Exhibit 99.2
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue | $ | 148,320 | $ | 140,400 | $ | 291,663 | $ | 274,232 | ||||||||
Cost of operations | 60,407 | 54,456 | 118,284 | 107,020 | ||||||||||||
Sales and marketing | 32,570 | 33,321 | 65,046 | 66,232 | ||||||||||||
General and administrative | 23,002 | 22,339 | 44,455 | 46,120 | ||||||||||||
Depreciation and amortization | 7,592 | 7,042 | 15,837 | 14,370 | ||||||||||||
Interest income | 9 | 17 | 26 | 32 | ||||||||||||
Interest expense | 6,171 | 6,172 | 12,343 | 12,344 | ||||||||||||
Gain on investments | 139 | — | 139 | — | ||||||||||||
Other expense | 4,100 | — | 4,100 | — | ||||||||||||
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Income before income tax provision | 14,626 | 17,087 | 31,763 | 28,178 | ||||||||||||
Income tax provision | 1,255 | 7,371 | 8,388 | 12,196 | ||||||||||||
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Net income | $ | 13,371 | $ | 9,716 | $ | 23,375 | $ | 15,982 | ||||||||
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Net income per common share: | ||||||||||||||||
Basic | $ | 0.36 | $ | 0.26 | $ | 0.64 | $ | 0.41 | ||||||||
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Diluted | $ | 0.32 | $ | 0.23 | $ | 0.57 | $ | 0.38 | ||||||||
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Weighted-average shares outstanding used in computing income per common share: | ||||||||||||||||
Basic | 36,705 | 37,819 | 36,549 | 38,543 | ||||||||||||
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Diluted | 53,618 | 45,801 | 43,684 | 46,667 | ||||||||||||
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WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue | ||||||||||||||||
Advertising and sponsorship | ||||||||||||||||
Biopharma and medical device | $ | 85,977 | $ | 81,981 | $ | 161,822 | $ | 150,469 | ||||||||
OTC, CPG and other | 30,249 | 29,503 | 60,197 | 63,972 | ||||||||||||
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116,226 | 111,484 | 222,019 | 214,441 | |||||||||||||
Private portal services | 26,441 | 24,188 | 55,763 | 48,817 | ||||||||||||
Information services | 5,653 | 4,728 | 13,881 | 10,974 | ||||||||||||
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$ | 148,320 | $ | 140,400 | $ | 291,663 | $ | 274,232 | |||||||||
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Earnings before interest, taxes, non-cash and other items | $ | 40,549 | $ | 37,917 | $ | 79,467 | $ | 71,183 | ||||||||
Interest, taxes, non-cash and other items (b) | ||||||||||||||||
Interest income | 9 | 17 | 26 | 32 | ||||||||||||
Interest expense | (6,171 | ) | (6,172 | ) | (12,343 | ) | (12,344 | ) | ||||||||
Income tax provision | (1,255 | ) | (7,371 | ) | (8,388 | ) | (12,196 | ) | ||||||||
Depreciation and amortization | (7,592 | ) | (7,042 | ) | (15,837 | ) | (14,370 | ) | ||||||||
Non-cash stock-based compensation | (8,208 | ) | (7,633 | ) | (15,589 | ) | (16,323 | ) | ||||||||
Gain on investments | 139 | — | 139 | — | ||||||||||||
Other expense | (4,100 | ) | — | (4,100 | ) | — | ||||||||||
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Net income | $ | 13,371 | $ | 9,716 | $ | 23,375 | $ | 15,982 | ||||||||
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(a) | See Annex A-Explanation of Non-GAAP Financial Measures. |
(b) | Reconciliation of Adjusted EBITDA to net income. |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, 2015 | December 31, 2014 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 757,382 | $ | 706,776 | ||||
Accounts receivable, net | 149,088 | 136,806 | ||||||
Prepaid expenses and other current assets | 20,633 | 13,877 | ||||||
Deferred tax assets | 12,038 | 18,147 | ||||||
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Total current assets | 939,141 | 875,606 | ||||||
Property and equipment, net | 54,416 | 59,573 | ||||||
Goodwill | 202,980 | 202,980 | ||||||
Intangible assets, net | 12,549 | 14,215 | ||||||
Deferred tax assets | 1,976 | 18,947 | ||||||
Other assets | 23,433 | 26,236 | ||||||
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Total Assets | $ | 1,234,495 | $ | 1,197,557 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Accrued expenses | $ | 58,799 | $ | 72,658 | ||||
