Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - WebMD Health Corp. | d305924d8k.htm |
| EX-99.3 - EX-99.3 - WebMD Health Corp. | d305924dex993.htm |
| EX-99.4 - EX-99.4 - WebMD Health Corp. | d305924dex994.htm |
| EX-99.1 - EX-99.1 - WebMD Health Corp. | d305924dex991.htm |
Exhibit 99.2
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
| Three Months Ended December 31, |
Years Ended December 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenue |
$ | 150,659 | $ | 168,477 | $ | 558,775 | $ | 534,519 | ||||||||
| Cost of operations |
52,979 | 51,859 | 201,677 | 187,831 | ||||||||||||
| Sales and marketing |
30,165 | 34,085 | 124,326 | 120,874 | ||||||||||||
| General and administrative |
23,657 | 23,146 | 91,271 | 85,496 | ||||||||||||
| Depreciation and amortization |
6,872 | 7,310 | 26,801 | 27,578 | ||||||||||||
| Interest income |
24 | 99 | 112 | 3,949 | ||||||||||||
| Interest expense |
5,809 | 1,347 | 20,645 | 11,453 | ||||||||||||
| Loss on convertible notes |
— | 6,362 | — | 23,332 | ||||||||||||
| Gain (loss) on investments |
3,837 | 13,460 | 18,516 | (9,517 | ) | |||||||||||
| Transaction and other expense (income) |
2,275 | (20 | ) | 2,328 | 72 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from continuing operations before income tax provision |
32,763 | 57,947 | 110,355 | 72,315 | ||||||||||||
| Income tax provision |
13,561 | 24,183 | 46,167 | 20,043 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from continuing operations |
19,202 | 33,764 | 64,188 | 52,272 | ||||||||||||
| Income from discontinued operations, net of tax |
— | 2,824 | 10,388 | 1,800 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 19,202 | $ | 36,588 | $ | 74,576 | $ | 54,072 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Basic income per common share: |
||||||||||||||||
| Income from continuing operations |
$ | 0.34 | $ | 0.58 | $ | 1.11 | $ | 0.93 | ||||||||
| Income from discontinued operations |
— | 0.05 | 0.18 | 0.04 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 0.34 | $ | 0.63 | $ | 1.29 | $ | 0.97 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted income per common share: |
||||||||||||||||
| Income from continuing operations |
$ | 0.33 | $ | 0.55 | $ | 1.08 | $ | 0.85 | ||||||||
| Income from discontinued operations |
— | 0.04 | 0.17 | 0.03 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 0.33 | $ | 0.59 | $ | 1.25 | $ | 0.88 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted-average shares outstanding used in computing income per common share: |
||||||||||||||||
| Basic |
55,685 | 57,505 | 57,356 | 55,328 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
68,326 | 62,330 | 59,124 | 62,228 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
| Three Months
Ended December 31, |
Years
Ended December 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenue |
||||||||||||||||
| Public portal advertising and sponsorship |
$ | 130,821 | $ | 147,042 | $ | 477,325 | $ | 446,969 | ||||||||
| Private portal services |
19,838 | 21,435 | 81,450 | 87,550 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 150,659 | $ | 168,477 | $ | 558,775 | $ | 534,519 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a) |
$ | 54,626 | $ | 69,082 | $ | 181,238 | $ | 173,618 | ||||||||
| Interest, taxes, non-cash and other items (b) |
||||||||||||||||
| Interest income |
24 | 99 | 112 | 3,949 | ||||||||||||
| Interest expense |
(5,809 | ) | (1,347 | ) | (20,645 | ) | (11,453 | ) | ||||||||
| Income tax provision |
(13,561 | ) | (24,183 | ) | (46,167 | ) | (20,043 | ) | ||||||||
| Depreciation and amortization |
(6,872 | ) | (7,310 | ) | (26,801 | ) | (27,578 | ) | ||||||||
| Non-cash stock-based compensation |
(10,768 | ) | (9,695 | ) | (39,737 | ) | (33,300 | ) | ||||||||
| Loss on convertible notes |
— | (6,362 | ) | — | (23,332 | ) | ||||||||||
| Gain (loss) on investments |
3,837 | 13,460 | 18,516 | (9,517 | ) | |||||||||||
| Transaction and other (expense) income |
(2,275 | ) | 20 | (2,328 | ) | (72 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from continuing operations |
19,202 | 33,764 | 64,188 | 52,272 | ||||||||||||
