WebMD Health (WBMD) 8-K WebMD Announces Record Fourth Quarter and Full Year 2015 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,
	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		—
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
Income from continuing operations		27,461		15,154		64,024		40,941
Income from discontinued operations, net of tax		—		1,122		—		1,122
Net income	$	27,461	$	16,276	$	64,024	$	42,063
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
Net income	$	0.75	$	0.45	$	1.75	$	1.11
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
Net income	$	0.60	$	0.38	$	1.48	$	1.00
Weighted-average shares outstanding used in computing income per common share:
Basic		36,583		36,427		36,600		37,869
Diluted		51,338		53,082		52,653		45,614

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
		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
	$	192,129		$	162,727		$	636,399		$	580,449
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	)		—
Income from continuing operations		27,461			15,154			64,024			40,941
Income from discontinued operations, net of tax		—			1,122			—			1,122
Net income	$	27,461		$	16,276		$	64,024		$	42,063

(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
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
Total Assets	$	1,165,967	$	1,197,557
Liabilities and Stockholders’ Equity
Accrued expenses	$	80,664	$	72,658
Deferred revenue		102,715		89,785
2.25% convertible notes due 2016		102,682		—
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
Total Liabilities and Stockholders’ Equity	$	1,165,967	$	1,197,557

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
Net cash provided by continuing operations		107,563			113,536
Net cash used in discontinued operations		—			(384	)
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	)
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
Net cash used in financing activities		(124,941	)		(204,880	)
Net decrease in cash and cash equivalents		(65,611	)		(118,104	)
Cash and cash equivalents at beginning of period		706,776			824,880
Cash and cash equivalents at end of period	$	641,165		$	706,776

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		—
Income from continuing operations – Diluted	$	30,571	$	18,918	$	78,129	$	44,397
Income from discontinued operations, net of tax – Basic and Diluted	$	—	$	1,122	$	—	$	1,122
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		—
Adjusted weighted-average shares after assumed conversions – Diluted		51,338		53,082		52,653		45,614
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
Net income	$	0.75	$	0.45	$	1.75	$	1.11
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
Net income	$	0.60	$	0.38	$	1.48	$	1.00