8-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

August 4, 2003

Date of Report (Date of earliest event reported)

WEBMD CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-24975	94-3236644
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer
incorporation)		Identification No.)

669 River Drive, Center 2
Elmwood Park, New Jersey 07407-1361

(Address of principal executive offices, including zip code)

(201) 703-3400

(Registrant’s telephone number, including area code)

(Former name or address, if changed since last report)

TABLE OF CONTENTS

EX-99.1 PRESS RELEASE DATED AUGUST 4, 2003

EX-99.2 PRESS RELEASE DATED AUGUST 5, 2003

EX-99.3 SECOND QUARTER FINANCIAL TABLES

     All statements contained in this Current Report on Form 8-K, other than statements of historical fact, are forward-looking statements, including those regarding WebMD’s guidance on future financial results and other projections or measures of future performance of WebMD; the amount and timing of the benefits expected from strategic initiatives and acquisitions; potential changes in WebMD’s business relationships; future deployment of applications; the prospects for new applications of porous plastics and other porous media; and other potential sources of additional revenue. These statements are based on WebMD’s current plans and expectations and involve risks and uncertainties that could cause actual future events or results to be different than those described in or implied by such forward-looking statements. These risks and uncertainties include those relating to: market acceptance of WebMD’s products and services; operational difficulties relating to combining acquired companies and businesses; WebMD’s ability to form and maintain mutually beneficial relationships with customers and strategic partners; changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet, information technology and plastics industries, including matters relating to the Health Insurance Portability and Accountability Act of 1996 (HIPAA); and the ability of WebMD to attract and retain qualified personnel. Further information about these matters can be found in WebMD’s other Securities and Exchange Commission filings. WebMD expressly disclaims any intent or obligation to update these forward-looking statements.

*     *     *     *

     This Current Report on Form 8-K includes both financial measures in accordance with accounting principles generally accepted in the United States of America, or GAAP, as well as non-GAAP financial measures. The non-GAAP financial measures include: income before taxes, restructuring, non-cash and other items; income from continuing operations before taxes, restructuring, non-cash and other items; and related per share amounts. WebMD believes that those non-GAAP measures, and changes in those measures, are meaningful indicators of WebMD’s performance and provide additional information that management finds useful in evaluating such performance and in planning for future periods. Accordingly, WebMD believes that such additional information may be useful to investors. The non-GAAP financial measures should be viewed as supplemental to, and not as an alternative for, the GAAP financial measures.

*     *     *     *

ITEM 5. OTHER EVENTS

     On August 4, 2003, WebMD Corporation announced that it had completed the sale of Porex Bio Products, Inc. and Porex Medical Products, Inc. in two separate transactions for an aggregate sales price of $46.5 million in cash, subject to customary post-closing adjustments. Porex, WebMD’s plastic technologies segment, retains its core Porous Products and Surgical Products units.

     Molecular BioProducts, Inc., a subsidiary of Apogent Technologies Inc., purchased Bio Products and Medegen Holdings LLC purchased Medical Products. Bio Products manufactures

2

injection-molded disposable plastic products for liquid handling and storage used in the research and clinical laboratory and life science markets. Medical Products manufactures injection-molded plastic medical products and components for the hospital, clinic and home care markets.

     WebMD will realize a loss of approximately $36 million on the divestitures, subject to customary post-closing adjustments, of which approximately $33 million will be reflected in the results for the June 30, 2003 quarter as an impairment charge, with the balance being reflected in the September 30, 2003 quarter as a loss on disposal. Beginning in the September 2003 quarter, the historical results of these businesses, including the loss related to the divestiture, will be reclassified as discontinued operations in the Company’s financial statements.

*     *     *     *

     On August 5, 2003, WebMD Corporation announced its results for the quarter ended June 30, 2003. Attached hereto as Exhibit 99.3 and incorporated by reference herein are financial tables that accompanied the press release issued by WebMD announcing the results.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

(c) Exhibits

     The following exhibits are filed herewith:

99.1	Press Release issued by WebMD Corporation, dated August 4, 2003, regarding the sale of Porex Bio Products, Inc. and Porex Medical Products, Inc.
99.2	Press Release issued by WebMD Corporation, dated August 5, 2003, regarding WebMD’s second quarter results
99.3	Second Quarter Financial Tables Accompanying Exhibit 99.2

ITEM 9. REGULATION FD DISCLOSURE

     On August 4, 2003, WebMD Corporation issued a press release announcing the sale of Porex Bio Products, Inc. and Porex Medical Products, Inc. for an aggregate sales price of $46.5 million in cash, subject to customary post-closing adjustments. A copy of the press release is attached as Exhibit 99.1. Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

3

ITEM 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     On August 5, 2003, WebMD Corporation issued a press release announcing its second quarter 2003 results. A copy of the press release is attached as Exhibit 99.2. Exhibit 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

     The press release was accompanied by the financial tables incorporated by reference into Item 5, above.

