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, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenue | $ | 117,513 | $ | 135,138 | $ | 337,128 | $ | 408,116 | ||||||||
Cost of operations | 53,295 | 49,097 | 161,009 | 148,698 | ||||||||||||
Sales and marketing | 33,136 | 29,597 | 95,061 | 94,161 | ||||||||||||
General and administrative | 23,083 | 22,787 | 73,851 | 67,614 | ||||||||||||
Depreciation and amortization | 6,508 | 6,781 | 20,151 | 19,929 | ||||||||||||
Interest income | 19 | 21 | 64 | 88 | ||||||||||||
Interest expense | 5,832 | 5,862 | 17,500 | 14,836 | ||||||||||||
(Loss) gain on investments | — | (1,150 | ) | 8,074 | 14,679 | |||||||||||
Other expense | — | — | 2,297 | 53 | ||||||||||||
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(Loss) income from continuing operations before income tax (benefit) provision | (4,322 | ) | 19,885 | (24,603 | ) | 77,592 | ||||||||||
Income tax (benefit) provision | (1,202 | ) | 8,645 | (7,604 | ) | 32,606 | ||||||||||
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(Loss) income from continuing operations | (3,120 | ) | 11,240 | (16,999 | ) | 44,986 | ||||||||||
Income from discontinued operations, net of tax | 2,235 | 2,994 | 2,743 | 10,388 | ||||||||||||
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Net (loss) income | $ | (885 | ) | $ | 14,234 | $ | (14,256 | ) | $ | 55,374 | ||||||
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Basic (loss) income per common share: | ||||||||||||||||
(Loss) income from continuing operations | $ | (0.06 | ) | $ | 0.19 | $ | (0.33 | ) | $ | 0.77 | ||||||
Income from discontinued operations | 0.04 | 0.06 | 0.05 | 0.18 | ||||||||||||
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Net (loss) income | $ | (0.02 | ) | $ | 0.25 | $ | (0.28 | ) | $ | 0.95 | ||||||
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Diluted (loss) income per common share: | ||||||||||||||||
(Loss) income from continuing operations | $ | (0.06 | ) | $ | 0.19 | $ | (0.33 | ) | $ | 0.75 | ||||||
Income from discontinued operations | 0.04 | 0.05 | 0.05 | 0.17 | ||||||||||||
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Net (loss) income | $ | (0.02 | ) | $ | 0.24 | $ | (0.28 | ) | $ | 0.92 | ||||||
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Weighted-average shares outstanding used in computing (loss) income per common share: | ||||||||||||||||
Basic | 49,021 | 57,461 | 51,468 | 57,913 | ||||||||||||
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Diluted | 49,021 | 58,698 | 51,468 | 59,882 | ||||||||||||
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WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenue | ||||||||||||||||
Public portal advertising and sponsorship | $ | 97,562 | $ | 115,033 | $ | 279,082 | $ | 346,504 | ||||||||
Private portal services | 19,951 | 20,105 | 58,046 | 61,612 | ||||||||||||
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$ | 117,513 | $ | 135,138 | $ | 337,128 | $ | 408,116 | |||||||||
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Earnings before interest, taxes, non-cash and other items (“Adjusted | $ | 17,611 | $ | 43,465 | $ | 43,100 | $ | 126,612 | ||||||||
Interest, taxes, non-cash and other items (b) | ||||||||||||||||
Interest income | 19 | 21 | 64 | 88 | ||||||||||||
Interest expense | (5,832 | ) | (5,862 | ) | (17,500 | ) | (14,836 | ) | ||||||||
Income tax benefit (provision) | 1,202 | (8,645 | ) | 7,604 | (32,606 | ) | ||||||||||
Depreciation and amortization | (6,508 | ) | (6,781 | ) | (20,151 | ) | (19,929 | ) | ||||||||
Non-cash stock-based compensation | (9,612 | ) | (9,808 | ) | (35,893 | ) | (28,969 | ) | ||||||||
(Loss) gain on investments | — | (1,150 | ) | 8,074 | 14,679 | |||||||||||
Other expense | — | — | (2,297 | ) | (53 | ) | ||||||||||
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(Loss) income from continuing operations | (3,120 | ) | 11,240 | (16,999 | ) | 44,986 | ||||||||||
Income from discontinued operations, net of tax | 2,235 | 2,994 | 2,743 | 10,388 | ||||||||||||
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Net (loss) income | $ | (885 | ) | $ | 14,234 | $ | (14,256 | ) | $ | 55,374 | ||||||
