EX-99.2 4 g85668exv99w2.htm EX-99.2 THIRD QUARTER FINANCIAL TABLES EX-99.2 THIRD QUARTER FINANCIAL TABLES
 

EXHIBIT 99.2

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

                                     
        Three Months Ended   Nine Months Ended
        September 30,   September 30,
       
 
        2003   2002   2003   2002
       
 
 
 
Revenue
  $ 250,635     $ 217,004     $ 705,584     $ 642,220  
Costs and expenses:
                               
   
Cost of operations
    149,270       123,360       410,556       379,101  
   
Development and engineering
    11,334       10,869       32,654       32,640  
   
Sales, marketing, general and administrative
    72,450       66,883       209,917       218,501  
   
Depreciation, amortization and other
    11,097       32,073       52,961       95,575  
   
Legal expense
    493             493        
   
Restructuring and integration benefit
          2,100             5,850  
   
Gain on investments
    3,039       681       3,222       6,547  
   
Interest income
    6,401       5,222       16,434       14,341  
   
Interest expense
    4,703       2,819       10,444       5,677  
   
Other income
          2,323       1,118       2,323  
 
   
     
     
     
 
Income (loss) from continuing operations before income tax provision (benefit)
    10,728       (8,674 )     9,333       (60,213 )
   
Income tax provision (benefit)
    1,273       (12,103 )     3,261       (10,700 )
 
   
     
     
     
 
Income (loss) from continuing operations
    9,455       3,429       6,072       (49,513 )
Income (loss) from discontinued operations, net of income taxes
    (3,366 )     1,109       (33,611 )     2,240  
 
   
     
     
     
 
Net income (loss)
  $ 6,089     $ 4,538     $ (27,539 )   $ (47,273 )
 
   
     
     
     
 
Basic income (loss) per common share:
                               
   
Income (loss) from continuing operations
  $ 0.03     $ 0.01     $ 0.02     $ (0.16 )
   
Income (loss) from discontinued operations
    (0.01 )     0.01       (0.11 )     0.01  
 
   
     
     
     
 
Net income (loss)
  $ 0.02     $ 0.02     $ (0.09 )   $ (0.15 )
 
   
     
     
     
 
Diluted income (loss) per common share:
                               
   
Income (loss) from continuing operations
  $ 0.03     $ 0.01     $ 0.02     $ (0.16 )
   
Income (loss) from discontinued operations
    (0.01 )     0.00       (0.10 )     0.01  
 
   
     
     
     
 
Net income (loss)
  $ 0.02     $ 0.01     $ (0.08 )   $ (0.15 )
 
   
     
     
     
 
Weighted-average shares outstanding used in computing income (loss) per common share:
                               
 
Basic
    305,471       297,352       304,121       306,161  
 
   
     
     
     
 
 
Diluted
    328,463       308,537       326,396       306,161  
 
   
     
     
     
 

 


 

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

                                     
        Three Months Ended   Nine Months Ended
        September 30,   September 30,
       
 
        2003   2002   2003   2002
       
 
 
 
Revenues
                               
 
Transaction services
  $ 131,977     $ 115,026     $ 365,491     $ 350,157  
 
Physician services
    75,487       70,581       224,295       202,738  
 
Portal services
    31,164       19,851       79,882       54,991  
 
Plastic technologies (a)
    19,093       16,803       55,015       49,552  
 
Inter-segment eliminations
    (7,086 )     (5,257 )     (19,099 )     (15,218 )
 
   
     
     
     
 
 
  $ 250,635     $ 217,004     $ 705,584     $ 642,220  
 
   
     
     
     
 
Income (loss) before restructuring, taxes, non-cash and other items
                               
 
Transaction services
  $ 21,767     $ 24,327     $ 68,160     $ 60,129  
 
Physician services
    3,686       7,174       16,342       19,660  
 
Portal services
    8,712       3,577       18,922       (3,479 )
 
Plastic technologies (a)
    5,690       5,125       15,857       15,526  
 
Corporate
    (12,809 )     (11,493 )     (37,652 )     (38,741 )
 
Interest income
    6,401       5,222       16,434       14,341  
 
Interest expense
    (4,703 )     (2,819 )     (10,444 )     (5,677 )
 
