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

March 8, 2005

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 incorporation)	(Commission File Number)	(I.R.S. Employer 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)

     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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition
	Item 7.01. Regulation FD Disclosure
	Item 8.01. Other Events.
	Item 9.01. Financial Statements and Exhibits
SIGNATURE
EXHIBIT INDEX
EX-99.1 PRESS RELEASE DATED MARCH 8, 2005
EX-99.2 FINANCIAL TABLES ACCOMPANYING EXHIBIT 99.1
EX-99.3 UPDATED 2005 FINANCIAL GUIDANCE SUMMARY

     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 transaction for 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 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 99.1 furnished with this Current Report on Form 8-K includes forward-looking financial measures in accordance with accounting principles generally accepted in the United States of America, or GAAP, as well as non-GAAP forward-looking financial measures, each of which is expected to be discussed on the Analyst and Investor Conference Call referred to in Exhibit 99.1. 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. Forward-looking income per share before taxes, non-cash and other items is based on 335 million weighted-average shares outstanding, which is also the projected weighted-average shares outstanding used in computing forward-looking net income per share. Exhibit 99.3 to this Current Report includes a reconciliation of forward-looking non-GAAP information to forward-looking GAAP financial information. 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 2.02. Results of Operations and Financial Condition

     On March 8, 2005, WebMD Corporation issued a press release announcing its results for the quarter and year ended December 31, 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.

2

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 March 8, 2005, WebMD Corporation issued a press release announcing its results for the quarter ended December 31, 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.

* * *

     WebMD is continuing to pursue its previously announced plan to establish WebMD Health, its Portal Services segment, as a separate publicly traded company. WebMD’s Board of Directors continues to evaluate the two previously announced alternatives it has been considering — a one-step split-off of WebMD Health equity through an exchange offer transaction with WebMD’s stockholders or an initial public offering of a minority interest in WebMD Health. While the evaluation process is complex, considerable progress has been made in refining the tax analysis of these alternative transactions, preparing the necessary financial statements and Securities and Exchange Commission filings, planning the necessary corporate infrastructure separation and completing the analysis of employee, corporate, third-party contractual and other considerations relevant to these two alternatives. As each alternative offers certain potential advantages for WebMD’s stockholders, some of which are dependant on market conditions, the Board will not make a decision as to which alternative to pursue until shortly before WebMD is in a position to make the required registration statement filing with the SEC. WebMD anticipates being in a position to make this SEC filing in April.

* * *

     WebMD Corporation will hold its 2005 Annual Meeting of Stockholders on September 22, 2005. Proposals that WebMD’s stockholders intend to present at the 2005 Annual Meeting must be received by WebMD no later than the close of business on April 21, 2005, in order that they may be considered for possible inclusion in WebMD’s proxy statement and form of proxy for that meeting. In addition, WebMD’s Bylaws establish an advance notice procedure pursuant to which stockholder proposals not included in WebMD’s proxy statement may be brought before a meeting of stockholders. For nominations or other business to be properly brought before WebMD’s 2005 Annual Meeting by a stockholder, that stockholder must deliver written notice, complying with the requirements of WebMD’s Bylaws, to the Secretary of WebMD not later than the close of business on July 25, 2005. All notices of proposals by stockholders should be sent to: Secretary, WebMD Corporation, 669 River Drive, Center 2, Elmwood Park, New Jersey 07407-1361.

3

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 March 8, 2005, regarding WebMD’s results for the quarter and year ended December 31, 2004 and updated first quarter 2005 Guidance
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Updated Consolidated Guidance for the Quarter Ending March 31, 2005

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: March 8, 2005	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 March 8, 2005, regarding WebMD’s results for the quarter and year ended December 31, 2004 and updated first quarter 2005 Guidance
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Updated Consolidated Guidance for the Quarter Ending March 31, 2005

6

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 FOURTH QUARTER AND FULL YEAR 2004 RESULTS

Company Increases First Quarter 2005 Guidance

ELMWOOD PARK, NJ (March 8, 2005) – WebMD Corporation (NASDAQ: HLTH) today announced financial results for the quarter and year ended December 31, 2004.

Key Financial Highlights

Revenue for the fourth quarter was $307.6 million compared to $258.4 million a year ago, an increase of 19.1%. Income before taxes, non-cash and other items for the fourth quarter was $46.8 million or $0.14 per share compared to $30.4 million or $0.09 per share a year ago. Income from continuing operations for the fourth quarter was $19.7 million or $0.06 per share compared to income from continuing operations of $10.5 million or $0.03 per share a year ago. As of December 31, 2004, WebMD had approximately $620 million in cash, short-term investments and long-term marketable debt securities.

