Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K/A - WebMD Health Corp. | g22077e8vkza.htm |
| EX-99.4 - EX-99.4 - WebMD Health Corp. | g22077exv99w4.htm |
TABLE OF CONTENTS
Table of Contents
Exhibit 99.3
WEBMD
HEALTH CORP.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
Nine Months Ended |
Years Ended December 31, | |||||||||||
| September 30, 2009 | 2008 | 2007 | ||||||||||
| (In thousands, except per share data, unaudited) | ||||||||||||
|
Revenue
|
$ | 300,463 | $ | 373,462 | $ | 319,232 | ||||||
|
Cost of operations
|
117,759 | 135,138 | 114,000 | |||||||||
|
Sales and marketing
|
80,623 | 106,080 | 91,035 | |||||||||
|
General and administrative
|
65,818 | 88,053 | 102,661 | |||||||||
|
Depreciation and amortization
|
21,193 | 28,410 | 27,808 | |||||||||
|
Interest income
|
6,060 | 35,300 | 42,035 | |||||||||
|
Interest expense
|
17,858 | 26,428 | 25,887 | |||||||||
|
Gain on repurchases of convertible notes
|
10,120 | — | — | |||||||||
|
Restructuring
|
— | 7,416 | — | |||||||||
|
Gain on sale of EBS Master LLC
|
— | 538,024 | — | |||||||||
|
Impairment of auction rate securities
|
— | 60,108 | — | |||||||||
|
Other (expense) income, net
|
(944 | ) | (5,949 | ) | 3,805 | |||||||
|
Income from continuing operations before income tax provision
(benefit)
|
12,448 | 489,204 | 3,681 | |||||||||
|
Income tax provision (benefit)
|
4,922 | 26,638 | (9,053 | ) | ||||||||
|
Equity in earnings of EBS Master LLC
|
— | 4,007 | 28,566 | |||||||||
|
Consolidated income from continuing operations
|
7,526 | 466,573 | 41,300 | |||||||||
|
Consolidated income (loss) from discontinued operations, net of
tax
|
14,695 | 94,682 | (18,048 | ) | ||||||||
|
Consolidated net income inclusive of noncontrolling interest
|
22,221 | 561,255 | 23,252 | |||||||||
|
Income attributable to noncontrolling interest
|
(3,181 | ) | (1,032 | ) | (10,667 | ) | ||||||
|
Net income attributable to Company stockholders
|
$ | 19,040 | $ | 560,223 | $ | 12,585 | ||||||
|
Amounts attributable to Company stockholders:
|
||||||||||||
|
Income from continuing operations
|
$ | 3,381 | $ | 465,725 | $ | 31,845 | ||||||
|
Income (loss) from discontinued operations
|
15,659 | 94,498 | (19,260 | ) | ||||||||
|
Net income attributable to Company stockholders
|
$ | 19,040 | $ | 560,223 | $ | 12,585 | ||||||
|
Basic income per common share:
|
||||||||||||
|
Income from continuing operations
|
$ | 0.07 | $ | 5.99 | $ | 0.40 | ||||||
|
Income (loss) from discontinued operations
|
0.34 | 1.22 | (0.24 | ) | ||||||||
|
Net income attributable to Company stockholders
|
$ | 0.41 | $ | 7.21 | $ | 0.16 | ||||||
|
Diluted income per common share:
|
||||||||||||
|
Income from continuing operations
|
$ | 0.06 | $ | 4.92 | $ | 0.36 | ||||||
|
Income (loss) from discontinued operations
|
0.33 | 0.96 | (0.23 | ) | ||||||||
|
Net income attributable to Company stockholders
|
$ | 0.39 | $ | 5.88 | $ | 0.13 | ||||||
|
Weighted-average shares outstanding used in computing income per
common share:
|
||||||||||||
|
Basic
|
45,637 | 77,738 | 79,694 | |||||||||
|
Diluted
|
47,167 | 97,824 | 83,886 | |||||||||
Weighted-average shares outstanding used in computing income per
common share have been adjusted by multiplying the historical
weighted-average shares outstanding for HLTH Corporation, for
the respective periods, by the 0.4444 exchange ratio in the
Merger. Additionally, basic and diluted income per common share
have been recalculated to reflect the adjusted weighted-average
shares outstanding for all periods presented.
1
Table of Contents
WEBMD
HEALTH CORP.
