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 | 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)
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)
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)
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 | ||||