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 | — | ||||||
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Income before income tax provision | 19,494 | 26,147 | ||||||
Income tax provision | 7,161 | 10,429 | ||||||
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Net income | $ | 12,333 | $ | 15,718 | ||||
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Net income per common share: | ||||||||
Basic | $ | 0.33 | $ | 0.42 | ||||
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Diluted | $ | 0.30 | $ | 0.36 | ||||
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Weighted-average shares outstanding used in computing income per common share: | ||||||||
Basic | 36,866 | 37,267 | ||||||
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Diluted | 49,828 | 52,335 | ||||||
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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 | ||||||
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121,478 | 122,439 | |||||||
Health services | 24,539 | 28,255 | ||||||
Information services | 8,041 | 7,859 | ||||||
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$ | 154,058 | $ | 158,553 | |||||
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Net income | $ | 12,333 | $ | 15,718 | ||||
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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 | — | ||||||
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Earnings before interest, taxes,non-cash and other items (“Adjusted EBITDA”) (b) | $ | 40,953 | $ | 47,056 | ||||
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(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 | ||||||
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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 | ||||||
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Total Assets | $ | 1,726,107 | $ | 1,501,186 | ||||
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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 | — | ||||||
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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 | ||||||
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Total Liabilities and Stockholders’ Equity | $ | 1,726,107 | $ | 1,501,186 | ||||
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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 | ||||||
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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 | ||||||
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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 | ) | |||||
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Net cash provided by (used in) financing activities | 2,740 | (73,407 | ) | |||||
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Net decrease in cash and cash equivalents | (403,857 | ) | (48,294 | ) | ||||
Cash and cash equivalents at beginning of period | 492,424 | 641,165 | ||||||
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Cash and cash equivalents at end of period | $ | 88,567 | $ | 592,871 | ||||
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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 | ||||||
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Net income – Diluted | $ | 15,038 | $ | 18,880 | ||||
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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 | ||||||
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Adjusted weighted-average shares after assumed conversions – Diluted | 49,828 | 52,335 | ||||||
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Net income per common share: | ||||||||
Basic | $ | 0.33 | $ | 0.42 | ||||
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Diluted | $ | 0.30 | $ | 0.36 | ||||
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