Exhibit 99.2
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
| | | | | | | | |
| | Three Months Ended | |
| | March 31, | |
| | 2017 | | | 2016 | |
Revenue | | $ | 154,058 | | | $ | 158,553 | |
Cost of operations | | | 63,501 | | | | 62,513 | |
Sales and marketing | | | 36,008 | | | | 33,756 | |
General and administrative | | | 22,619 | | | | 23,756 | |
Depreciation and amortization | | | 7,061 | | | | 7,487 | |
Interest income | | | 1,953 | | | | 206 | |
Interest expense | | | 7,066 | | | | 5,100 | |
Other expense | | | 262 | | | | — | |
| | | | | | | | |
Income before income tax provision | | | 19,494 | | | | 26,147 | |
Income tax provision | | | 7,161 | | | | 10,429 | |
| | | | | | | | |
Net income | | $ | 12,333 | | | $ | 15,718 | |
| | | | | | | | |
| | |
Net income per common share: | | | | | | | | |
Basic | | $ | 0.33 | | | $ | 0.42 | |
| | | | | | | | |
Diluted | | $ | 0.30 | | | $ | 0.36 | |
| | | | | | | | |
| | |
Weighted-average shares outstanding used in computing income per common share: | | | | | | | | |
Basic | | | 36,866 | | | | 37,267 | |
| | | | | | | | |
Diluted | | | 49,828 | | | | 52,335 | |
| | | | | | | | |
WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
| | | | | | | | |
| | Three Months Ended | |
| | March 31, | |
| | 2017 | | | 2016 | |
Revenue | | | | | | | | |
Advertising and sponsorship | | | | | | | | |
Biopharma and medical device | | $ | 89,480 | | | $ | 88,685 | |
OTC, CPG and other | | | 31,998 | | | | 33,754 | |
| | | | | | | | |
| | | 121,478 | | | | 122,439 | |
Health services | | | 24,539 | | | | 28,255 | |
Information services | | | 8,041 | | | | 7,859 | |
| | | | | | | | |
| | $ | 154,058 | | | $ | 158,553 | |
| | | | | | | | |
| | |
Net income | | $ | 12,333 | | | $ | 15,718 | |
| | | | | | | | |
Interest, taxes,non-cash and other items (a) | | | | | | | | |
Interest income | | | (1,953 | ) | | | (206 | ) |
Interest expense | | | 7,066 | | | | 5,100 | |
Income tax provision | | | 7,161 | | | | 10,429 | |
Depreciation and amortization | | | 7,061 | | | | 7,487 | |
Non-cash stock-based compensation | | | 9,023 | | | | 8,528 | |
Other expense | | | 262 | | | | — | |
| | | | | | | | |
Earnings before interest, taxes,non-cash and other items (“Adjusted EBITDA”) (b) | | $ | 40,953 | | | $ | 47,056 | |
| | | | | | | | |
(a) | Reconciliation of net income to Adjusted EBITDA. |
(b) | See AnnexA-Explanation ofNon-GAAP Financial Measures. |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| | | | | | | | |
| | March 31, | | | December 31, | |
| | 2017 | | | 2016 | |
| | (unaudited) | | | | |
Assets | | | | | | | | |
Cash and cash equivalents | | $ | 88,567 | | | $ | 492,424 | |
Accounts receivable, net | | | 158,228 | | | | 179,454 | |
Investments | | | 945,885 | | | | 498,500 | |
Prepaid expenses and other current assets | | | 21,381 | | | | 15,294 | |
| | | | | | | | |
Total current assets | | | 1,214,061 | | | | 1,185,672 | |
| | |
Property and equipment, net | | | 81,870 | | | | 83,296 | |
Goodwill | | | 202,980 | | | | 202,980 | |
Intangible assets, net | | | 7,124 | | | | 7,774 | |
Deferred tax assets, net | | | 212,690 | | | | 14,544 | |
Other assets | | | 7,382 | | | | 6,920 | |
| | | | | | | | |
Total Assets | | $ | 1,726,107 | | | $ | 1,501,186 | |
| | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | |
Accrued expenses | | $ | 56,082 | | | $ | 78,597 | |
Deferred revenue | | | 123,411 | | | | 105,310 | |
2.50% convertible notes due 2018, net | | | 398,512 | | | | — | |
| | | | | | | | |
Total current liabilities | | | 578,005 | | | | 183,907 | |
| | |
