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						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
(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
(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
Net (loss) income	$	(885	)	$	14,234		$	(14,256	)	$	55,374
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
Net (loss) income	$	(0.02	)	$	0.25		$	(0.28	)	$	0.95
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
Net (loss) income	$	(0.02	)	$	0.24		$	(0.28	)	$	0.92
Weighted-average shares outstanding used in computing (loss) income per common share:
Basic		49,021			57,461			51,468			57,913
Diluted		49,021			58,698			51,468			59,882

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
	$	117,513		$	135,138		$	337,128		$	408,116
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	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	)
(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
Net (loss) income	$	(885	)	$	14,234		$	(14,256	)	$	55,374

(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
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
Total Assets	$	1,472,813	$	1,641,025
Liabilities and Stockholders’ Equity
Accrued expenses	$	54,120	$	55,238
Deferred revenue		83,538		88,055
Liabilities of discontinued operations		1,506		1,506
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
Total Liabilities and Stockholders’ Equity	$	1,472,813	$	1,641,025

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	)
Net cash provided by continuing operations		44,032			98,487
Net cash provided by (used in) discontinued operations		759			(136	)
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	)
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
Net cash (used in) provided by financing activities		(176,842	)		601,934
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
Cash and cash equivalents at end of period	$	969,396		$	1,101,286