8-K

UNITED STATES
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

November 2, 2004

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 Identification
incorporation)		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)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[  ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-99.1 PRESS RELEASE, DATED NOVEMBER 4, 2004

EX-99.2 FINANCIAL TABLES

EX-99.3 UPDATED 2004 FINANCIAL GUIDANCE

EX-99.4 CHARTER OF THE GOVERNANCE COMMITTEE OF THE BOARD OF DIRECTORS

     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 planned IPO of WebMD Health equity; the amount and timing of the benefits expected from strategic initiatives and acquisitions or from deployment of new or updated technologies, products, services or 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 manner and timing of implementation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the healthcare industry’s responses; 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.

* * * *

     Exhibit 99.2 furnished with 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 WebMD’s income before restructuring, taxes, non-cash and other items; WebMD’s income before taxes, non-cash and other items; and related per share amounts. Exhibit 99.2 to this Current Report on Form 8-K includes a reconciliation of the non-GAAP financial measures to the GAAP financial measures. Exhibit 99.3 to this Current Report includes a reconciliation of forward-looking non-GAAP information to forward-looking GAAP financial information, each of which is expected to be discussed on the Analyst and Investor Conference Call referred to in Exhibit 99.1. WebMD believes that the above 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.

Item 1.01. Entry into a Material Definitive Agreement

     On November 2, 2004, the Compensation Committee of our Board of Directors approved changes in the compensation of non-employee directors for service on the Board and certain of its committees. The description of such compensation included in Item 8.01 is incorporated by reference herein.

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Item 2.02. Results of Operations and Financial Condition

     On November 4, 2004, WebMD Corporation issued a press release announcing its results for the quarter ended September 30, 2004. A copy of the press release is attached as Exhibit 99.1. Exhibit 99.1 is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange 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 8.01, below.

Item 7.01. Regulation FD Disclosure

     Exhibit 99.3 to this Current Report includes forward-looking financial information expected to be discussed on the previously announced conference call with investors and analysts to be held by WebMD at 4:45 pm (Eastern time) today. The call can be accessed at www.webmd.com (in the About WebMD section) and a replay will be available at the same location. Exhibit 99.3 is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange 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.

Item 8.01. Other Events.

     On November 4, 2004, WebMD Corporation issued a press release announcing its results for the quarter ended September 30, 2004. Attached hereto as Exhibit 99.2 and incorporated by reference herein are financial tables that accompanied the press release issued by WebMD announcing the results. In addition, WebMD provided an update regarding its previously announced plans to establish WebMD Health, its Portal Services segment, as a publicly traded company. WebMD stated that, based on the recommendations of its outside advisors, WebMD has decided to take the steps necessary for a sale of approximately 10% of the equity of WebMD Health in an initial public offering. WebMD expects to file a registration statement for the WebMD Health IPO in early 2005, following the release of its year-end financial statements, subject to the Board’s evaluation of market conditions at that time. WebMD does not anticipate making any decisions until after the IPO is completed regarding whether any additional equity will be sold or any other subsequent transaction will occur. WebMD’s Board of Directors has formed a special committee (which we refer to as the WebMD Health Transaction Committee), consisting of Martin Wygod, Mark Adler and Neil Dimick, to provide oversight of the preparations for the WebMD Health IPO.

     This Current Report shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of WebMD Health securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

* * *

     Our Board of Directors currently has four standing committees: an Executive Committee, a Compensation Committee, an Audit Committee, and a Nominating Committee. On October 28, 2004, our Board

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of Directors reconstituted the Nominating Committee, effective on November 15, 2004, with the following members: Neil Dimick (who will serve as its Chairperson), Paul Brooke and Herman Sarkowsky. Additional information regarding our Board and its committees is contained in the Proxy Statement, filed with the SEC on August 16, 2004, for our 2004 Annual Meeting of Stockholders.

     On October 28, 2004, our Board of Directors established, effective on November 15, 2004, an additional standing committee: the Governance & Compliance Committee. The Charter of the Governance & Compliance Committee, which describes the purpose and responsibilities of the Committee, is filed with this Current Report as Exhibit 99.4. Pursuant to that Charter, the membership of the Governance & Compliance Committee shall consist of the Chairpersons of the Nominating, Audit and Compensation Committees and the Chairperson of the Nominating Committee shall be the Chairperson of the Governance & Compliance Committee, unless otherwise determined by the Committee. The initial members of the Governance & Compliance Committee will be Neil Dimick (who, as Chairperson of the Nominating Committee, will serve as its Chairperson), Mark Adler (who is Chairperson of the Compensation Committee) and James Manning (who is Chairperson of the Audit Committee).