CONSOLIDATED
STATEMENTS OF OPERATIONS
| Three Months Ended | ||||||||||||||||||||||||||||
|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||||||||||||||||||||||
| 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 | ||||||||||||||||||||||
| (In thousands, except per share data, unaudited) | ||||||||||||||||||||||||||||
|
Revenue
|
$ | 111,568 | $ | 98,631 | $ | 90,264 | $ | 110,071 | $ | 96,777 | $ | 85,964 | $ | 80,650 | ||||||||||||||
|
Cost of operations
|
41,965 | 39,229 | 36,565 | 38,018 | 34,225 | 31,968 | 30,927 | |||||||||||||||||||||
|
Sales and marketing
|
26,265 | 26,797 | 27,561 | 30,012 | 26,021 | 24,898 | 25,149 | |||||||||||||||||||||
|
General and administrative
|
21,967 | 22,003 | 21,848 | 21,933 | 22,493 | 22,778 | 20,849 | |||||||||||||||||||||
|
Depreciation and amortization
|
7,134 | 6,956 | 7,103 | 7,233 | 7,188 | 7,214 | 6,775 | |||||||||||||||||||||
|
Interest income
|
1,840 | 1,958 | 2,262 | 5,916 | 9,386 | 8,062 | 11,936 | |||||||||||||||||||||
|
Interest expense
|
5,541 | 5,781 | 6,536 | 6,682 | 6,636 | 6,585 | 6,525 | |||||||||||||||||||||
|
Gain on repurchases of convertible notes
|
— | 3,473 | 6,647 | — | — | — | — | |||||||||||||||||||||
|
Restructuring
|
— | — | — | 7,416 | — | — | — | |||||||||||||||||||||
|
Gain on sale of EBS Master LLC
|
— | — | — | — | — | — | 538,024 | |||||||||||||||||||||
|
Impairment of auction rate securities
|
— | — | — | — | — | — | 60,108 | |||||||||||||||||||||
|
Other expense, net
|
(123 | ) | (552 | ) | (269 | ) | (142 | ) | (997 | ) | (666 | ) | (4,144 | ) | ||||||||||||||
|
Income from continuing operations before income tax provision
|
10,413 | 2,744 | (709 | ) | 4,551 | 8,603 | (83 | ) | 476,133 | |||||||||||||||||||
|
Income tax provision (benefit)
|
5,389 | 750 | (1,217 | ) | (3,026 | ) | 3,493 | 569 | 25,602 | |||||||||||||||||||
|
Equity in earnings of EBS Master LLC
|
— | — | — | — | — | — | 4,007 | |||||||||||||||||||||
|
Consolidated income (loss) from continuing operations
|
5,024 | 1,994 | 508 | 7,577 | 5,110 | (652 | ) | 454,538 | ||||||||||||||||||||
|
Consolidated income (loss) from discontinued operations, net of
tax
|
27,462 | (13,284 | ) | 517 | 2,041 | 92,647 | (3,063 | ) | 3,057 | |||||||||||||||||||
|
Consolidated net income (loss) inclusive of noncontrolling
interest
|
32,486 | (11,290 | ) | 1,025 | 9,618 | 97,757 | (3,715 | ) | 457,595 | |||||||||||||||||||
|
(Income) loss attributable to noncontrolling interest
|
(2,184 | ) | (387 | ) | (610 | ) | (1,961 | ) | (1,845 | ) | (1,071 | ) | 3,845 | |||||||||||||||
|
Net income (loss) attributable to Company stockholders
|
$ | 30,302 | $ | (11,677 | ) | $ | 415 | $ | 7,657 | $ | 95,912 | $ | (4,786 | ) | $ | 461,440 | ||||||||||||
|
Amounts attributable to Company stockholders:
|
||||||||||||||||||||||||||||
|
Income (loss) from continuing operations
|
$ | 2,872 | $ | 703 | $ | (194 | ) | $ | 5,611 | $ | 3,403 | $ | (1,611 | ) | $ | 458,322 | ||||||||||||
|
Income (loss) from discontinued operations
|
27,430 | (12,380 | ) | 609 | 2,046 | 92,509 | (3,175 | ) | 3,118 | |||||||||||||||||||
|
Net income attributable to Company stockholders
|
$ | 30,302 | $ | (11,677 | ) | $ | 415 | $ | 7,657 | $ | 95,912 | $ | (4,786 | ) | $ | 461,440 | ||||||||||||
|
Basic income (loss) per common share:
|
||||||||||||||||||||||||||||
|
Income (loss) from continuing operations
|
$ | 0.06 | $ | 0.02 | $ | (0.00 | ) | $ | 0.08 | $ | 0.04 | $ | (0.02 | ) | $ | 5.66 | ||||||||||||
|
Income (loss) from discontinued operations
|
0.59 | (0.28 | ) | 0.01 | 0.03 | 1.13 | (0.04 | ) | 0.04 | |||||||||||||||||||
|
Net income (loss) attributable to Company stockholders
|
$ | 0.65 | $ | (0.26 | ) | $ | 0.01 | $ | 0.11 | $ | 1.17 | $ | (0.06 | ) | $ | 5.70 | ||||||||||||
|
Diluted income (loss) per common share:
|
||||||||||||||||||||||||||||
|
Income (loss) from continuing operations
|
$ | 0.05 | $ | 0.01 | $ | (0.00 | ) | $ | 0.08 | $ | 0.04 | $ | (0.02 | ) | $ | 4.56 | ||||||||||||
|
Income (loss) from discontinued operations
|
0.56 | (0.26 | ) | 0.01 | 0.03 | 1.11 | (0.04 | ) | 0.03 | |||||||||||||||||||
|
Net income (loss) attributable to Company stockholders
|
$ | 0.61 | $ | (0.25 | ) | $ | 0.01 | $ | 0.11 | $ | 1.15 | $ | (0.06 | ) | $ | 4.59 | ||||||||||||
|
Weighted-average shares outstanding used in computing income
(loss) per common share:
|
||||||||||||||||||||||||||||
|
Basic
|
46,096 | 45,599 | 45,217 | 67,193 | 81,644 | 81,157 | 80,959 | |||||||||||||||||||||
|
Diluted
|
48,609 | 46,733 | 45,217 | 67,785 | 83,337 | 82,766 | 101,394 | |||||||||||||||||||||
Weighted-average shares outstanding used in computing income per
common share have been adjusted by multiplying the historical
weighted-average shares outstanding for HLTH Corporation, for
the respective periods, by the 0.4444 exchange ratio in the
Merger. Additionally, basic and diluted income per common share
have been recalculated to reflect the adjusted weighted-average
shares outstanding for all periods presented.
