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 21, 2008

Date of Report (Date of earliest event reported)

HLTH CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation) 0-24975
(Commission File Number) 94-3236644
(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))

     All statements contained in this Current Report or in the exhibits furnished with this Current Report, 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; our expectations concerning market opportunities and our ability to capitalize on them; the benefits expected from acquisitions, from new products or services and from other potential sources of additional revenue; the merger transaction (the “Merger Transaction”) between HLTH and WebMD Health Corp. (“WHC”); the potential sales transactions with respect to ViPS and Porex (the “Potential Sales Transactions”);and expectations regarding the credit ratings and valuation of and market for HLTH’s and WHC’s investments in auction rate securities (ARS). 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 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; length of sales and implementation cycles for our products and services; our 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; and our ability to attract and retain qualified personnel. Further information about these matters can be found in our Securities and Exchange Commission filings. In addition, there can be no assurances regarding: whether HLTH and WHC will be able to complete the Merger Transaction or as to the timing of such transaction; or whether HLTH will be able to complete the Potential Sales Transactions or as to the timing or terms of such transactions. Except as required by applicable law or regulation, we do not undertake any obligation to update our forward-looking statements to reflect future events or circumstances.

Item 2.02. Results of Operations and Financial Condition

     On February 21, 2008, we issued a press release announcing our results for the quarter ended December 31, 2007. A copy of the press release is attached as Exhibit 99.1 to this Current Report. Exhibit 99.2 to this Current Report contains the financial tables that accompanied the press release. Exhibit 99.3 to this Current Report contains an Annex to the press release entitled “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 any of those exhibits 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.

     On February 21, 2008, WebMD Health Corp. (which we refer to as WHC) issued a press release announcing its results for the quarter ended December 31, 2007. The Registrant owns approximately 84% of the outstanding Common Stock of WHC. A copy of the press release issued by WHC is incorporated by reference, as Exhibit 99.4 hereto, from Exhibit 99.1 to the Current Report on Form 8-K filed today by WHC. A copy of the financial tables that accompanied the WHC press release are incorporated by reference, as Exhibit 99.5 hereto, from Exhibit 99.2 to the Current Report on Form 8-K filed today by WHC. A copy of Annex A to the WHC press release, entitled “Explanation of Non-GAAP Financial Measures,” is incorporated by reference, as Exhibit 99.6 hereto, from Exhibit 99.3 to the Current Report on Form 8-K filed today by WHC. Exhibits 99.4, 99.5 and 99.6 to this Current Report are being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall any of those Exhibits 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.

2

Item 2.06. Material Impairments

     To the extent required by Item 2.06 of Form 8-K, the information contained in Item 8.01 of this Current Report is incorporated by reference herein.

Item 8.01. Other Events

     HLTH currently has a total of approximately $1.45 billion in consolidated cash, cash equivalents and marketable securities, which includes approximately $364 million of investments in certain auction rate securities (ARS). WHC holds $327 million of HLTH’s current amount of cash, cash equivalents and marketable securities, including $169 million of HLTH’s consolidated ARS investments. The types of ARS investments that HLTH owns are backed by student loans, 97% of which are guaranteed under the Federal Family Education Loan Program (FFELP), and all had credit ratings of AAA or Aaa when purchased. HLTH and its subsidiaries do not own any other type of ARS investments.

     The interest rates on these ARS are reset every 28 days by an auction process. Historically, these types of ARS investments have been highly liquid. Last week, auctions for ARS investments backed by student loans failed, including auctions for the ARS investments held by HLTH. The result of a failed auction is that these ARS continue to pay interest in accordance with their terms until the next successful auction; however, liquidity will be limited until there is a successful auction or until such time as other markets for these ARS investments develop. HLTH believes that the underlying credit quality of the assets backing its ARS investments have not been impacted by the reduced liquidity of these ARS investments. As a result of these recent events, HLTH is in the process of evaluating the extent of any impairment in its ARS investments resulting from the current lack of liquidity; however, HLTH is not yet able to quantify the amount of any impairment. HLTH believes that any lack of liquidity relating to its ARS investments will not have an impact on its ability to fund its operations.

