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

April 28, 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
EX-99.2 FINANCIAL TABLES
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 initial public offering 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 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 financial measures in accordance with U.S. generally accepted accounting principles, or GAAP, as well as non-GAAP 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 taxes, non-cash and other items; and related per share amounts. Exhibit 99.2 to this Current Report includes a reconciliation of the historical non-GAAP financial measures to historical GAAP financial measures. Exhibit 99.3 to this Current Report includes a reconciliation of forward-looking non-GAAP financial measures to forward-looking GAAP financial measures. Forward-looking income per share before taxes, non-cash and other items is based on 338 million weighted-average shares outstanding, which is also the projected weighted-average shares outstanding used in computing forward-looking net income per share. 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 April 28, 2005, WebMD Corporation issued a press release announcing its results for the quarter ended March 31, 2005. 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 (April 28, 2005). 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 April 28, 2005, WebMD Corporation issued a press release announcing its results for the quarter ended March 31, 2005. 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.

*      *       *

     On April 28, 2005, WebMD announced its proposed plan to establish WebMD Health as a separate publicly traded company through an initial public offering of approximately 10% to 14% of the equity of WebMD Health. It is anticipated an initial registration statement will be filed with the Securities and Exchange Commission in the next several weeks.

*      *       *

     On April 28, 2005, WebMD announced that it is taking steps and intends to redeem all of its outstanding 3¼% convertible subordinated notes due 2007 in the near future. These notes are convertible at a conversion price of approximately $9.26 per share. The redemption price for these notes is 101.3% of their principal amount plus accrued and unpaid interest. There are approximately $300 million principal amount of these notes outstanding.

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 April 28, 2005, regarding WebMD’s results for the quarter ended March 31, 2005 and other information to be discussed during the related conference call
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Updated 2005 Financial Guidance Summary

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: April 28, 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 April 28, 2005, regarding WebMD’s results for the quarter ended March 31, 2005 and other information to be discussed during the related conference call
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Updated 2005 Financial Guidance Summary

6

EX-99.1

Exhibit 99.1

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

WEBMD REPORTS FIRST QUARTER RESULTS

WEBMD RAISES GUIDANCE SUBSTANTIALLY FOR 2005

DAVID GANG JOINS WEBMD HEALTH

WAYNE GATTINELLA AND DAVID GANG NAMED CO-CEOS OF WEBMD HEALTH

WEBMD ANNOUNCES IPO OF WEBMD HEALTH

WEBMD ANNOUNCES INTENT TO REDEEM ALL OF ITS OUTSTANDING
3¼% CONVERTIBLE SUBORDINATED NOTES DUE 2007

ELMWOOD PARK, NJ (April 28, 2005) — WebMD Corporation (NASDAQ: HLTH) today announced financial results for the three months ended March 31, 2005.

Key Financial Highlights
Revenue for the first quarter was $303.9 million compared to $271.2 million a year ago, an increase of 12.1%. Income before taxes, non-cash and other items for the first quarter was $38.8 million or $0.12 per share compared to $28.2 million or $0.09 per share a year ago. Net income for the first quarter was $9.8 million or $0.03 per share compared to $5.7 million or $0.02 per share a year ago.

As of March 31, 2005, WebMD had approximately $569.7 million in cash and short and long-term marketable debt securities.

Kevin M. Cameron, Chief Executive Officer of WebMD Corporation, stated, “I am pleased with our results for the first quarter, and more importantly, with the progress we are making across our businesses. With these improved results, we are raising our financial guidance for the balance of 2005 by approximately $40 million in revenue and by approximately $0.08, or 16%, for income before taxes, non-cash and other items per share and $0.07, or 42%, for net income per share.”

Segment Operating Results
WebMD Business Services revenues were $185.7 million for the first quarter compared to $163.8 million in the prior year, an increase of 13.4%. The increase in WebMD Business Services revenues is primarily attributable to the acquisitions of Dakota Imaging and ViPS. Growth across a number of our businesses including ABF and ExpressBill was offset by the anticipated decline in traditional medical service and EDI revenues. Income before taxes, non-cash and other items was $38.3 million compared to $29.9 million in the prior year. Operating margins increased as a result of lower operating expenses due to reduced HIPAA expenses and lower transaction related expenses.

