EX-99.2 3 g98052exv99w2.htm EX-99.2 FINANCIAL TABLES ACCOMPANYING EXHIBIT 99.1 EX-99.2 FINANCIAL TABLES ACCOMPANYING EXHIBIT 99.1
 

Exhibit 99.2
EMDEON CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2005     2004     2005     2004  
Revenue
  $ 323,153     $ 299,615     $ 949,643     $ 852,710  
 
                               
Costs and expenses:
                               
Cost of operations
    182,910       168,571       537,023       495,174  
Development and engineering
    14,681       14,392       43,778       38,479  
Sales, marketing, general and administrative
    82,386       84,762       248,056       245,054  
Depreciation and amortization
    18,895       15,189       52,940       40,922  
Legal expense
    5,904       2,325       14,347       6,577  
Restructuring and integration charge
          4,535             4,535  
Interest income
    5,125       4,512       13,382       14,506  
Interest expense
    2,996       4,843       11,672       14,429  
Other expense (income), net
    1,863       (94 )     7,407       (578 )
 
                       
Income before income tax provision
    18,643       9,604       47,802       22,624  
Income tax provision
    4,536       1,435       7,680       2,979  
 
                       
Net income
  $ 14,107     $ 8,169     $ 40,122     $ 19,645  
 
                       
 
                               
Net income per common share:
                               
Basic
  $ 0.04     $ 0.03     $ 0.12     $ 0.06  
 
                       
Diluted
  $ 0.04     $ 0.02     $ 0.11     $ 0.06  
 
                       
 
                               
Weighted-average shares outstanding used in computing net income per common share:
                               
Basic
    356,091       323,004       339,576       318,978  
 
                       
Diluted
    370,313       333,978       351,875       333,048  
 
                       

 


 

EMDEON CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2005     2004     2005     2004  
Revenues
                               
Emdeon Business Services
  $ 190,502     $ 174,643     $ 567,749     $ 504,459  
Emdeon Practice Services
    75,499       76,924       227,113       219,703  
WebMD Health
    45,094       37,017       119,134       95,178  
Porex
    20,410       19,385       60,663       58,543  
Inter-segment eliminations
    (8,352 )     (8,354 )     (25,016 )     (25,173 )
 
                       
 
  $ 323,153     $ 299,615     $ 949,643     $ 852,710  
 
                       
 
                               
Income before restructuring, taxes, non-cash and other items
                               
Emdeon Business Services
  $ 35,926     $ 31,750     $ 114,599     $ 90,514  
Emdeon Practice Services
    7,632       5,856       20,212       8,978  
WebMD Health (c)
    9,077       8,441       15,100       17,572  
Porex
    6,385       5,823       17,846       17,140  
Corporate (c)
    (12,738 )     (13,571 )     (36,485 )     (38,067 )
Interest income
    5,125       4,512       13,382       14,506  
Interest expense
    (2,996 )     (4,843 )     (11,672 )     (14,429 )
 
                       
 
  $ 48,411     $ 37,968     $ 132,982     $ 96,214  
 
                       
 
                               
Basic income per common share before restructuring, taxes, non-cash and other items (a)
  $ 0.14     $ 0.12     $ 0.39       0.30  
 
                       
Diluted income per common share before restructuring, taxes, non-cash and other items (a)
  $ 0.13     $ 0.11     $ 0.38       0.29  
 
                       
 
                               
Restructuring, taxes, non-cash and other items (b)
                               
Depreciation and amortization
  $ (18,895 )   $ (15,189 )   $ (52,940 )   $ (40,922 )
Amortization of non-cash advertising and distribution services (included in cost of operations)
    (74 )     (104 )     (291 )     (705 )
Amortization of non-cash advertising and distribution services (included in sales, marketing, general and administrative)
    (1,912 )     (3,505 )     (6,708 )     (14,188 )
Non-cash stock-based compensation (included in sales, marketing, general and administrative)
    (1,120 )     (2,800 )     (3,487 )     (7,241 )
Legal expense
    (5,904 )     (2,325 )     (14,347 )     (6,577 )
Restructuring and integration charge
          (4,535 )           (4,535 )
Other (expense) income, net
    (1,863 )     94       (7,407 )     578  
Income tax provision
    (4,536 )     (1,435 )     (7,680 )     (2,979 )
 
                       
 
                               
Net income
  $ 14,107     $ 8,169     $ 40,122     $ 19,645  
 
                       
Net income per common share:
                               
Basic
  $ 0.04     $ 0.03     $ 0.12     $ 0.06  
 
                       
Diluted
  $ 0.04     $ 0.02     $ 0.11     $ 0.06  
 
                       
 
                               
Weighted-average shares outstanding used in computing net income per common share:
                               
Basic
    356,091       323,004       339,576       318,978  
 
                       
Diluted
    370,313       333,978       351,875       333,048  
 
                       
 
(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 per common share.
 