4

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, WebMD Corporation has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	WEBMD CORPORATION
Dated: August 5, 2003	By:	/s/ Lewis H. Leicher
		Lewis H. Leicher
		Senior Vice President

5

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release issued by WebMD Corporation, dated August 4, 2003, regarding the sale of Porex Bio Products, Inc. and Porex Medical Products, Inc.
99.2	Press Release issued by WebMD Corporation, dated August 5, 2003, regarding WebMD’s second quarter results
99.3	Second Quarter Financial Tables Accompanying Exhibit 99.2

6 EX-99.1 3 g84217exv99w1.htm EX-99.1 PRESS RELEASE DATED AUGUST 4, 2003

EXHIBIT 99.1

Contacts:
Investors:	Media:
Risa Fisher	Jennifer Meyer
rfisher@webmd.net	jmeyer@webmd.net
201-414-2002	212-624-3912

WEBMD CORPORATION SELLS TWO SUBSIDIARIES OF POREX,
ITS PLASTIC TECHNOLOGIES SEGMENT

Porex to Focus on its Specialty Porous Materials Business

ELMWOOD PARK, NJ (August 4, 2003) — WebMD Corporation (NASDAQ: HLTH) today announced that it has completed the sale of Porex Bio Products, Inc. and Porex Medical Products, Inc., in two separate transactions for an aggregate sales price of $46.5 million in cash, subject to customary post-closing adjustments. Porex, WebMD’s plastic technologies segment, retains its core Porous Products and Surgical Products units. WebMD believes that these transactions will enable Porex to focus on substantial opportunities in the product pipeline of its porous materials business.

“The divestiture of the Bio Products and Medical Products units reflects a recent change in strategic direction to focus Porex on its specialty porous plastic technology businesses where growth opportunities are more significant. As part of our planning process for next year, we determined that the Bio Products and Medical Products businesses would require additional long-term investment in order to deal effectively with increasing competition. Although these businesses are profitable, the prospect of making additional investments in a non-core business in an increasingly competitive market led to our decision to change our strategy and divest these businesses,” said Roger C. Holstein, CEO of WebMD Corporation. He continued, “We remain focused on the new product developments in our core Porex business, including new proprietary surgical implant biomaterials for the reconstructive, aesthetic and neurosurgery markets, as well as new proprietary material designs for the rapidly growing water filtration market, new components that enable superior fluid dynamics in photo quality printers and patented membrane media technology for the immunoassay diagnostic testing market.”

Molecular BioProducts, Inc., a subsidiary of Apogent Technologies Inc. (NYSE:AOT), purchased Bio Products and Medegen Holdings LLC purchased Medical Products. Bio Products manufactures injection-molded disposable plastic products for liquid handling and storage used in the research and clinical laboratory and life science markets. Medical Products manufactures injection-molded plastic medical products and components for the hospital, clinic and home care markets.

WebMD will realize a loss of approximately $36 million on the divestitures, subject to customary post-closing adjustments, of which approximately $33 million will be reflected in the results for the June 30, 2003 quarter as an impairment charge, with the balance being reflected in the September 30, 2003 quarter as a loss on disposal. The two units had revenues of $54.2 million for the twelve months ended December 31, 2002 and $13.2 million for the three months ended March 31, 2003, respectively. They contributed approximately $10.1 million and $2.6 million in income before restructuring, taxes, non-cash and other items and $3.4 million and $1.5 million in net income for the same periods, respectively. Additionally, beginning in the September 2003 quarter, the historical results of these businesses, including the loss related to the divestiture, will be reclassified as discontinued operations in the Company’s financial statements. In connection with the transactions, WebMD is retaining ownership of certain real estate assets.

*     *     *     *

As previously announced, WebMD will release financial results for the three months ended June 30, 2003 at approximately 4:00 pm (ET) on Tuesday, August 5, 2003. The Company will host a conference call at 4:45 pm (ET) on that day to discuss these results and, among other things, the transactions described in this release. Investors can access the call via webcast at www.webmd.com (in the About WebMD section). A replay of the call will be available at the same web address.

