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 December 31,					Years Ended December 31,
	2013		2012			2013		2012
Revenue	$	146,277	$	132,738		$	515,293	$	469,866
Cost of operations		57,763		55,352			209,740		216,361
Sales and marketing		33,081		32,598			127,997		127,659
General and administrative		22,715		23,767			93,220		97,618
Depreciation and amortization		6,566		8,248			26,606		28,399
Interest income		22		22			76		86
Interest expense		5,329		5,834			22,826		23,334
Loss on convertible notes		1,575		—			4,871		—
Gain on investments		—		—			—		8,074
Restructuring		—		7,579			—		7,579
Other expense		—		—			1,353		2,297
Income (loss) from continuing operations before income tax provision (benefit)		19,270		(618	)		28,756		(25,221	)
Income tax provision (benefit)		8,458		5,470			13,640		(2,134	)
Income (loss) from continuing operations		10,812		(6,088	)		15,116		(23,087	)
Income from discontinued operations, net of tax		—		—			—		2,743
Net income (loss)	$	10,812	$	(6,088	)	$	15,116	$	(20,344	)
Basic income (loss) per common share:
Income (loss) from continuing operations	$	0.27	$	(0.12	)	$	0.32	$	(0.45	)
Income from discontinued operations		—		—			—		0.05
Net income (loss)	$	0.27	$	(0.12	)	$	0.32	$	(0.40	)
Diluted income (loss) per common share (a):
Income (loss) from continuing operations	$	0.25	$	(0.12	)	$	0.31	$	(0.45	)
Income from discontinued operations		—		—			—		0.05
Net income (loss)	$	0.25	$	(0.12	)	$	0.31	$	(0.40	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		40,457		49,041			46,830		50,862
Diluted		44,872		49,041			48,398		50,862

(a) See schedule of Net Income (Loss) Per Common Share below.

WEBMD HEALTH CORP.

CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands, unaudited)

	Three Months Ended December 31,						Years Ended December 31,
	2013			2012			2013			2012
Revenue
Public portal advertising and sponsorship	$	124,353		$	112,257		$	433,182		$	391,339
Private portal services		21,924			20,481			82,111			78,527
	$	146,277		$	132,738		$	515,293		$	469,866
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	40,636		$	30,049		$	122,886		$	73,149
Interest, taxes, non-cash and other items (b)
Interest income		22			22			76			86
Interest expense		(5,329	)		(5,834	)		(22,826	)		(23,334	)
Income tax (provision) benefit		(8,458	)		(5,470	)		(13,640	)		2,134
Depreciation and amortization		(6,566	)		(8,248	)		(26,606	)		(28,399	)
Non-cash stock-based compensation		(7,918	)		(9,028	)		(38,550	)		(44,921	)
Loss on convertible notes		(1,575	)		—			(4,871	)		—
Gain on investments		—			—			—			8,074
Restructuring		—			(7,579	)		—			(7,579	)
Other expense		—			—			(1,353	)		(2,297	)
Income (loss) from continuing operations		10,812			(6,088	)		15,116			(23,087	)
Income from discontinued operations, net of tax		—			—			—			2,743
Net income (loss)	$	10,812		$	(6,088	)	$	15,116		$	(20,344	)

(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, unaudited)

	December 31,
	2013		2012
Assets
Cash and cash equivalents	$	824,880	$	991,835
Accounts receivable, net		124,232		106,622
Prepaid expenses and other current assets		13,243		13,882
Deferred tax assets		13,620		10,328
Total current assets		975,975		1,122,667
Property and equipment, net		64,884		66,604
Goodwill		202,980		202,104
Intangible assets, net		13,834		16,105
Deferred tax assets		38,802		56,039
Other assets		29,153		27,106
Total Assets	$	1,325,628	$	1,490,625
Liabilities and Stockholders’ Equity
Accrued expenses	$	73,739	$	64,256
Deferred revenue		85,148		92,176
Liabilities of discontinued operations		1,506		1,506
Total current liabilities		160,393		157,938
2.25% convertible notes due 2016		252,232		400,000
2.50% convertible notes due 2018		400,000		400,000
1.50% convertible notes due 2020		300,000		—
Other long-term liabilities		22,103		22,698
Stockholders’ equity		190,900		509,989
Total Liabilities and Stockholders’ Equity	$	1,325,628	$	1,490,625

WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Years Ended December 31,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	15,116		$	(20,344	)
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		26,606			28,399
Non-cash interest, net		4,192			4,326
Non-cash stock-based compensation		38,550			44,921
Deferred income taxes		13,070			(2,337	)
Loss on convertible notes		4,871			—
Gain on investments		—			(8,074	)
Changes in operating assets and liabilities:
Accounts receivable		(17,610	)		14,713
Prepaid expenses and other, net		266			(1,589	)
Accrued expenses and other long-term liabilities		8,061			9,429
Deferred revenue		(7,028	)		4,121
Net cash provided by continuing operations		86,094			70,822
Net cash provided by discontinued operations		—			4,324
Net cash provided by operating activities		86,094			75,146
Cash flows from investing activities:
Proceeds received from ARS option		—			9,269
Purchases of property and equipment		(22,341	)		(35,171	)
Proceeds from sale of property and equipment		1,381			—
Net cash used in investing activities		(20,960	)		(25,902	)
Cash flows from financing activities:
Proceeds from exercise of stock options		29,724			827
Cash used for withholding taxes due on stock-based awards		(12,526	)		(2,740	)
Net proceeds from issuance of convertible notes		291,823			—
Repurchase of convertible notes		(150,354	)		—
Repurchase of shares through tender offers		(170,516	)		(150,759	)
Purchases of treasury stock		(220,298	)		(26,331	)
Excess tax benefit on stock-based awards		58			377
Net cash used in financing activities		(232,089	)		(178,626	)
Net decrease in cash and cash equivalents		(166,955	)		(129,382	)
Cash and cash equivalents at beginning of period		991,835			1,121,217
Cash and cash equivalents at end of period	$	824,880		$	991,835

WEBMD HEALTH CORP.

NET INCOME (LOSS) PER COMMON SHARE

(In thousands, except per share data, unaudited)

	Three Months Ended					Years Ended
	December 31,					December 31,
	2013		2012			2013		2012
Numerator:
Income (loss) from continuing operations — Basic	$	10,812	$	(6,088	)	$	15,116	$	(23,087	)
Interest expense on 1.50% convertible notes, net of tax		326		—			—		—
Income (loss) from continuing operations — Diluted	$	11,138	$	(6,088	)	$	15,116	$	(23,087	)
Income from discontinued operations, net of tax — Basic and Diluted	$	—	$	—		$	—	$	2,743
Denominator:
Weighted-average shares — Basic		40,457		49,041			46,830		50,862
Stock options and restricted stock		2,192		—			1,568		—
1.50% convertible notes		2,223		—			—		—
Adjusted weighted-average shares after assumed conversions — Diluted		44,872		49,041			48,398		50,862
Basic income (loss) per common share:
Income (loss) from continuing operations	$	0.27	$	(0.12	)	$	0.32	$	(0.45	)
Income from discontinued operations		—		—			—		0.05
Net income (loss)	$	0.27	$	(0.12	)	$	0.32	$	(0.40	)
Diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.25	$	(0.12	)	$	0.31	$	(0.45	)
Income from discontinued operations		—		—			—		0.05
Net income (loss)	$	0.25	$	(0.12	)	$	0.31	$	(0.40	)