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

October 25, 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, DATED OCTOBER 25,2006

EX-99.2 ANNEX A TO EXHIBIT 99.1

EX-99.3 ANNEX B TO EXHIBIT 99.1

Item 2.02. Results of Operations and Financial Condition

     On October 25, 2006, Emdeon Corporation issued a press release announcing its preliminary financial results for the quarter ended September 30, 2006. A copy of the press release is attached as Exhibit 99.1 to this Current Report. Exhibit 99.2 to this Current Report contains Annex A to the press release, which provides reconciliations of non-GAAP financial measures to GAAP financial measures. Exhibit 99.3 to this Current Report contains Annex B to the press release, which is titled “Explanation of Non-GAAP Financial Measures.” Exhibits 99.1, 99.2 and 99.3 are 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 they be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

     The information included in Exhibits 99.1 and 99.2 is preliminary. During Emdeon’s closing process and preparation of final consolidated financial statements and related notes, Emdeon may identify items that would require it to make adjustments to the preliminary results included in those exhibits.

     As previously announced, Emdeon and WebMD Health Corp., Emdeon’s 85.6% owned subsidiary, will release their respective financial results for the three months ended September 30, 2006 at approximately 4:00 pm (ET) on Thursday, November 2, 2006. The companies will host a conference call at 4:45 pm (ET) on that day to discuss those results. Investors can access the call via webcast at www.emdeon.com (in the About Emdeon section) or at www.wbmd.com (in the Investor Relations section) at that time. A replay of the call will be available at the same web addresses.

Item 8.01. Other Events

     On October 25, 2006, Emdeon Corporation announced that the Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in connection with the previously announced sale of a 52% interest in its Emdeon Business Services segment (excluding the ViPS business) to an investment vehicle formed for purposes of the acquisition by General Atlantic LLC.

Item 9.01. Financial Statements and Exhibits

(c)	Exhibits
	The following exhibits are furnished herewith:

99.1	Press Release, dated October 25, 2006, regarding Emdeon Corporation’s release of preliminary results for the quarter ended September 30, 2006
99.2	Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (Annex A to Exhibit 99.1)
99.3	Explanation of Non-GAAP Financial Measures (Annex B to Exhibit 99.1)

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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: October 25, 2006	By:	/s/ Lewis H. Leicher
		Lewis H. Leicher
		Senior Vice President

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EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release, dated October 25, 2006, regarding Emdeon Corporation’s release of preliminary results for the quarter ended September 30, 2006
99.2	Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (Annex A to Exhibit 99.1)
99.3	Explanation of Non-GAAP Financial Measures (Annex B to Exhibit 99.1)

EX-99.1

EXHIBIT 99.1

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

EMDEON ANNOUNCES PRELIMINARY THIRD QUARTER RESULTS

EMDEON ANNOUNCES EARLY TERMINATION OF HART-SCOTT-RODINO WAITING PERIOD IN CONNECTION WITH SALE OF EMDEON BUSINESS SERVICES

ELMWOOD PARK, NJ (October 25, 2006) – Emdeon Corporation (NASDAQ: HLTH) today announced preliminary financial results for the quarter ended September 30, 2006. This announcement is being made in connection with the provision of information to potential lenders in relation to the previously announced agreement to sell a 52% interest in the Emdeon Business Services segment (excluding its ViPS business) to General Atlantic LLC.

“Emdeon expects to report stronger than anticipated third quarter results, primarily due to lower than anticipated expenses at Emdeon Business Services,” said Kevin Cameron, Chief Executive Officer of Emdeon. “We are completing our normal closing process and will provide more detail on November 2, 2006, our previously scheduled earnings release date.”

Preliminary Results for the Three Months Ended September 30, 2006

Emdeon expects that it will report the following financial results for the third quarter of 2006. These results will reflect the reclassification of Emdeon Practice Services as a discontinued operation in the current and prior year period, as a result of the completion of the sale of Emdeon Practice Services to Sage Software in September 2006.