ABOUT WEBMD

WebMD Corporation provides services that help physicians, consumers, providers and health plans navigate the complexity of the healthcare system. Our products and services streamline administrative and clinical processes, promote efficiency and reduce costs by facilitating information exchange, communication and electronic transactions between healthcare participants.

WebMD Health is the leading provider of online information, educational services and communities for physicians and consumers. WebMD Medical Manager is the leading provider of physician practice management software and related services. WebMD Envoy is the leader in payer and healthcare provider transaction processing and reimbursement cycle management services.

Porex is a developer, manufacturer and distributor of proprietary porous plastic products and components used in healthcare, industrial and consumer applications.

All statements contained in this press release, other than statements of historical fact, are forward-looking statements, including those regarding: WebMD’s guidance on future financial results and other projections or measures of future performance of WebMD; the amount and timing of the benefits expected from strategic initiatives and acquisitions; potential changes in WebMD’s business relationships; future deployment of applications; the prospects for new applications of porous plastics and other porous media; and other potential sources of additional revenue. These statements are based on WebMD’s current plans and expectations and involve risks and uncertainties that could cause actual future events or results to be different than those described in or implied by such forward-looking statements. These risks and uncertainties include those relating to: market acceptance of WebMD’s products and services; operational difficulties relating to combining acquired companies and businesses; WebMD’s ability to form and maintain mutually beneficial relationships with customers and strategic partners; changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet, information technology and plastics industries, including matters relating to the Health Insurance Portability and Accountability Act of 1996 (HIPAA); and the ability of WebMD to attract and retain qualified personnel. Further information about these matters can be found in WebMD’s Securities and Exchange Commission filings. WebMD expressly disclaims any intent or obligation to update these forward-looking statements.

EX-99.2 4 g84217exv99w2.htm EX-99.2 PRESS RELEASE DATED AUGUST 5, 2003

EXHIBIT 99.2

FOR IMMEDIATE RELEASE

Contacts:
Investors:	Media:
Risa Fisher	Jennifer Meyer
rfisher@webmd.net	jmeyer@webmd.net
201-414-2002	212-624-3912

WEBMD REPORTS SECOND QUARTER RESULTS

WEBMD REPORTS 8% REVENUE GROWTH

WEBMD REPORTS 56% GROWTH IN INCOME BEFORE TAXES, RESTRUCTURING, NON-CASH AND
OTHER ITEMS

WEBMD NET LOSS OF $(0.09) PER SHARE INCLUDES $(0.11) PER SHARE IMPAIRMENT CHARGE FROM SALE OF
CERTAIN POREX SUBSIDIARIES

ELMWOOD PARK, NJ (August 5, 2003) — WebMD Corporation (NASDAQ: HLTH) today reported financial results for its second quarter ended June 30, 2003.

Key Financial Highlights

Revenue for the quarter was $246.5 million compared to $227.6 million last year, an increase of 8%. Income before taxes, non-cash, restructuring and other items for the quarter was $32.5 million or $0.11 per share compared to $20.9 million or $0.07 per share last year, an increase of 56%. Net loss for the quarter was ($26.3) million or ($0.09) per share which includes an impairment charge of approximately $33 million or $0.11 per share related to the sale of certain divisions of Porex. Excluding the impairment charges related to these businesses, the Company would have had net income of $6.8 million or $0.02 per share, an improvement of $28.4 million or $0.09 per share over the prior year. As of June 30, 2003, WebMD had $946 million in cash and short and long-term marketable debt securities.

Roger C. Holstein, Chief Executive Officer, stated, “With revenue growth of 8% and growth of income before taxes, non-cash, restructuring and other items of 56%, I am pleased with our accomplishments in the June quarter and our continued progress in each of our businesses. The external trends in healthcare and recent regulatory announcements continue to validate our strategy and encourage the use of our products and services.”

Segment Operating Results

WebMD Envoy revenues were $118 million for the June 2003 quarter, which as anticipated, was flat compared to last year. Revenue and profitability continues to reflect positive changes in transaction mix. Income before interest, taxes, restructuring, non-cash and other items was $22.3 million, an increase of approximately 22% from last year, reflecting the continued benefits of the Company’s consolidation activities and more profitable transaction mix.

