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, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue | $ | 192,129 | $ | 162,727 | $ | 636,399 | $ | 580,449 | ||||||||
Cost of operations | 69,475 | 60,676 | 247,311 | 224,094 | ||||||||||||
Sales and marketing | 40,129 | 36,978 | 138,025 | 136,160 | ||||||||||||
General and administrative | 24,183 | 24,756 | 91,580 | 94,119 | ||||||||||||
Depreciation and amortization | 7,418 | 7,774 | 30,521 | 29,811 | ||||||||||||
Interest income | 15 | 18 | 51 | 69 | ||||||||||||
Interest expense | 5,099 | 6,171 | 23,123 | 24,686 | ||||||||||||
Loss on convertible notes | — | — | 2,058 | — | ||||||||||||
Gain on investments | — | — | 139 | — | ||||||||||||
Other expense | — | — | 4,100 | — | ||||||||||||
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Income from continuing operations before income tax provision | 45,840 | 26,390 | 99,871 | 71,648 | ||||||||||||
Income tax provision | 18,379 | 11,236 | 35,847 | 30,707 | ||||||||||||
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Income from continuing operations | 27,461 | 15,154 | 64,024 | 40,941 | ||||||||||||
Income from discontinued operations, net of tax | — | 1,122 | — | 1,122 | ||||||||||||
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Net income | $ | 27,461 | $ | 16,276 | $ | 64,024 | $ | 42,063 | ||||||||
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Basic income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.75 | $ | 0.42 | $ | 1.75 | $ | 1.08 | ||||||||
Income from discontinued operations | — | 0.03 | — | 0.03 | ||||||||||||
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Net income | $ | 0.75 | $ | 0.45 | $ | 1.75 | $ | 1.11 | ||||||||
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Diluted income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.60 | $ | 0.36 | $ | 1.48 | $ | 0.97 | ||||||||
Income from discontinued operations | — | 0.02 | — | 0.03 | ||||||||||||
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Net income | $ | 0.60 | $ | 0.38 | $ | 1.48 | $ | 1.00 | ||||||||
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Weighted-average shares outstanding used in computing income per common share: | ||||||||||||||||
Basic | 36,583 | 36,427 | 36,600 | 37,869 | ||||||||||||
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Diluted | 51,338 | 53,082 | 52,653 | 45,614 | ||||||||||||
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WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue | ||||||||||||||||
Advertising and sponsorship | ||||||||||||||||
Biopharma and medical device | $ | 119,528 | $ | 93,742 | $ | 371,220 | $ | 329,329 | ||||||||
OTC, CPG and other | 38,758 | 33,294 | 127,805 | 124,636 | ||||||||||||
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158,286 | 127,036 | 499,025 | 453,965 | |||||||||||||
Private portal services | 27,218 | 28,570 | 110,441 | 103,182 | ||||||||||||
Information services | 6,625 | 7,121 | 26,933 | 23,302 | ||||||||||||
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$ | 192,129 | $ | 162,727 | $ | 636,399 | $ | 580,449 | |||||||||
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Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a) | $ | 67,354 | $ | 48,138 | $ | 193,226 | $ | 158,622 | ||||||||
Interest, taxes, non-cash and other items (b) | ||||||||||||||||
Interest income | 15 | 18 | 51 | 69 | ||||||||||||
Interest expense | (5,099 | ) | (6,171 | ) | (23,123 | ) | (24,686 | ) | ||||||||
Income tax provision | (18,379 | ) | (11,236 | ) | (35,847 | ) | (30,707 | ) | ||||||||
Depreciation and amortization | (7,418 | ) | (7,774 | ) | (30,521 | ) | (29,811 | ) | ||||||||
Non-cash stock-based compensation | (9,012 | ) | (7,821 | ) | (33,743 | ) | (32,546 | ) | ||||||||
Loss on convertible notes | — | — | (2,058 | ) | — | |||||||||||
Gain on investments | — | — | 139 | — | ||||||||||||
Other expense | — | — | (4,100 | ) | — | |||||||||||
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Income from continuing operations | 27,461 | 15,154 | 64,024 | 40,941 | ||||||||||||
Income from discontinued operations, net of tax | — | 1,122 | — | 1,122 | ||||||||||||
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Net income | $ | 27,461 | $ | 16,276 | $ | 64,024 | $ | 42,063 | ||||||||
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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)
December 31, | ||||||||
2015 | 2014 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 641,165 | $ | 706,776 | ||||
Accounts receivable, net | 174,313 | 136,806 | ||||||
Prepaid expenses and other current assets | 18,998 | 13,877 | ||||||
Deferred tax assets | 16,126 | 18,147 | ||||||
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Total current assets | 850,602 | 875,606 | ||||||
Property and equipment, net | 81,027 | 59,573 | ||||||
Goodwill | 202,980 | 202,980 | ||||||
Intangible assets, net | 10,894 | 14,215 | ||||||
Deferred tax assets | — | 18,947 | ||||||
Other assets | 20,464 | 26,236 | ||||||
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Total Assets | $ | 1,165,967 | $ | 1,197,557 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Accrued expenses | $ | 80,664 | $ | 72,658 | ||||
Deferred revenue | 102,715 | 89,785 | ||||||