2
Table of Contents
WEBMD
HEALTH CORP.
CONSOLIDATED
SUPPLEMENTAL FINANCIAL INFORMATION
|
Nine Months Ended |
Years Ended |
|||||||||||
|
September 30, |
December 31, | |||||||||||
| 2009 | 2008 | 2007 | ||||||||||
| (In thousands, unaudited) | ||||||||||||
|
Revenue
|
||||||||||||
|
Public portal advertising and sponsorship
|
$ | 232,695 | $ | 284,416 | $ | 238,022 | ||||||
|
Private portal services
|
67,768 | 89,046 | 81,210 | |||||||||
| $ | 300,463 | $ | 373,462 | $ | 319,232 | |||||||
|
Earnings before interest, taxes, non-cash and other items
(“Adjusted EBITDA”)(a)
|
$ | 65,846 | $ | 74,255 | $ | 54,969 | ||||||
|
Interest, taxes, non-cash and other items(b)
|
||||||||||||
|
Interest income
|
6,060 | 35,300 | 42,035 | |||||||||
|
Interest expense
|
(17,858 | ) | (26,428 | ) | (25,887 | ) | ||||||
|
Income tax (provision) benefit
|
(4,922 | ) | (26,638 | ) | 9,053 | |||||||
|
Depreciation and amortization
|
(21,193 | ) | (28,410 | ) | (27,808 | ) | ||||||
|
Non-cash stock-based compensation
|
(27,783 | ) | (24,632 | ) | (32,336 | ) | ||||||
|
Non-cash advertising
|
(1,753 | ) | (5,097 | ) | (5,264 | ) | ||||||
|
Gain on repurchases of convertible notes
|
10,120 | — | — | |||||||||
|
Equity in earnings of EBS Master LLC
|
— | 4,007 | 28,566 | |||||||||
|
Gain on sale of EBS Master LLC
|
— | 538,024 | — | |||||||||
|
Impairment of auction rate securities
|
— | (60,108 | ) | — | ||||||||
|
Restructuring
|
— | (7,416 | ) | — | ||||||||
|
Other expense, net
|
(991 | ) | (6,284 | ) | (2,028 | ) | ||||||
|
Consolidated income from continuing operations
|
7,526 | 466,573 | 41,300 | |||||||||
|
Consolidated income (loss) from discontinued operations, net of
tax
|
14,695 | 94,682 | (18,048 | ) | ||||||||
|
Consolidated net income inclusive of noncontrolling interest
|
22,221 | 561,255 | 23,252 | |||||||||
|
Income attributable to noncontrolling interest
|
(3,181 | ) | (1,032 | ) | (10,667 | ) | ||||||
|
Net income attributable to Company stockholders
|
$ | 19,040 | $ | 560,223 | $ | 12,585 | ||||||
| (a) | See Annex A-Explanation of Non-GAAP Financial Measures. | |
| (b) | Reconciliation of Adjusted EBITDA to consolidated income from continuing operations. |
3
Table of Contents
WEBMD
HEALTH CORP.
