WebMD Health Corp. - FORM 8-K - EX-99.2

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file	filename
8-K - FORM 8-K - WebMD Health Corp.	g27807e8vk.htm
EX-99.4 - EX-99.4 - WebMD Health Corp.	g27807exv99w4.htm
EX-99.1 - EX-99.1 - WebMD Health Corp.	g27807exv99w1.htm
EX-99.3 - EX-99.3 - WebMD Health Corp.	g27807exv99w3.htm

Exhibit 99.2

WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011			2010
Revenue	$	141,369	$	122,707	$	272,978		$	230,737
Cost of operations		51,152		45,368		99,601			88,362
Sales and marketing		32,270		29,425		64,564			57,832
General and administrative		22,006		20,577		44,827			39,386
Depreciation and amortization		6,724		6,318		13,148			13,333
Interest income		51		420		67			3,829
Interest expense		5,833		3,170		8,974			8,309
Loss on convertible notes		—		11,011		—			14,738
Gain (loss) on investments		1,769		6,002		15,829			(22,846	)
Other income (expense), net		—		99		(53	)		(199	)

Income (loss) from continuing operations before income tax provision (benefit)		25,204		13,359		57,707			(10,439	)
Income tax provision (benefit)		11,003		5,675		23,961			(14,333	)

Income from continuing operations		14,201		7,684		33,746			3,894
Income from discontinued operations, net of tax		7,394		—		7,394			—

Net income	$	21,595	$	7,684	$	41,140		$	3,894


Basic income per common share:
Income from continuing operations	$	0.24	$	0.14	$	0.58		$	0.07
Income from discontinued operations		0.13		—		0.12			—

Net income	$	0.37	$	0.14	$	0.70		$	0.07


Diluted income per common share:
Income from continuing operations	$	0.23	$	0.13	$	0.55		$	0.07
Income from discontinued operations		0.13		—		0.13			—

Net income	$	0.36	$	0.13	$	0.68		$	0.07


Weighted-average shares outstanding used in computing income per common share:
Basic		58,096		53,521		58,140			52,856

Diluted		60,236		62,504		60,473			57,272

WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Revenue
Public portal advertising and sponsorship	$	121,108		$	100,592		$	231,471		$	186,849
Private portal services		20,261			22,115			41,507			43,888

	$	141,369		$	122,707		$	272,978		$	230,737

Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	45,289		$	34,301		$	83,147		$	59,958

Interest, taxes, non-cash and other items (b)
Interest income		51			420			67			3,829
Interest expense		(5,833	)		(3,170	)		(8,974	)		(8,309	)
Income tax (provision) benefit		(11,003	)		(5,675	)		(23,961	)		14,333
Depreciation and amortization		(6,724	)		(6,318	)		(13,148	)		(13,333	)
Non-cash stock-based compensation		(9,348	)		(6,964	)		(19,161	)		(14,801	)
Loss on convertible notes		—			(11,011	)		—			(14,738	)
Gain (loss) on investments		1,769			6,002			15,829			(22,846	)
Other income (expense), net		—			99			(53	)		(199	)

Income from continuing operations		14,201			7,684			33,746			3,894
Income from discontinued operations, net of tax		7,394			—			7,394			—

Net income	$	21,595		$	7,684		$	41,140		$	3,894


(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, unaudited)


	June 30, 2011		December 31, 2010
Assets
Cash and cash equivalents	$	1,145,061	$	400,501
Accounts receivable, net		115,214		134,448
Prepaid expenses and other current assets		17,913		12,161
Deferred tax assets		21,527		23,467

Total current assets		1,299,715		570,577

Property and equipment, net		58,290		61,516
Goodwill		202,104		202,104
Intangible assets, net		21,313		22,626
Deferred tax assets		63,827		71,125
Other assets		33,420		14,254

Total Assets	$	1,678,669	$	942,202


Liabilities and Stockholders’ Equity
Accrued expenses	$	56,701	$	53,181
Deferred revenue		95,999		97,043
Liabilities of discontinued operations		4,804		17,327

