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 September 30,					Nine Months Ended September 30,
	2013		2012			2013		2012
Revenue	$	130,937	$	117,513		$	369,016	$	337,128
Cost of operations		53,438		53,295			151,977		161,009
Sales and marketing		32,561		33,136			94,916		95,061
General and administrative		22,689		23,083			70,505		73,851
Depreciation and amortization		6,552		6,508			20,040		20,151
Interest income		16		19			54		64
Interest expense		5,833		5,832			17,497		17,500
Gain on investments		—		—			—		8,074
Loss on convertible notes		3,296		—			3,296		—
Other expense		—		—			1,353		2,297
Income (loss) from continuing operations before income tax provision (benefit)		6,584		(4,322	)		9,486		(24,603	)
Income tax provision (benefit)		3,353		(1,202	)		5,182		(7,604	)
Income (loss) from continuing operations		3,231		(3,120	)		4,304		(16,999	)
Income from discontinued operations, net of tax		—		2,235			—		2,743
Net income (loss)	$	3,231	$	(885	)	$	4,304	$	(14,256	)
Basic income (loss) per common share:
Income (loss) from continuing operations	$	0.07	$	(0.06	)	$	0.09	$	(0.33	)
Income from discontinued operations		—		0.04			—		0.05
Net income (loss)	$	0.07	$	(0.02	)	$	0.09	$	(0.28	)
Diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.06	$	(0.06	)	$	0.09	$	(0.33	)
Income from discontinued operations		—		0.04			—		0.05
Net income (loss)	$	0.06	$	(0.02	)	$	0.09	$	(0.28	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		48,540		49,021			48,954		51,468
Diluted		50,594		49,021			50,315		51,468

WEBMD HEALTH CORP.

CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands, unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenue
Public portal advertising and sponsorship	$	109,608		$	97,562		$	308,829		$	279,082
Private portal services		21,329			19,951			60,187			58,046
	$	130,937		$	117,513		$	369,016		$	337,128
Earnings before interest, taxes, non-cash and other items ("Adjusted EBITDA") (a)	$	31,720		$	17,611		$	82,250		$	43,100
Interest, taxes, non-cash and other items (b)
Interest income		16			19			54			64
Interest expense		(5,833	)		(5,832	)		(17,497	)		(17,500	)
Income tax (provision) benefit		(3,353	)		1,202			(5,182	)		7,604
Depreciation and amortization		(6,552	)		(6,508	)		(20,040	)		(20,151	)
Non-cash stock-based compensation		(9,471	)		(9,612	)		(30,632	)		(35,893	)
Gain on investments		—			—			—			8,074
Loss on convertible notes		(3,296	)		—			(3,296	)		—
Other expense		—			—			(1,353	)		(2,297	)
Income (loss) from continuing operations		3,231			(3,120	)		4,304			(16,999	)
Income from discontinued operations, net of tax		—			2,235			—			2,743
Net income (loss)	$	3,231		$	(885	)	$	4,304		$	(14,256	)

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

(b) Reconciliation of Adjusted EBITDA to net income (loss).

WEBMD HEALTH CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 30, 2013		December 31, 2012
	(unaudited)
Assets
Cash and cash equivalents	$	776,098	$	991,835
Accounts receivable, net		99,705		106,622
Prepaid expenses and other current assets		13,836		13,882
Deferred tax assets		9,821		10,328
Total current assets		899,460		1,122,667
Property and equipment, net		56,786		66,604
Goodwill		202,104		202,104
Intangible assets, net		14,402		16,105
Deferred tax assets		51,247		56,039
Other assets		22,007		27,106
Total Assets	$	1,246,006	$	1,490,625
Liabilities and Stockholders' Equity
Accrued expenses	$	58,620	$	64,256
Deferred revenue		86,850		92,176
Liabilities of discontinued operations		1,506		1,506
Total current liabilities		146,976		157,938
2.25% convertible notes due 2016		300,000		400,000
2.50% convertible notes due 2018		400,000		400,000
Other long-term liabilities		22,224		22,698
Stockholders' equity		376,806		509,989
Total Liabilities and Stockholders' Equity	$	1,246,006	$	1,490,625

WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Nine Months Ended September 30,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	4,304		$	(14,256	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Income from discontinued operations, net of tax		—			(2,743	)
Depreciation and amortization		20,040			20,151
Non-cash interest, net		3,245			3,244
Non-cash stock-based compensation		30,632			35,893
Deferred income taxes		4,592			(7,702	)
Loss on convertible notes		3,296			—
Gain on investments		—			(8,074	)
Changes in operating assets and liabilities:
Accounts receivable		6,917			26,325
Prepaid expenses and other, net		(100	)		(2,529	)
Accrued expenses and other long-term liabilities		(5,689	)		(1,760	)
Deferred revenue		(5,326	)		(4,517	)
Net cash provided by continuing operations		61,911			44,032
Net cash provided by discontinued operations		—			759
Net cash provided by operating activities		61,911			44,791
Cash flows from investing activities:
Proceeds received from ARS option		—			9,269
Purchases of property and equipment		(9,901	)		(29,039	)
Proceeds from sale of property and equipment		1,381			—
Net cash used in investing activities		(8,520	)		(19,770	)
Cash flows from financing activities:
Proceeds from exercise of stock options		19,482			827
Cash used for withholding taxes due on stock-based awards		(7,321	)		(2,332	)
Repurchase of convertible notes		(101,750	)		—
Repurchases of shares through tender offers		(170,516	)		(150,759	)
Purchases of treasury stock		(9,023	)		(24,879	)
Excess tax benefit on stock-based awards		—			301
Net cash used in financing activities		(269,128	)		(176,842	)
Net decrease in cash and cash equivalents		(215,737	)		(151,821	)
Cash and cash equivalents at beginning of period		991,835			1,121,217
Cash and cash equivalents at end of period	$	776,098		$	969,396