   
     
     
     
 
 
    28,744       31,113       87,619       61,759  
 
   
     
     
     
 
 
Basic income per common share before restructuring, taxes, non-cash and other items (b)
  $ 0.09     $ 0.10     $ 0.29     $ 0.20  
 
   
     
     
     
 
 
Diluted income per common share before restructuring, taxes, non-cash and other items (b)
  $ 0.09     $ 0.10     $ 0.27     $ 0.20  
 
   
     
     
     
 
Restructuring, taxes, non-cash and other items (c)
                               
 
Depreciation, amortization and other
    (11,097 )     (32,073 )     (52,961 )     (95,575 )
 
Amortization of prepaid content and services (included in cost of operations)
    (1,105 )     (453 )     (1,932 )     (2,176 )
 
Amortization of prepaid content and services (included in sales, marketing, general and administrative)
    (4,970 )     (5,696 )     (16,292 )     (17,382 )
 
Non-cash stock compensation (included in sales, marketing, general and administrative)
    (3,390 )     (6,669 )     (10,948 )     (21,559 )
 
Restructuring and integration benefit
          2,100             5,850  
 
Legal expense
    (493 )           (493 )      
 
Gain on investments
    3,039       681       3,222       6,547  
 
Income tax (provision) benefit
    (1,273 )     12,103       (3,261 )     10,700  
 
Other income
          2,323       1,118       2,323  
 
   
     
     
     
 
Income (loss) from continuing operations
    9,455       3,429       6,072       (49,513 )
 
   
     
     
     
 
Income (loss) from discontinued operations, net of income taxes
    (3,366 )     1,109       (33,611 )     2,240  
 
   
     
     
     
 
Net income (loss)
  $ 6,089     $ 4,538     $ (27,539 )   $ (47,273 )
 
   
     
     
     
 
Basic income (loss) per common share:
                               
 
Income (loss) from continuing operations
  $ 0.03     $ 0.01     $ 0.02     $ (0.16 )
 
Income (loss) from discontinued operations
    (0.01 )     0.01       (0.11 )     0.01  
 
   
     
     
     
 
Net income (loss)
  $ 0.02     $ 0.02     $ (0.09 )   $ (0.15 )
 
   
     
     
     
 
Diluted income (loss) per common share:
                               
 
Income (loss) from continuing operations
  $ 0.03     $ 0.01     $ 0.02     $ (0.16 )
 
Income (loss) from discontinued operations
    (0.01 )     0.00       (0.10 )     0.01  
 
   
     
     
     
 
Net income (loss)
  $ 0.02     $ 0.01     $ (0.08 )   $ (0.15 )
 
   
     
     
     
 
Weighted-average shares outstanding used in computing income (loss) per common share:
                               
 
Basic
    305,471       297,352       304,121       306,161  
 
   
     
     
     
 
 
Diluted
    328,463       308,537       326,396       306,161  
 
   
     
     
     
 

(a)   Effective August 1, 2003, the Company completed the sale of two operating units of its Plastic Technologies segment, Porex Bio Products, Inc. and Porex Medical Products, Inc., in two separate transactions. Beginning in the quarter ended September 30, 2003, the Company’s consolidated financial statements reflect these operating units as discontinued operations for all prior periods. The above segment information reflects these operating units as discontinued operations for the current and prior periods.
 
(b)   Basic and diluted income (loss) per common share before restructuring, taxes, non-cash and other items is based on the weighted-average shares outstanding used in computing basic and diluted income (loss) per common share.
 
(c)   Reconciliation of income (loss) before restructuring, taxes, non-cash and other items to income (loss) from continuing operations.

