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

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,
	2014		2013		2014		2013
Revenue	$	140,400	$	125,317	$	274,232	$	238,079
Cost of operations		54,456		51,596		107,020		98,539
Sales and marketing		33,321		31,422		66,232		62,355
General and administrative		22,339		24,282		46,120		47,816
Depreciation and amortization		7,042		6,635		14,370		13,488
Interest income		17		17		32		38
Interest expense		6,172		5,832		12,344		11,664
Other expense		—		1,353		—		1,353

Income before income tax provision		17,087		4,214		28,178		2,902
Income tax provision		7,371		1,603		12,196		1,829

Net income	$	9,716	$	2,611	$	15,982	$	1,073


Net income per common share:
Basic	$	0.26	$	0.05	$	0.41	$	0.02

Diluted	$	0.23	$	0.05	$	0.38	$	0.02


Weighted-average shares outstanding used in computing income per common share:
Basic		37,819		49,315		38,543		49,161

Diluted		45,801		50,925		46,667		50,175

WEBMD HEALTH CORP.

CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands, unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Revenue
Public portal advertising and sponsorship	$	116,212		$	105,783		$	225,415		$	199,221
Private portal services		24,188			19,534			48,817			38,858

	$	140,400		$	125,317		$	274,232		$	238,079


Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	37,917		$	29,241		$	71,183		$	50,530

Interest, taxes, non-cash and other items (b)
Interest income		17			17			32			38
Interest expense		(6,172	)		(5,832	)		(12,344	)		(11,664	)
Income tax provision		(7,371	)		(1,603	)		(12,196	)		(1,829	)
Depreciation and amortization		(7,042	)		(6,635	)		(14,370	)		(13,488	)
Non-cash stock-based compensation		(7,633	)		(11,224	)		(16,323	)		(21,161	)
Other expense		—			(1,353	)		—			(1,353	)

Net income	$	9,716		$	2,611		$	15,982		$	1,073

(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)


	June 30, 2014		December 31, 2013
	(unaudited)
Assets
Cash and cash equivalents	$	781,311	$	824,880
Accounts receivable, net		128,493		124,232
Prepaid expenses and other current assets		16,141		13,243
Deferred tax assets		13,172		13,620

Total current assets		939,117		975,975

Property and equipment, net		61,301		64,884
Goodwill		202,980		202,980
Intangible assets, net		12,699		13,834
Deferred tax assets		36,463		38,802
Other assets		26,885		29,153

Total Assets	$	1,279,445	$	1,325,628


Liabilities and Stockholders’ Equity
Accrued expenses	$	57,668	$	73,739
Deferred revenue		98,336		85,148
Liabilities of discontinued operations		1,506		1,506

Total current liabilities		157,510		160,393

2.25% convertible notes due 2016		252,232		252,232
2.50% convertible notes due 2018		400,000		400,000
1.50% convertible notes due 2020		300,000		300,000
Other long-term liabilities		21,235		22,103
Stockholders’ equity		148,468		190,900

Total Liabilities and Stockholders’ Equity	$	1,279,445	$	1,325,628

WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)


	Six Months Ended
	June 30,
	2014			2013
Cash flows from operating activities:
Net income	$	15,982		$	1,073
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		14,370			13,488
Non-cash interest, net		2,256			2,163
Non-cash stock-based compensation		16,323			21,161
Deferred income taxes		2,803			856
Changes in operating assets and liabilities:
Accounts receivable		(4,261	)		2,829
Prepaid expenses and other, net		(2,668	)		(3,060	)
Accrued expenses and other long-term liabilities		(16,015	)		(10,665	)
Deferred revenue		13,188			6,149

Net cash provided by operating activities		41,978			33,994

Cash flows from investing activities:
Purchases of property and equipment		(11,446	)		(7,367	)

Net cash used in investing activities		(11,446	)		(7,367	)

Cash flows from financing activities:
Proceeds from exercise of stock options		30,147			10,340
Cash used for withholding taxes due on stock-based awards		(10,339	)		(1,745	)
Purchases of treasury stock		(102,353	)		(1,281	)
Excess tax benefit on stock-based awards		8,444			363

Net cash (used in) provided by financing activities		(74,101	)		7,677

Net (decrease) increase in cash and cash equivalents		(43,569	)		34,304
Cash and cash equivalents at beginning of period		824,880			991,835

Cash and cash equivalents at end of period	$	781,311		$	1,026,139

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,
	2014		2013		2014		2013
Numerator:
Net income — Basic	$	9,716	$	2,611	$	15,982	$	1,073
Interest expense on 1.50% convertible notes, net of tax		864		—		1,728		—

Net income — Diluted	$	10,580	$	2,611	$	17,710	$	1,073


Denominator:
Weighted-average shares — Basic		37,819		49,315		38,543		49,161
Stock options and restricted stock		2,301		1,610		2,443		1,014
1.50% convertible notes		5,681		—		5,681		—

Adjusted weighted-average shares after assumed conversions — Diluted		45,801		50,925		46,667		50,175


Net income per common share:
Basic	$	0.26	$	0.05	$	0.41	$	0.02

Diluted	$	0.23	$	0.05	$	0.38	$	0.02

WebMD Health Corp. - FORM 8-K - EX-99.2 - August 5, 2014