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 | Years Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenue | $ | 111,532 | $ | 96,642 | $ | 382,777 | $ | 331,954 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of operations | 38,708 | 29,645 | 138,363 | 117,281 | ||||||||||||
Sales and marketing | 30,585 | 26,387 | 108,316 | 93,645 | ||||||||||||
General and administrative | 14,487 | 14,112 | 58,085 | 60,986 | ||||||||||||
Depreciation and amortization | 7,185 | 7,216 | 28,291 | 27,233 | ||||||||||||
Interest income | 2,033 | 3,856 | 10,452 | 12,378 | ||||||||||||
Impairment of auction rate securities | — | — | 27,406 | — | ||||||||||||
Restructuring | 2,910 | — | 2,910 | — | ||||||||||||
Income from continuing operations before income tax (benefit) provision | 19,690 | 23,138 | 29,858 | 45,187 | ||||||||||||
Income tax (benefit) provision | (13,364 | ) | (21,926 | ) | 3,021 | (17,255 | ) | |||||||||
Income from continuing operations | 33,054 | 45,064 | 26,837 | 62,442 | ||||||||||||
(Loss) income from discontinued operations, net of tax | (135 | ) | 3,232 | (135 | ) | 3,442 | ||||||||||
Net income | $ | 32,919 | $ | 48,296 | $ | 26,702 | $ | 65,884 | ||||||||
Basic income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.57 | $ | 0.78 | $ | 0.46 | $ | 1.09 | ||||||||
(Loss) income from discontinued operations | (0.00 | ) | 0.06 | (0.00 | ) | 0.06 | ||||||||||
Net income | $ | 0.57 | $ | 0.84 | $ | 0.46 | $ | 1.15 | ||||||||
Diluted income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.57 | $ | 0.75 | $ | 0.46 | $ | 1.05 | ||||||||
(Loss) income from discontinued operations | (0.01 | ) | 0.06 | (0.01 | ) | 0.05 | ||||||||||
Net income | $ | 0.56 | $ | 0.81 | $ | 0.45 | $ | 1.10 | ||||||||
Weighted-average shares outstanding used in computing basic and diluted net income per common share: | ||||||||||||||||
Basic | 57,771 | 57,534 | 57,717 | 57,184 | ||||||||||||
Diluted | 58,384 | 59,748 | 58,925 | 59,743 | ||||||||||||
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 | Years Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenue | ||||||||||||||||
Online Services: | ||||||||||||||||
Advertising and sponsorship | $ | 85,296 | $ | 70,389 | $ | 275,790 | $ | 229,333 | ||||||||
Licensing | 23,198 | 21,556 | 89,126 | 81,471 | ||||||||||||
Content syndication and other | 280 | 351 | 1,434 | 2,378 | ||||||||||||
Total Online Services | 108,774 | 92,296 | 366,350 | 313,182 | ||||||||||||
Publishing and Other Services | 2,758 | 4,346 | 16,427 | 18,772 | ||||||||||||
$ | 111,532 | $ | 96,642 | $ | 382,777 | $ | 331,954 | |||||||||
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a) | ||||||||||||||||
Online Services | $ | 34,148 | $ | 31,612 | $ | 95,435 | $ | 80,594 | ||||||||
Publishing and Other Services | (338 | ) | 1,460 | 1,147 | 4,103 | |||||||||||
33,810 | 33,072 | 96,582 | 84,697 | |||||||||||||
Adjusted EBITDA per basic common share | $ | 0.59 | $ | 0.57 | $ | 1.67 | $ | 1.48 | ||||||||
Adjusted EBITDA per diluted common share | $ | 0.58 | $ | 0.55 | $ | 1.64 | $ | 1.42 | ||||||||
Interest, taxes, non-cash and other items (b) | ||||||||||||||||
Interest income | 2,033 | 3,856 | 10,452 | 12,378 | ||||||||||||
Depreciation and amortization | (7,185 | ) | (7,216 | ) | (28,291 | ) | (27,233 | ) | ||||||||
Non-cash advertising | (3,361 | ) | (2,775 | ) | (5,097 | ) | (5,264 | ) | ||||||||
Non-cash stock-based compensation | (2,697 | ) | (3,799 | ) | (13,472 | ) | (19,391 | ) | ||||||||
Impairment of auction rate securities | — | — | (27,406 | ) | — | |||||||||||
Restructuring | (2,910 | ) | — | (2,910 | ) | — | ||||||||||
Income tax benefit (provision) | 13,364 | 21,926 | (3,021 | ) | 17,255 | |||||||||||
Income from continuing operations | 33,054 | 45,064 | 26,837 | 62,442 | ||||||||||||
(Loss) income from discontinued operations, net of tax | (135 | ) | 3,232 | (135 | ) | 3,442 | ||||||||||
Net income | $ | 32,919 | $ | 48,296 | $ | 26,702 | $ | 65,884 | ||||||||
