EX-99.2 3 g10243exv99w2.htm EX-99.2 FINANCIAL TABLES ACCOMPANYING EXHIBIT 99.1 EX-99.2 FINANCIAL TABLES ACCOMPANYING EXHIBIT 99.1
 

Exhibit 99.2
HLTH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
            (Restated)             (Restated)  
Revenue:
                               
Services
  $ 108,804     $ 274,158     $ 308,876     $ 792,509  
Products
    24,504       25,574       75,751       76,048  
 
                       
Total revenue
    133,308       299,732       384,627       868,557  
 
                               
Cost of operations:
                               
Services
    43,737       158,967       132,380       472,951  
Products
    9,603       10,743       30,290       32,974  
 
                       
Total cost of operations
    53,340       169,710       162,670       505,925  
 
                               
Development and engineering
    4,209       9,243       13,550       27,164  
Sales, marketing, general and administrative
    57,352       74,390       176,091       216,603  
Depreciation and amortization
    11,826       18,189       34,231       51,964  
Legal expense
    373       1,023       1,164       1,840  
Interest income
    10,864       6,599       30,638       15,450  
Interest expense
    4,573       4,723       13,909       14,082  
Transition services income, net
    985       340       4,909       340  
Other income (expense)
    377       (2,126 )     1,522       (4,198 )
 
                       
Income from continuing operations before income tax provision
    13,861       27,267       20,081       62,571  
Income tax provision
    3,935       4,779       6,956       15,123  
Minority interest in WHC income (loss)
    1,800       69       2,758       (524 )
Equity in earnings of EBS Master LLC
    8,005             22,679        
 
                       
Income from continuing operations
    16,131       22,419       33,046       47,972  
Income (loss) from discontinued operations, net of tax
    440       358,048       (56,236 )     370,171  
 
                       
Net income (loss)
  $ 16,571     $ 380,467     $ (23,190 )   $ 418,143  
 
                       
 
                               
Basic income (loss) per common share:
                               
Income from continuing operations
  $ 0.09     $ 0.08     $ 0.19     $ 0.17  
Income (loss) from discontinued operations
    0.00       1.24       (0.32 )     1.29  
 
                       
Net income (loss)
  $ 0.09     $ 1.32     $ (0.13 )   $ 1.46  
 
                       
 
                               
Diluted income (loss) per common share:
                               
Income from continuing operations
  $ 0.08     $ 0.07     $ 0.17     $ 0.16  
Income (loss) from discontinued operations
    0.01       1.20       (0.30 )     1.25  
 
                       
Net income (loss)
  $ 0.09     $ 1.27     $ (0.13 )   $ 1.41  
 
                       
 
                               
Weighted-average shares outstanding used in computing income (loss) per common share:
                               
Basic
    179,811       287,967       178,681       286,749  
 
                       
Diluted
    188,071       300,012       188,486       297,409  
 
                       

 


 

HLTH CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
            (Restated)             (Restated)  
Revenue
                               
Emdeon Business Services
  $     $ 187,266     $     $ 557,975  
WebMD
    87,198       66,645       238,639       173,308  
ViPS
    24,307       24,843       76,851       73,524  
Porex
    21,867       21,298       69,579       64,544  
Inter-segment eliminations
    (64 )     (320 )     (442 )     (794 )
 
                       
 
  $ 133,308     $ 299,732     $ 384,627     $ 868,557  
 
                       
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”)
                               
Emdeon Business Services
  $     $ 44,547     $     $ 127,519  
WebMD
    24,077       14,633       51,839       30,759  
ViPS
    4,809       5,302       14,743       15,517  
Porex
    6,445       6,133       20,262       18,732  
Corporate
    (6,053 )     (11,000 )     (19,267 )     (33,633 )
 
                       
 
  $ 29,278     $ 59,615     $ 67,577     $ 158,894  
 
                               
Adjusted EBITDA per diluted common share (a)
  $ 0.16     $ 0.20     $ 0.36     $ 0.53  
 
                       
 
                               
Interest, taxes, non-cash and other items (b)
                               
Depreciation and amortization
  $ (11,826 )   $ (18,189 )   $ (34,231 )   $ (51,964 )
Non-cash stock-based compensation
    (9,717 )     (11,226 )     (27,863 )     (35,235 )
Non-cash advertising
    (169 )     (1,660 )     (2,489 )     (4,454 )
Legal expense
    (373 )     (1,023 )     (1,164 )     (1,840 )
Interest income
    10,864       6,599       30,638       15,450  
Interest expense
    (4,573 )     (4,723 )     (13,909 )     (14,082 )
Income tax provision
    (3,935 )     (4,779 )     (6,956 )     (15,123 )
Minority interest in WHC (income) loss
    (1,800 )     (69 )     (2,758 )     524  
Equity in earnings of EBS Master LLC
    8,005             22,679        
Other income (expense)
    377       (2,126 )     1,522       (4,198 )
 
                       
Income from continuing operations
    16,131       22,419       33,046       47,972  
Income (loss) from discontinued operations, net of tax
    440       358,048       (56,236 )     370,171  
 
                       
Net income (loss)
  $ 16,571     $ 380,467     $ (23,190 )   $ 418,143  
 
                       
 
                               
Basic income (loss) per common share:
                               
Income from continuing operations
  $ 0.09     $ 0.08     $ 0.19     $ 0.17  
Income (loss) from discontinued operations
    0.00       1.24       (0.32 )     1.29  
 
                       
Net income (loss)
  $ 0.09     $ 1.32     $ (0.13 )   $ 1.46  
 
                       
 
                               
Diluted income (loss) per common share:
                               
Income from continuing operations
  $ 0.08     $ 0.07     $ 0.17     $ 0.16  
Income (loss) from discontinued operations
    0.01       1.20       (0.30 )     1.25  
 
                       
Net income (loss)
  $ 0.09     $ 1.27     $ (0.13 )   $ 1.41  
 
                       
 
                               
Weighted-average shares outstanding used in computing income (loss) per common share:
                               
Basic
    179,811       287,967       178,681       286,749  
 
                       
Diluted
    188,071       300,012       188,486       297,409  
 
                       
 
(a)   Adjusted EBITDA per diluted common share is based on the weighted-average shares outstanding used in computing diluted income (loss) per common share.
 