WebMD Medical Manager revenues were $76.8 million for the June 2003 quarter, an increase of 16% from last year, driven by increases in larger systems installations for Intergy as well as a record number of network

services installations. Income before interest, taxes, restructuring, non-cash and other items was $6.4 million, which is equal to last year and reflects the previously announced investments necessary to deal with the strong demand for network services product offerings.

WebMD Health revenues were $26.5 million for the June 2003 quarter, an increase of 47% from last year, driven by the continued demand for educational and promotional programs aimed at physicians and consumers. Income before interest, taxes, restructuring, non-cash and other items was $6.2 million, an improvement of $8.4 million from a loss of ($2.2) million last year.

Porex revenues were $31.6 million for the June 2003 quarter, which as anticipated, was equal to last year. Income before interest, taxes, restructuring, non-cash and other items was $8.0 million, a decrease of $0.2 million from last year. These results include the revenues and earnings from the two subsidiaries of Porex, which were divested last week. The divestiture of the two Porex business units reflects a change in strategic direction to focus Porex principally on its specialty porous plastic materials businesses where growth opportunities are more significant.

Financial Guidance

WebMD’s financial guidance for the balance of 2003 is impacted by the divestiture of the Porex injection molding businesses, recent acquisitions, and the continued investments to meet the demand for its all-payer solution, capitalize upon opportunities from the new acquisitions and support HIPAA-related testing, translating, reporting and communications.

WebMD expects revenues for the last two quarters of 2003 to be approximately $257 to $262 million for the September quarter and $269 to $274 million for the December quarter. Income per share from continuing operations before taxes, non-cash, restructuring and other items is expected to be $0.11 per share in the September quarter and $0.13 per share in the December quarter. These per share amounts reflect the impact of the divestiture of the Porex businesses which had contributed approximately $0.01 per share on a quarterly basis. Income from continuing operations is expected to be $0.04 per share in the September quarter and $0.07 per share in the December quarter.

Martin J. Wygod, Chairman of the Board, said, “With $946 million in cash, we are well positioned to make the investments, both internal and through acquisition, to leverage the strength of the WebMD brand and our unmatched distribution to physicians, patients and payers. We are already seeing the results of our investments at WebMD Health. We should begin to reap the return on our HIPAA investments at WebMD Medical Manager in the second half. Additionally, we will continue our investments in new product development at WebMD Envoy to capitalize upon our recent acquisition to create substantial future revenue opportunities.”

Analyst and Investor Conference Call

As previously announced, WebMD will hold a conference call with investors and analysts to discuss these results at 4:45 p.m. (EDT) on August 5, 2003. Investors and the general public are invited to listen to a live audio webcast of the call at www.webmd.com (in the About WebMD section).

At the conclusion of its conference call, WebMD will make available on its website (www.webmd.com in the About WebMD section) historical unaudited pro forma condensed quarterly income statements, segment data and balance sheets which reflect the reclassification of the divested plastics businesses as a discontinued operation for 2002 and 2003.

ABOUT WEBMD

WebMD Corporation provides services that help physicians, consumers, providers and health plans navigate the complexity of the healthcare system. Our products and services streamline administrative and clinical processes, promote efficiency and reduce costs by facilitating information exchange, communication and electronic transactions between healthcare participants.

WebMD Health is the leading provider of online information, educational services and communities for physicians and consumers. WebMD Medical Manager is the leading provider of physician practice management software and related services. WebMD Envoy is the leading provider of electronic data interchange services for healthcare providers and commercial health plans.

Porex is a developer, manufacturer and distributor of proprietary porous plastic products and components used in healthcare, industrial and consumer applications. Porex customers include both end-users of its finished products as well as manufacturers that include Porex components in their products.

All statements contained in this press release, other than statements of historical fact, are forward-looking statements, including those regarding our guidance on future financial results and other projections or measures of future performance of WebMD; the amount and timing of the benefits expected from strategic initiatives and acquisitions; potential changes in WebMD’s business relationships; future deployment of applications; the prospects for new applications of porous plastics and other porous media; and other potential sources of additional revenue. These statements are based on WebMD’s current plans and expectations and involve risks and uncertainties that could cause actual future events or results to be different than those described in or implied by such forward-looking statements. These risks and uncertainties include those relating to: market acceptance of WebMD’s products and services; operational difficulties relating to combining acquired companies and businesses; WebMD’s ability to form and maintain mutually beneficial relationships with customers and strategic partners; changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet, information technology and plastics industries, including matters relating to the Health Insurance Portability and Accountability Act of 1996 (HIPAA); and the ability of WebMD to attract and retain qualified personnel. Further information about these matters can be found in WebMD’s Securities and Exchange Commission filings. WebMD expressly disclaims any intent or obligation to update these forward-looking statements.