Total current liabilities		157,504		167,551

2.25% convertible notes due 2016		400,000		—
2.50% convertible notes due 2018		400,000		—
Other long-term liabilities		22,401		21,756

Stockholders’ equity		698,764		752,895


Total Liabilities and Stockholders’ Equity	$	1,678,669	$	942,202

WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)


	Six Months Ended
	June 30,
	2011			2010
Cash flows from operating activities:
Net income	$	41,140		$	3,894
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Income from discontinued operations, net of tax		(7,394	)		—
Depreciation and amortization		13,148			13,333
Non-cash interest, net		1,599			3,885
Non-cash stock-based compensation		19,161			14,801
Deferred income taxes		4,423			(27,729	)
Loss on convertible notes		—			14,738
(Gain) loss on investments		(15,829	)		22,846
Changes in operating assets and liabilities:
Accounts receivable		19,234			13,248
Prepaid expenses and other, net		(2,103	)		(2,144	)
Accrued expenses and other long-term liabilities		4,765			(4,801	)
Deferred revenue		(1,044	)		14,596

Net cash provided by continuing operations		77,100			66,667
Net cash used in discontinued operations		(136	)		(15,501	)

Net cash provided by operating activities		76,964			51,166

Cash flows from investing activities:
Proceeds from sales of available-for-sale securities		—			361,852
Proceeds received from ARS option		16,561			354
Purchases of property and equipment		(9,557	)		(9,719	)
Finalization of sale price of discontinued operations		—			(1,430	)

Net cash provided by investing activities		7,004			351,057

Cash flows from financing activities:
Proceeds from exercise of stock options		25,053			48,114
Cash used for withholding taxes due on stock-based awards		(6,632	)		(39,728	)
Net proceeds from issuance of the 2.50% Notes and 2.25% Notes		774,745			—
Repurchases of 1.75% Notes and 3 1/8% Notes		—			(81,362	)
Purchases of treasury stock		(150,417	)		(264,527	)
Excess tax benefit on stock-based awards		17,843			10,219

Net cash provided by (used in) financing activities		660,592			(327,284	)

Net increase in cash and cash equivalents		744,560			74,939
Cash and cash equivalents at beginning of period		400,501			459,766

Cash and cash equivalents at end of period	$	1,145,061		$	534,705

WEBMD HEALTH CORP.
NET INCOME PER COMMON SHARE
(In thousands, except per share data, unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Numerator:
Income from continuing operations	$	14,201		$	7,684		$	33,746		$	3,894
Effect of participating non-vested restricted stock		(91	)		(88	)		(255	)		(50	)

Income from continuing operations- Basic		14,110			7,596			33,491			3,844
Interest expense on 1.75% Notes, net of tax		—			592			—			—

Income from continuing operations- Diluted	$	14,110		$	8,188		$	33,491		$	3,844


Income from discontinued operations, net of tax	$	7,394		$	—		$	7,394		$	—
Effect of participating non-vested restricted stock		(47	)		—			(56	)		—

Income from discontinued operations, net of tax — Basic and Diluted	$	7,347		$	—		$	7,338		$	—


Denominator:
Weighted-average shares — Basic		58,096			53,521			58,140			52,856
Employee stock options and restricted stock		2,140			3,848			2,333			4,416
1.75% Notes		—			5,135			—			—

Adjusted weighted-average shares after assumed conversions — Diluted		60,236			62,504			60,473			57,272


Basic income per common share:
Income from continuing operations	$	0.24		$	0.14		$	0.58		$	0.07
Income from discontinued operations		0.13			—			0.12			—

Net income	$	0.37		$	0.14		$	0.70		$	0.07


Diluted income per common share:
Income from continuing operations	$	0.23		$	0.13		$	0.55		$	0.07
Income from discontinued operations		0.13			—			0.13			—

Net income	$	0.36		$	0.13		$	0.68		$	0.07

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WebMD Health Corp. - FORM 8-K - EX-99.2 - August 2, 2011

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