WebMD Health (WBMD) 8-K WebMD Announces Second Quarter Financial Results

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		—
Income before income tax provision		14,626		17,087		31,763		28,178
Income tax provision		1,255		7,371		8,388		12,196
Net income	$	13,371	$	9,716	$	23,375	$	15,982
Net income per common share:
Basic	$	0.36	$	0.26	$	0.64	$	0.41
Diluted	$	0.32	$	0.23	$	0.57	$	0.38
Weighted-average shares outstanding used in computing income per common share:
Basic		36,705		37,819		36,549		38,543
Diluted		53,618		45,801		43,684		46,667

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
		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
	$	148,320		$	140,400		$	291,663		$	274,232
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	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	)		—
Net income	$	13,371		$	9,716		$	23,375		$	15,982

(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
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
Total Assets	$	1,234,495	$	1,197,557
Liabilities and Stockholders’ Equity
Accrued expenses	$	58,799	$	72,658
Deferred revenue		114,865		89,785
2.25% convertible notes due 2016		252,232		—
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
Total Liabilities and Stockholders’ Equity	$	1,234,495	$	1,197,557

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
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	)
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
Net cash provided by (used in) financing activities		16,533			(74,101	)
Net increase (decrease) in cash and cash equivalents		50,606			(43,569	)
Cash and cash equivalents at beginning of period		706,776			824,880
Cash and cash equivalents at end of period	$	757,382		$	781,311

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		—		—		—
Net income — Diluted	$	17,135	$	10,580	$	25,103	$	17,710
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		—		—		—
Adjusted weighted-average shares after assumed conversions — Diluted		53,618		45,801		43,684		46,667
Net income per common share:
Basic	$	0.36	$	0.26	$	0.64	$	0.41
Diluted	$	0.32	$	0.23	$	0.57	$	0.38