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

February 28, 2006

Date of Report (Date of earliest event reported)

EMDEON 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

EX-99.1 PRESS RELEASE

EX-99.2 FINANCIAL TABLES

EX-99.3 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: our guidance on future financial results and other projections or measures of our future performance; the amount and timing of the benefits expected from acquisitions or other transactions or from new or updated products or services; other potential sources of additional revenue; and explorations regarding possible transactions or other alternatives with respect to Emdeon Business Services and Emdeon Practice Services. These statements speak only as of the date of this Current Report and are based on our current plans and expectations, and they involve risks and uncertainties that could cause actual future events or results to be different from those described in or implied by such forward-looking statements. These risks and uncertainties include those relating to: market acceptance of our products and services; relationships with customers and strategic partners; difficulties in integrating acquired businesses; 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); our ability to attract and retain qualified personnel; and uncertainties regarding the outcome of the process of exploring alternatives with respect to Emdeon Business Services and Emdeon Practice Services and its effects on those segments. Further information about these matters can be found in our other Securities and Exchange Commission filings. We expressly disclaim 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: our earnings before restructuring, interest, taxes, non-cash and other items (which we refer to as “Adjusted EBITDA”); income before restructuring, 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. We believe that the above non-GAAP measures, and changes in those measures, are meaningful indicators of our company’s performance and provide additional information that our management finds useful in evaluating such performance and in planning for future periods. Accordingly, we believe 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 February 28, 2006, we issued a press release announcing our results for the quarter and year ended December 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 (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

2

Item 7.01. Regulation FD Disclosure

     On February 28, 2006, we issued a press release announcing our results for the quarter and year ended December 31, 2005. Exhibit 99.3 to this Current Report includes forward-looking financial information that accompanied the press release and that is expected to be discussed on the previously announced conference call with investors and analysts to be held by us at 4:45 p.m., Eastern time, today (February 28, 2006). The call can be accessed at www.emdeon.com (in the About Emdeon 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 Exchange Act, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01. Other Events

     On February 28, 2006, we issued a press release announcing our results for the quarter and year ended December 31, 2005. Attached hereto as Exhibit 99.2 and incorporated by reference herein are financial tables that accompanied the press release announcing the results.

Item 9.01. Financial Statements and Exhibits

(c)	Exhibits
	The following exhibits are furnished herewith:

99.1	Press Release, dated February 28, 2006, regarding the Registrant’s results for the quarter and year ended December 31, 2005
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Financial Guidance Summary accompanying Exhibit 99.1

3

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	EMDEON CORPORATION
Dated: February 28, 2006	By:	/s/ Lewis H. Leicher
		Lewis H. Leicher
		Senior Vice President

4

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release, dated February 28, 2006, regarding the Registrant’s results for the quarter and year ended December 31, 2005
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Financial Guidance Summary accompanying Exhibit 99.1

5

EX-99.1

EXHIBIT 99.1

Contacts:
Investors:	Media:
Risa Fisher	Jennifer Newman
rfisher@emdeon.com	jnewman@emdeon.com
201-414-2002	212-624-3912

EMDEON REPORTS FOURTH QUARTER AND FULL YEAR 2005 RESULTS

EMDEON 2006 GUIDANCE CONSISTENT WITH PRIOR FORECASTS

ELMWOOD PARK, NJ (February 28, 2006) — Emdeon Corporation (NASDAQ: HLTH) today announced financial results for the quarter and year ended December 31, 2005.

“I am pleased with the progress we have made in light of the challenges we faced in the second half of 2005,” said Kevin Cameron, Chief Executive Officer of Emdeon. “During 2005, we improved our operations, introduced enhanced products and extended the value proposition we offer our customers. Our businesses are well positioned to grow as we facilitate improved revenue cycle management, the capturing and sharing of clinical information and the empowerment of the patient.”

Key Financial Highlights
Revenue for the fourth quarter was $327.2 million compared to $307.6 million in the prior year period, an increase of 6.4%. Earnings before restructuring, interest, taxes, non-cash and other items (“Adjusted EBITDA”) for the fourth quarter was $52.3 million or $0.15 per share compared to $47.4 million or $0.14 per share a year ago. Net Income for the fourth quarter was $32.9 million or $0.09 per share compared to net income of $19.7 million or $0.06 per share a year ago.