CONSOLIDATED
SUPPLEMENTAL FINANCIAL INFORMATION
| Three Months Ended | ||||||||||||||||||||||||||||
|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||||||||||||||||||||||
| 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 | ||||||||||||||||||||||
| (In thousands, unaudited) | ||||||||||||||||||||||||||||
|
Revenue
|
||||||||||||||||||||||||||||
|
Public portal advertising and sponsorship
|
$ | 89,414 | $ | 75,992 | $ | 67,289 | $ | 86,893 | $ | 74,658 | $ | 64,138 | $ | 58,727 | ||||||||||||||
|
Private portal services
|
22,154 | 22,639 | 22,975 | 23,178 | 22,119 | 21,826 | 21,923 | |||||||||||||||||||||
| $ | 111,568 | $ | 98,631 | $ | 90,264 | $ | 110,071 | $ | 96,777 | $ | 85,964 | $ | 80,650 | |||||||||||||||
|
Earnings before interest, taxes, non-cash and other items
(“Adjusted EBITDA”)(a)
|
$ | 30,564 | $ | 20,021 | $ | 15,261 | $ | 29,375 | $ | 20,788 | $ | 12,819 | $ | 11,273 | ||||||||||||||
|
Interest, taxes, non-cash and other items(b)
|
||||||||||||||||||||||||||||
|
Interest income
|
1,840 | 1,958 | 2,262 | 5,916 | 9,386 | 8,062 | 11,936 | |||||||||||||||||||||
|
Interest expense
|
(5,541 | ) | (5,781 | ) | (6,536 | ) | (6,682 | ) | (6,636 | ) | (6,585 | ) | (6,525 | ) | ||||||||||||||
|
Income tax (provision) benefit
|
(5,389 | ) | (750 | ) | 1,217 | 3,026 | (3,493 | ) | (569 | ) | (25,602 | ) | ||||||||||||||||
|
Depreciation and amortization
|
(7,134 | ) | (6,956 | ) | (7,103 | ) | (7,233 | ) | (7,188 | ) | (7,214 | ) | (6,775 | ) | ||||||||||||||
|
Non-cash stock-based compensation
|
(9,217 | ) | (9,412 | ) | (9,154 | ) | (5,776 | ) | (6,468 | ) | (6,448 | ) | (5,940 | ) | ||||||||||||||
|
Non-cash advertising
|
— | — | (1,753 | ) | (3,361 | ) | (178 | ) | — | (1,558 | ) | |||||||||||||||||
|
Gain on repurchases of convertible notes
|
— | 3,473 | 6,647 | — | — | — | — | |||||||||||||||||||||
|
Equity in earnings of EBS Master LLC
|
— | — | — | — | — | — | 4,007 | |||||||||||||||||||||
|
Gain on sale of EBS Master LLC
|
— | — | — | — | — | — | 538,024 | |||||||||||||||||||||
|
Impairment of auction rate securities
|
— | — | — | — | — | — | (60,108 | ) | ||||||||||||||||||||
|
Restructuring
|
— | — | — | (7,416 | ) | — | — | — | ||||||||||||||||||||
|
Other expense, net
|
(99 | ) | (559 | ) | (333 | ) | (272 | ) | (1,101 | ) | (717 | ) | (4,194 | ) | ||||||||||||||
|
Consolidated income (loss) from continuing operations
|
5,024 | 1,994 | 508 | 7,577 | 5,110 | (652 | ) | 454,538 | ||||||||||||||||||||
|
Consolidated income (loss) from discontinued operations, net of
tax
|
27,462 | (13,284 | ) | 517 | 2,041 | 92,647 | (3,063 | ) | 3,057 | |||||||||||||||||||
|
Consolidated net income (loss) inclusive of noncontrolling
interest
|
32,486 | (11,290 | ) | 1,025 | 9,618 | 97,757 | (3,715 | ) | 457,595 | |||||||||||||||||||
|
(Income) loss attributable to noncontrolling interest
|
(2,184 | ) | (387 | ) | (610 | ) | (1,961 | ) | (1,845 | ) | (1,071 | ) | 3,845 | |||||||||||||||
|
Net income (loss) attributable to Company stockholders
|
$ | 30,302 | $ | (11,677 | ) | $ | 415 | $ | 7,657 | $ | 95,912 | $ | (4,786 | ) | $ | 461,440 | ||||||||||||
| (a) | See Annex A-Explanation of Non-GAAP Financial Measures. | |
| (b) | Reconciliation of Adjusted EBITDA to consolidated income from continuing operations. |
4
Table of Contents
WEBMD
HEALTH CORP.
CONDENSED
CONSOLIDATED BALANCE SHEETS
| September 30, 2009 | June 30, 2009 | March 31, 2009 | ||||||||||
| (In thousands, unaudited) | ||||||||||||
|
Assets
|
||||||||||||
|
Cash and cash equivalents
|
$ | 589,553 | $ | 555,247 | $ | 552,483 | ||||||
|
Accounts receivable, net
|
87,072 | 78,674 | 90,835 | |||||||||
|
Prepaid expenses and other current assets
|
26,192 | 21,659 | 44,551 | |||||||||
|
Assets of discontinued operations
|
121,413 | 124,945 | 129,253 | |||||||||
|
Total current assets
|
824,230 | 780,525 | 817,122 | |||||||||
|
Investments
|
275,217 | 273,209 | 275,885 | |||||||||
|
Property and equipment, net
|
54,530 | 56,864 | 56,492 | |||||||||
|
Goodwill
|
202,104 | 202,104 | 202,104 | |||||||||
|
Intangible assets, net
|
27,385 | 28,888 | 30,570 | |||||||||
|
Other assets
|
45,474 | 65,814 | 21,918 | |||||||||
|
Total Assets
|
$ | 1,428,940 | $ | 1,407,404 | $ | 1,404,091 | ||||||
|
Liabilities and Equity
|
||||||||||||
|
Accrued expenses
|
$ | 69,402 | $ | 58,726 | $ | 42,333 | ||||||
|
Deferred revenue
|
83,861 | 86,261 | 84,574 | |||||||||
|
1.75% convertible notes(a)
|
264,583 | 264,583 | — | |||||||||
|
Liabilities of discontinued operations
|
68,383 | 113,588 | 98,506 | |||||||||
|
Total current liabilities
|
486,229 | 523,158 | 225,413 | |||||||||
|
1.75% convertible notes
|
— | — | 273,483 | |||||||||
|
31/8%
convertible notes, net of discount(b)
|
225,757 | 223,891 | 250,201 | |||||||||
|
Other long-term liabilities
|
19,699 | 19,670 | 19,899 | |||||||||
|
Stockholders’ equity
|
538,676 | 491,627 | 494,004 | |||||||||
|
Noncontrolling interest
|
158,579 | 149,058 | 141,091 | |||||||||
|
Equity
|
697,255 | 640,685 | 635,095 | |||||||||
|
Total Liabilities and Equity
|
$ | 1,428,940 | $ | 1,407,404 | $ | 1,404,091 | ||||||
|
(a) The 1.75% convertible notes are classified as a current
liability in these periods as the holders of these
notes may require the Company to repurchase these notes within one year from the balance sheet date, for cash at 100% of the principal amount of the notes, plus accrued interest. |
||||||||||||
| September 30, 2009 | June 30, 2009 | March 31, 2009 | ||||||||||
|
(b) Discount on
31/8%
convertible notes
|
$ | 24,543 | $ | 26,409 | $ | 31,799 | ||||||
5
Table of Contents
WEBMD
HEALTH CORP.