WebMD Practice Services revenues were $73.0 million for the first quarter compared to $71.0 million in the prior year, an increase of 2.8%. Income before taxes, non-cash and other items was $4.4 million compared to $1.4 million in the prior year. Operating margins increased from 1.9% to 6.0% as a result of greater operating efficiencies.

WebMD Health revenues were $33.6 million for the first quarter compared to $26.3 million in the prior year, an increase of 27.6%, driven by continued growth in online services from our public and private portals. Income before taxes, non-cash and other items was $4.9 million compared to $4.5 million in the prior year.

Porex revenues were $19.9 million for the first quarter compared to $18.4 million in the prior year. Income before taxes, non-cash and other items was $5.4 million compared to $5.0 million in the prior year.

Financial Guidance
WebMD has increased its financial guidance for the remainder of 2005. The Company expects that consolidated revenue for 2005 will be in the range of $1.260 billion to $1.300 billion; income before taxes, non-cash and other items to be $0.54 to $0.60 per share and net income to be $0.22 to $0.25 per share. For the second quarter of 2005, the Company expects revenues to be $315 to $325 million; income before taxes, non-cash and other items to be $0.13 to $0.14 per share and net income to be $0.05 to $0.06 per share. A schedule outlining this guidance has been furnished as an exhibit to a Form 8-K filed today with the Securities and Exchange Commission.

Management Changes
Wayne Gattinella, 53, who currently serves as President, WebMD Health, will become President and co-CEO of WebMD Health. In addition, David Gang will be joining WebMD Health as its co-CEO and Chief Operating Officer in June 2005.

Mr. Gang, 48, previously served as Executive Vice President, AOL Products at America Online, Inc. In this role, he held responsibility for creating and implementing all AOL products shared across various platforms including narrowband, broadband, wireless, and voice. Recently, Mr. Gang’s organization successfully launched AOL 9.0 Optimized, the latest version of AOL, and AOL for Broadband, which included valuable new and enhanced features designed to help members maximize their online experience. Mr. Gang has spent the past decade as a leader in technological innovation. Since joining AOL in 1995, Mr. Gang has held various senior management positions. Mr. Gang will be responsible for technology, product development and operations.

Mr. Gattinella has served as President of WebMD Health since August 2001. Previously, Mr. Gattinella held senior management positions in several high growth corporations, including Medco Health Solutions, MCI Telecommunications and PeoplePC. As co-CEO, Mr. Gattinella will have responsibility for both the content and services of our public and private healthcare portals as well as the sales and marketing to our pharmaceutical, medical device, consumer package goods and employer and payer markets.

“With a proven track record managing product development, technology and operations, David has been a leader in developing and implementing consumer-facing technology solutions,” said Kevin Cameron, CEO, WebMD Corporation. “Wayne has done a tremendous job driving the growth at WebMD Health over the last several years. Together, David and Wayne will position WebMD Health for the future and enable us to continue to deliver the highest quality services to our consumer, physician, employer and payer customers.”

In addition, the company announced that Roger Holstein, who has served as CEO of WebMD Health since October 2004, will be leaving the Company for personal reasons. “We appreciate his contributions over the years and wish him success in his future endeavors,” said Martin J. Wygod, Chairman, WebMD Corporation.

WebMD Announces IPO of WebMD Health
WebMD announced its proposed plan to establish WebMD Health as a separate publicly traded company through an initial public offering of approximately 10% to 14% of the equity of WebMD Health. It is anticipated an initial registration statement will be filed with the Securities and Exchange Commission in the next several weeks.

WebMD Announces Intent to Redeem Its Outstanding 3¼% Convertible Subordinated Notes due 2007
WebMD announced that it is taking steps and intends to redeem all of its outstanding 3¼% Convertible Subordinated Notes due 2007 in the near future. These notes are convertible at a conversion price of approximately $9.26. The redemption price for these notes is 101.3% of their principal amount plus accrued and unpaid interest. There are approximately $300 million principal amount of these notes outstanding.