Revenue for the year was $1.16 billion compared to $964.0 million a year ago, an increase of 20.4%. Income before restructuring, taxes, non-cash and other items for the year was $143.0 million or $0.43 per share compared to $118.0 million or $0.36 per share in the prior year. Income from continuing operations for the year was $39.3 million or $0.12 per share compared to income from continuing operations of $16.6 million or $0.05 per share a year ago.

“We have made significant improvements in our businesses. However, 2004 was not without its challenges. This past year we focused on broadening our product and service offerings, integrating acquisitions, implementing HIPAA, working to comply with the new Sarbanes-Oxley requirements, and strengthening the talent and technology that support our customers,” said Kevin Cameron, CEO, WebMD Corporation. “We continue to believe that there are large opportunities in the markets we serve and are committed to successfully executing on our plan to deliver value to both our customers and shareholders.”

Segment Operating Results

WebMD Business Services revenue was $182.1 million for the fourth quarter compared to $140.2 million in the prior year, an increase of 29.9%. The $41.9 million increase in WebMD Business Services revenue includes $33.9 million of revenue from customers acquired in recent acquisitions. Income before taxes, non-cash and other items was $41.3 million compared to $26.1 million in the prior year. Operating margins increased as a result of recent acquisitions and lower operating expenses as a percentage of revenue due to operating efficiencies and lower HIPAA costs.

WebMD Practice Services revenue was $76.4 million for the fourth quarter compared to $78.3 million in the prior year, a decrease of 2.5%. Income before taxes, non-cash and other items was $5.6 million compared to $4.6 million in the prior year. Operating margins increased as a result of greater operating efficiencies.

WebMD Health revenue was $39.1 million for the fourth quarter compared to $30.8 million in the prior year, an increase of 27.1%, primarily driven by continued growth in online promotion and continuing education services from our public portal, and benefits and health management services from our private portals. Income before taxes, non-cash and other items was $10.7 million compared to $6.0 million in the prior year. These results primarily reflect the increased margin associated with increased revenue and operating efficiencies.

Porex revenue was $18.6 million for the fourth quarter compared to $16.9 million in the prior year, an increase of 9.6%. Income before taxes, non-cash and other items was $5.5 million compared to $4.7 million in the prior year.

Financial Guidance

WebMD has raised its financial guidance for the first quarter of 2005. A schedule outlining this guidance has been provided in a Form 8-K furnished to the Securities and Exchange Commission. For the first quarter of 2005, this guidance includes revenues of $297 to $307 million, an increase of $7 million; income before taxes, non-cash and other items of $0.10 to $0.11 per share, an increase of $0.01 per share and net income of $0.02 to $0.03 per share, an increase of $0.01 per share.

Company Continues to Evaluate WebMD Health Transaction Alternatives

WebMD continues to pursue its previously announced plan to establish WebMD Health as a separate publicly traded company. The Board of Directors continues to evaluate the two previously announced alternatives it has been considering, a one-step split-off of WebMD Health equity through an exchange offer transaction with WebMD’s stockholders or an initial public offering of a minority interest in WebMD Health. Martin J. Wygod, Chairman of the Board of WebMD, said, “While the evaluation process is complex, considerable progress has been made in refining the tax analysis of the transaction alternatives, preparing the necessary financial statements and SEC filings, planning the necessary corporate infrastructure separation and completing the analysis of employee, corporate, third-party contractual and other considerations relevant to the alternatives.” WebMD anticipates that it will complete its evaluation and be in a position to make the required registration statement filing with the SEC in April.