CONDENSED
CONSOLIDATED BALANCE SHEETS
| December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | December 31, 2007 | ||||||||||||||||
| (In thousands, unaudited) | ||||||||||||||||||||
|
Assets
|
||||||||||||||||||||
|
Cash and cash equivalents
|
$ | 629,848 | $ | 1,380,179 | $ | 1,123,899 | $ | 1,106,128 | $ | 536,879 | ||||||||||
|
Short-term investments
|
— | 284,789 | 304,325 | 309,256 | 290,858 | |||||||||||||||
|
Accounts receivable, net
|
93,082 | 77,135 | 68,161 | 72,961 | 83,410 | |||||||||||||||
|
Prepaid expenses and other current assets
|
44,740 | 28,995 | 26,002 | 29,408 | 73,893 | |||||||||||||||
|
Assets of discontinued operations
|
131,350 | 132,470 | 280,393 | 279,205 | 277,451 | |||||||||||||||
|
Total current assets
|
899,020 | 1,903,568 | 1,802,780 | 1,796,958 | 1,262,491 | |||||||||||||||
|
Investments
|
288,049 | 2,175 | 2,543 | 2,036 | 2,383 | |||||||||||||||
|
Property and equipment, net
|
56,633 | 51,682 | 48,394 | 47,803 | 49,474 | |||||||||||||||
|
Goodwill
|
202,104 | 200,370 | 203,431 | 203,579 | 206,279 | |||||||||||||||
|
Intangible assets, net
|
32,328 | 28,492 | 30,834 | 33,188 | 35,634 | |||||||||||||||
|
Investment in EBS Master LLC
|
— | — | — | — | 25,261 | |||||||||||||||
|
Other assets
|
23,600 | 37,535 | 61,278 | 58,738 | 69,959 | |||||||||||||||
|
Total Assets
|
$ | 1,501,734 | $ | 2,223,822 | $ | 2,149,260 | $ | 2,142,302 | $ | 1,651,481 | ||||||||||
|
Liabilities and Equity
|
||||||||||||||||||||
|
Accrued expenses
|
$ | 54,595 | $ | 44,169 | $ | 44,625 | $ | 58,904 | $ | 49,341 | ||||||||||
|
Deferred revenue
|
79,613 | 80,885 | 85,713 | 86,748 | 75,518 | |||||||||||||||
|
Liabilities of discontinued operations
|
100,771 | 102,948 | 128,005 | 116,194 | 125,547 | |||||||||||||||
|
Total current liabilities
|
234,979 | 228,002 | 258,343 | 261,846 | 250,406 | |||||||||||||||
|
1.75% convertible notes
|
350,000 | 350,000 | 350,000 | 350,000 | 350,000 | |||||||||||||||
|
31/8%
convertible notes, net of discount(a)
|
264,018 | 261,900 | 259,821 | 257,780 | 255,776 | |||||||||||||||
|
Other long-term liabilities
|
21,816 | 21,184 | 21,332 | 21,214 | 21,137 | |||||||||||||||
|
Stockholders’ equity
|
496,698 | 1,223,486 | 1,124,348 | 1,121,231 | 642,809 | |||||||||||||||
|
Noncontrolling interest
|
134,223 | 139,250 | 135,416 | 130,231 | 131,353 | |||||||||||||||
|
Equity
|
630,921 | 1,362,736 | 1,259,764 | 1,251,462 | 774,162 | |||||||||||||||
|
Total Liabilities and Equity
|
$ | 1,501,734 | $ | 2,223,822 | $ | 2,149,260 | $ | 2,142,302 | $ | 1,651,481 | ||||||||||
|
(a) Discount on
31/8%
convertible notes
|
35,982 | 38,100 | 40,179 | 42,220 | 44,224 | |||||||||||||||
6
Table of Contents
WEBMD
HEALTH CORP.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
Nine Months Ended |
Years Ended December 31, | |||||||||||
| September 30, 2009 | 2008 | 2007 | ||||||||||
| (In thousands, unaudited) | ||||||||||||
|
Cash flows from operating activities:
|
||||||||||||
|
Consolidated net income inclusive of noncontrolling interest
|
$ | 22,221 | $ | 561,255 | $ | 23,252 | ||||||
|
Adjustments to reconcile consolidated net income inclusive of
noncontrolling interest to net cash provided by operating
activities:
|
||||||||||||
|
Consolidated (income) loss from discontinued operations, net of
tax
|
(14,695 | ) | (94,682 | ) | 18,048 | |||||||
|
Depreciation and amortization
|
21,193 | 28,410 | 27,808 | |||||||||
|
Equity in earnings of EBS Master LLC
|
— | (4,007 | ) | (28,566 | ) | |||||||
|
Non-cash interest expense
|
7,737 | 9,859 | 10,210 | |||||||||
|
Non-cash advertising
|
1,753 | 5,097 | 5,264 | |||||||||
|
Non-cash stock-based compensation
|
27,783 | 24,632 | 32,336 | |||||||||
|
Deferred income taxes
|
7,563 | 7,474 | (10,430 | ) | ||||||||
|
Gain on repurchases of convertible notes
|