3

Item 9.01. Financial Statements and Exhibits

     (d) Exhibits. The following exhibits are furnished herewith:

Exhibit
Number	Description
99.1	Press Release, dated February 21, 2008, regarding the Registrant’s results for the quarter ended December 31, 2007
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Annex A to Exhibits 99.1 and 99.2
99.4	Press Release, dated February 21, 2008, regarding WebMD Health Corp.’s results for the quarter ended December 31, 2007 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by WebMD Health Corp. on February 21, 2008)
99.5	Financial Tables accompanying Exhibit 99.4 (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K filed by WebMD Health Corp. on February 21, 2008)
99.6	Annex A to Exhibits 99.4 and 99.5 (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K filed by WebMD Health Corp. on February 21, 2008)

4

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.

	HLTH CORPORATION
Dated: February 21, 2008	By:	/s/ Lewis H. Leicher
		Lewis H. Leicher
		Senior Vice President

5

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release, dated February 21, 2008, regarding the Registrant’s results for the quarter ended December 31, 2007
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Annex A to Exhibits 99.1 and 99.2
99.4	Press Release, dated February 21, 2008, regarding WebMD Health Corp.’s results for the quarter ended December 31, 2007 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by WebMD Health Corp. on February 21, 2008)
99.5	Financial Tables accompanying Exhibit 99.4 (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K filed by WebMD Health Corp. on February 21, 2008)
99.6	Annex A to Exhibits 99.4 and 99.5 (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K filed by WebMD Health Corp. on February 21, 2008)

EX-99.1

Exhibit 99.1

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

HLTH CORPORATION ANNOUNCES FOURTH QUARTER FINANCIAL RESULTS

HLTH AND WEBMD ANNOUNCE MERGER

POREX AND VIPS SUBSIDIARIES TO BE DIVESTED

ELMWOOD PARK, NJ (February 21, 2008) – HLTH Corporation (Nasdaq: HLTH) today announced financial results for the three months ended December 31, 2007.

Martin J. Wygod, Chairman and Acting Chief Executive Officer of HLTH Corporation, said: “Our fourth quarter results were strong as WebMD continued to build its leadership position as the most recognized and trusted brand of health care information.” He continued, “I am pleased that HLTH and WebMD have agreed to the merger transaction we outlined today.”

Consolidated Financial Highlights

Revenue for the fourth quarter was $145.8 million. Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) for the fourth quarter was $40.3 million or $0.17 per share. Income from continuing operations for the fourth quarter was $41.5 million or $0.19 per share. Net income for the December 2007 quarter was $43.1 million or $0.20 per share. Income from continuing operations and net income for the fourth quarter 2007 include a benefit of $23.7 million, or $0.10 per share, relating to certain reversals of its valuation allowance against deferred tax assets, primarily net operating loss (“NOL”) carryforwards.

Revenue for the year ended December 31, 2007 was $527.1 million. Adjusted EBITDA for the year was $107.7 million or $0.51 per share. Income from continuing operations for the year was $74.3 million or $0.38 per share. Net income for the year was $19.9 million or $0.12 per share. Income from continuing operations and net income for the year ended December 31, 2007 include a benefit of $23.7 million, or $0.11 per share, relating to certain reversals of its valuation allowance against deferred tax assets, primarily NOL carryforwards.

HLTH’s financial results for the fourth quarter and year ended December 31, 2007 reflect the reclassification of WebMD’s offline professional medical reference and textbook publication business as a discontinued operation in the current and prior year periods, as a result of the completion of the sale of the business on December 31, 2007.