2.50% convertible notes due 2018, net | | | — | | | | 398,066 | |
1.50% convertible notes due 2020, net | | | 295,724 | | | | 295,432 | |
2.625% convertible notes due 2023, net | | | 351,531 | | | | 351,190 | |
Other long-term liabilities | | | 28,067 | | | | 28,731 | |
| | |
Stockholders’ equity | | | 472,780 | | | | 243,860 | |
| | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 1,726,107 | | | $ | 1,501,186 | |
| | | | | | | | |
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
| | | | | | | | |
| | Three Months Ended | |
| | March 31, | |
| | 2017 | | | 2016 | |
Cash flows from operating activities: | | | | | | | | |
Net income | | $ | 12,333 | | | $ | 15,718 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
Depreciation and amortization | | | 7,061 | | | | 7,487 | |
Non-cash interest, net | | | 1,079 | | | | 897 | |
Non-cash stock-based compensation | | | 9,023 | | | | 8,528 | |
Deferred income taxes | | | 6,621 | | | | 9,074 | |
Changes in operating assets and liabilities: | | | | | | | | |
Accounts receivable | | | 21,226 | | | | (3,070 | ) |
Prepaid expenses and other, net | | | (7,850 | ) | | | 1,731 | |
Accrued expenses and other long-term liabilities | | | (22,722 | ) | | | (20,147 | ) |
Deferred revenue | | | 18,101 | | | | 13,598 | |
| | | | | | | | |
Net cash provided by operating activities | | | 44,872 | | | | 33,816 | |
| | |
Cash flows from investing activities: | | | | | | | | |
Purchases of property and equipment | | | (5,427 | ) | | | (9,229 | ) |
Purchases of investments | | | (446,042 | ) | | | — | |
Partial redemption of cost-method investment | | | — | | | | 526 | |
| | | | | | | | |
Net cash used in investing activities | | | (451,469 | ) | | | (8,703 | ) |
| | |
Cash flows from financing activities: | | | | | | | | |
Proceeds from exercise of stock options | | | 6,604 | | | | 30,165 | |
Cash used for withholding taxes due on stock-based awards | | | (3,864 | ) | | | (890 | ) |
Maturity of convertible notes | | | — | | | | (102,682 | ) |
| | | | | | | | |
Net cash provided by (used in) financing activities | | | 2,740 | | | | (73,407 | ) |
| | | | | | | | |
Net decrease in cash and cash equivalents | | | (403,857 | ) | | | (48,294 | ) |
Cash and cash equivalents at beginning of period | | | 492,424 | | | | 641,165 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 88,567 | | | $ | 592,871 | |
| | | | | | | | |
WEBMD HEALTH CORP.
NET INCOME PER COMMON SHARE
(In thousands, except per share data, unaudited)
| | | | | | | | |
| | Three Months Ended | |
| | March 31, | |
| | 2017 | | | 2016 | |
Numerator: | | | | | | | | |
Net income – Basic | | $ | 12,333 | | | $ | 15,718 | |
Interest expense on 1.50% convertible notes, net of tax | | | 878 | | | | 878 | |
Interest expense on 2.50% convertible notes, net of tax | | | 1,827 | | | | 1,827 | |
Interest expense on 2.25% convertible notes, net of tax | | | — | | | | 457 | |
| | | | | | | | |
Net income – Diluted | | $ | 15,038 | | | $ | 18,880 | |
| | | | | | | | |
| | |
Denominator: | | | | | | | | |
Weighted-average shares – Basic | | | 36,866 | | | | 37,267 | |
Stock options and restricted stock | | | 1,007 | | | | 1,755 | |
1.50% convertible notes | | | 5,721 | | | | 5,694 | |
2.50% convertible notes | | | 6,234 | | | | 6,205 | |
2.25% convertible notes | | | — | | | | 1,414 | |
| | | | | | | | |
Adjusted weighted-average shares after assumed conversions – Diluted | | | 49,828 | | | | 52,335 | |
| | | | | | | | |
Net income per common share: | | | | | | | | |
Basic | | $ | 0.33 | | | $ | 0.42 | |
| | | | | | | | |
Diluted | | $ | 0.30 | | | $ | 0.36 | |
| | | | | | | | |