(10,120 | ) | — | — | ||||||||
|
Gain on sale of EBS Master LLC
|
— | (538,024 | ) | — | ||||||||
|
Impairment of auction rate securities
|
— | 60,108 | — | |||||||||
|
Changes in operating assets and liabilities:
|
||||||||||||
|
Accounts receivable
|
6,010 | (9,672 | ) | 4,239 | ||||||||
|
Prepaid expenses and other, net
|
(8,394 | ) | 1,893 | 5,200 | ||||||||
|
Accrued expenses and other long-term liabilities
|
(7,740 | ) | 6,052 | (44,248 | ) | |||||||
|
Deferred revenue
|
4,248 | 4,095 | 93 | |||||||||
|
Net cash provided by continuing operations
|
57,559 | 62,490 | 43,206 | |||||||||
|
Net cash provided by discontinued operations
|
9,273 | 34,624 | 32,187 | |||||||||
|
Net cash provided by operating activities
|
66,832 | 97,114 | 75,393 | |||||||||
|
Cash flows from investing activities:
|
||||||||||||
|
Proceeds from maturities and sales of
available-for-sale
securities
|
2,200 | 118,339 | 670,326 | |||||||||
|
Purchases of
available-for-sale
securities
|
— | (177,150 | ) | (927,038 | ) | |||||||
|
Purchases of property and equipment
|
(14,248 | ) | (24,265 | ) | (19,041 | ) | ||||||
|
Purchase of investment in preferred stock
|
— | (6,471 | ) | — | ||||||||
|
Cash paid in business combinations, net of cash acquired
|
— | (2,633 | ) | — | ||||||||
|
Purchase of noncontrolling interest in subsidiary
|
— | (12,818 | ) | — | ||||||||
|
Proceeds related to the sale of EBS Master LLC
|
— | 574,617 | — | |||||||||
|
Proceeds from the sale of discontinued operations
|
2,840 | 247,491 | 11,667 | |||||||||
|
Other proceeds from (disbursements) to EBS
|
— | 1,224 | 21,690 | |||||||||
|
Net cash (used in) provided by continuing operations
|
(9,208 | ) | 718,334 | (242,396 | ) | |||||||
|
Net cash used in discontinued operations
|
(3,315 | ) | (4,852 | ) | (4,753 | ) | ||||||
|
Net cash (used in) provided by investing activities
|
(12,523 | ) | 713,482 | (247,149 | ) | |||||||
|
Cash flows from financing activities:
|
||||||||||||
|
Net proceeds from issuance of common stock
|
28,770 | 21,683 | 133,054 | |||||||||
|
Purchase of treasury stock
|
— | (737,324 | ) | (47,123 | ) | |||||||
|
Repurchases of convertible notes
|
(123,857 | ) | — | — | ||||||||
|
Other
|
63 | 48 | 6,581 | |||||||||
|
Net cash (used in) provided by continuing operations
|
(95,024 | ) | (715,593 | ) | 92,512 | |||||||
|
Net cash used in discontinued operations
|
— | (76 | ) | (175 | ) | |||||||
|
Net cash (used in) provided by financing activities
|
(95,024 | ) | (715,669 | ) | 92,337 | |||||||
|
Effect of exchange rates on cash
|
420 | (1,958 | ) | 1,607 | ||||||||
|
Net (decrease) increase in cash and cash equivalents
|
(40,295 | ) | 92,969 | (77,812 | ) | |||||||
|
Cash and cash equivalents at beginning of period
|
629,848 | 536,879 | 614,691 | |||||||||
|
Cash and cash equivalents at end of period
|
$ | 589,553 | $ | 629,848 | $ | 536,879 | ||||||
7
Table of Contents
WEBMD
HEALTH CORP.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
| Three Months Ended | ||||||||||||||||||||||||||||
|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||||||||||||||||||||||
| 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 | ||||||||||||||||||||||
| (In thousands, unaudited) | ||||||||||||||||||||||||||||
|
Cash flows from operating activities:
|
||||||||||||||||||||||||||||
|
Consolidated net income (loss) inclusive of noncontrolling
interest
|
$ | 32,486 | $ | (11,290 | ) | $ | 1,025 | $ | 9,618 | $ | 97,757 | $ | (3,715 | ) | $ | 457,595 | ||||||||||||
|
Adjustments to reconcile consolidated net income (loss)
inclusive of noncontrolling interest to net cash provided by
(used in) operating activities:
|
||||||||||||||||||||||||||||
|
Consolidated (income) loss from discontinued operations, net of
tax
|
(27,462 | ) | 13,284 | (517 | ) | (2,041 | ) | (92,647 | ) | 3,063 | (3,057 | ) | ||||||||||||||||