(b)   Reconciliation of income before restructuring, taxes, non-cash and other items to net income.
 
(c)   Income before restructuring, taxes, non-cash and other items during prior periods, for the Corporate and WebMD Health segments, has been reclassified to reflect Corporate’s services charge to WebMD Health.

 


 

EMDEON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                 
    September 30,     December 31,  
    2005     2004  
    (Unaudited)          
Assets
               
Cash and cash equivalents
  $ 82,047     $ 46,019  
Stock subscription receivable
    129,142        
Short-term investments
    603,360       61,675  
Accounts receivable, net
    230,174       204,447  
Inventory
    13,183       13,978  
Prepaid expenses and other current assets
    42,168       40,613  
 
           
Total current assets
    1,100,074       366,732  
 
               
Marketable debt securities
    147,060       511,864  
Marketable equity securities
    4,873       4,017  
Property and equipment, net
    112,786       89,677  
Goodwill
    1,026,998       1,010,564  
Intangible assets, net
    242,702       260,509  
Other assets
    52,257       48,871  
 
           
Total Assets
  $ 2,686,750     $ 2,292,234  
 
           
 
               
Liabilities and Stockholders’ Equity
               
Accounts payable
  $ 10,669     $ 17,366  
Accrued expenses
    168,363       201,528  
Deferred revenue
    111,672       99,543  
 
           
Total current liabilities
    290,704       318,437  
 
               
Convertible notes
    650,000       649,999  
Other long-term liabilities
    5,226       1,283  
 
Minority interest in WebMD Health Corp.
    41,506        
 
               
Convertible redeemable exchangeable preferred stock
    98,474       98,299  
 
               
Stockholders’ equity
    1,600,840       1,224,216  
 
           
 
               
Total Liabilities and Stockholders’ Equity
  $ 2,686,750     $ 2,292,234  
 
           

 


 

EMDEON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
                 
    Nine Months Ended  
    September 30,  
    2005     2004  
Cash flows from operating activities:
               
Net income
  $ 40,122     $ 19,645  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    52,940       40,922  
Amortization of debt issuance costs
    1,856       2,255  
Non-cash advertising and distribution services
    6,999       14,893  
Non-cash stock-based compensation
    3,487       7,241  
Bad debt expense
    4,876       3,726  
Loss (gain) on investments
    3,642       (457 )
Loss on redemption of convertible debt
    1,902        
Non-cash reversal of income tax valuation allowance
    4,330        
Gain on sale of property and equipment
          (121 )
Changes in operating assets and liabilities:
               
Accounts receivable
    (28,861 )     (6,869 )
Inventory
    795       (303 )
Accounts payable
    (6,387 )     (874 )
Accrued expenses
    7,913       (8,189 )
Deferred revenue
    7,815       4,426  
Prepaid expenses and other, net
    (2,328 )     2,905  
 
           
Net cash provided by operating activities
    99,101       79,200  
 
               
Cash flows from investing activities:
               
Proceeds from maturities and sales of available-for-sale securities
    336,014       1,387,614  
Purchases of available-for-sale securities
    (516,109 )     (1,267,726 )
Purchases of property and equipment
    (49,325 )     (24,889 )
Proceeds received from sale of property and equipment
    400       417  
Cash paid in business combinations, net of cash acquired
    (74,410 )     (225,375 )
 
           
Net cash used in investing activities
    (303,430 )     (129,959 )
 
               
Cash flows from financing activities:
               
Redemption of convertible debt
    (86,694 )      
Proceeds from issuance of common stock
    43,384       30,528  
Net proceeds from issuance of preferred stock
          98,115  
Net proceeds from issuance of convertible debt
    289,875        
Payments of notes payable and other
    (495 )     (433 )
Purchases of treasury stock
    (4,596 )     (22,267 )
 
           
Net cash provided by financing activities
    241,474       105,943  
 
               
Effect of exchange rates on cash
    (1,117 )     (28 )
 
           
 
               
Net increase in cash and cash equivalents
    36,028       55,156  
Cash and cash equivalents at beginning of period
    46,019       39,648  
 
           
Cash and cash equivalents at end of period
  $ 82,047     $ 94,804