Revenue for 2005 was $1.28 billion compared to $1.16 billion a year ago, an increase of 10%. Adjusted EBITDA for 2005 increased 28% to $183.7 million or $0.52 per share from $143.5 million or $0.43 per share in the prior year. Net Income for 2005 increased 85.5% to $73.0 million or $0.21 per share from $39.3 million or $0.12 per share a year ago.

Emdeon highlighted today that its previously reported results, financial guidance and analyst consensus estimates referenced “income before restructuring, taxes, non-cash and other items” rather than Adjusted EBITDA. Net interest income was included in the prior measure; however, it is not included in Adjusted EBITDA and the related per share amounts discussed above. Net interest income (expense) for the fourth quarter was $3.5 million or $0.01 per share compared to $(0.6) million or $0.00 per share a year ago. Net interest income (expense) for 2005 was $5.2 million or $0.02 per share compared to $(0.5) million or $0.00 per share a year ago. Accordingly, to compare today’s reported results to prior guidance and analyst consensus estimates, the amounts for net interest income as discussed above should be added to the Adjusted EBITDA reported today. On that basis, Emdeon would have reported “income before restructuring, taxes, non-cash and other items” of $0.16 per share and $0.54 per share for the fourth quarter and full year 2005, respectively. Emdeon intends to report Adjusted EBITDA in the future.

As of December 31, 2005, Emdeon had approximately $427 million in cash and short-term investments on a consolidated basis, including $154 million in cash and short-term investments held by WebMD Health Corp., its 85.8% owned subsidiary.

Segment Operating Results
Emdeon Business Services revenue was $191.1 million for the fourth quarter compared to $182.1 million in the prior year period, an increase of 4.9%. The increase in Emdeon Business Services revenue was attributable to growth in our paid-claims communications services, patient statement services and government business. Adjusted EBITDA was $39.9 million compared to $41.3 million in the prior year period. Operating margins decreased as a result of revenue mix and higher sales, marketing, general and administrative expenses.

Emdeon Practice Services revenue was $77.1 million for the fourth quarter compared to $76.4 million in the prior year period, an increase of 0.9%. Adjusted EBITDA was $9.2 million compared to $5.6 million in the prior year period. Operating margins increased from 7.3% in the prior year period to 11.9% as a result of revenue mix and improvements in our delivery and service infrastructure.

As previously announced on February 23, 2006, WebMD revenue was $49.1 million for the fourth quarter compared to $39.1 million in the prior year period, an increase of 25.5%, driven by continued growth in our online public and private portals. Adjusted EBITDA was $12.4 million compared to $8.7 million in the prior year.

Porex revenue was $18.5 million for the fourth quarter compared to $18.6 million in the prior year period. Adjusted EBITDA for the fourth quarter was $4.7 million compared to $5.5 million in the prior year period.

Financial Guidance
Emdeon’s current expectations are consistent with previously disclosed financial guidance, after taking into account the impact of the completion of the Company’s December 2005 tender offer which reduced the number of its outstanding common shares by approximately 67 million. Due to the use of approximately $550 million to purchase those shares, interest income in 2006 is now expected to be reduced by approximately $20 million.

Emdeon expects revenue in 2006 to be approximately $1.365 billion to $1.415 billion, an increase of approximately 7% to 11% over 2005. Adjusted EBITDA is expected to increase 9% to 25% over 2005 to approximately $200 million to $230 million, or $0.67 to $0.77 per share. Net Income is expected to be approximately $45 million to $65 million, or $0.15 to $0.22 per share, which includes approximately $49.0 million to $51.0 million, or $0.16 to $0.17 per share of non-cash stock-based compensation expense in accordance with SFAS 123R.

A schedule outlining Emdeon’s financial guidance for 2006 is attached to this press release.

Evaluating Strategic Alternatives Related to Emdeon Business Services and Emdeon Practice Services
In connection with inquiries received from several potential strategic buyers that have expressed an interest in acquiring Emdeon Business Services and Emdeon Practice Services, the Board of Directors of Emdeon has commenced a process to evaluate strategic alternatives as it relates to these businesses to maximize stockholder value. Emdeon’s ViPS business unit, currently part of Emdeon Business Services, is not included in the evaluation process and will be retained by Emdeon.