• Revenue of $298 million to $301 million, compared to $261 million in the prior year period.

• Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) of $0.19 to $0.20 per share, compared to $0.11 per share in the prior year period.

• Income from continuing operations of $0.07 to $0.08 per share, compared to $0.03 per share in the prior year period.

These preliminary results reflect:

• An increase in revenues and an offsetting increase in expenses of approximately $14 million and $13 million for the quarters ending September 30, 2006 and 2005, respectively, related to the activity between (a) the discontinued Emdeon Practice Services segment and (b) other Emdeon operating segments (primarily Emdeon Business Services). These amounts had previously been eliminated in consolidation prior to Emdeon Practice Services being reflected as a discontinued operation.

• Higher than anticipated revenue and Adjusted EBITDA at Emdeon Business Services, excluding ViPS, resulting from a combination of stronger than anticipated revenue from medical claims and remittance and payment services and lower than anticipated expenses driven by operating efficiencies and cost savings.

• Slightly less than anticipated revenue at ViPS, with Adjusted EBITDA for ViPS to be approximately as anticipated, reflecting lower than anticipated expenses.

• Revenue and Adjusted EBITDA for Emdeon’s WebMD Health subsidiary to be at or slightly above the high end of its previously issued financial guidance range.

The above information is preliminary. During Emdeon’s closing process and preparation of final consolidated financial statements and related notes, Emdeon may identify items that would require it to make adjustments to the preliminary results presented above.

Early Termination of Hart-Scott-Rodino Waiting Period

Emdeon Corporation today announced that the Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in connection with the previously announced sale of a 52% interest in Emdeon Business Services (excluding ViPS) described above.

Analyst and Investor Conference Calls

As previously announced, Emdeon and WebMD Health Corp. (Nasdaq: WBMD), Emdeon’s 85.6% owned subsidiary, will release their respective financial results for the three months ended September 30, 2006 at approximately 4:00 pm (ET) on Thursday, November 2, 2006. The Companies will host a conference call at 4:45 pm (ET) on that day to discuss those results. Investors can access the call via webcast at www.emdeon.com (in the About Emdeon section) or at www.wbmd.com (in the Investor Relations section) at that time. A replay of the call will be available at the same web addresses.

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. WebMD (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.

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All statements contained in this press release, other than statements of historical fact, are forward-looking statements. 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; our ability to attract and retain qualified personnel; and the pending sale transaction involving Emdeon Business Services and its effects on that segment and on Emdeon. 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.

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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. Annex A attached to this press release includes reconciliations of non-GAAP financial measures to GAAP financial measures. In addition, an “Explanation of Non-GAAP Financial Measures” is attached to this press release as Annex B.

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

EX-99.2

EXHIBIT 99.2

ANNEX A

Q3 2006 Preliminary Consolidated Financial Results
and Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

	Range for Q3 2006						Actual Q3 2005
	(unaudited)						(unaudited)
Revenue	$	298		$	301		$	261
Adjusted EBITDA per diluted share	$	0.19		$	0.20		$	0.11
Reconciliation of Adjusted EBITDA to income from
continuing operations per diluted share:
Interest income	$	(0.01	)	$	(0.01	)	$	(0.01	)
Depreciation and amortization		0.06			0.06			0.04
Non-cash stock-based compensation		0.04			0.04			—
Non-cash advertising		0.01			0.01			0.01
Legal expense		—			—			0.02
Advisory expense		0.01			0.01			—
Income tax provision		0.01			0.01			0.01
Other expense		—			—			0.01
Income from continuing operations per diluted share	$	0.07		$	0.08		$	0.03

The above results reflect the reclassification of Emdeon Practice Services as a discontinued operation in the current and prior year periods, as a result of the completion of the sale of Emdeon Practice Services to Sage Software in September 2006.

