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					Years Ended
	December 31,					December 31,
	2012			2011		2012			2011
Revenue	$	132,738		$	150,659	$	469,866		$	558,775
Cost of operations		55,352			52,979		216,361			201,677
Sales and marketing		32,598			30,165		127,659			124,326
General and administrative		23,767			23,657		97,618			91,271
Depreciation and amortization		8,248			6,872		28,399			26,801
Interest income		22			24		86			112
Interest expense		5,834			5,809		23,334			20,645
Gain on investments		—			3,837		8,074			18,516
Restructuring		7,579			—		7,579			—
Other expense		—			2,275		2,297			2,328
(Loss) income from continuing operations before income tax provision (benefit)		(618	)		32,763		(25,221	)		110,355
Income tax provision (benefit)		5,470			13,561		(2,134	)		46,167
(Loss) income from continuing operations		(6,088	)		19,202		(23,087	)		64,188
Income from discontinued operations, net of tax		—			—		2,743			10,388
Net (loss) income	$	(6,088	)	$	19,202	$	(20,344	)	$	74,576
Basic (loss) income per common share:
(Loss) income from continuing operations	$	(0.12	)	$	0.34	$	(0.45	)	$	1.11
Income from discontinued operations		—			—		0.05			0.18
Net (loss) income	$	(0.12	)	$	0.34	$	(0.40	)	$	1.29
Diluted (loss) income per common share:
(Loss) income from continuing operations	$	(0.12	)	$	0.33	$	(0.45	)	$	1.08
Income from discontinued operations		—			—		0.05			0.17
Net (loss) income	$	(0.12	)	$	0.33	$	(0.40	)	$	1.25
Weighted-average shares outstanding used in computing (loss) income per common share:
Basic		49,041			55,685		50,862			57,356
Diluted		49,041			68,326		50,862			59,124

WEBMD HEALTH CORP.

CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands, unaudited)

	Three Months Ended						Years Ended
	December 31,						December 31,
	2012			2011			2012			2011
Revenue
Public portal advertising and sponsorship	$	112,257		$	130,821		$	391,339		$	477,325
Private portal services		20,481			19,838			78,527			81,450
	$	132,738		$	150,659		$	469,866		$	558,775
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	30,049		$	54,626		$	73,149		$	181,238
Interest, taxes, non-cash and other items (b)
Interest income		22			24			86			112
Interest expense		(5,834	)		(5,809	)		(23,334	)		(20,645	)
Income tax (provision) benefit		(5,470	)		(13,561	)		2,134			(46,167	)
Depreciation and amortization		(8,248	)		(6,872	)		(28,399	)		(26,801	)
Non-cash stock-based compensation		(9,028	)		(10,768	)		(44,921	)		(39,737	)
Gain on investments		—			3,837			8,074			18,516
Restructuring		(7,579	)		—			(7,579	)		—
Other expense		—			(2,275	)		(2,297	)		(2,328	)
(Loss) income from continuing operations		(6,088	)		19,202			(23,087	)		64,188
Income from discontinued operations, net of tax		—			—			2,743			10,388
Net (loss) income	$	(6,088	)	$	19,202		$	(20,344	)	$	74,576

(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)

	December 31,
	2012		2011
Assets
Cash and cash equivalents	$	991,835	$	1,121,217
Accounts receivable, net		106,622		121,335
Prepaid expenses and other current assets		13,882		12,690
Deferred tax assets		10,328		20,482
Total current assets		1,122,667		1,275,724
Property and equipment, net		66,604		57,139
Goodwill		202,104		202,104
Intangible assets, net		16,105		19,999
Deferred tax assets		56,039		55,017
Other assets		27,106		31,042
Total Assets	$	1,490,625	$	1,641,025
Liabilities and Stockholders’ Equity
Accrued expenses	$	64,256	$	55,238
Deferred revenue		92,176		88,055
Liabilities of discontinued operations		1,506		1,506
Total current liabilities		157,938		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		22,698		21,790
Stockholders’ equity		509,989		674,436
Total Liabilities and Stockholders’ Equity	$	1,490,625	$	1,641,025

WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Years Ended
	December 31,
	2012			2011
Cash flows from operating activities:
Net (loss) income	$	(20,344	)	$	74,576
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		28,399			26,801
Non-cash interest, net		4,326			3,758
Non-cash stock-based compensation		44,921			39,737
Deferred income taxes		(2,337	)		13,696
Gain on investments		(8,074	)		(18,516	)
Changes in operating assets and liabilities:
Accounts receivable		14,713			13,113
Prepaid expenses and other, net		(1,589	)		1,416
Accrued expenses and other long-term liabilities		9,429			2,511
Deferred revenue		4,121			(8,988	)
Net cash provided by continuing operations		70,822			137,716
Net cash provided by (used in) discontinued operations		4,324			(440	)
Net cash provided by operating activities		75,146			137,276
Cash flows from investing activities:
Proceeds received from ARS option		9,269			21,566
Purchases of property and equipment		(35,171	)		(20,911	)
Net cash (used in) provided by investing activities		(25,902	)		655
Cash flows from financing activities:
Proceeds from exercise of stock options		827			28,339
Cash used for withholding taxes due on stock-based awards		(2,740	)		(9,234	)
Net proceeds from issuance of the 2.50% Notes and 2.25% Notes		—			774,745
Purchases of treasury stock		(177,090	)		(241,263	)
Excess tax benefit on stock-based awards		377			30,198
Net cash (used in) provided by financing activities		(178,626	)		582,785
Net (decrease) increase in cash and cash equivalents		(129,382	)		720,716
Cash and cash equivalents at beginning of period		1,121,217			400,501
Cash and cash equivalents at end of period	$	991,835		$	1,121,217