WebMD Health (WBMD) 8-K WebMD Announces Fourth Quarter and Year End Financial Results

Exhibit 99.2

WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data, unaudited)

	Three Months Ended December 31,					Years Ended December 31,
	2011		2010			2011		2010
Revenue	$	150,659	$	168,477		$	558,775	$	534,519
Cost of operations		52,979		51,859			201,677		187,831
Sales and marketing		30,165		34,085			124,326		120,874
General and administrative		23,657		23,146			91,271		85,496
Depreciation and amortization		6,872		7,310			26,801		27,578
Interest income		24		99			112		3,949
Interest expense		5,809		1,347			20,645		11,453
Loss on convertible notes		—		6,362			—		23,332
Gain (loss) on investments		3,837		13,460			18,516		(9,517	)
Transaction and other expense (income)		2,275		(20	)		2,328		72
Income from continuing operations before income tax provision		32,763		57,947			110,355		72,315
Income tax provision		13,561		24,183			46,167		20,043
Income from continuing operations		19,202		33,764			64,188		52,272
Income from discontinued operations, net of tax		—		2,824			10,388		1,800
Net income	$	19,202	$	36,588		$	74,576	$	54,072
Basic income per common share:
Income from continuing operations	$	0.34	$	0.58		$	1.11	$	0.93
Income from discontinued operations		—		0.05			0.18		0.04
Net income	$	0.34	$	0.63		$	1.29	$	0.97
Diluted income per common share:
Income from continuing operations	$	0.33	$	0.55		$	1.08	$	0.85
Income from discontinued operations		—		0.04			0.17		0.03
Net income	$	0.33	$	0.59		$	1.25	$	0.88
Weighted-average shares outstanding used in computing income per common share:
Basic		55,685		57,505			57,356		55,328
Diluted		68,326		62,330			59,124		62,228

WEBMD HEALTH CORP.

CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands, unaudited)

	Three Months Ended December 31,						Years Ended December 31,
	2011			2010			2011			2010
Revenue
Public portal advertising and sponsorship	$	130,821		$	147,042		$	477,325		$	446,969
Private portal services		19,838			21,435			81,450			87,550
	$	150,659		$	168,477		$	558,775		$	534,519
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	54,626		$	69,082		$	181,238		$	173,618
Interest, taxes, non-cash and other items (b)
Interest income		24			99			112			3,949
Interest expense		(5,809	)		(1,347	)		(20,645	)		(11,453	)
Income tax provision		(13,561	)		(24,183	)		(46,167	)		(20,043	)
Depreciation and amortization		(6,872	)		(7,310	)		(26,801	)		(27,578	)
Non-cash stock-based compensation		(10,768	)		(9,695	)		(39,737	)		(33,300	)
Loss on convertible notes		—			(6,362	)		—			(23,332	)
Gain (loss) on investments		3,837			13,460			18,516			(9,517	)
Transaction and other (expense) income		(2,275	)		20			(2,328	)		(72	)
Income from continuing operations		19,202			33,764			64,188			52,272
Income from discontinued operations, net of tax		—			2,824			10,388			1,800
Net income	$	19,202		$	36,588		$	74,576		$	54,072

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

(b) Reconciliation of Adjusted EBITDA to net income.

WEBMD HEALTH CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

	December 31,
	2011		2010
Assets
Cash and cash equivalents	$	1,121,217	$	400,501
Accounts receivable, net		121,335		134,448
Prepaid expenses and other current assets		12,690		12,161
Deferred tax assets		20,482		23,467
Total current assets		1,275,724		570,577
Property and equipment, net		57,139		61,516
Goodwill		202,104		202,104
Intangible assets, net		19,999		22,626
Deferred tax assets		55,017		71,125
Other assets		31,042		14,254
Total Assets	$	1,641,025	$	942,202
Liabilities and Stockholders’ Equity
Accrued expenses	$	55,238	$	53,181
Deferred revenue		88,055		97,043
Liabilities of discontinued operations		1,506		17,327
Total current liabilities		144,799		167,551
2.25% convertible notes due 2016		400,000		—
2.50% convertible notes due 2018		400,000		—
Other long-term liabilities		21,790		21,756
Stockholders’ equity		674,436		752,895
Total Liabilities and Stockholders’ Equity	$	1,641,025	$	942,202

WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Years Ended December 31,
	2011			2010
Cash flows from operating activities:
Net income	$	74,576		$	54,072
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Income from discontinued operations, net of tax		(10,388	)		(1,800	)
Depreciation and amortization		26,801			27,578
Non-cash interest, net		3,758			5,594
Non-cash stock-based compensation		39,737			33,300
Deferred income taxes		13,696			(403	)
Loss on convertible notes		—			23,332
(Gain) loss on investments		(18,516	)		9,517
Changes in operating assets and liabilities:
Accounts receivable		13,113			(16,292	)
Prepaid expenses and other, net		1,416			4,617
Accrued expenses and other long-term liabilities		2,511			213
Deferred revenue		(8,988	)		(1,431	)
Net cash provided by continuing operations		137,716			138,297
Net cash used in discontinued operations		(440	)		(16,474	)
Net cash provided by operating activities		137,276			121,823
Cash flows from investing activities:
Proceeds from sales of available-for-sale securities		—			361,852
Proceeds received from ARS option		21,566			10,467
Purchases of property and equipment		(20,911	)		(32,254	)
Finalization of sale price of discontinued operations		—			(1,430	)
Net cash provided by investing activities		655			338,635
Cash flows from financing activities:
Proceeds from exercise of stock options		28,339			59,825
Cash used for withholding taxes due on stock-based awards		(9,234	)		(86,533	)
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		—			(94,525	)
Purchases of treasury stock		(241,263	)		(420,948	)
Excess tax benefit on stock-based awards		30,198			22,458
Net cash provided by (used in) financing activities		582,785			(519,723	)
Net increase (decrease) in cash and cash equivalents		720,716			(59,265	)
Cash and cash equivalents at beginning of period		400,501			459,766
Cash and cash equivalents at end of period	$	1,121,217		$	400,501

WEBMD HEALTH CORP.

NET INCOME PER COMMON SHARE

(In thousands, except per share data, unaudited)

	Three Months Ended December 31,						Years Ended December 31,
	2011			2010			2011			2010
Numerator:
Income from continuing operations	$	19,202		$	33,764		$	64,188		$	52,272
Effect of participating non-vested restricted stock		(111	)		(339	)		(436	)		(601	)
Income from continuing operations-Basic		19,091			33,425			63,752			51,671
Interest expense on 2.50% Notes, net of tax		1,682			—			—			—
Interest expense on 2.25% Notes, net of tax		1,627			—			—			—
Interest expense on 1.75% Notes, net of tax		—			—			—			1,469
Interest expense on 3 1/8% Notes, net of tax		—			809			—			—
Income from continuing operations — Diluted	$	22,400		$	34,234		$	63,752		$	53,140
Income from discontinued operations, net of tax	$	—		$	2,824		$	10,388		$	1,800
Effect of participating non-vested restricted stock		—			(28	)		(71	)		(21	)
Income from discontinued operations, net of tax — Basic and Diluted	$	—		$	2,796		$	10,317		$	1,779
Denominator:
Weighted-average shares-Basic		55,685			57,505			57,356			55,328
Employee stock options and restricted stock		1,164			2,651			1,768			3,706
2.50% Notes		6,049			—			—			—
2.25% Notes		5,428			—			—			—
1.75% Notes		—			—			—			3,194
3 1/8% Notes		—			2,174			—			—
Adjusted weighted-average shares after assumed conversions — Diluted		68,326			62,330			59,124			62,228
Basic income per common share:
Income from continuing operations	$	0.34		$	0.58		$	1.11		$	0.93
Income from discontinued operations		—			0.05			0.18			0.04
Net income	$	0.34		$	0.63		$	1.29		$	0.97
Diluted income per common share:
Income from continuing operations	$	0.33		$	0.55		$	1.08		$	0.85
Income from discontinued operations		—			0.04			0.17			0.03
Net income	$	0.33		$	0.59		$	1.25		$	0.88