EX-99.2 3 g02852exv99w2.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     Six Months Ended  
    June 30,     June 30,  
    2006     2005     2006     2005  
Revenue:
                               
Services
  $ 313,766     $ 282,729     $ 615,346     $ 549,307  
Products
    41,115       39,827       78,654       77,183  
 
                       
Total revenue
    354,881       322,556       694,000       626,490  
 
                               
Cost of operations:
                               
Services
    177,039       161,840       354,202       316,016  
Products
    20,107       20,110       38,211       38,097  
 
                       
Total cost of operations
    197,146       181,950       392,413       354,113  
 
                               
Development and engineering
    15,283       14,457       30,197       29,097  
Sales, marketing, general and administrative
    90,008       83,533       178,840       165,670  
Depreciation and amortization
    19,381       17,541       38,309       34,045  
Legal expense
    275       4,283       817       8,443  
Advisory expense
    4,104             4,104        
Loss (gain) on investments
          (190 )           3,642  
Loss on redemption of convertible debt
          1,902             1,902  
Interest income
    4,435       3,936       8,854       8,257  
Interest expense
    4,668       3,895       9,359       8,676  
 
                       
Income before income tax provision and minority interest
    28,451       19,121       48,815       29,159  
Income tax provision
    5,434       2,955       9,996       3,144  
Minority interest in WebMD Health Corp., net of tax
    (164 )           (793 )      
 
                       
Net income
  $ 23,181     $ 16,166     $ 39,612     $ 26,015  
 
                       
 
                               
Net income per common share:
                               
Basic
  $ 0.08     $ 0.05     $ 0.14     $ 0.08  
 
                       
Diluted
  $ 0.08     $ 0.05     $ 0.13     $ 0.08  
 
                       
 
                               
Weighted-average shares outstanding used in computing net income per common share:
                               
Basic
    285,086       337,303       286,141       331,318  
 
                       
Diluted
    296,722       349,624       296,107       342,656  
 
                       

 


 

EMDEON CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2006     2005     2006     2005  
Revenue
                               
Emdeon Business Services
  $ 206,943     $ 191,514     $ 408,097     $ 377,247  
Emdeon Practice Services
    77,272       78,596       152,978       151,614  
WebMD
    56,612       40,465       106,663       74,040  
Porex
    22,659       20,397       43,246       40,253  
Inter-segment eliminations
    (8,605 )     (8,416 )     (16,984 )     (16,664 )
 
                       
 
  $ 354,881     $ 322,556     $ 694,000     $ 626,490  
 
                       
 
                               
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”)
                               
Emdeon Business Services
  $ 49,598     $ 40,420     $ 92,791     $ 78,673  
Emdeon Practice Services
    12,119       8,183       22,292       12,580  
WebMD (a)
    9,599       2,793       16,126       6,023  
Porex
    7,045       6,064       12,599       11,461  
Corporate (a)
    (11,628 )     (11,742 )     (22,902 )     (23,747 )
 
                       
 
  $ 66,733     $ 45,718     $ 120,906     $ 84,990  
 
                               
Adjusted EBITDA per diluted common share (b)
  $ 0.22     $ 0.13     $ 0.41     $ 0.25  
 
                       
 
                               
Interest, taxes, non-cash and other items (c)
                               
Depreciation and amortization
  $ (19,381 )   $ (17,541 )   $ (38,309 )   $ (34,045 )
Non-cash stock-based compensation (d)
    (13,100 )     (716 )     (25,562 )     (2,367 )
Non-cash advertising
    (1,189 )     (2,386 )     (2,794 )     (5,013 )
Legal expense
    (275 )     (4,283 )     (817 )     (8,443 )
Advisory expense
    (4,104 )           (4,104 )      
(Loss) gain on investments
          190             (3,642 )
Loss on redemption of convertible debt
          (1,902 )           (1,902 )
Interest income
    4,435       3,936       8,854       8,257  
Interest expense
    (4,668 )     (3,895 )     (9,359 )     (8,676 )
Income tax provision
    (5,434 )     (2,955 )     (9,996 )     (3,144 )
Minority interest in WebMD Health Corp., net of tax
    164             793        
 
                       
Net income
  $ 23,181     $ 16,166     $ 39,612     $ 26,015  
 
                       
 
                               
Net income per common share:
                               
Basic
  $ 0.08     $ 0.05     $ 0.14     $ 0.08  
 
                       
Diluted
  $ 0.08     $ 0.05     $ 0.13     $ 0.08  
 
                       
 
                               
Weighted-average shares outstanding used in computing net income per common share:
                               
Basic
    285,086       337,303       286,141       331,318  
 
                       
Diluted
    296,722       349,624       296,107       342,656  
 
                       
 
(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 diluted common share is based on the weighted-average shares outstanding used in computing diluted net income per common share.
 
