Exhibit 99.2
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenue | $ | 167,583 | $ | 148,320 | $ | 326,136 | $ | 291,663 | ||||||||
Cost of operations | 65,788 | 60,407 | 128,301 | 118,284 | ||||||||||||
Sales and marketing | 35,614 | 32,570 | 69,370 | 65,046 | ||||||||||||
General and administrative | 23,983 | 23,002 | 47,739 | 44,455 | ||||||||||||
Depreciation and amortization | 7,672 | 7,592 | 15,159 | 15,837 | ||||||||||||
Interest income | 367 | 9 | 573 | 26 | ||||||||||||
Interest expense | 5,265 | 6,171 | 10,365 | 12,343 | ||||||||||||
Gain on investments | — | 139 | — | 139 | ||||||||||||
Other expense | — | 4,100 | — | 4,100 | ||||||||||||
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Income before income tax provision | 29,628 | 14,626 | 55,775 | 31,763 | ||||||||||||
Income tax provision | 11,848 | 1,255 | 22,277 | 8,388 | ||||||||||||
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Net income | $ | 17,780 | $ | 13,371 | $ | 33,498 | $ | 23,375 | ||||||||
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Net income per common share: | ||||||||||||||||
Basic | $ | 0.47 | $ | 0.36 | $ | 0.89 | $ | 0.64 | ||||||||
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Diluted | $ | 0.39 | $ | 0.32 | $ | 0.75 | $ | 0.57 | ||||||||
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Weighted-average shares outstanding used in computing income per common share: | ||||||||||||||||
Basic | 38,041 | 36,705 | 37,654 | 36,549 | ||||||||||||
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Diluted | 51,948 | 53,618 | 52,142 | 43,684 | ||||||||||||
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WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenue | ||||||||||||||||
Advertising and sponsorship | ||||||||||||||||
Biopharma and medical device | $ | 100,620 | $ | 85,977 | $ | 189,305 | $ | 161,822 | ||||||||
OTC, CPG and other | 31,127 | 30,249 | 64,881 | 60,197 | ||||||||||||
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131,747 | 116,226 | 254,186 | 222,019 | |||||||||||||
Health services | 28,632 | 26,441 | 56,887 | 55,763 | ||||||||||||
Information services | 7,204 | 5,653 | 15,063 | 13,881 | ||||||||||||
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$ | 167,583 | $ | 148,320 | $ | 326,136 | $ | 291,663 | |||||||||
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Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a) | $ | 50,070 | $ | 40,549 | $ | 97,126 | $ | 79,467 | ||||||||
Interest, taxes, non-cash and other items (b) | ||||||||||||||||
Interest income | 367 | 9 | 573 | 26 | ||||||||||||
Interest expense | (5,265 | ) | (6,171 | ) | (10,365 | ) | (12,343 | ) | ||||||||
Income tax provision | (11,848 | ) | (1,255 | ) | (22,277 | ) | (8,388 | ) | ||||||||
Depreciation and amortization | (7,672 | ) | (7,592 | ) | (15,159 | ) | (15,837 | ) | ||||||||
Non-cash stock-based compensation | (7,872 | ) | (8,208 | ) | (16,400 | ) | (15,589 | ) | ||||||||
Gain on investments | — | 139 | — | 139 | ||||||||||||
Other expense | — | (4,100 | ) | — | (4,100 | ) | ||||||||||
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Net income | $ | 17,780 | $ | 13,371 | $ | 33,498 | $ | 23,375 | ||||||||
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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)
June 30, 2016 | December 31, 2015 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 69,545 | $ | 641,165 | ||||
Accounts receivable, net | 158,489 | 174,313 | ||||||
Investments | 948,661 | — | ||||||
Prepaid expenses and other current assets | 16,570 | 18,998 | ||||||
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Total current assets | 1,193,265 | 834,476 | ||||||
Property and equipment, net | 87,198 | 81,027 | ||||||
Goodwill | 202,980 | 202,980 | ||||||
Intangible assets, net | 9,334 | 10,894 | ||||||
Deferred tax assets, net | 12,217 | 15,694 | ||||||
Other assets | 10,606 | 10,852 | ||||||
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Total Assets | $ | 1,515,600 | $ | 1,155,923 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Accrued expenses | $ | 65,235 | $ | 80,664 | ||||
Deferred revenue | 117,301 | 102,715 | ||||||
2.25% convertible notes due 2016, net | — | 102,523 | ||||||
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Total current liabilities | 182,536 | 285,902 | ||||||