     On November 2, 2004, the Compensation Committee of our Board of Directors approved changes in the compensation of non-employee directors for service on the Board and certain of its committees. The annual retainer for non-employee directors was increased from $25,000 to $30,000. Members of the Audit Committee will continue to receive an additional annual retainer of $15,000. The following additional retainers for members on standing committees were established: Compensation and Nominating Committees – $5,000; Governance & Compliance Committee – $10,000. In addition, the following retainers payable to committee chairpersons for their services as chairperson were established: Compensation Committee and Nominating Committee – $2,500; Audit Committee and Governance & Compliance Committee – $10,000. Our non-employee directors do not receive per meeting fees for service on the Board or any of its committees. Non-employee directors will continue to receive an automatic grant, on January 1 of each year, of options to purchase 20,000 shares of WebMD common stock, with an exercise price equal to the closing price on the last trading day of the prior year.

     The Compensation Committee also determined that non-employee members of the WebMD Health Transaction Committee (described above) will receive a fee of $10,000 per quarter, payable in arrears, during their period of service on that Committee.

     The fees payable to members of the Special Committee of the Board of Directors overseeing matters related to the previously reported investigation by the United States Attorney for the District of South Carolina were not changed and remain $15,000 per quarter, payable in arrears.

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Item 9.01. Financial Statements and Exhibits

(c)	Exhibits
	The following exhibits are filed or furnished herewith:

99.1	Press Release issued by WebMD Corporation, dated November 4, 2004, regarding WebMD’s results for the quarter ended September 30, 2004
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Updated 2004 Financial Guidance
99.4	Charter of the Governance & Compliance Committee of WebMD Corporation’s Board of Directors

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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: November 4, 2004	By:	/s/ Lewis H. Leicher
		Lewis H. Leicher
		Senior Vice President

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EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release issued by WebMD Corporation, dated November 4, 2004, regarding WebMD’s results for the quarter ended September 30, 2004
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Updated 2004 Financial Guidance
99.4	Charter of the Governance & Compliance Committee of WebMD Corporation’s Board of Directors

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EX-99.1

EXHIBIT 99.1

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

WEBMD REPORTS THIRD QUARTER RESULTS

ELMWOOD PARK, NJ (November 4, 2004) – WebMD Corporation (NASDAQ: HLTH) today announced financial results for the three months ended September 30, 2004.

Key Financial Highlights

Revenue for the third quarter was $299.6 million compared to $250.6 million a year ago, an increase of 19.5%. Income before restructuring, taxes, non-cash and other items for the third quarter was $38.0 million or $0.11 per share compared to $28.7 million or $0.09 per share a year ago. Income from continuing operations for the third quarter was $8.2 million or $0.02 per share compared to income from continuing operations of $9.5 million or $0.03 per share a year ago.

As of September 30, 2004, WebMD had approximately $650 million in cash, short-term investments and long-term marketable debt securities.

“Our third quarter results were consistent with our expectations,” said Kevin Cameron, Chief Executive Officer of WebMD Corporation. “We made progress against our strategic and operational objectives, which contributed in part to improved results for the quarter. We will continue to focus on accelerating payer and provider adoption of enhanced products and services that take advantage of the technologies available today.”

Segment Operating Results

WebMD Business Services revenue was $174.6 million for the third quarter compared to $132.0 million in the prior year, an increase of 32.3%. The $42.7 million increase in WebMD Business Services revenues includes $29.7 million of revenues from customers acquired in recent acquisitions. Income before taxes, non-cash and other items was $31.8 million compared to $21.8 million in the prior year. Operating margins increased as a result of higher operating margins of recent acquisitions.

WebMD Practice Services revenue was $76.9 million for the third quarter compared to $75.5 million in the prior year. Income before taxes, non-cash and other items was $5.9 million compared to $3.7 million in the prior year. These results primarily reflect the increased margin associated with increased revenue and operating efficiencies.