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 pm (eastern) on April 28, 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.

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

This announcement shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of any securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of 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 initial public offering 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 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 furnishing this press release as an exhibit. Exhibit 99.3 furnished with 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
	March 31,
	2005		2004
Revenue	$	303,934	$	271,214
Costs and expenses:
Cost of operations		172,163		162,642
Development and engineering		14,640		11,096
Sales, marketing, general and administrative		82,137		76,994
Depreciation and amortization		16,504		12,585
Legal expense		4,160		2,037
Loss on investments		3,832		84
Interest income		4,321		5,483
Interest expense		4,781		4,748
Other income, net		—		121
Income before income tax provision		10,038		6,632
Income tax provision		189		931
Net income	$	9,849	$	5,701
Net income per common share:
Basic	$	0.03	$	0.02
Diluted	$	0.03	$	0.02
Weighted-average shares outstanding used in computing net income per common share:
Basic		325,334		311,011
Diluted		335,689		327,402

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

	Three Months Ended
	March 31,
	2005			2004
Revenues
WebMD Business Services	$	185,733		$	163,779
WebMD Practice Services		73,018			71,006
WebMD Health		33,575			26,309
Porex		19,856			18,421
Inter-segment eliminations		(8,248	)		(8,301	)
	$	303,934		$	271,214
Income before taxes, non-cash and other items
WebMD Business Services	$	38,253		$	29,850
WebMD Practice Services		4,397			1,351
WebMD Health		4,851			4,542
Porex		5,397			5,042
Corporate		(13,626	)		(13,305	)
Interest income		4,321			5,483
Interest expense		(4,781	)		(4,748	)
		38,812			28,215
Basic income per common share before taxes, non-cash and other items (a)	$	0.12		$	0.09
Diluted income per common share before taxes, non-cash and other items (a)	$	0.12		$	0.09
Taxes, non-cash and other items (b)
Depreciation and amortization		(16,504	)		(12,585	)
Amortization of prepaid content and services (included in cost of operations)		—			(255	)
Amortization of prepaid content and services (included in sales, marketing, general and administrative)		(2,627	)		(5,038	)
Non-cash stock compensation (included in sales, marketing, general and administrative)		(1,651	)		(1,705	)
Legal expense		(4,160	)		(2,037	)
Loss on investments		(3,832	)		(84	)
Income tax provision		(189	)		(931	)
Other income, net		—			121
Net income	$	9,849		$	5,701
Net income per common share:
Basic	$	0.03		$	0.02
Diluted	$	0.03		$	0.02
Weighted-average shares outstanding used in computing net income per common share:
Basic		325,334			311,011
Diluted		335,689			327,402

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

WebMD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)

	March 31,		December 31,
	2005		2004
Assets
Cash and cash equivalents	$	42,754	$	46,019
Short-term investments		130,690		61,675
Accounts receivable, net		231,450		214,437
Inventory		13,844		13,978
Prepaid expenses and other current assets		38,421		40,613
Total current assets		457,159		376,722
Marketable debt securities		396,220		511,864
Marketable equity securities		3,331		4,017
Property and equipment, net		93,778		89,677
Goodwill		1,030,948		1,010,564
Intangible assets, net		263,074		260,509
Other assets		45,815		48,871
	$	2,290,325	$	2,302,224
Liabilities and Stockholders’ Equity
Accounts payable	$	8,423	$	17,366
Accrued expenses		161,588		201,528
Deferred revenue		122,866		109,533
Total current liabilities		292,877		328,427
Convertible subordinated notes		649,999		649,999
Other long-term liabilities		1,236		1,283
Convertible redeemable exchangeable preferred stock		98,357		98,299
Stockholders’ equity		1,247,856		1,224,216
	$	2,290,325	$	2,302,224