Analyst and Investor Conference Call
As previously announced, Emdeon will hold a conference call with investors and analysts to discuss these results at 4:45 pm (eastern) on February 28, 2006. The call can be accessed at www.emdeon.com (in the About Emdeon section). A replay of the audio webcast will be available at the same web address.

ABOUT EMDEON
Emdeon (Nasdaq: HLTH) is a leading provider of business, technology and information solutions that transform both the financial and clinical aspects of healthcare delivery. At the core of Emdeon’s vision is the commitment to connect providers, payers, employers, physicians and consumers in order to simplify business processes, to provide actionable knowledge at the right time and place and to improve healthcare quality.

Emdeon Business Services provides revenue cycle management and clinical communication solutions that enable payers, providers and patients to improve healthcare business processes. Emdeon Practice Services provides physician practice management and electronic health record software and services that increase practice efficiency and enhance patient care. WebMD Health (Nasdaq: WBMD) provides health information services for consumers, physicians, healthcare professionals, employers and health plans through its public and private online portals and health-focused publications. Porex is a developer, manufacturer and distributor of proprietary porous plastic products and components used in healthcare, industrial and consumer applications.

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

All statements contained in this press release, other than statements of historical fact, are forward-looking statements, including those regarding: guidance on our future financial results and other projections or measures of our future performance; 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; and other potential sources of additional revenue; and explorations regarding possible transactions or other alternatives with respect to Emdeon Business Services and Emdeon Practice Services. These statements speak only as of the date of this release and are based on our current plans and expectations, and they 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 our products and services; difficulties in integrating acquired businesses; 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); our ability to attract and retain qualified personnel; and uncertainties regarding the outcome of the process of exploring alternatives with respect to Emdeon Business Services and Emdeon Practice Services and its effects on those segments. Further information about these matters can be found in our Securities and Exchange Commission filings. We expressly disclaim 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: our earnings before restructuring, interest, taxes, non-cash and other items (which we refer to as “Adjusted EBITDA”); income before restructuring, taxes, non-cash and other items; and related per share amounts. We believe that those non-GAAP measures, and changes in those measures, are meaningful indicators of our company’s performance and provide additional information that our management finds useful in evaluating such performance and in planning for future periods. Accordingly, we believe 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. The guidance summary attached to this press release includes a reconciliation of certain forward-looking non-GAAP information to forward-looking GAAP financial information.

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

WebMD^®, WebMD Health^®, Emdeon™, Emdeon Business Services™, Emdeon Practice Services™ and POREX^® are trademarks of Emdeon Corporation or its subsidiaries.

-Tables Follow-

EX-99.2

Exhibit 99.2

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

	Three Months Ended					Years Ended
	December 31,					December 31,
	2005			2004		2005			2004
Revenue	$	327,236		$	307,641	$	1,276,879		$	1,160,351
Costs and expenses:
Cost of operations		180,024			171,257		717,047			666,431
Development and engineering		14,716			15,682		58,494			54,161
Sales, marketing, general and administrative		85,270			78,973		333,288			324,027
Depreciation and amortization		18,827			16,843		71,767			57,765
Legal expense		3,488			2,653		17,835			9,230
Restructuring and integration charge		—			—		—			4,535
Loss (gain) on investments		2,723			—		6,365			(457	)
Interest income		8,149			4,211		21,531			18,717
Interest expense		4,652			4,824		16,324			19,253
Other expense (income), net		—			—		3,765			(121	)
Income before income tax (benefit) provision and minority interest		25,685			21,620		73,525			44,244
Income tax (benefit) provision		(8,037	)		1,931		(357	)		4,910
Minority interest in WebMD Health Corp., net of tax		870			—		908			—
Net income	$	32,852		$	19,689	$	72,974		$	39,334
Net income per common share:
Basic and diluted	$	0.09		$	0.06	$	0.21		$	0.12
Weighted-average shares outstanding used in computing net income per common share:
Basic		348,261			312,745		341,747			320,080
Diluted		355,782			333,576		352,852			333,343