(b)   Reconciliation of Adjusted EBITDA to net income (loss) (see Annex A — Explanation of Non-GAAP Financial Measures).

 


 

HLTH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
                 
    September 30, 2007     December 31, 2006  
Assets
               
Cash and cash equivalents
  $ 412,330     $ 614,691  
Short-term investments
    372,128       34,140  
Accounts receivable, net
    104,014       121,608  
Inventory
    10,199       9,922  
Due from EBS Master LLC
    95       30,716  
Prepaid expenses and other current assets
    54,804       31,871  
 
           
Total current assets
    953,570       842,948  
 
               
Marketable equity securities
    2,634       2,633  
Property and equipment, net
    74,644       72,040  
Goodwill
    332,689       337,669  
Intangible assets, net
    115,083       129,473  
Investment in EBS Master LLC
    23,169       1,521  
Other assets
    36,203       65,659  
 
           
Total Assets
  $ 1,537,992     $ 1,451,943  
 
           
 
               
Liabilities and Stockholders’ Equity
               
Accounts payable
  $ 2,815     $ 3,996  
Accrued expenses
    56,483       113,175  
Deferred revenue
    91,837       87,438  
Liabilities of discontinued operations
    48,434        
 
           
Total current liabilities
    199,569       204,609  
 
               
Convertible notes
    650,000       650,000  
Other long-term liabilities
    33,881       24,179  
 
               
Minority interest in WebMD Health Corp. (WHC)
    119,785       101,860  
 
               
Convertible redeemable exchangeable preferred stock
          98,768  
 
               
Stockholders’ equity
    534,757       372,527  
 
               
 
           
Total Liabilities and Stockholders’ Equity
  $ 1,537,992     $ 1,451,943  
 
           

 


 

HLTH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
                 
    Nine Months Ended  
    September 30,  
    2007     2006  
          (Restated)  
Cash flows from operating activities:
               
Net (loss) income
  $ (23,190 )   $ 418,143  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
               
Loss (income) from discontinued operations, net of tax
    56,236       (370,171 )
Depreciation and amortization
    34,231       51,964  
Minority interest in WHC income (loss)
    2,758       (524 )
Equity in earnings of EBS Master LLC
    (22,679 )      
Amortization of debt issuance costs
    2,179       2,190  
Non-cash advertising
    2,489       4,454  
Non-cash stock-based compensation
    27,863       35,235  
Deferred income taxes
    2,345       3,041  
EBS working capital adjustment
    (399 )      
Reversal of income tax valuation allowance applied to goodwill
    1,676       5,307  
Changes in operating assets and liabilities:
               
Accounts receivable
    18,042       (18,760 )
Inventory
    (88 )     601  
Prepaid expenses and other, net
    (1,783 )     (9,701 )
Accounts payable
    (1,181 )     825  
Accrued expenses and other long-term liabilities
    (46,333 )     3,284  
Deferred revenue
    4,399       9,926  
 
           
Net cash provided by continuing operations
    56,565       135,814  
Net cash (used in) provided by discontinued operations
    (9,339 )     25,985  
 
           
Net cash provided by operating activities
    47,226       161,799  
 
               
Cash flows from investing activities:
               
Proceeds from maturities and sales of available-for-sale securities
    356,492       831,145  
Purchases of available-for-sale securities
    (694,522 )     (632,955 )
Purchases of property and equipment
    (18,112 )     (38,231 )
Cash paid in business combinations, net of cash acquired
    (100 )     (119,635 )
Proceeds from the sale of EBS, net
    2,898        
Proceeds from advances to EBS Master LLC
    19,921        
Proceeds from the sale of discontinued operations
    11,667       524,245  
Other changes in equity of discontinued operations
          28,279  
 
           
Net cash (used in) provided by continuing operations
    (321,756 )     592,848  
Net cash used in discontinued operations
          (26,010 )
 
           
Net cash (used in) provided by investing activities
    (321,756 )     566,838  
 
               
Cash flows from financing activities:
               
Proceeds from issuance of HLTH and WHC common stock
    114,077       62,768  
Tax benefit on stock-based awards
    4,318        
Purchases of treasury stock under repurchase program
    (47,120 )     (71,843 )
Payments of notes payable and other
    (148 )     (359 )
 
           
Net cash provided by (used in) financing activities
    71,127       (9,434 )
 
               
Effect of exchange rates on cash
    1,042       616  
 
           
 
               
Net (decrease) increase in cash and cash equivalents
    (202,361 )     719,819  
Change in cash of discontinued operations
          25  
Cash and cash equivalents at beginning of period
    614,691       155,616  
 
           
Cash and cash equivalents at end of period
  $ 412,330     $ 875,460