This press release includes both financial measures in accordance with accounting principles generally accepted in the United States of America, or GAAP, as well as non-GAAP financial measures. The non-GAAP financial measures include: income before taxes, restructuring, non-cash and other items; income from continuing operations before taxes, restructuring, non-cash and other items; and related per share amounts. WebMD believes that those non-GAAP measures, and changes in those measures, are meaningful indicators of WebMD’s performance and provide additional information that WebMD management finds useful in evaluating such performance and in planning for future periods. Accordingly, WebMD believes that such additional information may be useful to investors. The non-GAAP financial measures should be viewed as supplemental to, and not as an alternative for, the GAAP financial measures. The tables attached to this press release contain historical GAAP financial measures and a reconciliation between historical GAAP and non-GAAP financial measures. With respect to the Financial Guidance in this press release, income from continuing operations is expected to include, for each of the September and December quarters, depreciation and amortization of $11 to $12 million, other non-cash expenses of $7 million to $10 million and income taxes of $1.0 to $1.5 million.

-Tables Follow-

EX-99.3 5 g84217exv99w3.htm EX-99.3 SECOND QUARTER FINANCIAL TABLES

EXHIBIT 99.3

WebMD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)

		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2003			2002			2003			2002
Revenue		$	246,471		$	227,644		$	481,214		$	453,517
Costs and expenses:
	Cost of operations		143,582			135,648			277,962			274,179
	Development and engineering		10,490			11,113			21,502			21,981
	Sales, marketing, general and administrative		71,724			76,511			141,794			155,877
	Depreciation and amortization		16,016			33,033			43,992			65,792
	Impairment of long-lived assets		33,113			609			33,113			609
	Restructuring and integration charge (benefit)		—			1,160			—			(2,590	)
	Other income		1,118			5,866			1,301			5,866
	Interest income		4,994			6,022			10,049			9,162
	Interest expense		2,927			2,954			5,848			3,095
Loss before income tax provision			(25,269	)		(21,496	)		(31,647	)		(50,398	)
	Income tax provision		1,001			713			1,981			1,413
Net loss		$	(26,270	)	$	(22,209	)	$	(33,628	)	$	(51,811	)
Basic and diluted net loss per common share		$	(0.09	)	$	(0.07	)	$	(0.11	)	$	(0.17	)
Weighted-average shares outstanding used in computing basic and diluted net loss per common share			304,001			309,462			303,447			310,565

WebMD CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)

		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2003			2002			2003			2002
Revenues
	Transaction services	$	118,021		$	117,204		$	233,514		$	235,131
	Physician services		76,797			66,068			148,808			132,157
	Portal services		26,538			18,006			48,718			35,140
	Plastic technologies		31,649			31,509			62,187			61,050
	Inter-segment eliminations		(6,534	)		(5,143	)		(12,013	)		(9,961	)
		$	246,471		$	227,644		$	481,214		$	453,517
Income (loss) before taxes, restructuring, non-cash and other items
	Transaction services	$	22,342		$	18,264		$	46,393		$	35,802
	Physician services		6,359			6,234			12,656			12,486
	Portal services		6,192			(2,219	)		10,210			(7,056	)
	Plastic technologies		7,967			8,197			15,247			15,795
	Corporate		(12,381	)		(12,641	)		(24,843	)		(27,248	)
	Interest income		4,994			6,022			10,049			9,162
	Interest expense		(2,927	)		(2,954	)		(5,848	)		(3,095	)
		$	32,546		$	20,903		$	63,864		$	35,846
	Basic and diluted income per common share before taxes, restructuring, non-cash and other items (a)	$	0.11		$	0.07		$	0.21		$	0.12
Taxes, restructuring, non-cash and other items (b)
	Depreciation and amortization	$	(16,016	)	$	(33,033	)	$	(43,992	)	$	(65,792	)
	Amortization of prepaid content and services (included in cost of operations)		(827	)		(750	)		(827	)		(1,724	)
	Amortization of prepaid content and services (included in sales, marketing, general and administrative)		(5,176	)		(5,399	)		(11,322	)		(11,685	)
	Non-cash stock compensation (included in sales, marketing, general and administrative)		(3,801	)		(7,314	)		(7,558	)		(14,890	)
	Impairment of long-lived assets		(33,113	)		(609	)		(33,113	)		(609	)
	Restructuring and integration (charge) benefit		—			(1,160	)		—			2,590
	Income tax provision		(1,001	)		(713	)		(1,981	)		(1,413	)
	Other income		1,118			5,866			1,301			5,866
Net loss		$	(26,270	)	$	(22,209	)	$	(33,628	)	$	(51,811	)
	Basic and diluted net loss per common share	$	(0.09	)	$	(0.07	)	$	(0.11	)	$	(0.17	)
	Weighted-average shares outstanding used in computing basic and diluted net loss per common share		304,001			309,462			303,447			310,565