WebMD Health revenue was $37.0 million for the third quarter compared to $31.2 million in the prior year, a gain of 18.8%, primarily driven by continued growth in online promotion, education from our public portal, and benefits and health management solutions from our private portals. Income before taxes, non-cash and other items was $10.0 million compared to $8.7 million in the prior year.

Porex revenue was $19.4 million for the third quarter compared to $19.1 million in the prior year, an increase of 1.5%. Income before taxes, non-cash and other items was $5.8 million compared to $5.7 million in the prior year.

Financial Guidance

WebMD provided guidance for the remainder of 2004 in a Form 8-K furnished to the Securities and Exchange Commission today. This guidance includes revenues for the fourth quarter of $305 to $310 million; income before taxes, non-cash and other items of $0.13 per share and net income of $0.06 per share.

At WebMD Business Services, the Company expects growth from its new suite of value added services; however, it also expects that revenue from traditional EDI services may decline. If this decline does occur, it may not be offset until the latter half of 2005, due to the implementation cycles associated with many of its new products. WebMD intends to provide full financial guidance for 2005 in January.

Company Intends to Pursue IPO of WebMD Health Business

Based on the recommendations of the Company’s outside advisers, WebMD has decided to take the steps necessary to sell approximately 10% of the equity of WebMD Health in an initial public offering. The

Company expects to file a registration statement for the WebMD Health IPO in early 2005, after the release of its year-end financial statements, subject to the Board’s evaluation of market conditions at that time.

Analyst and Investor Conference Call

WebMD will hold a conference call with investors and analysts to discuss these results at 4:45 pm (eastern) on November 4, 2004. The call can be accessed at www.webmd.com (in the About WebMD section). A replay of the audio webcast 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 a leading provider of online information, educational services and communities for physicians and consumers. WebMD Practice Services is a leading provider of physician practice management software and related services. WebMD Business Services is a 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. Porex customers include both end-users of its finished products as well as manufacturers that include Porex components in their products.

*****************************

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of WebMD Health securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

*****************************

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 planned IPO of WebMD Health equity; the amount and timing of the benefits expected from strategic initiatives and acquisitions or from deployment of new or updated technologies, products, services or 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 manner and timing of implementation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the healthcare industry’s responses; 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: WebMD’s income before restructuring, taxes, non-cash and other items; income before taxes, 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. WebMD is filing a Current Report on Form 8-K today containing this press release. Exhibit 99.3 to that Current Report includes a reconciliation of certain forward-looking non-GAAP information to GAAP financial information.

-Tables Follow-

EX-99.2

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,
	2004		2003			2004		2003
Revenue	$	299,615	$	250,635		$	852,710	$	705,584
Costs and expenses:
Cost of operations		168,571		149,270			495,174		410,556
Development and engineering		14,392		11,334			38,479		32,654
Sales, marketing, general and administrative		84,762		72,450			245,054		209,917
Depreciation, amortization and other		15,189		11,097			40,922		52,961
Legal expense		2,325		493			6,577		493
Restructuring and integration charge		4,535		—			4,535		—
Interest income		4,512		6,401			14,506		16,434
Interest expense		4,843		4,703			14,429		10,444
Other income, net		94		3,039			578		4,340
Income from continuing operations before income tax provision		9,604		10,728			22,624		9,333
Income tax provision		1,435		1,273			2,979		3,261
Income from continuing operations		8,169		9,455			19,645		6,072
Loss from discontinued operations, net of income taxes		—		3,366			—		33,611
Net income (loss)	$	8,169	$	6,089		$	19,645	$	(27,539	)
Basic income (loss) per common share:
Income from continuing operations	$	0.03	$	0.03		$	0.06	$	0.02
Loss from discontinued operations		—		(0.01	)		—		(0.11	)
Net income (loss)	$	0.03	$	0.02		$	0.06	$	(0.09	)
Diluted income (loss) per common share:
Income from continuing operations	$	0.02	$	0.03		$	0.06	$	0.02
Loss from discontinued operations		—		(0.01	)		—		(0.10	)
Net income (loss)	$	0.02	$	0.02		$	0.06	$	(0.08	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		312,366		305,471			311,379		304,121
Diluted		333,978		328,463			333,048		326,396