Deferred revenue | 114,865 | 89,785 | ||||||
2.25% convertible notes due 2016 | 252,232 | — | ||||||
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Total current liabilities | 425,896 | 162,443 | ||||||
2.25% convertible notes due 2016 | — | 252,232 | ||||||
2.50% convertible notes due 2018 | 400,000 | 400,000 | ||||||
1.50% convertible notes due 2020 | 300,000 | 300,000 | ||||||
Other long-term liabilities | 21,001 | 21,293 | ||||||
Stockholders’ equity | 87,598 | 61,589 | ||||||
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Total Liabilities and Stockholders’ Equity | $ | 1,234,495 | $ | 1,197,557 | ||||
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WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Six Months Ended | ||||||||
June 30, | ||||||||
2015 | 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 23,375 | $ | 15,982 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 15,837 | 14,370 | ||||||
Non-cash interest, net | 2,256 | 2,256 | ||||||
Non-cash stock-based compensation | 15,589 | 16,323 | ||||||
Deferred income taxes | (6,476 | ) | 2,803 | |||||
Gain on investments | (139 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (12,282 | ) | (4,261 | ) | ||||
Prepaid expenses and other, net | (6,130 | ) | (2,668 | ) | ||||
Accrued expenses and other long-term liabilities | (14,465 | ) | (16,015 | ) | ||||
Deferred revenue | 25,080 | 13,188 | ||||||
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Net cash provided by operating activities | 42,645 | 41,978 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from sale of investments | 139 | — | ||||||
Purchases of property and equipment | (8,711 | ) | (11,446 | ) | ||||
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Net cash used in investing activities | (8,572 | ) | (11,446 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options | 11,653 | 30,147 | ||||||
Cash used for withholding taxes due on stock-based awards | (2,960 | ) | (10,339 | ) | ||||
Purchases of treasury stock | (5,351 | ) | (102,353 | ) | ||||
Excess tax benefit on stock-based awards | 13,191 | 8,444 | ||||||
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Net cash provided by (used in) financing activities | 16,533 | (74,101 | ) | |||||
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Net increase (decrease) in cash and cash equivalents | 50,606 | (43,569 | ) | |||||
Cash and cash equivalents at beginning of period | 706,776 | 824,880 | ||||||
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Cash and cash equivalents at end of period | $ | 757,382 | $ | 781,311 | ||||
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WEBMD HEALTH CORP.
NET INCOME PER COMMON SHARE
(In thousands, except per share data, unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Numerator: | ||||||||||||||||
Net income — Basic | $ | 13,371 | $ | 9,716 | $ | 23,375 | $ | 15,982 | ||||||||
Interest expense on 1.50% convertible notes, net of tax | 864 | 864 | 1,728 | 1,728 | ||||||||||||
Interest expense on 2.50% convertible notes, net of tax | 1,797 | — | — | — | ||||||||||||
Interest expense on 2.25% convertible notes, net of tax | 1,103 | — | — | — | ||||||||||||
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Net income — Diluted | $ | 17,135 | $ | 10,580 | $ | 25,103 | $ | 17,710 | ||||||||
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Denominator: | ||||||||||||||||
Weighted-average shares — Basic | 36,705 | 37,819 | 36,549 | 38,543 | ||||||||||||
Stock options and restricted stock | 1,503 | 2,301 | 1,441 | 2,443 | ||||||||||||
1.50% convertible notes | 5,694 | 5,681 | 5,694 | 5,681 | ||||||||||||
2.50% convertible notes | 6,205 | — | — | — | ||||||||||||
2.25% convertible notes | 3,511 | — | — | — | ||||||||||||
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Adjusted weighted-average shares after assumed conversions — Diluted | 53,618 | 45,801 | 43,684 | 46,667 | ||||||||||||
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Net income per common share: | ||||||||||||||||
Basic | $ | 0.36 | $ | 0.26 | $ | 0.64 | $ | 0.41 | ||||||||
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Diluted | $ | 0.32 | $ | 0.23 | $ | 0.57 | $ | 0.38 | ||||||||
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