22,459			77,729			67,258
General and administrative		15,209		15,388			43,599			46,874
Impairment of auction rate securities		—		—			27,406			—
Depreciation and amortization		7,133		7,085			21,106			20,017
Interest income		2,616		3,486			8,419			8,522
Income from continuing operations before income tax provision		18,899		14,631			10,169			22,049
Income tax provision		8,133		3,129			16,385			4,671
Income (loss) from continuing operations		10,766		11,502			(6,217	)		17,378
(Loss) income from discontinued operations, net of tax		—		(10	)		—			210
Net income (loss)	$	10,766	$	11,492		$	(6,217	)	$	17,588
Basic income (loss) per common share:
Income (loss) from continuing operations	$	0.19	$	0.20		$	(0.11	)	$	0.30
(Loss) income from discontinued operations		—		(0.00	)		—			0.01
Net income (loss)	$	0.19	$	0.20		$	(0.11	)	$	0.31
Diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.18	$	0.19		$	(0.11	)	$	0.29
(Loss) income from discontinued operations		—		(0.00	)		—			0.00
Net income (loss)	$	0.18	$	0.19		$	(0.11	)	$	0.29
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share:
Basic		57,770		57,154			57,699			57,067
Diluted		59,111		59,848			57,699			59,742

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
Revenue
Online Services:
Advertising and sponsorship	$	72,046		$	59,087		$	190,494		$	158,944
Licensing		22,139			20,001			65,928			59,915
Content syndication and other		392			490			1,154			2,027
Total Online Services		94,577			79,578			257,576			220,886
Publishing and Other Services		5,810			6,520			13,669			14,426
	$	100,387		$	86,098		$	271,245		$	235,312
Earnings before interest, taxes, depreciation, amortization and other non-cash items (“Adjusted EBITDA”) (a)
Online Services	$	25,956		$	21,948		$	61,287		$	48,982
Publishing and Other Services		1,212			2,138			1,485			2,643
		27,168			24,086			62,772			51,625
Adjusted EBITDA per basic common share	$	0.47		$	0.42		$	1.09		$	0.90
Adjusted EBITDA per diluted common share (b)	$	0.46		$	0.40		$	1.06		$	0.86
Interest, taxes, depreciation, amortization and other non-cash items (c)
Interest income		2,616			3,486			8,419			8,522
Depreciation and amortization		(7,133	)		(7,085	)		(21,106	)		(20,017	)
Non-cash advertising		(178	)		(169	)		(1,736	)		(2,489	)
Non-cash stock-based compensation		(3,574	)		(5,687	)		(10,774	)		(15,592	)
Impairment of auction rate securities		—			—			(27,406	)		—
Income tax provision		(8,133	)		(3,129	)		(16,385	)		(4,671	)
Income (loss) from continuing operations		10,766			11,502			(6,217	)		17,378
(Loss) income from discontinued operations, net of tax		—			(10	)		—			210
Net income (loss)	$	10,766		$	11,492		$	(6,217	)	$	17,588
Basic income (loss) per common share:
Income (loss) from continuing operations	$	0.19		$	0.20		$	(0.11	)	$	0.30
(Loss) income from discontinued operations		—			(0.00	)		—			0.01
Net income (loss)	$	0.19		$	0.20		$	(0.11	)	$	0.31
Diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.18		$	0.19		$	(0.11	)	$	0.29
(Loss) income from discontinued operations		—			(0.00	)		—			0.00
Net income (loss)	$	0.18		$	0.19		$	(0.11	)	$	0.29
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share:
Basic		57,770			57,154			57,699			57,067
Diluted		59,111			59,848			57,699			59,742

(a)	See Annex A — Explanation of Non-GAAP Financial Measures
(b)	Nine months ended September 30, 2008 Adjusted EBITDA per share is calculated based on 59,106 diluted shares
(c)	Reconciliation of Adjusted EBITDA to income (loss) from continuing operations

WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)

	September 30,		December 31,
	2008		2007
ASSETS
Current assets:
Cash and cash equivalents	$	199,752	$	213,753
Short-term investments		132,848		80,900
Accounts receivable, net		78,148		86,081
Current portion of prepaid advertising		5,114		2,329
Due from HLTH		611		1,153
Other current assets		9,602		10,840
Total current assets		426,075		395,056
Property and equipment, net		49,935		48,589
Prepaid advertising		—		4,521
Goodwill		221,281		221,429
Intangible assets, net		28,917		36,314
Other assets		1,184		12,955
	$	727,392	$	718,864
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accrued expenses	$	26,442	$	26,498
Deferred revenue		81,740		76,401
Total current liabilities		108,182		102,899
Other long-term liabilities		8,719		9,210
Stockholders’ equity		610,491		606,755
	$	727,392	$	718,864

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

	Nine Months Ended
	September 30,
	2008			2007
Cash flows from operating activities:
Net (loss) income	$	(6,217	)	$	17,588
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Income from discontinued operations, net of tax		—			(210	)
Depreciation and amortization		21,106			20,017
Non-cash advertising		1,736			2,489
Non-cash stock-based compensation		10,774			15,592
Deferred income taxes		13,769			1,975
Impairment of auction rate securities		27,406			—
Changes in operating assets and liabilities:
Accounts receivable		7,932			14,648
Other assets		(1,251	)		(303	)
Accrued expenses and other long-term liabilities		(406	)		(7,463	)
Due to/from HLTH		563			5,223
Deferred revenue		5,340			3,253
Net cash provided by continuing operations		80,752			72,809
Net cash used by discontinued operations		—			(35	)
Net cash provided by operating activities		80,752			72,774
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		43,300			123,885
Purchases of available-for-sale securities		(127,900	)		(214,295	)
Purchases of property and equipment		(15,054	)		(13,574	)
Cash received from sale of business and business combinations, net of fees		1,133			—
Net cash used in investing activities		(98,521	)		(103,984	)
Cash flows from financing activities:
Proceeds from issuance of common stock		3,453			8,490
Tax benefit on stock-based awards		315			655
Net cash transfers with HLTH		—			155,119
Net cash provided by financing activities		3,768			164,264
Net (decrease) increase in cash and cash equivalents		(14,001	)		133,054
Cash and cash equivalents at beginning of period		213,753			44,660
Cash and cash equivalents at end of period	$	199,752		$	177,714