| Income from discontinued operations, net of tax |
— | 2,824 | 10,388 | 1,800 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 19,202 | $ | 36,588 | $ | 74,576 | $ | 54,072 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
(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)
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| Assets |
||||||||
| Cash and cash equivalents |
$ | 1,121,217 | $ | 400,501 | ||||
| Accounts receivable, net |
121,335 | 134,448 | ||||||
| Prepaid expenses and other current assets |
12,690 | 12,161 | ||||||
| Deferred tax assets |
20,482 | 23,467 | ||||||
|
|
|
|
|
|||||
| Total current assets |
1,275,724 | 570,577 | ||||||
| Property and equipment, net |
57,139 | 61,516 | ||||||
| Goodwill |
202,104 | 202,104 | ||||||
| Intangible assets, net |
19,999 | 22,626 | ||||||
| Deferred tax assets |
55,017 | 71,125 | ||||||
| Other assets |
31,042 | 14,254 | ||||||
|
|
|
|
|
|||||
| Total Assets |
$ | 1,641,025 | $ | 942,202 | ||||
|
|
|
|
|
|||||
| Liabilities and Stockholders’ Equity |
||||||||
| Accrued expenses |
$ | 55,238 | $ | 53,181 | ||||
| Deferred revenue |
88,055 | 97,043 | ||||||
| Liabilities of discontinued operations |
1,506 | 17,327 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
144,799 | 167,551 | ||||||
| 2.25% convertible notes due 2016 |
400,000 | — | ||||||
| 2.50% convertible notes due 2018 |
400,000 | — | ||||||
| Other long-term liabilities |
21,790 | 21,756 | ||||||
| Stockholders’ equity |
674,436 | 752,895 | ||||||
|
|
|
|
|
|||||
| Total Liabilities and Stockholders’ Equity |
$ | 1,641,025 | $ | 942,202 | ||||
|
|
|
|
|
|||||
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
| Years Ended December 31, |
||||||||
| 2011 | 2010 | |||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 74,576 | $ | 54,072 | ||||
| Adjustments to reconcile consolidated net income to net cash provided by operating activities: |
||||||||
| Income from discontinued operations, net of tax |
(10,388 | ) | (1,800 | ) | ||||
| Depreciation and amortization |
26,801 | 27,578 | ||||||
| Non-cash interest, net |
3,758 | 5,594 | ||||||
| Non-cash stock-based compensation |
39,737 | 33,300 | ||||||
| Deferred income taxes |
13,696 | (403 | ) | |||||
| Loss on convertible notes |
— | 23,332 | ||||||
| (Gain) loss on investments |
(18,516 | ) | 9,517 | |||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
13,113 | (16,292 | ) | |||||
| Prepaid expenses and other, net |
1,416 | 4,617 | ||||||
| Accrued expenses and other long-term liabilities |
2,511 | 213 | ||||||
| Deferred revenue |
(8,988 | ) | (1,431 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by continuing operations |
137,716 | 138,297 | ||||||
| Net cash used in discontinued operations |
(440 | ) | (16,474 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
137,276 | 121,823 | ||||||
| Cash flows from investing activities: |
||||||||
| Proceeds from sales of available-for-sale securities |
— | 361,852 | ||||||
| Proceeds received from ARS option |
21,566 | 10,467 | ||||||
| Purchases of property and equipment |
(20,911 | ) | (32,254 | ) | ||||
| Finalization of sale price of discontinued operations |
— | (1,430 | ) | |||||
|
|
|
|
|
|||||
| Net cash provided by investing activities |
655 | 338,635 | ||||||
| Cash flows from financing activities: |
||||||||
| Proceeds from exercise of stock options |
28,339 | 59,825 | ||||||
| Cash used for withholding taxes due on stock-based awards |
(9,234 | ) | (86,533 | ) | ||||
| 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 |
— | (94,525 | ) | |||||
| Purchases of treasury stock |
(241,263 | ) | (420,948 | ) | ||||
| Excess tax benefit on stock-based awards |
30,198 | 22,458 | ||||||
|
|
|
|
|
|||||
| Net cash provided by (used in) financing activities |
582,785 | (519,723 | ) | |||||
|
|
|
|
|
|||||
| Net increase (decrease) in cash and cash equivalents |
720,716 | (59,265 | ) | |||||
| Cash and cash equivalents at beginning of period |
400,501 | 459,766 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 1,121,217 | $ | 400,501 | ||||
|
|
|
|
|
|||||
WEBMD HEALTH CORP.