2.25% convertible notes due 2016 | 102,682 | — | ||||||
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Total current liabilities | 286,061 | 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 | 23,678 | 21,293 | ||||||
Stockholders’ equity | 156,228 | 61,589 | ||||||
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Total Liabilities and Stockholders’ Equity | $ | 1,165,967 | $ | 1,197,557 | ||||
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WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Years Ended December 31, | ||||||||
2015 | 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 64,024 | $ | 42,063 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Income from discontinued operations, net of tax | — | (1,122 | ) | |||||
Depreciation and amortization | 30,521 | 29,811 | ||||||
Non-cash interest, net | 4,172 | 4,511 | ||||||
Non-cash stock-based compensation | 33,743 | 32,546 | ||||||
Deferred income taxes | (7,713 | ) | 14,717 | |||||
Loss on convertible notes | 2,058 | — | ||||||
Gain on investments | (139 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (37,507 | ) | (12,574 | ) | ||||
Prepaid expenses and other, net | (4,132 | ) | (673 | ) | ||||
Accrued expenses and other long-term liabilities | 9,606 | (380 | ) | |||||
Deferred revenue | 12,930 | 4,637 | ||||||
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Net cash provided by continuing operations | 107,563 | 113,536 | ||||||
Net cash used in discontinued operations | — | (384 | ) | |||||
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Net cash provided by operating activities | 107,563 | 113,152 | ||||||
Cash flows from investing activities: | ||||||||
Cash paid in business combination | — | (3,182 | ) | |||||
Proceeds from sale of investments | 139 | — | ||||||
Purchases of property and equipment | (48,372 | ) | (23,194 | ) | ||||
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Net cash used in investing activities | (48,233 | ) | (26,376 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options | 21,939 | 40,602 | ||||||
Cash used for withholding taxes due on stock-based awards | (6,438 | ) | (33,385 | ) | ||||
Repurchase of convertible notes | (151,038 | ) | — | |||||
Repurchase of shares through tender offers | — | (97,588 | ) | |||||
Purchases of treasury stock | (28,406 | ) | (128,748 | ) | ||||
Excess tax benefit on stock-based awards | 39,002 | 14,239 | ||||||
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Net cash used in financing activities | (124,941 | ) | (204,880 | ) | ||||
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Net decrease in cash and cash equivalents | (65,611 | ) | (118,104 | ) | ||||
Cash and cash equivalents at beginning of period | 706,776 | 824,880 | ||||||
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Cash and cash equivalents at end of period | $ | 641,165 | $ | 706,776 | ||||
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WEBMD HEALTH CORP.
NET INCOME PER COMMON SHARE
(In thousands, except per share data, unaudited)
Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Numerator: | ||||||||||||||||
Income from continuing operations – Basic | $ | 27,461 | $ | 15,154 | $ | 64,024 | $ | 40,941 | ||||||||
Interest expense on 1.50% convertible notes, net of tax | 864 | 864 | 3,456 | 3,456 | ||||||||||||
Interest expense on 2.50% convertible notes, net of tax | 1,797 | 1,797 | 7,189 | — | ||||||||||||
Interest expense on 2.25% convertible notes, net of tax | 449 | 1,103 | 3,460 | — | ||||||||||||
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Income from continuing operations – Diluted | $ | 30,571 | $ | 18,918 | $ | 78,129 | $ | 44,397 | ||||||||
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Income from discontinued operations, net of tax – Basic and Diluted | $ | — | $ | 1,122 | $ | — | $ | 1,122 | ||||||||
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Denominator: | ||||||||||||||||
Weighted-average shares – Basic | 36,583 | 36,427 | 36,600 | 37,869 | ||||||||||||
Stock options and restricted stock | 1,427 | 1,245 | 1,412 | 2,060 | ||||||||||||
1.50% convertible notes | 5,694 | 5,694 | 5,694 | 5,685 | ||||||||||||
2.50% convertible notes | 6,205 | 6,205 | 6,205 | — | ||||||||||||
2.25% convertible notes | 1,429 | 3,511 | 2,742 | — | ||||||||||||
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Adjusted weighted-average shares after assumed conversions – Diluted | 51,338 | 53,082 | 52,653 | 45,614 | ||||||||||||
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Basic income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.75 | $ | 0.42 | $ | 1.75 | $ | 1.08 | ||||||||
Income from discontinued operations | — | 0.03 | — | 0.03 | ||||||||||||
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Net income | $ | 0.75 | $ | 0.45 | $ | 1.75 | $ | 1.11 | ||||||||
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Diluted income per common share: | ||||||||||||||||
Income from continuing operations | $ | 0.60 | $ | 0.36 | $ | 1.48 | $ | 0.97 | ||||||||
Income from discontinued operations | — | 0.02 | — | 0.03 | ||||||||||||
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Net income | $ | 0.60 | $ | 0.38 | $ | 1.48 | $ | 1.00 | ||||||||
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