 


 

WebMD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

                     
        September 30,   December 31,
        2003   2002
       
 
        (Unaudited)        
Assets
               
Cash and cash equivalents
  $ 83,872     $ 175,596  
Short-term investments
    211,378       10,888  
Accounts receivable, net
    172,988       163,244  
Inventory
    11,120       9,976  
Current portion of prepaid content and distribution services
    23,582       25,406  
Assets of discontinued operations
          94,056  
Other current assets
    23,810       25,814  
 
   
     
 
   
Total current assets
    526,750       504,980  
                     
Marketable debt securities
    678,315       449,289  
Marketable equity securities
    5,681       7,427  
Property and equipment, net
    80,264       70,488  
Prepaid content and distribution services
    32,670       48,532  
Goodwill
    667,444       586,043  
Intangible assets, net
    91,806       73,222  
Other assets
    34,733       26,267  
 
   
     
 
 
  $ 2,117,663     $ 1,766,248  
 
   
     
 
Liabilities and Stockholders’ Equity
               
Accounts payable
  $ 10,389     $ 10,063  
Accrued expenses
    217,479       208,342  
Deferred revenue
    83,959       81,179  
Liabilities of discontinued operations
          12,365  
 
   
     
 
 
Total current liabilities
    311,827       311,949  
                     
Convertible subordinated notes
    649,999       300,000  
Other long-term liabilities
    1,338       498  
                     
Stockholders’ equity
    1,154,499       1,153,801  
 
   
     
 
 
  $ 2,117,663     $ 1,766,248  
 
   
     
 

 


 

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

                         
            Nine Months Ended
            September 30,
           
            2003   2002
           
 
Cash flows from operating activities:
               
Net loss
  $ (27,539 )   $ (47,273 )
Adjustments to reconcile net loss to net cash provided by operating activities:
               
   
(Income) loss from discontinued operations
    33,611       (2,240 )
   
Depreciation, amortization and other
    52,961       95,575  
   
Amortization of debt issuance costs
    1,505       740  
   
Non-cash content and distribution services
    18,224       19,558  
   
Non-cash stock based compensation
    10,948       21,559  
   
Gain on investments
    (3,222 )     (6,547 )
   
Changes in operating assets and liabilities:
               
     
Accounts receivable
    3,580       5,226  
     
Inventory
    (1,144 )     711  
     
Federal income tax receivable
          (12,887 )
     
Prepaid content and distribution services
    (537 )     (201 )
     
Accounts payable
    (775 )     (3,220 )
     
Accrued expenses
    (12,174 )     (10,216 )
     
Deferred revenue
    (2,228 )     6,822  
     
Other, net
    5,685       (8,001 )
 
   
     
 
       
Net cash provided by continuing operations
    78,895       59,606  
       
Net cash provided by discontinued operations
    5,130       5,809  
 
   
     
 
       
Net cash provided by operating activities
    84,025       65,415  
Cash flows from investing activities:
               
 
Proceeds from maturities and sales of available-for-sale securities
    11,322       106,108  
 
Proceeds from maturities and redemptions of held-to-maturity securities
    157,919       59,095  
 
Purchases of available-for-sale securities
    (7,754 )     (206,983 )
 
Purchases of held-to-maturity securities
    (590,113 )     (300,970 )
 
Purchases of property and equipment
    (13,643 )     (20,737 )
 
Proceeds received from sale of discontinued operations
    46,500        
 
Cash paid in business combinations, net of cash acquired
    (133,471 )     (9,929 )
 
Other changes in equity of discontinued operations
    1,754       7,511  
 
   
     
 
       
Net cash used in continuing operations
    (527,486 )     (365,905 )
       
Net cash used in discontinued operations
    (2,529 )     (9,184 )
 
   
     
 
       
Net cash used in investing activities
    (530,015 )     (375,089 )
Cash flows from financing activities:
               
 
Proceeds from issuance of common stock
    35,367       14,313  
 
Payments of notes payable and other
    (211 )     (2,899 )
 
Redemption of Series B Preferred Stock
          (10,000 )
 
Purchases of treasury shares
    (18,125 )     (103,784 )
 
Net proceeds from issuance of convertible debt
    339,125       292,000  
 
   
     
 
       
Net cash provided by continuing operations
    356,156       189,630  
       
Net cash used in discontinued operations
    (6,546 )     (1,147 )
 
   
     
 
       
Net cash provided by financing activities
    349,610       188,483  
Effect of exchange rates on cash
    711       765  
 
   
     
 
Net decrease in cash and cash equivalents
    (95,669 )     (120,426 )
Changes in cash attributable to discontinued operations
    3,945       4,522  
Cash and cash equivalents at beginning of period
    175,596       278,513  
 
   
     
 
Cash and cash equivalents at end of period
  $ 83,872     $ 162,609