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

	Three Months Ended
	March 31,
	2005			2004
Cash flows from operating activities:
Net income	$	9,849		$	5,701
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		16,504			12,585
Amortization of debt issuance costs		726			746
Non-cash content and distribution services		2,627			5,293
Non-cash stock-based compensation		1,651			1,705
Bad debt expense		2,283			1,472
Loss on investments		3,832			84
Gain on sale of property and equipment		—			(121	)
Changes in operating assets and liabilities:
Accounts receivable		(17,554	)		(2,778	)
Inventory		134			202
Prepaid expenses and other, net		2,931			6,337
Accounts payable		(8,631	)		(1,548	)
Accrued expenses		(106	)		(3,177	)
Deferred revenue		8,711			3,155
Net cash provided by operating activities		22,957			29,656
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		45,846			464,352
Purchases of available-for-sale securities		(2,550	)		(285,351	)
Purchases of property and equipment		(11,892	)		(6,568	)
Proceeds received from sale of property and equipment		400			417
Cash paid in business combinations, net of cash acquired		(70,775	)		(70	)
Net cash (used in) provided by investing activities		(38,971	)		172,780
Cash flows from financing activities:
Proceeds from issuance of common stock		13,170			10,885
Net proceeds from issuance of preferred shares		—			98,115
Payments of notes payable and other		(63	)		(95	)
Purchases of treasury stock		—			(4,877	)
Net cash provided by financing activities		13,107			104,028
Effect of exchange rates on cash		(358	)		(194	)
Net (decrease) increase in cash and cash equivalents		(3,265	)		306,270
Cash and cash equivalents at beginning of period		46,019			39,648
Cash and cash equivalents at end of period	$	42,754		$	345,918

EX-99.3

Exhibit 99.3

UPDATED 2005 FINANCIAL GUIDANCE SUMMARY

(Table presented in thousands)

					Quarterly Mix
Consolidated	Range				Q1			Q2			Q3			Q4
Revenues	$	1,260,000	$	1,300,000		24	%		25	%		25	%		26	%
Income before taxes, non-cash and other items	$	182,000	$	202,000		20	%		25	%		26	%		29	%
Depreciation and amortization		72,000		76,000		22	%		25	%		26	%		27	%
Non-cash content and stock compensation		14,000		16,000		29	%		26	%		25	%		20	%
Loss on investments		4,000		4,000		100	%
Legal Expense		4,000		4,000		100	%
Income tax provision		15,000		17,000		1	%		29	%		33	%		37	%
Net Income	$	73,000	$	85,000		12	%		26	%		28	%		34	%

Operating Segments

Revenues:

•   Business Services – Approximately 61% of consolidated revenues in Q1, decreasing sequentially to approximately 57% by year-end.

•   Practice Services – Approximately 24% of consolidated revenues in Q1 through Q3 and 25% for Q4.

•   Health – Approximately 11% of consolidated revenues in Q1 and averaging approximately 13% for the year.

•   Porex – Approximately 7% of consolidated revenues in Q1 and averaging 6% to 7% for the year.

•   Eliminations – Approximately 2.6% of net revenues.

Operating Margin:

•   Business Services – Approximately 21% throughout the year.

•   Practice Services – Approximately 6% in Q1 and increasing to 10% by the end of 2005.

•   Health – Approximately 14% in Q1 and increasing to about 30% by year end.

•   Porex – Approximately 27-30% throughout the year.

•   Corporate – Approximately 4.2% of net revenues for the balance of the year.

Background and Assumptions

•   The 2005 guidance reflects the actual first quarter expense for the on-going Department of Justice Investigation but does not include any projected expenses related to the Department of Justice Investigation, which may continue to be significant.

•   The 2005 guidance includes the impact of our Healthshare acquisition from its acquisition date of March 14, 2005 but does not include the effects of any additional acquisitions that may occur during 2005.

•   Our guidance does not include any potential financial impact that could occur if we redeem our 3.25% Convertible Subordinated Notes due 2007.

•   The 2005 guidance does not reflect the effect of the WebMD Health IPO, including incremental public company costs, the net proceeds of the IPO itself and recording shared services allocation between segments and the post-IPO minority interest.

•   The 2005 guidance does not reflect any compensation arrangements made pursuant to the announced WebMD Health organizational changes.