(c)   Reconciliation of Adjusted EBITDA to net income (see Annex A — Explanation of Non-GAAP Financial Measures).
 
(d)   Reflects the adoption of SFAS 123R effective January 1, 2006.

 


 

EMDEON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                 
    June 30,     December 31,  
    2006     2005  
    (Unaudited)          
Assets
               
Cash and cash equivalents
  $ 92,210     $ 159,510  
Short-term investments
    296,750       267,387  
Accounts receivable, net
    239,024       233,070  
Inventory
    14,486       14,251  
Prepaid expenses and other current assets
    36,079       34,615  
 
           
Total current assets
    678,549       708,833  
 
               
Marketable equity securities
    2,944       4,481  
Property and equipment, net
    126,376       116,032  
Goodwill
    1,110,521       1,075,549  
Intangible assets, net
    238,213       240,510  
Other assets
    47,837       50,278  
 
           
Total Assets
  $ 2,204,440     $ 2,195,683  
 
           
 
               
Liabilities and Stockholders’ Equity
               
Accounts payable
  $ 15,135     $ 11,611  
Accrued expenses
    158,249       186,381  
Deferred revenue
    125,811       115,840  
 
           
Total current liabilities
    299,195       313,832  
 
               
Convertible notes
    650,000       650,000  
Other long-term liabilities
    15,946       15,353  
 
               
Minority interest in WebMD Health Corp.
    53,811       43,229  
 
               
Convertible redeemable exchangeable preferred stock
    98,650       98,533  
 
               
Stockholders’ equity
    1,086,838       1,074,736  
 
               
 
           
Total Liabilities and Stockholders’ Equity
  $ 2,204,440     $ 2,195,683  
 
           

 


 

EMDEON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
                 
    Six Months Ended  
    June 30,  
    2006     2005  
Cash flows from operating activities:
               
Net income
  $ 39,612     $ 26,015  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    38,309       34,045  
Minority interest in WebMD Health Corp., net of tax
    (793 )      
Amortization of debt issuance costs
    1,461       1,333  
Non-cash advertising
    2,794       5,013  
Non-cash stock-based compensation
    25,562       2,367  
Bad debt expense
    1,645       3,722  
Loss on investments
          3,642  
Loss on redemption of convertible debt
          1,902  
Reversal of income tax valuation allowance applied to goodwill
    5,215       2,146  
Changes in operating assets and liabilities:
               
Accounts receivable
    (4,719 )     (18,350 )
Inventory
    (179 )     186  
Prepaid expenses and other, net
    (3,659 )     1,655  
Accounts payable
    3,479       (5,881 )
Accrued expenses and other long-term liabilities
    222       (4,596 )
Deferred revenue
    6,272       9,501  
 
           
Net cash provided by operating activities
    115,221       62,700  
 
               
Cash flows from investing activities:
               
Proceeds from maturities and sales of available-for-sale securities
    398,870       190,673  
Purchases of available-for-sale securities
    (426,470 )     (94,350 )
Purchases of property and equipment
    (28,971 )     (38,717 )
Proceeds received from sale of property and equipment
          400  
Cash paid in business combinations, net of cash acquired
    (84,846 )     (74,110 )
 
           
Net cash used in investing activities
    (141,417 )     (16,104 )
 
               
Cash flows from financing activities:
               
Proceeds from issuance of common stock
    30,433       31,437  
Purchases of treasury stock
    (71,843 )      
Redemption of convertible debt
          (86,694 )
Payments of notes payable and other
    (173 )     (304 )
 
           
Net cash used in financing activities
    (41,583 )     (55,561 )
 
               
Effect of exchange rates on cash
    479       (1,124 )
 
           
 
               
Net decrease in cash and cash equivalents
    (67,300 )     (10,089 )
Cash and cash equivalents at beginning of period
    159,510       46,019  
 
           
Cash and cash equivalents at end of period
  $ 92,210     $ 35,930