HLTH’s consolidated results are not comparable to the respective prior year periods. On November 16, 2006, HLTH completed the sale of a 52% interest in its Emdeon Business Services segment (excluding the ViPS business) to an affiliate of General Atlantic LLC. Accordingly, the results of Emdeon Business Services are

included in HLTH’s consolidated revenue and earnings until November 16, 2006, and HLTH’s 48% portion of EBS’ income is reflected in the line item “Equity in earnings of EBS Master LLC” for all periods subsequent to November 16, 2006. As previously disclosed, on February 11, 2008, HLTH completed the sale, for $575 million in cash, of its remaining 48% minority interest in Emdeon Business Services to General Atlantic LLC and Hellman & Friedman LLC.

Income from discontinued operations includes $3.6 million reflecting the net gain on the sale of WebMD’s offline professional medical reference and textbook publication business. This business generated revenue of approximately $1 million and $4 million for the fourth quarter and full year 2007. Also included in discontinued operations is a $1 million net charge from an increase in the estimate of HLTH’s indemnification obligation for defense costs for nine former officers and directors of HLTH’s former subsidiary Emdeon Practice Services, Inc. who were indicted in connection with the previously disclosed investigation by the United States Attorney for the District of South Carolina, which was almost fully offset by proceeds from settlements with two of the insurance companies related to this matter.

Segment Operating Results

WebMD segment revenue was $96.6 million for the fourth quarter compared to $79.4 million in the prior year period, an increase of 22%, driven by continued growth in online services. Segment Adjusted EBITDA was $33.1 million compared to $22.4 million in the prior year period, an increase of 48% over the prior year, primarily as a result of the increase in revenues. WebMD’s segment results reflect the reclassification of the discontinued operation as noted above.

ViPS segment revenue was $26.2 million for the fourth quarter compared to $25.3 million in the prior year period, an increase of 3%, primarily due to an increase in consulting services and license revenue. Segment Adjusted EBITDA was $6.3 million, up from $5.0 million a year ago. Operating margins increased to 23.9% compared to 19.8% a year ago primarily as a result of favorable revenue mix.

Porex segment revenue was $23.0 million for the fourth quarter compared to $21.2 million in the prior year period, an increase of 9%. The increase was primarily attributable to strength in sales of surgical products and the impact of favorable foreign currency exchange rates. Segment Adjusted EBITDA was $6.8 million compared to $6.2 million in the prior year period, an increase of 9%. Operating margins increased to 29.6% from 29.5% in the year ago period.

Investment in Emdeon Business Services

HLTH recorded $5.9 million of Equity in earnings of EBS Master LLC in the December 2007 quarter, reflecting its 48% portion of the income of that entity. HLTH sold its 48% interest in Emdeon Business Services for $575 million in cash on February 11, 2008. HLTH expects to recognize a taxable gain on the sale and expects to utilize a portion of its federal NOL carryforward to offset a portion of the tax liability that would otherwise result from the sale.

HLTH and WebMD Announce Agreement to Merge

In a separate release today, HLTH and WebMD announced that they have entered into a definitive merger agreement pursuant to which HLTH will merge into WebMD. In the merger, each outstanding share of HLTH common stock will be converted into 0.1979 shares of WebMD common stock and $6.89 in cash, subject to certain adjustments, representing a premium of 26% based on WebMD’s closing price on February 20, 2008. The cash portion is subject to adjustment as described in a separate release issued today. HLTH stockholders will own approximately 80% of WebMD after completion of the merger, based on the currently outstanding shares of HLTH and WebMD.

Porex and ViPS To Be Divested

HLTH announced today that it intends to divest its ViPS and Porex subsidiaries. HLTH has received significant interest from potential strategic buyers for both ViPS and Porex and will be moving rapidly to obtain formal offers for these businesses.

Investment in Auction Rate Securities Backed by Federally Guaranteed Student Loans

HLTH currently has a total of approximately $1.45 billion in consolidated cash, cash equivalents and marketable securities, which includes approximately $364 million of investments in certain auction rate securities (ARS).

WebMD holds $327 million of HLTH’s current amount of cash, cash equivalents and marketable securities, including $169 million of HLTH’s consolidated ARS investments. The types of ARS investments that HLTH owns are backed by student loans, 97% of which are guaranteed under the Federal Family Education Loan Program (FFELP), and all had credit ratings of AAA or Aaa when purchased. HLTH and its subsidiaries do not own any other type of ARS investments.