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004			2003			2004			2003
Revenues
Transaction services	$	174,643		$	131,977		$	504,459		$	365,491
Physician services		76,924			75,487			219,703			224,295
Portal services		37,017			31,164			95,178			79,882
Plastic technologies		19,385			19,093			58,543			55,015
Inter-segment eliminations		(8,354	)		(7,086	)		(25,173	)		(19,099	)
	$	299,615		$	250,635		$	852,710		$	705,584
Income (loss) before restructuring, taxes, non-cash and other items
Transaction services	$	31,750		$	21,767		$	90,514		$	68,160
Physician services		5,856			3,686			8,978			16,342
Portal services		10,040			8,712			22,208			18,922
Plastic technologies		5,823			5,690			17,140			15,857
Corporate		(15,170	)		(12,809	)		(42,703	)		(37,652	)
Interest income		4,512			6,401			14,506			16,434
Interest expense		(4,843	)		(4,703	)		(14,429	)		(10,444	)
	$	37,968		$	28,744		$	96,214		$	87,619
Basic income per common share before restructuring, taxes, non-cash and other items (a)	$	0.12		$	0.09		$	0.31		$	0.29
Diluted income per common share before restructuring, taxes, non-cash and other items (a)	$	0.11		$	0.09		$	0.29		$	0.27
Restructuring, taxes, non-cash and other items (b)
Depreciation, amortization and other	$	(15,189	)	$	(11,097	)	$	(40,922	)	$	(52,961	)
Amortization of prepaid content and services (included in cost of operations)		(104	)		(1,105	)		(705	)		(1,932	)
Amortization of prepaid content and services (included in sales, marketing, general and administrative)		(3,505	)		(4,970	)		(14,188	)		(16,292	)
Non-cash stock compensation (included in sales, marketing, general and administrative)		(2,800	)		(3,390	)		(7,241	)		(10,948	)
Legal expense		(2,325	)		(493	)		(6,577	)		(493	)
Restructuring and integration charge		(4,535	)		—			(4,535	)		—
Income tax provision		(1,435	)		(1,273	)		(2,979	)		(3,261	)
Other income, net		94			3,039			578			4,340
Income from continuing operations		8,169			9,455			19,645			6,072
Loss from discontinued operations, net of income taxes		—			(3,366	)		—			(33,611	)
Net income (loss)	$	8,169		$	6,089		$	19,645		$	(27,539	)
Basic income (loss) per common share:
Income from continuing operations	$	0.03		$	0.03		$	0.06		$	0.02
Loss from discontinued operations		—			(0.01	)		—			(0.11	)
Net income (loss)	$	0.03		$	0.02		$	0.06		$	(0.09	)
Diluted income (loss) per common share:
Income from continuing operations	$	0.02		$	0.03		$	0.06		$	0.02
Loss from discontinued operations		—			(0.01	)		—			(0.10	)
Net income (loss)	$	0.02		$	0.02		$	0.06		$	(0.08	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		312,366			305,471			311,379			304,121
Diluted		333,978			328,463			333,048			326,396

(a)	Basic and diluted income 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.
(b)	Reconciliation of income before restructuring, taxes, non-cash and other items to income from continuing operations.

WebMD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	September 30,		December 31,
	2004		2003
	(Unaudited)		(Audited)
Assets
Cash and cash equivalents	$	108,204	$	63,298
Short-term investments		25,784		207,383
Accounts receivable, net		203,288		181,173
Inventory		12,579		12,158
Current portion of prepaid content and distribution services		16,221		18,116
Other current assets		24,978		25,973
Total current assets		391,054		508,101
Marketable debt securities		515,096		451,290
Marketable equity securities		3,373		4,744
Property and equipment, net		83,071		77,278
Prepaid content and distribution services		19,020		31,992
Goodwill		959,799		844,448
Intangible assets, net		270,426		184,130
Other assets		35,800		33,323
	$	2,277,639	$	2,135,306
Liabilities and Stockholders’ Equity
Accounts payable	$	10,777	$	10,390
Accrued expenses		207,271		208,430
Deferred revenue		104,794		86,708
Total current liabilities		322,842		305,528
Convertible subordinated notes		649,999		649,999
Other long-term liabilities		974		1,182
Convertible redeemable exchangeable preferred stock		98,240		—
Stockholders’ equity		1,205,584		1,178,597
	$	2,277,639	$	2,135,306

