EX-99.2 3 g04016exv99w2.htm EX-99.2 FINANCIAL TABLES EX-99.2 FINANCIAL TABLES
 

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,  
    2006     2005     2006     2005  
Revenue :
                               
Services
  $ 274,158     $ 237,198     $ 792,509     $ 690,615  
Products
    25,574       23,824       76,048       72,096  
 
                       
Total revenue
    299,732       261,022       868,557       762,711  
 
                               
Cost of operations :
                               
Services
    158,967       142,484       472,951       414,533  
Products
    10,743       9,582       32,974       30,562  
 
                       
Total cost of operations
    169,710       152,066       505,925       445,095  
 
                               
Development and engineering
    9,243       8,912       27,164       26,595  
Sales, marketing, general and administrative
    74,050       63,865       216,263       189,292  
Depreciation and amortization
    18,189       15,801       51,964       44,826  
Legal expense
    1,023       5,904       1,840       14,347  
Advisory expense
    2,126             4,198        
Loss on investments
                      3,642  
Loss on redemption of convertible debt
                      1,902  
Interest income
    6,599       5,124       15,450       13,380  
Interest expense
    4,723       2,996       14,082       11,670  
Other expense
          1,863             1,863  
 
                       
Income from continuing operations before income tax provision and minority interest
    27,267       14,739       62,571       36,859  
Income tax provision
    3,474       1,851       12,082       3,567  
Minority interest in WebMD Health Corp., net of tax
    140       38       (653 )     38  
 
                       
Income from continuing operations
    23,653       12,850       51,142       33,254  
Income from discontinued operations, net of tax
    358,048       1,257       370,171       6,868  
 
                       
Net income
  $ 381,701     $ 14,107     $ 421,313     $ 40,122  
 
                       
 
                               
Basic income per common share:
                               
Income from continuing operations
  $ 0.08     $ 0.04     $ 0.18     $ 0.10  
Income from discontinued operations
    1.25             1.29       0.02  
 
                       
Net income
  $ 1.33     $ 0.04     $ 1.47     $ 0.12  
 
                       
 
                               
Diluted income per common share:
                               
Income from continuing operations
  $ 0.08     $ 0.03     $ 0.17     $ 0.09  
Income from discontinued operations
    1.19       0.01       1.25       0.02  
 
                       
Net income
  $ 1.27     $ 0.04     $ 1.42     $ 0.11  
 
                       
 
                               
Weighted-average shares outstanding used in computing income per common share:
                               
Basic
    287,967       356,091       286,749       339,576  
 
                       
Diluted
    300,012       370,313       297,409       351,875  
 
                       

 


 

EMDEON CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2006     2005     2006     2005  
Revenue
                               
Emdeon Business Services
  $ 187,266     $ 171,396     $ 557,974     $ 516,941  
WebMD
    66,645       45,094       173,308       119,134  
ViPS
    24,843       24,278       73,525       66,310  
Porex
    21,298       20,410       64,544       60,663  
Inter-segment eliminations
    (320 )     (156 )     (794 )     (337 )
 
                       
 
  $ 299,732     $ 261,022     $ 868,557     $ 762,711  
 
                       
 
                               
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”)
                               
Emdeon Business Services
  $ 44,547     $ 32,297     $ 127,519     $ 103,315  
WebMD
    14,633       9,077       30,759       15,100  
ViPS
    5,302       3,988       15,517       11,992  
Porex
    6,133       6,385       18,732       17,846  
Corporate
    (11,000 )     (12,509 )     (33,633 )     (35,894 )
 
                       
 
  $ 59,615     $ 39,238     $ 158,894     $ 112,359  
 
                               
Adjusted EBITDA per diluted common share (a)
  $ 0.20     $ 0.11     $ 0.53     $ 0.32  
 
                       
 
                               
Interest, taxes, non-cash and other items (b)
                               
Depreciation and amortization
  $ (18,189 )   $ (15,801 )   $ (51,964 )   $ (44,826 )
Non-cash stock-based compensation
    (11,226 )     (1,073 )     (35,235 )     (3,631 )
Non-cash advertising
    (1,660 )     (1,986 )     (4,454 )     (6,999 )
Legal expense
    (1,023 )     (5,904 )     (1,840 )     (14,347 )
Advisory expense
    (2,126 )           (4,198 )      
Interest income
    6,599       5,124       15,450       13,380  
Interest expense
    (4,723 )     (2,996 )     (14,082 )     (11,670 )
Income tax provision
    (3,474 )     (1,851 )     (12,082 )     (3,567 )
Minority interest in WebMD Health Corp., net of tax
    (140 )     (38 )     653       (38 )
Loss on investments
                      (3,642 )
Loss on redemption of convertible debt
                      (1,902 )
Other expense
          (1,863 )           (1,863 )
 
                       
Income from continuing operations
    23,653       12,850       51,142       33,254  
Income from discontinued operations, net of tax
    358,048       1,257       370,171       6,868  
 
                       
Net income
  $ 381,701     $ 14,107     $ 421,313     $ 40,122  
 
                       
 
                               
Basic income per common share:
                               
Income from continuing operations
  $ 0.08     $ 0.04     $ 0.18     $ 0.10  
Income from discontinued operations
    1.25             1.29       0.02  
 
                       
Net income
  $ 1.33     $ 0.04     $ 1.47     $ 0.12  
 
                       
 
                               
Diluted income per common share:
                               
Income from continuing operations
  $ 0.08     $ 0.03     $ 0.17     $ 0.09  
Income from discontinued operations
    1.19       0.01       1.25       0.02  
 
                       
Net income
  $ 1.27     $ 0.04     $ 1.42     $ 0.11  
 
                       
 
                               
Weighted-average shares outstanding used in computing income per common share:
                               
Basic
    287,967       356,091       286,749       339,576  
 
                       
Diluted
    300,012       370,313       297,409       351,875  
 
                       
 
(a)   Adjusted EBITDA per diluted common share is based on the weighted-average shares outstanding used in computing diluted income per common share.
 