EX-99.3

EXHIBIT 99.3

ANNEX B

Explanation of Non-GAAP Financial Measures

     The accompanying 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 represent earnings before interest, taxes, non-cash and other items (which we refer to as “Adjusted EBITDA”) and related per share amounts. Adjusted EBITDA should be viewed as supplemental to, and not as an alternative for, “income from continuing operations” calculated in accordance with GAAP. Annex A attached to the accompanying press release include a reconciliation of non-GAAP financial measures to GAAP financial measures.

     Adjusted EBITDA is used by Emdeon’s management as an additional measure of Emdeon’s overall performance and its reporting segments’ performance for purposes of business decision-making, including developing budgets, managing expenditures, and evaluating potential acquisitions or divestitures. Period-to-period comparisons of Adjusted EBITDA help Emdeon’s management identify additional trends in Emdeon’s and its reporting segments’ financial results that may not be shown solely by period-to-period comparisons of income from continuing operations. In addition, Emdeon uses Adjusted EBITDA in the incentive compensation programs applicable to many of its employees in order to evaluate Emdeon’s performance. Emdeon management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. In order to compensate for those limitations, management also reviews the specific items that are excluded from Adjusted EBITDA, but included in income from continuing operations, as well as trends in those items. The per share amounts of those items are set forth, for the applicable periods, in the reconciliations of Adjusted EBITDA per share to income from continuing operations per share in Annex A.

     Emdeon believes that the presentation of Adjusted EBITDA is useful to investors in their analysis of Emdeon’s results for reasons similar to the reasons why Emdeon’s management finds it useful and because it helps facilitate investor understanding of decisions made by Emdeon’s management in light of the performance metrics used in making those decisions. In addition, as more fully described below, Emdeon believes that providing Adjusted EBITDA, together with a reconciliation of Adjusted EBITDA to income from continuing operations, helps investors make comparisons between Emdeon and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation. However, Adjusted EBITDA is intended to provide a supplemental way of comparing Emdeon with other public companies and is not intended as a substitute for comparisons based on “income from continuing operations” calculated in accordance with GAAP. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation

between such measure and income from continuing operations provided by each company under applicable SEC rules.

     The following is an explanation of the items excluded by Emdeon from Adjusted EBITDA but included in income from continuing operations:

• Depreciation and Amortization: Depreciation and amortization expense is a non-cash expense relating to capital expenditures and intangible assets arising from acquisitions that are expensed on a straight-line basis over the estimated useful life of the related assets. Emdeon excludes depreciation and amortization expense from Adjusted EBITDA because it believes (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of Emdeon’s business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired tangible and intangible assets. Accordingly, Emdeon believes this exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that use of tangible and intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation and should also note that such expenses will recur in future periods.

• Stock-Based Compensation expense: Prior to January 1, 2006, Emdeon accounted for stock-based compensation based upon Accounting Principles Board Opinion No.25 “Accounting for Stock Issued to Employees” (“APB 25”). In accordance with APB 25, stock-based compensation was determined using the intrinsic value method. As of January 1, 2006, Emdeon adopted Statement of Financial Accounting Standards No.123R, “Share-Based Payment” (“SFAS 123R”) and accounts for stock-based compensation under the fair value method. Emdeon utilized the modified prospective transition method under SFAS 123R and, accordingly, prior period results have not been restated. Emdeon believes that excluding the effect of stock-based compensation from Adjusted EBITDA assists management and investors in making period-to-period comparisons in its operating performance that are not impacted by the adoption of SFAS 123R. Additionally, because of alternative available valuation methodologies, subjective assumptions and the variety of award types that companies can use when adopting SFAS 123R, Emdeon believes that excluding stock-based compensation from Adjusted EBITDA assists management and investors in making meaningful comparisons between Emdeon’s operating performance and the operating performance of other companies. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods. Investors should also note that such expenses will recur in the future.