|
Depreciation and amortization
|
7,134 | 6,956 | 7,103 | 7,233 | 7,188 | 7,214 | 6,775 | |||||||||||||||||||||
|
Equity in earnings of EBS Master LLC
|
— | — | — | — | — | — | (4,007 | ) | ||||||||||||||||||||
|
Non-cash interest expense
|
2,427 | 2,511 | 2,799 | 1,736 | 2,758 | 2,704 | 2,661 | |||||||||||||||||||||
|
Non-cash advertising
|
— | — | 1,753 | 3,361 | 178 | — | 1,558 | |||||||||||||||||||||
|
Non-cash stock-based compensation
|
9,217 | 9,412 | 9,154 | 5,776 | 6,468 | 6,448 | 5,940 | |||||||||||||||||||||
|
Deferred income taxes
|
9,926 | 241 | (2,604 | ) | (1,974 | ) | 4,201 | 115 | 5,132 | |||||||||||||||||||
|
Gain on repurchases of convertible notes
|
— | (3,473 | ) | (6,647 | ) | — | — | — | — | |||||||||||||||||||
|
Gain on sale of EBS Master LLC
|
— | — | — | — | — | — | (538,024 | ) | ||||||||||||||||||||
|
Impairment of auction rate securities
|
— | — | — | — | — | — | 60,108 | |||||||||||||||||||||
|
Changes in operating assets and liabilities:
|
||||||||||||||||||||||||||||
|
Accounts receivable
|
(8,398 | ) | 12,161 | 2,247 | (15,947 | ) | (8,974 | ) | 4,800 | 10,449 | ||||||||||||||||||
|
Prepaid expenses and other, net
|
(4,619 | ) | (2,551 | ) | (1,224 | ) | (2,282 | ) | (2,291 | ) | 3,598 | 2,868 | ||||||||||||||||
|
Accrued expenses and other long-term liabilities
|
1,804 | 11,197 | (20,741 | ) | 9,570 | 102 | (14,099 | ) | 10,479 | |||||||||||||||||||
|
Deferred revenue
|
(2,400 | ) | 1,687 | 4,961 | (1,272 | ) | (4,827 | ) | (1,037 | ) | 11,231 | |||||||||||||||||
|
Net cash provided by (used in) continuing operations
|
20,115 | 40,135 | (2,691 | ) | 13,778 | 9,913 | 9,091 | 29,708 | ||||||||||||||||||||
|
Net cash provided by (used in) discontinued operations
|
3,764 | 3,508 | 2,001 | 4,511 | 12,718 | 4,736 | 12,659 | |||||||||||||||||||||
|
Net cash provided by (used in) operating activities
|
23,879 | 43,643 | (690 | ) | 18,289 | 22,631 | 13,827 | 42,367 | ||||||||||||||||||||
|
Cash flows from investing activities:
|
||||||||||||||||||||||||||||
|
Proceeds from maturities and sales of
available-for-sale
securities
|
1,100 | 500 | 600 | 800 | 10,953 | 2,068 | 104,518 | |||||||||||||||||||||
|
Purchases of
available-for-sale
securities
|
— | — | — | — | — | — | (177,150 | ) | ||||||||||||||||||||
|
Purchases of property and equipment
|
(3,293 | ) | (5,646 | ) | (5,309 | ) | (9,190 | ) | (8,130 | ) | (4,294 | ) | (2,651 | ) | ||||||||||||||
|
Purchase of investment in preferred stock
|
— | — | — | (6,471 | ) | — | — | — | ||||||||||||||||||||
|
Cash paid in business combinations, net of cash acquired
|
— | — | — | (2,781 | ) | — | 148 | — | ||||||||||||||||||||
|
Purchase of noncontrolling interest in subsidiary
|
— | — | — | (12,818 | ) | — | — | — | ||||||||||||||||||||
|
Proceeds related to the sale of EBS Master LLC
|
— | — | — | — | — | — | 574,617 | |||||||||||||||||||||
|
Proceeds from the sale of discontinued operations
|
2,590 | — | 250 | 402 | 222,771 | — | 24,318 | |||||||||||||||||||||
|
Other proceeds from (disbursements) to EBS
|
— | — | — | — | 69 | (40 | ) | 1,195 | ||||||||||||||||||||
|
Net cash provided by (used in) continuing operations
|
397 | (5,146 | ) | (4,459 | ) | (30,058 | ) | 225,663 | (2,118 | ) | 524,847 | |||||||||||||||||
|
Net cash used in discontinued operations
|
(959 | ) | (1,527 | ) | (829 | ) | (547 | ) | (1,121 | ) | (1,735 | ) | (1,449 | ) | ||||||||||||||
|
Net cash (used in) provided by investing activities
|
(562 | ) | (6,673 | ) | (5,288 | ) | (30,605 | ) | 224,542 | (3,853 | ) | 523,398 | ||||||||||||||||
|
Cash flows from financing activities:
|
||||||||||||||||||||||||||||
|
Net proceeds from issuance of common stock
|
10,576 | 11,153 | 7,041 | 958 | 11,081 | 7,867 | 1,777 | |||||||||||||||||||||
|