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

	Three Months Ended						Years Ended
	December 31,						December 31,
	2005			2004			2005			2004
Revenues
Emdeon Business Services	$	191,102		$	182,126		$	758,851		$	686,585
Emdeon Practice Services		77,062			76,412			304,175			296,115
WebMD		49,104			39,139			168,238			134,317
Porex		18,461			18,556			79,124			77,099
Inter-segment eliminations		(8,493	)		(8,592	)		(33,509	)		(33,765	)
	$	327,236		$	307,641		$	1,276,879		$	1,160,351
Earnings before restructuring, interest, taxes, non-cash and other items (“Adjusted EBITDA”)
Emdeon Business Services	$	39,913		$	41,320		$	154,512		$	131,834
Emdeon Practice Services		9,166			5,555			29,378			14,533
WebMD (a)		12,446			8,735			27,546			26,307
Porex		4,678			5,510			22,524			22,650
Corporate (a)		(13,854	)		(13,724	)		(50,301	)		(51,791	)
	$	52,349		$	47,396		$	183,659		$	143,533
Adjusted EBITDA per basic common share (b)	$	0.15		$	0.15		$	0.54		$	0.45
Adjusted EBITDA per diluted common share (b)	$	0.15		$	0.14		$	0.52		$	0.43
Restructuring, interest, taxes, non-cash and other items (c)
Depreciation and amortization	$	(18,827	)	$	(16,843	)	$	(71,767	)	$	(57,765	)
Amortization of non-cash advertising and distribution services		(3,871	)		(3,933	)		(10,870	)		(18,826	)
Non-cash stock-based compensation		(1,252	)		(1,734	)		(4,739	)		(8,975	)
Legal expense		(3,488	)		(2,653	)		(17,835	)		(9,230	)
(Loss) gain on investments		(2,723	)		—			(6,365	)		457
Restructuring and integration charge		—			—			—			(4,535	)
Interest income		8,149			4,211			21,531			18,717
Interest expense		(4,652	)		(4,824	)		(16,324	)		(19,253	)
Other (expense) income, net		—			—			(3,765	)		121
Minority interest in WebMD Health Corp., net of tax		(870	)		—			(908	)		—
Income tax benefit (provision)		8,037			(1,931	)		357			(4,910	)
Net income	$	32,852		$	19,689		$	72,974		$	39,334
Net income per common share:
Basic and diluted	$	0.09		$	0.06		$	0.21		$	0.12
Weighted-average shares outstanding used in computing net income per common share:
Basic		348,261			312,745			341,747			320,080
Diluted		355,782			333,576			352,852			333,343

(a)	Adjusted EBITDA during prior periods, for the Corporate and WebMD segments, has been reclassified to conform to the current period presentation.
(b)	Adjusted EBITDA per basic and diluted common share is based on the weighted-average shares outstanding used in computing net income per common share (basic and diluted).
(c)	Reconciliation of Adjusted EBITDA to net income.

EMDEON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	December 31,		December 31,
	2005		2004
	(Unaudited)
Assets
Cash and cash equivalents	$	159,510	$	46,019
Short-term investments		267,387		61,675
Accounts receivable, net		233,070		204,447
Inventory		14,251		14,367
Prepaid expenses and other current assets		34,615		40,224
Total current assets		708,833		366,732
Marketable debt securities		—		511,864
Marketable equity securities		4,481		4,017
Property and equipment, net		116,032		89,677
Goodwill		1,075,549		1,010,564
Intangible assets, net		240,510		260,509
Other assets		50,278		48,871
Total Assets	$	2,195,683	$	2,292,234
Liabilities and Stockholders’ Equity
Accounts payable	$	11,611	$	17,366
Accrued expenses		186,381		198,311
Deferred revenue		115,840		99,543
Total current liabilities		313,832		315,220
Convertible notes		650,000		649,999
Other long-term liabilities		15,353		4,500
Minority interest in WebMD Health Corp.		43,229		—
Convertible redeemable exchangeable preferred stock		98,533		98,299
Stockholders’ equity		1,074,736		1,224,216
Total Liabilities and Stockholders’ Equity	$	2,195,683	$	2,292,234