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

	Nine Months Ended
	September 30,
	2004			2003
Cash flows from operating activities:
Net income (loss)	$	19,645		$	(27,539	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss from discontinued operations		—			33,611
Depreciation, amortization and other		40,922			52,961
Amortization of debt issuance costs		2,255			1,505
Non-cash content and distribution services		14,893			18,224
Non-cash stock-based compensation		7,241			10,948
Gain on investments		(457	)		(3,222	)
Gain on sale of property and equipment		(121	)		—
Changes in operating assets and liabilities:
Accounts receivable		(8,001	)		3,580
Inventory		(417	)		(1,144	)
Prepaid content and distribution services		(26	)		(537	)
Accounts payable		(874	)		(775	)
Accrued expenses		(8,189	)		(12,174	)
Deferred revenue		9,284			(2,228	)
Other, net		3,045			5,685
Net cash provided by continuing operations		79,200			78,895
Net cash provided by discontinued operations		—			5,130
Net cash provided by operating activities		79,200			84,025
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		384,238			11,322
Proceeds from maturities and redemptions of held-to-maturity securities		—			157,919
Purchases of available-for-sale securities		(274,600	)		(7,754	)
Purchases of held-to-maturity securities		—			(590,113	)
Purchases of property and equipment		(24,889	)		(13,643	)
Proceeds received from sale of property and equipment		417			—
Proceeds received from sale of discontinued operations		—			46,500
Cash paid in business combinations, net of cash acquired		(225,375	)		(133,471	)
Other changes in equity of discontinued operations		—			1,754
Net cash used in continuing operations		(140,209	)		(527,486	)
Net cash used in discontinued operations		—			(2,529	)
Net cash used in investing activities		(140,209	)		(530,015	)
Cash flows from financing activities:
Proceeds from issuance of common stock		30,528			35,367
Net proceeds from issuance of preferred stock		98,115			—
Payments of notes payable and other		(433	)		(211	)
Purchases of treasury shares		(22,267	)		(18,125	)
Net proceeds from issuance of convertible debt		—			339,125
Net cash provided by continuing operations		105,943			356,156
Net cash used in discontinued operations		—			(6,546	)
Net cash provided by financing activities		105,943			349,610
Effect of exchange rates on cash		(28	)		711
Net increase (decrease) in cash and cash equivalents		44,906			(95,669	)
Changes in cash attributable to discontinued operations		—			3,945
Cash and cash equivalents at beginning of period		63,298			175,596
Cash and cash equivalents at end of period	$	108,204		$	83,872

EX-99.3

Exhibit 99.3

Consolidated Guidance

     Table presented in millions, except per share data

	Q4 - 2004		Full Year 2004
Revenues	$	305-$310	$	1,158-$1,163
Income before restructuring, taxes, non-cash and other items	$	42-$45	$	138-$141
Depreciation and amortization		18		59
Non-cash content and stock compensation		5		27
Restructuring charge (1)		—		4.5
Legal expense (2)		—		6.5
Income tax provision		2		5
Net income	$	17-$20	$	36-$39
Earnings per share:
Income before restructuring, taxes, non-cash and other items	$	0.13	$	0.42
Net income	$	0.06	$	0.11-$0.12

(1)	As previously disclosed, represents an incremental charge in connection with the termination of the Santa Clara, California operating lease
(2)	Legal expense reflects actual results for the nine months ended September 30, 2004; no guidance has been provided for Q4

Segment Information:

• Business Services — expected to represent approximately 59% of consolidated revenues in Q4; with operating margins of approximately 19%

• Practice Services — expected to represent approximately 25% of consolidated revenues in Q4; with operating margins of approximately 8%

• Health — expected to represent approximately 13% of consolidated revenues in Q4; with operating margins of approximately 30%

• Porex — expected to represent approximately 6% of consolidated revenues in Q4; with operating margins of approximately 25%

• Intersegment eliminations — expected to represent approximately 3% of consolidated revenue in Q4

• Corporate expenses should represent approximately 5% of net revenues in Q4

EX-99.4

EXHIBIT 99.4

WebMD Corporation

Governance & Compliance Committee Charter

As Adopted on October 28, 2004

A. Purpose; Membership

1.