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 March 8, 2005. 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 administrative, financial and clinical software and related services to the nation’s medical practices. 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 transaction for 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 U.S. generally accepted accounting principles, 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					Years Ended
	December 31,					December 31,
	2004		2003			2004		2003
Revenue	$	307,641	$	258,396		$	1,160,351	$	963,980
Costs and expenses:
Cost of operations		171,257		154,383			666,431		564,939
Development and engineering		15,682		10,331			54,161		42,985
Sales, marketing, general and administrative		78,973		72,565			324,027		282,482
Depreciation, amortization and other		16,843		9,473			57,765		62,434
Legal expense		2,653		3,466			9,230		3,959
Restructuring and integration charge		—		—			4,535		—
Gain (loss) on investments		—		(1,563	)		457		1,659
Interest income		4,211		6,467			18,717		22,901
Interest expense		4,824		4,770			19,253		15,214
Other income, net		—		3,100			121		4,218
Income from continuing operations before income tax provision		21,620		11,412			44,244		20,745
Income tax provision		1,931		879			4,910		4,140
Income from continuing operations		19,689		10,533			39,334		16,605
Loss from discontinued operations, net of income taxes		—		—			—		(33,611	)
Net income (loss)	$	19,689	$	10,533		$	39,334	$	(17,006	)
Basic income (loss) per common share:
Income from continuing operations	$	0.06	$	0.03		$	0.13	$	0.05
Loss from discontinued operations		—		—			—		(0.11	)
Net income (loss)	$	0.06	$	0.03		$	0.13	$	(0.06	)
Diluted income (loss) per common share:
Income from continuing operations	$	0.06	$	0.03		$	0.12	$	0.05
Loss from discontinued operations		—		—			—		(0.10	)
Net income (loss)	$	0.06		0.03		$	0.12	$	(0.05	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		312,745		307,069			311,721		304,858
Diluted		333,576		324,058			333,343		325,811

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

	Three Months Ended						Years Ended
	December 31,						December 31,
	2004			2003			2004			2003
Revenues
WebMD Business services	$	182,126		$	140,238		$	686,585		$	505,729
WebMD Practice services		76,412			78,345			296,115			302,640
WebMD Health		39,139			30,783			134,317			110,665
Porex		18,556			16,925			77,099			71,940
Inter-segment eliminations		(8,592	)		(7,895	)		(33,765	)		(26,994	)
	$	307,641		$	258,396		$	1,160,351		$	963,980
Income (loss) before restructuring, taxes, non-cash and other items
WebMD Business services	$	41,320		$	26,058		$	131,834		$	94,218
WebMD Practice services		5,555			4,582			14,533			20,924
WebMD Health		10,690			5,976			32,898			24,898
Porex		5,510			4,675			22,650			20,532
Corporate		(15,679	)		(12,599	)		(58,382	)		(50,251	)
Interest income		4,211			6,467			18,717			22,901
Interest expense		(4,824	)		(4,770	)		(19,253	)		(15,214	)
	$	46,783		$	30,389		$	142,997		$	118,008
Basic income per common share before restructuring, taxes,
non-cash and other items (a)	$	0.15		$	0.10		$	0.46		$	0.39
Diluted income per common share before restructuring, taxes,
non-cash and other items (a)	$	0.14		$	0.09		$	0.43		$	0.36
Restructuring, taxes, non-cash and other items (b)
Depreciation, amortization and other	$	(16,843	)	$	(9,473	)	$	(57,765	)	$	(62,434	)
Amortization of prepaid content and services (included in cost of operations)		(196	)		(425	)		(901	)		(2,356	)
Amortization of prepaid content and services (included in sales, marketing, general and administrative)		(3,737	)		(5,650	)		(17,925	)		(21,942	)
Non-cash stock compensation (included in sales, marketing, general and administrative)		(1,734	)		(1,500	)		(8,975	)		(12,449	)
Legal expense		(2,653	)		(3,466	)		(9,230	)		(3,959	)
Restructuring and integration charge		—			—			(4,535	)		—
Gain (loss) on investment		—			(1,563	)		457			1,659
Other income, net		—			3,100			121			4,218
Income tax provision		(1,931	)		(879	)		(4,910	)		(4,140	)
Income from continuing operations		19,689			10,533			39,334			16,605
Loss from discontinued operations, net of income taxes		—			—			—			(33,611	)
Net income (loss)	$	19,689		$	10,533		$	39,334		$	(17,006	)
Basic income (loss) per common share:
Income from continuing operations	$	0.06		$	0.03		$	0.13		$	0.05
Loss from discontinued operations		—			—			—			(0.11	)
Net income (loss)	$	0.06		$	0.03		$	0.13		$	(0.06	)
Diluted income (loss) per common share:
Income from continuing operations	$	0.06		$	0.03		$	0.12		$	0.05
Loss from discontinued operations		—			—			—			(0.10	)
Net income (loss)	$	0.06		$	0.03		$	0.12		$	(0.05	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		312,745			307,069			311,721			304,858
Diluted		333,576			324,058			333,343			325,811

(a)	Basic and diluted income per common share before restructuring, taxes, non-cash and other items are 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, unaudited)

