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

Exhibit 99.2

WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data, unaudited)

	Three Months Ended March 31,
	2016		2015
Revenue	$	158,553	$	143,343
Cost of operations		62,513		57,877
Sales and marketing		33,756		32,476
General and administrative		23,756		21,453
Depreciation and amortization		7,487		8,245
Interest income		206		17
Interest expense		5,100		6,172
Income before income tax provision		26,147		17,137
Income tax provision		10,429		7,133
Net income	$	15,718	$	10,004
Net income per common share:
Basic	$	0.42	$	0.27
Diluted	$	0.36	$	0.25
Weighted-average shares outstanding used in computing income per common share:
Basic		37,267		36,393
Diluted		52,335		43,465

WEBMD HEALTH CORP.

CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands, unaudited)

	Three Months Ended March 31,
	2016			2015
Revenue
Advertising and sponsorship
Biopharma and medical device	$	88,685		$	75,845
OTC, CPG and other		33,754			29,948
		122,439			105,793
Private portal services		28,255			29,322
Information services		7,859			8,228
	$	158,553		$	143,343
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	47,056		$	38,918
Interest, taxes, non-cash and other items (b)
Interest income		206			17
Interest expense		(5,100	)		(6,172	)
Income tax provision		(10,429	)		(7,133	)
Depreciation and amortization		(7,487	)		(8,245	)
Non-cash stock-based compensation		(8,528	)		(7,381	)
Net income	$	15,718		$	10,004

(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)

	March 31, 2016		December 31, 2015
	(unaudited)
Assets
Cash and cash equivalents	$	592,871	$	641,165
Accounts receivable, net		177,383		174,313
Prepaid expenses and other current assets		20,505		18,998
Total current assets		790,759		834,476
Property and equipment, net		86,835		81,027
Goodwill		202,980		202,980
Intangible assets, net		10,114		10,894
Deferred tax assets, net		14,591		15,694
Other assets		10,631		10,852
Total Assets	$	1,115,910	$	1,155,923
Liabilities and Stockholders’ Equity
Accrued expenses	$	63,540	$	80,664
Deferred revenue		116,313		102,715
2.25% convertible notes due 2016, net		—		102,523
Total current liabilities		179,853		285,902
2.50% convertible notes due 2018, net		396,727		396,281
1.50% convertible notes due 2020, net		294,558		294,266
Other long-term liabilities		23,909		23,246
Stockholders’ equity		220,863		156,228
Total Liabilities and Stockholders’ Equity	$	1,115,910	$	1,155,923

WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Three Months Ended March 31,
	2016			2015
Cash flows from operating activities:
Net income	$	15,718		$	10,004
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		7,487			8,245
Non-cash interest, net		897			1,128
Non-cash stock-based compensation		8,528			7,381
Deferred income taxes		1,177			(1,535	)
Changes in operating assets and liabilities:
Accounts receivable		(3,070	)		6,425
Prepaid expenses and other, net		1,731			(4,587	)
Accrued expenses and other long-term liabilities		(20,147	)		(17,515	)
Deferred revenue		13,598			14,831
Net cash provided by operating activities		25,919			24,377
Cash flows from investing activities:
Purchases of property and equipment		(9,229	)		(3,670	)
Partial redemption of cost-method investment		526			—
Net cash used in investing activities		(8,703	)		(3,670	)
Cash flows from financing activities:
Proceeds from exercise of stock options		30,165			4,488
Cash used for withholding taxes due on stock-based awards		(890	)		(1,044	)
Maturity of convertible notes		(102,682	)		—
Purchases of treasury stock		—			(3,219	)
Excess tax benefit on stock-based awards		7,897			7,584
Net cash (used in) provided by financing activities		(65,510	)		7,809
Net (decrease) increase in cash and cash equivalents		(48,294	)		28,516
Cash and cash equivalents at beginning of period		641,165			706,776
Cash and cash equivalents at end of period	$	592,871		$	735,292

WEBMD HEALTH CORP.

NET INCOME PER COMMON SHARE

(In thousands, except per share data, unaudited)

	Three Months Ended March 31,
	2016		2015
Numerator:
Net income – Basic	$	15,718	$	10,004
Interest expense on 1.50% convertible notes, net of tax		878		864
Interest expense on 2.50% convertible notes, net of tax		1,827		—
Interest expense on 2.25% convertible notes, net of tax		457		—
Net income – Diluted	$	18,880	$	10,868
Denominator:
Weighted-average shares – Basic		37,267		36,393
Stock options and restricted stock		1,755		1,378
1.50% convertible notes		5,694		5,694
2.50% convertible notes		6,205		—
2.25% convertible notes		1,414		—
Adjusted weighted-average shares after assumed conversions – Diluted		52,335		43,465
Net income per common share:
Basic	$	0.42	$	0.27
Diluted	$	0.36	$	0.25