Purpose. The Governance & Compliance Committee (the “Committee”) has been established by the Board of Directors (the “Board”) of WebMD Corporation (the “Corporation”): (a) to evaluate and make recommendations to the Board regarding matters relating to the governance of the Corporation; (b) to assist the Board in coordinating the activities of the Board’s other standing committees, including with respect to the Corporation’s compliance programs, and to provide additional oversight of those compliance programs; and (c) to provide oversight of senior executive recruitment and management development.

2.

Membership. The Committee shall consist of the Chairpersons of the Board’s Nominating Committee, Compensation Committee and Audit Committee. Unless otherwise determined by the Committee, the Chairperson of the Nominating Committee shall serve as the Chairperson of the Committee. Committee members shall serve until the earliest of their resignation or their replacement or removal by the Board as Chairpersons of the Nominating, Compensation or Audit Committee, as the case may be.

B. Operations

1.	Meetings. The Committee shall determine the schedule and frequency of the Committee meetings, provided that the Committee shall meet at least four times per year, one of which meetings shall be held in advance of the Board’s determination regarding proposals to be included in the Proxy Statement for the Annual Meeting of Stockholders.
2.	Agenda; Reports. The Committee shall determine the agenda for its meetings. The Committee may invite other Board members, members of management and others to attend meetings and provide pertinent information and reports, as it deems necessary. Nothing in this Charter shall be construed to restrict the reliance by any member of the Committee, to the full

extent permitted by law, on information, opinions, reports or statements presented to the Committee by any of the Corporation’s officers or employees, or other committees of the Board, or by any other person selected with reasonable care by or on behalf of the Corporation or the Committee as to matters the Committee member reasonably believes are within such other person’s professional or expert competence.

3.

Report to Board. The Committee shall report its actions and recommendations to the Board at the next Board meeting after each Committee meeting or, if so determined by the Committee, by distribution to the members of the Board of the minutes of a meeting, a unanimous written consent or other relevant documents.

C. Authority and Responsibilities Delegated to the Committee

1.	The Committee shall evaluate and make recommendations to the Board regarding (a) the governance of the Corporation; (b) Board procedures; and (c) related matters. Recommendations may include possible changes to the Corporation’s Certificate of Incorporation, By-laws, Board committee charters and other relevant constitutive documents, policy statements or similar materials.
2.	The Committee shall evaluate and make recommendations to the Board regarding any proposals for which a stockholder has provided required notice that such stockholder intends to make at the Annual Meeting of Stockholders, including recommendations regarding the Board’s response and regarding whether to include such proposal in the Corporation’s proxy statement.
3.	The Committee shall develop and present to the Board for its adoption a set of “Corporate Governance Guidelines,” which shall set forth guidelines in areas such as the function and operations of the Board and its committees.
4.	The Committee shall assess the adequacy of this Charter and the Corporate Governance Guidelines on at least an annual basis and shall submit any proposed amendments to this Charter or the Corporate Governance Guidelines that the Committee recommends be made to the Board for its approval.
5.	The Committee shall be responsible for making any required determinations regarding the independence of the members of the Board.
6.	The Committee shall assist the Board in coordinating the activities of the Board’s other standing committees, including with respect to the Corporation’s compliance programs, and shall provide additional oversight of those compliance programs and related matters.
7.	The Committee shall provide oversight with respect to matters relating to recruitment of senior executives of the Corporation and development of management talent.

GOVERNANCE & COMPLIANCE COMMITTEE CHARTER –
AS ADOPTED ON OCTOBER 28, 2004 – PAGE 2

     The foregoing list is not intended to be exhaustive, and the Committee shall, in addition, have such powers as may be necessary or appropriate in furtherance of the objectives set forth in this Charter or as may, from time to time, be delegated by the Board.

     The Committee shall, to the full extent permitted by applicable law and the listing standards of The NASDAQ Stock Market applicable to the Corporation, have the power to delegate its authority to subcommittees or individual members of the Committee as it deems appropriate.

     The Committee shall have the power to retain counsel or other advisors, as it deems appropriate. The Committee shall have the sole authority to retain and terminate such advisors or counsel and to review and approve their fees and other retention terms and shall have the authority to cause the payment of such fees by the Corporation.

GOVERNANCE & COMPLIANCE COMMITTEE CHARTER –
AS ADOPTED ON OCTOBER 28, 2004 – PAGE 3