The interest rates on these ARS are reset every 28 days by an auction process. Historically, these types of ARS investments have been highly liquid. Last week, auctions for ARS investments backed by student loans failed, including auctions for the ARS investments held by HLTH. The result of a failed auction is that these ARS continue to pay interest in accordance with their terms until the next successful auction; however, liquidity will be limited until there is a successful auction or until such time as other markets for these ARS investments develop. HLTH believes that the underlying credit quality of the assets backing its ARS investments have not been impacted by the reduced liquidity of these ARS investments. As a result of these recent events, HLTH is in the process of evaluating the extent of any impairment in its ARS investments resulting from the current lack of liquidity; however, HLTH is not yet able to quantify the amount of any impairment. HLTH believes that any lack of liquidity relating to its ARS investments will not have an impact on its ability to fund its operations.

Financial Guidance

HLTH is not providing financial guidance for 2008 at this time. WebMD provided financial guidance in a press release and Form 8-K on February 11, 2008. This guidance did not contemplate the merger announced today.

Analyst and Investor Conference Call

As previously announced, HLTH Corporation and WebMD Health Corp. will host a conference call at 4:45 pm (ET) today to discuss their respective fourth quarter results. Investors can access the call via webcast at www.hlth.com (in the Investor Relations section). A replay of the call will be available at the same web address.

About HLTH

HLTH Corporation’s (NASDAQ: HLTH) businesses are comprised of WebMD Health Corp., (NASDAQ: WBMD), ViPS and Porex. WebMD provides health information services for consumers, physicians, healthcare professionals, employers and health plans through its public and private online portals and health-focused publications. ViPS provides healthcare data management, analytics, decision-support and process automation solutions and related information technology services to governmental, Blue Cross Blue Shield and commercial healthcare payers. ViPS’ solutions and services help its clients improve patient outcomes, increase customer satisfaction and reduce costs. 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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This press release does not constitute an offer of any securities for sale. In connection with the proposed merger, HLTH and WebMD expect to file, with the SEC, a proxy statement/prospectus as part of a registration statement regarding the proposed transaction. Investors and security holders are urged to read the proxy statement/prospectus because it will contain important information about HLTH and WebMD and the proposed transaction. Investors and security holders may obtain a free copy of the definitive proxy statement/prospectus and other documents when filed by HLTH and WebMD with the SEC at www.sec.gov or www.hlth.com or www.wbmd.com. Investors and security holders are urged to read the proxy statement, prospectus and other relevant material when they become available before making any voting or investment decisions with respect to the merger.

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All statements contained in this press release, other than statements of historical fact, are forward-looking statements, including those regarding: expectations regarding the credit ratings and valuation of and market for HLTH’s and WebMD’s investments in auction rate securities (ARS); HLTH’s and WebMD’s future financial results and other measures of WebMD’s future performance; market opportunities and WebMD’s ability to capitalize on them; the benefits expected from new products or services and from other potential sources of additional revenue; the merger transaction between HLTH and WebMD (the “Merger Transaction”); and the potential sales transactions with respect to ViPS and Porex (the “Potential Sales Transactions”). These statements speak only as of the date of this press release, are based on HLTH’s and WebMD’s current plans and expectations, and 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: changes in the markets for ARS; market acceptance of HLTH’s and WebMD’s products and services; HLTH’s

and WebMD’s relationships with customers and strategic partners; and changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet and information technology industries. Further information about these matters can be found in our other Securities and Exchange Commission filings. In addition, there can be no assurances regarding: whether HLTH and WebMD will be able to complete the Merger Transaction or as to the timing of such transaction; or whether HLTH will be able to complete the Potential Sales Transactions or as to the timing or terms of such transactions. Except as required by applicable law or regulation, we do not undertake any obligation to update our forward-looking statements to reflect future events or circumstances.

