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 | ||||||||||||
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(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 | |||||||||||
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(Loss) income from continuing operations | (6,088 | ) | 19,202 | (23,087 | ) | 64,188 | ||||||||||
Income from discontinued operations, net of tax | — | — | 2,743 | 10,388 | ||||||||||||
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Net (loss) income | $ | (6,088 | ) | $ | 19,202 | $ | (20,344 | ) | $ | 74,576 | ||||||
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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 | ||||||||||||
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Net (loss) income | $ | (0.12 | ) | $ | 0.34 | $ | (0.40 | ) | $ | 1.29 | ||||||
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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 | ||||||||||||
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Net (loss) income | $ | (0.12 | ) | $ | 0.33 | $ | (0.40 | ) | $ | 1.25 | ||||||
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Weighted-average shares outstanding used in computing (loss) income per common share: | ||||||||||||||||
Basic | 49,041 | 55,685 | 50,862 | 57,356 | ||||||||||||
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Diluted | 49,041 | 68,326 | 50,862 | 59,124 | ||||||||||||
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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 | ||||||||||||
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$ | 132,738 | $ | 150,659 | $ | 469,866 | $ | 558,775 | |||||||||
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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 | ) | |||||||||
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(Loss) income from continuing operations | (6,088 | ) | 19,202 | (23,087 | ) | 64,188 | ||||||||||
Income from discontinued operations, net of tax | — | — | 2,743 | 10,388 | ||||||||||||
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Net (loss) income | $ | (6,088 | ) | $ | 19,202 | $ | (20,344 | ) | $ | 74,576 | ||||||
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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)
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 | ||||||
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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 | ||||||
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Total Assets | $ | 1,490,625 | $ | 1,641,025 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Accrued expenses | $ | 64,256 | $ | 55,238 | ||||
Deferred revenue | 92,176 | 88,055 | ||||||
Liabilities of discontinued operations | 1,506 | 1,506 | ||||||
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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 | ||||||
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Total Liabilities and Stockholders’ Equity | $ | 1,490,625 | $ | 1,641,025 | ||||
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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 | ) | |||||
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Net cash provided by continuing operations | 70,822 | 137,716 | ||||||
Net cash provided by (used in) discontinued operations | 4,324 | (440 | ) | |||||
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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 | ) | ||||
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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 | ||||||
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Net cash (used in) provided by financing activities | (178,626 | ) | 582,785 | |||||
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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 | ||||||
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Cash and cash equivalents at end of period | $ | 991,835 | $ | 1,121,217 | ||||
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