(a)	Basic and diluted income per common share before taxes, restructuring, non-cash and other items is based on the weighted average shares outstanding used in computing basic and diluted net loss per common share.
(b)	Reconciliation of income before taxes, restructuring, non-cash and other items to net loss.

WebMD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

			June 30,		December 31,
			2003		2002
			(Unaudited)
Assets
Cash and cash equivalents			$	461,530	$	179,541
Short-term investments				216,060		10,888
Accounts receivable, net				178,357		170,467
Inventory				19,724		18,804
Current portion of prepaid content and distribution services				24,944		25,406
Other current assets				21,180		26,197
		Total current assets		921,795		431,303
Marketable debt securities				268,222		449,289
Marketable equity securities				7,504		7,427
Property and equipment, net				89,160		94,737
Prepaid content and distribution services				37,290		48,532
Goodwill				615,488		629,055
Intangible assets, net				50,051		79,536
Other assets				35,801		26,369
			$	2,025,311	$	1,766,248
Liabilities and Stockholders’ Equity
Accounts payable			$	13,880	$	11,494
Accrued expenses				186,280		212,600
Deferred revenue				86,588		81,179
Current portion of long-term debt				—		6,546
	Total current liabilities			286,748		311,819
Convertible subordinated notes				599,999		300,000
Other long-term liabilities				631		628
Stockholders’ equity				1,137,933		1,153,801
			$	2,025,311	$	1,766,248

WebMD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)

				Six Months Ended
				June 30,
				2003			2002
Cash flows from operating activities:
Net loss				$	(33,628	)	$	(51,811	)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Depreciation and amortization				43,992			65,792
	Impairment of long-lived assets				33,113			609
	Amortization of debt issuance costs				774			374
	Non-cash content and distribution services				12,149			13,409
	Non-cash stock-based compensation				7,558			14,890
	Non-cash portion of restructuring and integration charge				—			617
	Gain on investments				(183	)		(5,866	)
	Changes in operating assets and liabilities:
		Accounts receivable			(5,262	)		2,097
		Inventory			(920	)		1,481
		Prepaid content and distribution services			(445	)		(938	)
		Accounts payable			1,827			(5,108	)
		Accrued expenses			(26,885	)		1,210
		Deferred revenue			478			10,871
		Other, net			4,751			(1,116	)
			Net cash provided by operating activities		37,319			46,511
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities					2,631			101,826
Proceeds from maturities and redemptions of held-to-maturity securities					102,919			1,055
Purchases of available-for-sale securities					(6,730	)		(201,565	)
Purchases of held-to-maturity securities					(124,931	)		(246,072	)
Purchases of property and equipment					(9,571	)		(14,370	)
Cash paid in business combinations, net of cash acquired					(14,701	)		(2,924	)
			Net cash used in investing activities		(50,383	)		(362,050	)
Cash flows from financing activities:
Proceeds from issuance of common stock					28,578			13,369
Payments of notes payable and other					(6,563	)		(4,021	)
Redemption of Series B Preferred Stock					—			(10,000	)
Purchases of treasury stock					(18,125	)		(88,747	)
Net proceeds from issuance of convertible debt					290,500			292,000
			Net cash provided by financing activities		294,390			202,601
Effect of exchange rates on cash					663			899
Net increase (decrease) in cash and cash equivalents					281,989			(112,039	)
Cash and cash equivalents at beginning of period					179,541			286,273
Cash and cash equivalents at end of period				$	461,530		$	174,234

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EX-99.1

EX-99.1 PRESS RELEASE DATED AUGUST 4, 2003

EX-99.2

EX-99.2 PRESS RELEASE DATED AUGUST 5, 2003

EX-99.3

EX-99.3 SECOND QUARTER FINANCIAL TABLES