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(a) | See Annex A-Explanation of Non-GAAP Financial Measures. |
(b) | Reconciliation of Adjusted EBITDA to net (loss) income. |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
September 30, 2012 | December 31, 2011 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 969,396 | $ | 1,121,217 | ||||
Accounts receivable, net | 95,010 | 121,335 | ||||||
Prepaid expenses and other current assets | 18,521 | 12,690 | ||||||
Deferred tax assets | 21,697 | 20,482 | ||||||
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Total current assets | 1,104,624 | 1,275,724 | ||||||
Property and equipment, net | 68,921 | 57,139 | ||||||
Goodwill | 202,104 | 202,104 | ||||||
Intangible assets, net | 18,029 | 19,999 | ||||||
Deferred tax assets | 51,365 | 55,017 | ||||||
Other assets | 27,770 | 31,042 | ||||||
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Total Assets | $ | 1,472,813 | $ | 1,641,025 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Accrued expenses | $ | 54,120 | $ | 55,238 | ||||
Deferred revenue | 83,538 | 88,055 | ||||||
Liabilities of discontinued operations | 1,506 | 1,506 | ||||||
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Total current liabilities | 139,164 | 144,799 | ||||||
2.25% convertible notes due 2016 | 400,000 | 400,000 | ||||||
2.50% convertible notes due 2018 | 400,000 | 400,000 | ||||||
Other long-term liabilities | 23,358 | 21,790 | ||||||
Stockholders’ equity | 510,291 | 674,436 | ||||||
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Total Liabilities and Stockholders’ Equity | $ | 1,472,813 | $ | 1,641,025 | ||||
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WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Nine Months Ended September 30, | ||||||||
2012 | 2011 | |||||||
Cash flows from operating activities: | ||||||||
Net (loss) income | $ | (14,256 | ) | $ | 55,374 | |||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
Income from discontinued operations, net of tax | (2,743 | ) | (10,388 | ) | ||||
Depreciation and amortization | 20,151 | 19,929 | ||||||
Non-cash interest, net | 3,244 | 2,702 | ||||||
Non-cash stock-based compensation | 35,893 | 28,969 | ||||||
Deferred income taxes | (7,702 | ) | 5,378 | |||||
Gain on investments | (8,074 | ) | (14,679 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 26,325 | 16,510 | ||||||
Prepaid expenses and other, net | (2,529 | ) | 1,238 | |||||
Accrued expenses and other long-term liabilities | (1,760 | ) | (176 | ) | ||||
Deferred revenue | (4,517 | ) | (6,370 | ) | ||||
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Net cash provided by continuing operations | 44,032 | 98,487 | ||||||
Net cash provided by (used in) discontinued operations | 759 | (136 | ) | |||||
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Net cash provided by operating activities | 44,791 | 98,351 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds received from ARS option | 9,269 | 16,561 | ||||||
Purchases of property and equipment | (29,039 | ) | (16,061 | ) | ||||
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Net cash (used in) provided by investing activities | (19,770 | ) | 500 | |||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options | 827 | 26,435 | ||||||
Cash used for withholding taxes due on stock-based awards | (2,332 | ) | (6,730 | ) | ||||
Net proceeds from issuance of the 2.50% Notes and 2.25% Notes | — | 774,745 | ||||||
Purchases of treasury stock | (175,638 | ) | (217,427 | ) | ||||
Excess tax benefit on stock-based awards | 301 | 24,911 | ||||||
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Net cash (used in) provided by financing activities | (176,842 | ) | 601,934 | |||||
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Net (decrease) increase in cash and cash equivalents | (151,821 | ) | 700,785 | |||||
Cash and cash equivalents at beginning of period | 1,121,217 | 400,501 | ||||||
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Cash and cash equivalents at end of period | $ | 969,396 | $ | 1,101,286 | ||||
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