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 September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Revenue	$	135,138		$	135,305		$	408,116		$	366,042
Cost of operations		49,097			47,610			148,698			135,972
Sales and marketing		29,597			28,957			94,161			86,789
General and administrative		22,787			22,964			67,614			62,350
Depreciation and amortization		6,781			6,935			19,929			20,268
Interest income		21			21			88			3,850
Interest expense		5,862			1,797			14,836			10,106
Loss on convertible notes		—			2,232			—			16,970
Gain (loss) on investments		(1,150	)		(131	)		14,679			(22,977	)
Other income (expense), net		—			107			(53	)		(92	)
Income from continuing operations before income tax provision (benefit)		19,885			24,807			77,592			14,368
Income tax provision (benefit)		8,645			10,193			32,606			(4,140	)
Income from continuing operations		11,240			14,614			44,986			18,508
Income (loss) from discontinued operations, net of tax		2,994			(1,024	)		10,388			(1,024	)
Net income	$	14,234		$	13,590		$	55,374		$	17,484
Basic income (loss) per common share:
Income from continuing operations	$	0.19		$	0.25		$	0.77		$	0.33
Income (loss) from discontinued operations		0.06			(0.02	)		0.18			(0.01	)
Net income	$	0.25		$	0.23		$	0.95		$	0.32
Diluted income (loss) per common share:
Income from continuing operations	$	0.19		$	0.24		$	0.75		$	0.31
Income (loss) from discontinued operations		0.05			(0.02	)		0.17			(0.02	)
Net income	$	0.24		$	0.22		$	0.92		$	0.29
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		57,461			58,095			57,913			54,602
Diluted		58,698			61,435			59,882			58,660

WEBMD HEALTH CORP.

CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands, unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Revenue
Public portal advertising and sponsorship	$	115,033		$	113,078		$	346,504		$	299,927
Private portal services		20,105			22,227			61,612			66,115
	$	135,138		$	135,305		$	408,116		$	366,042
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	43,465		$	44,578		$	126,612		$	104,536
Interest, taxes, non-cash and other items (b)
Interest income		21			21			88			3,850
Interest expense		(5,862	)		(1,797	)		(14,836	)		(10,106	)
Income tax (provision) benefit		(8,645	)		(10,193	)		(32,606	)		4,140
Depreciation and amortization		(6,781	)		(6,935	)		(19,929	)		(20,268	)
Non-cash stock-based compensation		(9,808	)		(8,804	)		(28,969	)		(23,605	)
Loss on convertible notes		—			(2,232	)		—			(16,970	)
Gain (loss) on investments		(1,150	)		(131	)		14,679			(22,977	)
Other income (expense), net		—			107			(53	)		(92	)
Income from continuing operations		11,240			14,614			44,986			18,508
Income (loss) from discontinued operations, net of tax		2,994			(1,024	)		10,388			(1,024	)
Net income	$	14,234		$	13,590		$	55,374		$	17,484

(a) See Annex A-Explanation of Non-GAAP Financial Measures.

(b) Reconciliation of Adjusted EBITDA to net income (loss).

WEBMD HEALTH CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

	September 30, 2011		December 31, 2010
Assets
Cash and cash equivalents	$	1,101,286	$	400,501
Accounts receivable, net		117,938		134,448
Prepaid expenses and other current assets		13,172		12,161
Deferred tax assets		21,204		23,467
Total current assets		1,253,600		570,577
Property and equipment, net		58,064		61,516
Goodwill		202,104		202,104
Intangible assets, net		20,656		22,626
Deferred tax assets		62,613		71,125
Other assets		32,318		14,254
Total Assets	$	1,629,355	$	942,202
Liabilities and Stockholders’ Equity
Accrued expenses	$	51,141	$	53,181
Deferred revenue		90,673		97,043
Liabilities of discontinued operations		1,810		17,327
Total current liabilities		143,624		167,551
2.25% convertible notes due 2016		400,000		—
2.50% convertible notes due 2018		400,000		—
Other long-term liabilities		22,403		21,756
Stockholders’ equity		663,328		752,895
Total Liabilities and Stockholders’ Equity	$	1,629,355	$	942,202

WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Nine Months Ended September 30,
	2011			2010
Cash flows from operating activities:
Net income	$	55,374		$	17,484
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
(Income) loss from discontinued operations, net of tax		(10,388	)		1,024
Depreciation and amortization		19,929			20,268
Non-cash interest, net		2,702			4,862
Non-cash stock-based compensation		28,969			23,605
Deferred income taxes		5,378			(17,260	)
Loss on convertible notes		—			16,970
(Gain) loss on investments		(14,679	)		22,977
Changes in operating assets and liabilities:
Accounts receivable		16,510			(2,206	)
Prepaid expenses and other, net		1,238			(3,006	)
Accrued expenses and other long-term liabilities		(176	)		1,695
Deferred revenue		(6,370	)		3,413
Net cash provided by continuing operations		98,487			89,826
Net cash used in discontinued operations		(136	)		(17,082	)
Net cash provided by operating activities		98,351			72,744
Cash flows from investing activities:
Proceeds from sales of available-for-sale securities		—			361,852
Proceeds received from ARS option		16,561			407
Purchases of property and equipment		(16,061	)		(20,329	)
Finalization of sale price of discontinued operations		—			(1,430	)
Net cash provided by investing activities		500			340,500
Cash flows from financing activities:
Proceeds from exercise of stock options		26,435			57,168
Cash used for withholding taxes due on stock-based awards		(6,730	)		(76,559	)
Net proceeds from issuance of the 2.50% Notes and 2.25% Notes		774,745			—
Repurchases of 1.75% Notes and 3 1/8% Notes		—			(94,475	)
Purchases of treasury stock		(217,427	)		(420,948	)
Excess tax benefit on stock-based awards		24,911			14,003
Net cash provided by (used in) financing activities		601,934			(520,811	)
Net increase in cash and cash equivalents		700,785			(107,567	)
Cash and cash equivalents at beginning of period		400,501			459,766
Cash and cash equivalents at end of period	$	1,101,286		$	352,199

WEBMD HEALTH CORP.

NET INCOME PER COMMON SHARE

(In thousands, except per share data, unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Numerator:
Income from continuing operations	$	11,240		$	14,614		$	44,986		$	18,508
Effect of participating non-vested restricted stock		(70	)		(152	)		(320	)		(222	)
Income from continuing operations- Basic and Diluted	$	11,170		$	14,462		$	44,666		$	18,286
Income (loss) from discontinued operations, net of tax	$	2,994		$	(1,024	)	$	10,388		$	(1,024	)
Effect of participating non-vested restricted stock		(19	)		12			(74	)		12
Income (loss) from discontinued operations, net of tax - Basic and Diluted	$	2,975		$	(1,012	)	$	10,314		$	(1,012	)
Denominator:
Weighted-average shares — Basic		57,461			58,095			57,913			54,602
Employee stock options and restricted stock		1,237			3,340			1,969			4,058
Adjusted weighted-average shares after assumed conversions — Diluted		58,698			61,435			59,882			58,660
Basic income (loss) per common share:
Income from continuing operations	$	0.19		$	0.25		$	0.77		$	0.33
Income (loss) from discontinued operations		0.06			(0.02	)		0.18			(0.01	)
Net income	$	0.25		$	0.23		$	0.95		$	0.32
Diluted income (loss) per common share:
Income from continuing operations	$	0.19		$	0.24		$	0.75		$	0.31
Income (loss) from discontinued operations		0.05			(0.02	)		0.17			(0.02	)
Net income	$	0.24		$	0.22		$	0.92		$	0.29