2.50% convertible notes due 2018, net | 397,174 | 396,281 | ||||||
1.50% convertible notes due 2020, net | 294,849 | 294,266 | ||||||
2.625% convertible notes due 2023, net | 350,369 | — | ||||||
Other long-term liabilities | 23,572 | 23,246 | ||||||
Stockholders’ equity | 267,100 | 156,228 | ||||||
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Total Liabilities and Stockholders’ Equity | $ | 1,515,600 | $ | 1,155,923 | ||||
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WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Six Months Ended June 30, | ||||||||
2016 | 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 33,498 | $ | 23,375 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 15,159 | 15,837 | ||||||
Non-cash interest, net | 1,750 | 2,256 | ||||||
Non-cash stock-based compensation | 16,400 | 15,589 | ||||||
Deferred income taxes | 3,309 | (6,476 | ) | |||||
Gain on investments | — | (139 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 15,824 | (12,282 | ) | |||||
Prepaid expenses and other, net | 785 | (6,130 | ) | |||||
Accrued expenses and other long-term liabilities | (15,152 | ) | (14,465 | ) | ||||
Deferred revenue | 14,586 | 25,080 | ||||||
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Net cash provided by operating activities | 86,159 | 42,645 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (19,858 | ) | (8,711 | ) | ||||
Purchase of investments | (948,078 | ) | — | |||||
Partial redemption of cost-method investment | 526 | — | ||||||
Proceeds from sale of investments | — | 139 | ||||||
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Net cash used in investing activities | (967,410 | ) | (8,572 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options | 49,412 | 11,653 | ||||||
Cash used for withholding taxes due on stock-based awards | (3,810 | ) | (2,960 | ) | ||||
Net proceeds from issuance of convertible notes | 350,254 | — | ||||||
Maturity of convertible notes | (102,682 | ) | — | |||||
Purchases of treasury stock | — | (5,351 | ) | |||||
Excess tax benefit on stock-based awards | 16,457 | 13,191 | ||||||
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Net cash provided by financing activities | 309,631 | 16,533 | ||||||
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Net (decrease) increase in cash and cash equivalents | (571,620 | ) | 50,606 | |||||
Cash and cash equivalents at beginning of period | 641,165 | 706,776 | ||||||
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Cash and cash equivalents at end of period | $ | 69,545 | $ | 757,382 | ||||
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WEBMD HEALTH CORP.
NET INCOME PER COMMON SHARE
(In thousands, except per share data, unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Numerator: | ||||||||||||||||
Net income – Basic | $ | 17,780 | $ | 13,371 | $ | 33,498 | $ | 23,375 | ||||||||
Interest expense on 1.50% convertible notes, net of tax | 878 | 864 | 1,757 | 1,728 | ||||||||||||
Interest expense on 2.50% convertible notes, net of tax | 1,827 | 1,797 | 3,653 | — | ||||||||||||
Interest expense on 2.25% convertible notes, net of tax | — | 1,103 | 457 | — | ||||||||||||
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Net income – Diluted | $ | 20,485 | $ | 17,135 | $ | 39,365 | $ | 25,103 | ||||||||
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Denominator: | ||||||||||||||||
Weighted-average shares – Basic | 38,041 | 36,705 | 37,654 | 36,549 | ||||||||||||
Stock options and restricted stock | 2,008 | 1,503 | 1,882 | 1,441 | ||||||||||||
1.50% convertible notes | 5,694 | 5,694 | 5,694 | 5,694 | ||||||||||||
2.50% convertible notes | 6,205 | 6,205 | 6,205 | — | ||||||||||||
2.25% convertible notes | — | 3,511 | 707 | — | ||||||||||||
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Adjusted weighted-average shares after assumed conversions – Diluted | 51,948 | 53,618 | 52,142 | 43,684 | ||||||||||||
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Net income per common share: | ||||||||||||||||
Basic | $ | 0.47 | $ | 0.36 | $ | 0.89 | $ | 0.64 | ||||||||
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Diluted | $ | 0.39 | $ | 0.32 | $ | 0.75 | $ | 0.57 | ||||||||
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