	December 31,		December 31,
	2004		2003
Assets
Cash and cash equivalents	$	46,019	$	39,648
Short-term investments		61,675		231,033
Accounts receivable, net		214,437		181,173
Inventory		13,476		12,158
Prepaid expenses and other current assets		41,115		44,089
Total current assets		376,722		508,101
Marketable debt securities		511,864		451,290
Marketable equity securities		4,017		4,744
Property and equipment, net		89,677		77,278
Goodwill		1,010,564		844,448
Intangible assets, net		260,509		184,130
Other assets		48,871		65,315
	$	2,302,224	$	2,135,306
Liabilities and Stockholders’ Equity
Accounts payable	$	17,366	$	10,390
Accrued expenses		201,528		208,430
Deferred revenue		109,533		86,708
Total current liabilities		328,427		305,528
Convertible subordinated notes		649,999		649,999
Other long-term liabilities		1,283		1,182
Convertible redeemable exchangeable preferred stock		98,299		—
Stockholders’ equity		1,224,216		1,178,597
	$	2,302,224	$	2,135,306

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

	Years Ended
	December 31,
	2004			2003
Cash flows from operating activities:
Net income (loss)	$	39,334		$	(17,006	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss from discontinued operations		—			33,611
Depreciation, amortization and other		57,765			62,434
Amortization of debt issuance costs		2,975			2,246
Non-cash content and distribution services		18,826			24,298
Non-cash stock-based compensation		8,975			12,449
Bad debt expense		3,606			6,328
Gain on investments		(457	)		(1,659	)
Gain on sale of property and equipment		(121	)		(3,100	)
Changes in operating assets and liabilities:
Accounts receivable		(20,477	)		(813	)
Inventory		(1,041	)		(2,176	)
Prepaid expenses and other, net		3,478			3,792
Accounts payable		5,577			(651	)
Accrued expenses		(43,703	)		(42,419	)
Deferred revenue		15,307			(225	)
Net cash provided by continuing operations		90,044			77,109
Net cash provided by discontinued operations		—			5,130
Net cash provided by operating activities		90,044			82,239
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		404,370			327,544
Proceeds from maturities and redemptions of held-to-maturity securities		—			157,919
Purchases of available-for-sale securities		(304,582	)		(8,254	)
Purchases of held-to-maturity securities		—			(590,113	)
Purchases of property and equipment		(38,800	)		(18,385	)
Proceeds received from sale of discontinued operations		—			46,500
Proceeds received from sale of property and equipment		417			9,779
Other changes in equity of discontinued operations		—			1,754
Cash paid in business combinations, net of cash acquired		(249,557	)		(400,491	)
Net cash used in continuing operations		(188,152	)		(473,747	)
Net cash used in discontinued operations		—			(2,529	)
Net cash used in investing activities		(188,152	)		(476,276	)
Cash flows from financing activities:
Proceeds from issuance of common stock		38,052			44,719
Net proceeds from issuance of convertible redeemable exchangeable preferred stock		98,115			—
Payments of notes payable and other		(602	)		(361	)
Purchase of treasury stock		(32,110	)		(20,316	)
Net proceeds from issuance of convertible debt		—			339,125
Net cash provided by continuing operations		103,455			363,167
Net cash used in discontinued operations		—			(6,546	)
Net cash provided by financing activities		103,455			356,621
Effect of exchange rates on cash		1,024			1,423
Net increase (decrease) in cash and cash equivalents		6,371			(35,993	)
Changes in cash attributable to discontinued operations		—			3,945
Cash and cash equivalents at beginning of period		39,648			71,696
Cash and cash equivalents at end of period	$	46,019		$	39,648

EX-99.3

Exhibit 99.3

Updated Consolidated Guidance for Quarter Ending March 31, 2005

Table presented in millions, except per share data

Revenues	$297 - $307
Income before taxes, non-cash and other items	$34 - $38
Depreciation and amortization	18.5
Non-cash content and stock compensation	4.5
Income tax provision	3.5
Net income	$7.5 - $11.5
Earnings per share:
Income before taxes, non-cash and other items	$0.10 - $0.11
Net income	$0.02 - $0.03

Background and Assumptions

•   The 2005 guidance does not include any expenses related to the previously announced Department of Justice Investigation, which may continue to be significant.

•   The 2005 guidance does not include the effects of any acquisitions that may occur during 2005.

•   The 2005 guidance does not reflect the impact of adopting Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based payment (which we refer to as SFAS 123R). SFAS 123R will be effective July 1, 2005. Adoption of SFAS 123R will require recognition of increased expenses for stock options and other forms of stock-based compensation. WebMD is currently reviewing the potential effects of adopting SFAS 123R.

•   The 2005 guidance does not reflect a potential WebMD Health initial public offering or split-off transaction. The items to be reflected may include shared services allocations between segments, incremental public company costs and the cost and proceeds of the transaction.