(b)   Reconciliation of Adjusted EBITDA to net income (see Annex A — Explanation of Non-GAAP Financial Measures).

 


 

EMDEON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
                 
    September 30,     December 31,  
    2006     2005  
Assets
               
Cash and cash equivalents
  $ 875,460     $ 155,616  
Short-term investments
    71,943       267,387  
Accounts receivable, net
    101,217       195,317  
Inventory
    9,342       10,791  
Prepaid expenses and other current assets
    39,889       30,936  
Assets held for sale
    949,693        
Assets of discontinued operations
          254,247  
 
           
Total current assets
    2,047,544       914,294  
 
               
Marketable equity securities
    2,668       4,430  
Property and equipment, net
    66,907       95,686  
Goodwill
    288,109       895,975  
Intangible assets, net
    125,969       235,271  
Other assets
    68,667       50,027  
 
           
Total Assets
  $ 2,599,864     $ 2,195,683  
 
           
 
               
Liabilities and Stockholders’ Equity
               
Accounts payable
  $ 7,014     $ 7,739  
Accrued expenses
    98,745       170,102  
Deferred revenue
    76,515       68,390  
Liabilities held for sale
    85,591        
Liabilities of discontinued operations
          68,436  
 
           
Total current liabilities
    267,865       314,667  
 
               
Convertible notes
    650,000       650,000  
Other long-term liabilities
    14,331       14,518  
 
               
Minority interest in WebMD Health Corp.
    60,413       43,229  
 
               
Convertible redeemable exchangeable preferred stock
    98,709       98,533  
 
               
Stockholders’ equity
    1,508,546       1,074,736  
 
               
 
           
Total Liabilities and Stockholders’ Equity
  $ 2,599,864     $ 2,195,683  
 
           

 


 

EMDEON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
                 
    Nine Months Ended  
    September 30,  
    2006     2005  
Cash flows from operating activities:
               
Net income
  $ 421,313     $ 40,122  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Income from discontinued operations, net of tax
    (370,171 )     (6,868 )
Depreciation and amortization
    51,964       44,826  
Minority interest in WebMD Health Corp., net of tax
    (653 )     38  
Amortization of debt issuance costs
    2,190       1,856  
Non-cash advertising
    4,454       6,999  
Non-cash stock-based compensation
    35,235       3,631  
Bad debt expense
    1,170       1,532  
Loss on investments
          3,642  
Loss on redemption of convertible debt
          1,902  
Reversal of income tax valuation allowance applied to goodwill
    5,307       4,330  
Changes in operating assets and liabilities:
               
Accounts receivable
    (19,930 )     (30,441 )
Inventory
    601       472  
Prepaid expenses and other, net
    (9,701 )     (2,399 )
Accounts payable
    825       (6,147 )
Accrued expenses and other long-term liabilities
    3,284       10,710  
Deferred revenue
    9,926       9,430  
 
           
Net cash provided by continuing operations
    135,814       83,635  
Net cash provided by discontinued operations
    25,985       15,466  
 
           
Net cash provided by operating activities
    161,799       99,101  
 
               
Cash flows from investing activities:
               
Proceeds from maturities and sales of available-for-sale securities
    831,145       336,014  
Purchases of available-for-sale securities
    (632,955 )     (516,109 )
Purchases of property and equipment
    (38,231 )     (39,107 )
Proceeds received from sale of discontinued operations
    524,245        
Cash paid in business combinations, net of cash acquired
    (119,635 )     (74,380 )
Other changes in equity of discontinued operations
    28,279       9,116  
 
           
Net cash provided by (used in) continuing operations
    592,848       (284,466 )
Net cash used in discontinued operations
    (26,010 )     (18,964 )
 
           
Net cash provided by (used in) investing activities
    566,838       (303,430 )
 
               
Cash flows from financing activities:
               
Proceeds from issuance of common stock
    62,768       43,384  
Purchases of treasury stock
    (71,843 )     (4,596 )
Net proceeds from issuance of convertible debt
          289,875  
Redemption of convertible debt
          (86,694 )
Payments of notes payable and other
    (359 )     (495 )
 
           
Net cash (used in) provided by continuing operations
    (9,434 )     241,474  
Net cash (used in) provided by discontinued operations
           
 
           
Net cash (used in) provided by financing activities
    (9,434 )     241,474  
 
               
Effect of exchange rates on cash
    616       (1,117 )
 
           
 
               
Net increase in cash and cash equivalents
    719,819       36,028  
Change in cash attributable to discontinued operations
    25       3,498  
Cash and cash equivalents at beginning of period
    155,616       39,980  
 
           
Cash and cash equivalents at end of period
  $ 875,460     $ 79,506