• Non-Cash Advertising Expense. This expense relates to the usage of non-cash advertising obtained from News Corporation (“Newscorp”) in exchange for equity securities issued by Emdeon in 2000. The advertising is available only on various Newscorp properties, primarily its television network and cable channels without any cash cost to Emdeon. The amount of advertising that can be used in any year is subject

to annual contractual limitation and expires in 2010. Emdeon does not incur any other cash expenses related to airing of television advertising. Emdeon excludes this expense from Adjusted EBITDA because (i) it is a non-cash expense, (ii) it is incremental to other non-television cash advertising expense that Emdeon otherwise incurs, (iii) Emdeon has not and believes it will not incur cash expenses relating to television advertising in the future and (iv) to assist management and investors in comparing its operating results over multiple periods. Investors should note that it is likely that Emdeon derives some benefit from such advertising and that such expenses will recur in the future.

• Interest Income and Expense. Interest income is associated with the level of marketable debt securities and other interest bearing accounts in which Emdeon invests, as well as with interest expenses arising from the capital structure of Emdeon. Interest income and expense varies over time due to a variety of financing transactions and due to acquisitions and divestitures that Emdeon has entered into or may enter into in the future. Emdeon has, in recent periods, issued convertible debentures and preferred stock, repurchased shares in a $549 million cash tender offer and through other repurchase transactions, conducted an initial public offering of equity in its WebMD subsidiary and completed the sale of its Practice Services segment. Emdeon excludes interest income and interest expense from Adjusted EBITDA (i) because these items are not directly attributable to the performance of Emdeon’s business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different capital structures. Investors should note that interest income and expense will recur in future periods.

• Income Tax Provision. Emdeon has net operating loss (NOL) carryforwards of approximately $2 billion as of the year ended December 31, 2005. Due to a limited history of generating taxable income, Emdeon maintains a full valuation allowance on these NOL carryforwards. As Emdeon uses these NOL carryforwards, the related valuation allowances are either reversed through the income statement or reversed to goodwill, to the extent those tax benefits were acquired through business combinations. The timing of such reversals is not consistent and as a result, Emdeon’s income tax expense can fluctuate significantly from period to period in a manner not directly related to Emdeon’s operating performance. Emdeon excludes the income tax provision from Adjusted EBITDA (i) because it believes that the income tax provision is not directly attributable to the underlying performance of Emdeon’s business operations and, accordingly, its exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different tax attributes. Investors should note that income tax provision will recur in future periods.

• Minority Interest in WebMD Health Corp. This represents the minority stockholders’ proportionate share of net income or net loss of Emdeon’s majority-owned WebMD subsidiary. The size of this Minority Interest is related to Emdeon’s percentage ownership of WebMD. Changes in that percentage ownership may result from changes

in WebMD’s capital structure, including as a result of sales of WebMD equity securities by WebMD or Emdeon or as a result of exercise of WebMD employee stock options. Emdeon excludes Minority Interest from Adjusted EBITDA (i) because it believes that the size of the Minority Interest can vary for reasons not attributable to the underlying performance of Emdeon’s business operations and, accordingly, its exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different capital structures. Investors should note that Minority Interest in WebMD Health Corp. will recur in future periods.

• Other Items. Emdeon engages in other activities and transactions that can impact Emdeon’s overall income from continuing operations. These other items include, but are not limited to, (i) “Legal Expense,” which relates to the on-going Department of Justice investigation, (ii) “Gain/(Loss) on Investments” and “Loss on Redemption of Convertible Notes” which relate to Emdeon’s financing activities and (iii) “Advisory Expense,” which relates to the evaluation by Emdeon’s Board of Directors of strategic alternatives for Emdeon’s Business Services segments. Emdeon excludes these other items from Adjusted EBITDA because it believes these activities or transactions are not directly attributable to the performance of Emdeon’s business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that these other items are expected to recur in future periods.