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, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue | $ | 152,607 | $ | 143,490 | $ | 444,270 | $ | 417,722 | ||||||||
Cost of operations | 59,552 | 56,398 | 177,836 | 163,418 | ||||||||||||
Sales and marketing | 32,850 | 32,950 | 97,896 | 99,182 | ||||||||||||
General and administrative | 22,942 | 23,243 | 67,397 | 69,363 | ||||||||||||
Depreciation and amortization | 7,266 | 7,667 | 23,103 | 22,037 | ||||||||||||
Interest income | 10 | 19 | 36 | 51 | ||||||||||||
Interest expense | 5,681 | 6,171 | 18,024 | 18,515 | ||||||||||||
Loss on convertible notes | 2,058 | — | 2,058 | — | ||||||||||||
Gain on investments | — | — | 139 | — | ||||||||||||
Other expense | — | — | 4,100 | — | ||||||||||||
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Income before income tax provision | 22,268 | 17,080 | 54,031 | 45,258 | ||||||||||||
Income tax provision | 9,080 | 7,275 | 17,468 | 19,471 | ||||||||||||
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Net income | $ | 13,188 | $ | 9,805 | $ | 36,563 | $ | 25,787 | ||||||||
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Net income per common share: | ||||||||||||||||
Basic | $ | 0.36 | $ | 0.26 | $ | 1.00 | $ | 0.67 | ||||||||
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Diluted | $ | 0.32 | $ | 0.23 | $ | 0.89 | $ | 0.61 | ||||||||
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Weighted-average shares outstanding used in computing income per common share: | ||||||||||||||||
Basic | 36,721 | 37,960 | 36,606 | 38,349 | ||||||||||||
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Diluted | 49,958 | 45,757 | 49,912 | 46,364 | ||||||||||||
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WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue | ||||||||||||||||
Advertising and sponsorship | ||||||||||||||||
Biopharma and medical device | $ | 89,870 | $ | 85,118 | $ | 251,692 | $ | 235,587 | ||||||||
OTC, CPG and other | 28,850 | 27,370 | 89,047 | 91,342 | ||||||||||||
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118,720 | 112,488 | 340,739 | 326,929 | |||||||||||||
Private portal services | 27,460 | 25,795 | 83,223 | 74,612 | ||||||||||||
Information services | 6,427 | 5,207 | 20,308 | 16,181 | ||||||||||||
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$ | 152,607 | $ | 143,490 | $ | 444,270 | $ | 417,722 | |||||||||
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Earnings before interest, taxes, non-cash and other items | $ | 46,405 | $ | 39,301 | $ | 125,872 | $ | 110,484 | ||||||||
Interest, taxes, non-cash and other items (b) | ||||||||||||||||
Interest income | 10 | 19 | 36 | 51 | ||||||||||||
Interest expense | (5,681 | ) | (6,171 | ) | (18,024 | ) | (18,515 | ) | ||||||||
Income tax provision | (9,080 | ) | (7,275 | ) | (17,468 | ) | (19,471 | ) | ||||||||
Depreciation and amortization | (7,266 | ) | (7,667 | ) | (23,103 | ) | (22,037 | ) | ||||||||
Non-cash stock-based compensation | (9,142 | ) | (8,402 | ) | (24,731 | ) | (24,725 | ) | ||||||||
Loss on convertible notes | (2,058 | ) | — | (2,058 | ) | — | ||||||||||
Gain on investments | — | — | 139 | — | ||||||||||||
Other expense | — | — | (4,100 | ) | — | |||||||||||
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Net income | $ | 13,188 | $ | 9,805 | $ | 36,563 | $ | 25,787 | ||||||||
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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)
September 30, 2015 | December 31, 2014 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 612,332 | $ | 706,776 | ||||
Accounts receivable, net | 147,007 | 136,806 | ||||||
Prepaid expenses and other current assets | 19,199 | 13,877 | ||||||
Deferred tax assets | 12,627 | 18,147 | ||||||
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Total current assets | 791,165 | 875,606 | ||||||
Property and equipment, net | 64,930 | 59,573 | ||||||
Goodwill | 202,980 | 202,980 | ||||||
Intangible assets, net | 11,716 | 14,215 | ||||||
Deferred tax assets | 2,546 | 18,947 | ||||||
Other assets | 21,585 | 26,236 | ||||||
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Total Assets | $ | 1,094,922 | $ | 1,197,557 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Accrued expenses | $ | 68,317 | $ | 72,658 | ||||