NET INCOME PER COMMON SHARE
(In thousands, except per share data, unaudited)
| Three Months Ended December 31, |
Years Ended December 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Numerator: |
||||||||||||||||
| Income from continuing operations |
$ | 19,202 | $ | 33,764 | $ | 64,188 | $ | 52,272 | ||||||||
| Effect of participating non-vested restricted stock |
(111 | ) | (339 | ) | (436 | ) | (601 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from continuing operations-Basic |
19,091 | 33,425 | 63,752 | 51,671 | ||||||||||||
| Interest expense on 2.50% Notes, net of tax |
1,682 | — | — | — | ||||||||||||
| Interest expense on 2.25% Notes, net of tax |
1,627 | — | — | — | ||||||||||||
| Interest expense on 1.75% Notes, net of tax |
— | — | — | 1,469 | ||||||||||||
| Interest expense on 3 1/8% Notes, net of tax |
— | 809 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from continuing operations — Diluted |
$ | 22,400 | $ | 34,234 | $ | 63,752 | $ | 53,140 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from discontinued operations, net of tax |
$ | — | $ | 2,824 | $ | 10,388 | $ | 1,800 | ||||||||
| Effect of participating non-vested restricted stock |
— | (28 | ) | (71 | ) | (21 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from discontinued operations, net of tax — Basic and Diluted |
$ | — | $ | 2,796 | $ | 10,317 | $ | 1,779 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Denominator: |
||||||||||||||||
| Weighted-average shares-Basic |
55,685 | 57,505 | 57,356 | 55,328 | ||||||||||||
| Employee stock options and restricted stock |
1,164 | 2,651 | 1,768 | 3,706 | ||||||||||||
| 2.50% Notes |
6,049 | — | — | — | ||||||||||||
| 2.25% Notes |
5,428 | — | — | — | ||||||||||||
| 1.75% Notes |
— | — | — | 3,194 | ||||||||||||
| 3 1/8% Notes |
— | 2,174 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted weighted-average shares after assumed conversions — Diluted |
68,326 | 62,330 | 59,124 | 62,228 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Basic income per common share: |
||||||||||||||||
| Income from continuing operations |
$ | 0.34 | $ | 0.58 | $ | 1.11 | $ | 0.93 | ||||||||
| Income from discontinued operations |
— | 0.05 | 0.18 | 0.04 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 0.34 | $ | 0.63 | $ | 1.29 | $ | 0.97 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted income per common share: |
||||||||||||||||
| Income from continuing operations |
$ | 0.33 | $ | 0.55 | $ | 1.08 | $ | 0.85 | ||||||||
| Income from discontinued operations |
— | 0.04 | 0.17 | 0.03 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 0.33 | $ | 0.59 | $ | 1.25 | $ | 0.88 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||