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

	Years Ended
	December 31,
	2005			2004
Cash flows from operating activities:
Net income	$	72,974		$	39,334
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		71,767			57,765
Minority interest in WebMD Health Corp., net of tax		908			—
Amortization of debt issuance costs		2,541			2,975
Non-cash advertising and distribution services		10,870			18,826
Non-cash stock-based compensation		4,739			8,975
Bad debt expense		6,410			3,606
Loss (gain) on investments		6,365			(457	)
Gain on sale of property and equipment		—			(121	)
Loss on redemption of convertible debt		1,902			—
Non-cash reversal of income tax valuation allowance		444			—
Changes in operating assets and liabilities:
Accounts receivable		(30,613	)		(16,152	)
Inventory		(224	)		(1,077	)
Prepaid expenses and other, net		2,683			3,514
Accounts payable		(6,074	)		5,577
Accrued expenses and other long-term liabilities		7,526			(43,703	)
Deferred revenue		9,068			10,982
Net cash provided by operating activities		161,286			90,044
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		1,063,606			1,408,091
Purchases of available-for-sale securities		(758,687	)		(1,308,303	)
Purchases of property and equipment		(62,645	)		(38,800	)
Proceeds received from sale of property and equipment		400			417
Cash paid in business combinations, net of cash acquired		(93,742	)		(249,557	)
Net cash provided by (used in) investing activities		148,932			(188,152	)
Cash flows from financing activities:
Proceeds from issuance of common stock		48,571			38,052
Purchases of treasury stock under repurchase program		(21,246	)		(32,110	)
Purchases of treasury stock in Tender Offer		(549,268	)		—
Net proceeds from issuance of convertible debt		289,875			—
Issuance of WebMD Health Corp. Class A common stock		123,344			—
Net proceeds from issuance of preferred shares		—			98,115
Redemption of convertible debt		(86,694	)		—
Payments of notes payable and other		(631	)		(602	)
Net cash (used in) provided by financing activities		(196,049	)		103,455
Effect of exchange rates on cash		(678	)		1,024
Net increase in cash and cash equivalents		113,491			6,371
Cash and cash equivalents at beginning of period		46,019			39,648
Cash and cash equivalents at end of period	$	159,510		$	46,019

EX-99.3

Exhibit 99.3

2006 Consolidated Financial Guidance Summary
(in millions, except per share amounts)

						Quarterly Mix
	Range					Q1	Q2	Q3	Q4
Revenue	$	1,365		$	1,415	24%	25%	25%	26%
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”)	$	200		$	230	20%	24%	26%	30%
Interest expense		3.0			4.0
Depreciation and amortization		80.0			85.0	23%	24%	26%	27%
Non-cash stock-based compensation		49.0			51.0	25%	27%	27%	21%
Non-cash advertising		7.3			7.5	21%	24%	21%	34%
Income tax provision		16.0			17.2	20%	24%	26%	30%
Minority interest in WebMD Health Corp.		(0.3	)		0.3
Net income	$	45.0		$	65.0	13%	22%	27%	38%
Adjusted EBITDA per diluted share	$	0.67		$	0.77
Net income per diluted share	$	0.15		$	0.22

Operating Segments

Revenue:

• Business Services — Approximately 59% of consolidated revenue in Q1, decreasing sequentially to approximately 56% by Q4.

• Practice Services — Approximately 23% of consolidated revenue throughout the year.

• WebMD — Approximately 14% of consolidated revenue in Q1, increasing to approximately 18% by Q4.

• Porex — Approximately 6% of consolidated revenue throughout the year.

• Eliminations — Approximately 2.5% of consolidated revenue.

Adjusted EBITDA:

• Business Services — Approximately 19% of segment revenue in Q1 and Q2 and 20% in Q3 and Q4.

• Practice Services — Approximately 10% of segment revenue in Q1, increasing sequentially to 13% by Q4.

• WebMD — Approximately 12% of segment revenue in Q1, increasing sequentially to about 30% in Q4.

• Porex — Approximately 27% of segment revenue throughout the year, slightly higher margins in the seasonally stronger Q2.

• Corporate — Approximately 3.6% of consolidated revenue.

Other Assumptions

• Historically, the Company has measured and reported its operating results using the term “income before taxes, non-cash and other items,” which included net interest income and expense. Going forward, the Company will exclude interest income and expense from this measure, and accordingly will report “Earnings before interest, taxes, non-cash and other items.” This measure will be referred to as “Adjusted EBITDA.” This presentation is consistent with our publicly traded subsidiary, WebMD Health Corp. All amounts presented in the above table reflect this modified presentation.

• The 2006 guidance does not reflect any projected expenses related to the on-going Department of Justice Investigation.

• Adjusted EBITDA per diluted share and net income per diluted share are both calculated on an assumed share count of approximately 300 million.

• Non-cash stock-based compensation expense considers the January 1, 2006 adoption of SFAS 123R, “Share-Based Payment.”