Deferred revenue | 105,065 | 89,785 | ||||||
2.25% convertible notes due 2016 | 102,682 | — | ||||||
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Total current liabilities | 276,064 | 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 | 21,965 | 21,293 | ||||||
Stockholders’ equity | 96,893 | 61,589 | ||||||
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Total Liabilities and Stockholders’ Equity | $ | 1,094,922 | $ | 1,197,557 | ||||
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WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Nine Months Ended September 30, | ||||||||
2015 | 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 36,563 | $ | 25,787 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 23,103 | 22,037 | ||||||
Non-cash interest, net | 3,276 | 3,384 | ||||||
Non-cash stock-based compensation | 24,731 | 24,725 | ||||||
Deferred income taxes | (7,246 | ) | 6,791 | |||||
Loss on convertible notes | 2,058 | — | ||||||
Gain on investments | (139 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (10,201 | ) | 10,784 | |||||
Prepaid expenses and other, net | (5,692 | ) | (2,429 | ) | ||||
Accrued expenses and other long-term liabilities | (4,555 | ) | (9,319 | ) | ||||
Deferred revenue | 15,280 | (901 | ) | |||||
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Net cash provided by operating activities | 77,178 | 80,859 | ||||||
Cash flows from investing activities: | ||||||||
Cash paid in business combination | — | (3,182 | ) | |||||
Proceeds from sale of investments | 139 | — | ||||||
Purchases of property and equipment | (25,638 | ) | (17,964 | ) | ||||
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Net cash used in investing activities | (25,499 | ) | (21,146 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options | 15,185 | 35,857 | ||||||
Cash used for withholding taxes due on stock-based awards | (3,836 | ) | (31,294 | ) | ||||
Repurchase of convertible notes | (151,038 | ) | — | |||||
Repurchase of shares through tender offers | — | (97,560 | ) | |||||
Purchases of treasury stock | (28,406 | ) | (103,602 | ) | ||||
Excess tax benefit on stock-based awards | 21,972 | 11,853 | ||||||
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Net cash used in financing activities | (146,123 | ) | (184,746 | ) | ||||
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Net decrease in cash and cash equivalents | (94,444 | ) | (125,033 | ) | ||||
Cash and cash equivalents at beginning of period | 706,776 | 824,880 | ||||||
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Cash and cash equivalents at end of period | $ | 612,332 | $ | 699,847 | ||||
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WEBMD HEALTH CORP.
NET INCOME PER COMMON SHARE
(In thousands, except per share data, unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Numerator: | ||||||||||||||||
Net income — Basic | $ | 13,188 | $ | 9,805 | $ | 36,563 | $ | 25,787 | ||||||||
Interest expense on 1.50% convertible notes, net of tax | 864 | 864 | 2,592 | 2,592 | ||||||||||||
Interest expense on 2.50% convertible notes, net of tax | 1,797 | — | 5,392 | — | ||||||||||||
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Net income — Diluted | $ | 15,849 | $ | 10,669 | $ | 44,547 | $ | 28,379 | ||||||||
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Denominator: | ||||||||||||||||
Weighted-average shares — Basic | 36,721 | 37,960 | 36,606 | 38,349 | ||||||||||||
Stock options and restricted stock | 1,338 | 2,113 | 1,407 | 2,333 | ||||||||||||
1.50% convertible notes | 5,694 | 5,684 | 5,694 | 5,682 | ||||||||||||
2.50% convertible notes | 6,205 | — | 6,205 | — | ||||||||||||
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Adjusted weighted-average shares after assumed conversions — Diluted | 49,958 | 45,757 | 49,912 | 46,364 | ||||||||||||
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Net income per common share: | ||||||||||||||||
Basic | $ | 0.36 | $ | 0.26 | $ | 1.00 | $ | 0.67 | ||||||||
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Diluted | $ | 0.32 | $ | 0.23 | $ | 0.89 | $ | 0.61 | ||||||||
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