Basic income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.57 | $ | 0.78 | $ | 0.46 | $ | 1.09 | ||||||||
(Loss) income from discontinued operations | (0.00 | ) | 0.06 | (0.00 | ) | 0.06 | ||||||||||
Net income | $ | 0.57 | $ | 0.84 | $ | 0.46 | $ | 1.15 | ||||||||
Diluted income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.57 | $ | 0.75 | $ | 0.46 | $ | 1.05 | ||||||||
(Loss) income from discontinued operations | (0.01 | ) | 0.06 | (0.01 | ) | 0.05 | ||||||||||
Net income | $ | 0.56 | $ | 0.81 | $ | 0.45 | $ | 1.10 | ||||||||
Weighted-average shares outstanding used in computing basic and diluted net income per common share: | ||||||||||||||||
Basic | 57,771 | 57,534 | 57,717 | 57,184 | ||||||||||||
Diluted | 58,384 | 59,748 | 58,925 | 59,743 | ||||||||||||
(a) | See Annex A — Explanation of Non-GAAP Financial Measures | |
(b) | Reconciliation of Adjusted EBITDA to income from continuing operations |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
December 31, | ||||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 191,659 | $ | 213,753 | ||||
Short-term investments | — | 80,900 | ||||||
Accounts receivable, net | 94,140 | 86,081 | ||||||
Current portion of prepaid advertising | 1,753 | 2,329 | ||||||
Due from HLTH | — | 1,153 | ||||||
Other current assets | 11,371 | 10,840 | ||||||
Total current assets | 298,923 | 395,056 | ||||||
Investments | 133,563 | — | ||||||
Property and equipment, net | 54,263 | 48,589 | ||||||
Prepaid advertising | — | 4,521 | ||||||
Goodwill | 220,011 | 221,429 | ||||||
Intangible assets, net | 26,599 | 36,314 | ||||||
Other assets | 20,963 | 12,955 | ||||||
$ | 754,322 | $ | 718,864 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accrued expenses | $ | 31,354 | $ | 26,498 | ||||
Deferred revenue | 80,489 | 76,401 | ||||||
Due to HLTH | 427 | — | ||||||
Total current liabilities | 112,270 | 102,899 | ||||||
Other long-term liabilities | 8,334 | 9,210 | ||||||
Stockholders’ equity | 633,718 | 606,755 | ||||||
$ | 754,322 | $ | 718,864 | |||||
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Years Ended December 31, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 26,702 | $ | 65,884 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Loss (income) from discontinued operations, net of tax | 135 | (3,442 | ) | |||||
Depreciation and amortization | 28,291 | 27,233 | ||||||
Non-cash advertising | 5,097 | 5,264 | ||||||
Non-cash stock-based compensation | 13,472 | 19,391 | ||||||
Deferred and other income taxes | 1,476 | (20,953 | ) | |||||
Impairment of auction rate securities | 27,406 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (8,059 | ) | 3,570 | |||||
Accrued expenses and other long-term liabilities | 4,053 | (7,185 | ) | |||||
Due to/from HLTH | 1,601 | (3,278 | ) | |||||
Deferred revenue | 4,088 | 314 | ||||||
Other | (1,350 | ) | 1,102 | |||||
Net cash provided by continuing operations | 102,912 | 87,900 | ||||||
Net cash used in discontinued operations | — | (390 | ) | |||||
Net cash provided by operating activities | 102,912 | 87,510 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 44,000 | 212,923 | ||||||
Purchases of available-for-sale securities | (127,900 | ) | (284,333 | ) | ||||
Purchases of property and equipment | (24,250 | ) | (18,058 | ) | ||||
Cash paid in business combinations, net of cash acquired | (1,648 | ) | — | |||||
Purchase of investment in preferred stock | (6,471 | ) | — | |||||
Net cash used in investing activities | (116,269 | ) | (89,468 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 3,797 | 14,355 | ||||||
Tax benefit on stock-based awards | 284 | 1,577 | ||||||
Net cash transfers with HLTH | — | 155,119 | ||||||
Purchases of treasury stock | (12,818 | ) | — | |||||
Net cash (used in) provided by financing activities | (8,737 | ) | 171,051 | |||||
Net (decrease) increase in cash and cash equivalents | (22,094 | ) | 169,093 | |||||
Cash and cash equivalents at beginning of period | 213,753 | 44,660 | ||||||
Cash and cash equivalents at end of period | $ | 191,659 | $ | 213,753 | ||||