Purchase of treasury stock
|
— | — | — | (737,324 | ) | — | — | — | ||||||||||||||||||||
|
Repurchases of convertible notes
|
— | (45,674 | ) | (78,183 | ) | — | — | — | — | |||||||||||||||||||
|
Other
|
63 | — | — | (295 | ) | 423 | (80 | ) | — | |||||||||||||||||||
|
Net cash provided by (used in) continuing operations
|
10,639 | (34,521 | ) | (71,142 | ) | (736,661 | ) | 11,504 | 7,787 | 1,777 | ||||||||||||||||||
|
Net cash used in discontinued operations
|
— | — | — | — | — | (30 | ) | (46 | ) | |||||||||||||||||||
|
Net cash provided by (used in) financing activities
|
10,639 | (34,521 | ) | (71,142 | ) | (736,661 | ) | 11,504 | 7,757 | 1,731 | ||||||||||||||||||
|
Effect of exchange rates on cash
|
350 | 315 | (245 | ) | (1,354 | ) | (2,397 | ) | 40 | 1,753 | ||||||||||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
34,306 | 2,764 | (77,365 | ) | (750,331 | ) | 256,280 | 17,771 | 569,249 | |||||||||||||||||||
|
Cash and cash equivalents at beginning of period
|
555,247 | 552,483 | 629,848 | 1,380,179 | 1,123,899 | 1,106,128 | 536,879 | |||||||||||||||||||||
|
Cash and cash equivalents at end of period
|
$ | 589,553 | $ | 555,247 | $ | 552,483 | $ | 629,848 | $ | 1,380,179 | $ | 1,123,899 | $ | 1,106,128 | ||||||||||||||
8
Table of Contents
The following tables provide detail of the components of
non-cash
stock-based
compensation and interest expense of our convertible notes.
|
Nine Months Ended |
Years Ended December 31, | |||||||||||
| September 30, 2009 | 2008 | 2007 | ||||||||||
| (In thousands, unaudited) | ||||||||||||
|
Non-cash stock-based compensation included in:
|
||||||||||||
|
Cost of operations
|
$ | 4,921 | $ | 3,818 | $ | 5,027 | ||||||
|
Sales and marketing
|
5,499 | 3,591 | 4,868 | |||||||||
|
General and administrative
|
17,363 | 17,223 | 22,441 | |||||||||
|
Equity in earnings of EBS Master LLC
|
— | — | 2,107 | |||||||||
|
Income (loss) from discontinued operations
|
654 | 1,600 | 2,489 | |||||||||
|
Interest expense related to convertible notes:
|
||||||||||||
|
Non-cash interest expense – 1.75% convertible notes
|
$ | 970 | $ | 1,542 | $ | 1,494 | ||||||
|
Non-cash interest expense –
31/8%
convertible notes
|
6,767 | 9,386 | 8,716 | |||||||||
|
Cash interest expense – 1.75% convertible notes
|
3,760 | 6,125 | 6,125 | |||||||||
|
Cash interest expense –
31/8%
convertible notes
|
6,354 | 9,375 | 9,375 | |||||||||
| Three Months Ended | ||||||||||||||||||||||||||||
|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||||||||||||||||||||||
| 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 | ||||||||||||||||||||||
| (In thousands, unaudited) | ||||||||||||||||||||||||||||
|
Non-cash stock-based compensation included in:
|
||||||||||||||||||||||||||||
|
Cost of operations
|
$ | 1,743 | $ | 1,555 | $ | 1,623 | $ | 888 | $ | 997 | $ | 817 | $ | 1,116 | ||||||||||||||
|
Sales and marketing
|
1,948 | 2,001 | 1,550 | (11 | ) | 1,215 | 1,261 | 1,126 | ||||||||||||||||||||
|
General and administrative
|
5,526 | 5,856 | 5,981 | 4,899 | 4,256 | 4,370 | 3,698 | |||||||||||||||||||||
|
Income (loss) from discontinued operations
|
112 | 225 | 317 | 194 | 694 | 369 | 343 | |||||||||||||||||||||
|
Interest expense related to convertible notes:
|
||||||||||||||||||||||||||||
|
Non-cash interest expense – 1.75% convertible notes
|
$ | 303 | $ | 303 | $ | 364 | $ | 390 | $ | 391 | $ | 382 | $ | 379 | ||||||||||||||
|
Non-cash interest expense –
31/8%
convertible notes
|
2,124 | 2,208 | 2,435 | 2,415 | 2,367 | 2,322 | 2,282 | |||||||||||||||||||||
|
Cash interest expense – 1.75% convertible notes
|
1,157 | 1,190 | 1,413 | 1,531 | 1,531 | 1,532 | 1,531 | |||||||||||||||||||||
|
Cash interest expense –
31/8%
convertible notes
|
1,955 | 2,078 | 2,321 | 2,344 | 2,343 | 2,344 | 2,344 | |||||||||||||||||||||
9