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This press release, and the accompanying tables, include both financial measures in accordance with accounting principles generally accepted in the United States of America, or GAAP, as well as certain non-GAAP financial measures. The tables attached to this press release include reconciliations of these 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 A.

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WebMD^®, WebMD Health^®, POREX^® and ViPS^SM are trademarks of HLTH Corporation or its subsidiaries.

Emdeon^tm and Emdeon Business Services^tm are trademarks of Emdeon Business Services, LLC or its subsidiaries.

-Tables Follow-

EX-99.2

EXHIBIT 99.2

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

	Three Months Ended					Years Ended
	December 31,					December 31,
	2007			2006		2007			2006
Revenue:
Services	$	122,135		$	205,743	$	430,930		$	998,016
Products		23,680			23,120		96,185			95,487
Total revenue		145,815			228,863		527,115			1,093,503
Cost of operations:
Services		43,696			107,393		174,552			578,544
Products		9,302			9,163		38,003			40,502
Total cost of operations		52,998			116,556		212,555			619,046
Development and engineering		4,505			6,485		18,055			33,649
Sales, marketing, general and administrative		58,542			71,412		234,633			288,015
Depreciation and amortization		11,796			10,010		46,023			61,968
Interest income		11,397			16,889		42,035			32,339
Interest expense		4,610			4,697		18,519			18,779
Gain on sale of EBS		—			352,297		399			352,297
Other (expense) income, net		(1,804	)		1,446		3,064			(4,252	)
Income from continuing operations before income tax (benefit) provision		22,957			390,335		42,828			452,430
Income tax (benefit) provision		(20,554	)		37,193		(13,598	)		52,316
Minority interest in WHC		7,909			929		10,667			405
Equity in earnings of EBS Master LLC		5,887			763		28,566			763
Income from continuing operations		41,489			352,976		74,325			400,472
Income (loss) from discontinued operations, net of tax		1,580			798		(54,446	)		371,445
Net income	$	43,069		$	353,774	$	19,879		$	771,917
Basic income (loss) per common share:
Income from continuing operations	$	0.23		$	1.38	$	0.42		$	1.44
Income (loss) from discontinued operations		0.01			0.00		(0.31	)		1.33
Net income	$	0.24		$	1.38	$	0.11		$	2.77
Diluted income (loss) per common share:
Income from continuing operations	$	0.19		$	1.16	$	0.38		$	1.26
Income (loss) from discontinued operations		0.01			0.00		(0.26	)		1.12
Net income	$	0.20		$	1.16	$	0.12		$	2.38
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		181,280			256,688		179,330			279,234
Diluted		231,609			308,295		211,505			331,642

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

	Three Months Ended						Years Ended
	December 31,						December 31,
	2007			2006			2007			2006
Revenue
Emdeon Business Services	$	—		$	103,116		$	—		$	661,090
WebMD		96,642			79,385			331,954			248,776
ViPS		26,232			25,349			103,083			98,874
Porex		23,002			21,158			92,581			85,702
Inter-segment eliminations		(61	)		(145	)		(503	)		(939	)
	$	145,815		$	228,863		$	527,115		$	1,093,503
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”)
Emdeon Business Services	$	—		$	25,392		$	—		$	152,911
WebMD		33,072			22,409			84,697			52,686
ViPS		6,269			5,012			21,012			20,529
Porex		6,812			6,242			27,074			24,974
Corporate		(5,844	)		(9,781	)		(25,111	)		(43,414	)
	$	40,309		$	49,274		$	107,672		$	207,686
Adjusted EBITDA per diluted common share (a)	$	0.17		$	0.16		$	0.51		$	0.63
Interest, taxes, non-cash and other items (b)
Depreciation and amortization	$	(11,796	)	$	(10,010	)	$	(46,023	)	$	(61,968	)
Non-cash stock-based compensation		(6,840	)		(9,720	)		(34,703	)		(44,955	)
Non-cash advertising		(2,775	)		(2,960	)		(5,264	)		(7,414	)
Interest income		11,397			16,889			42,035			32,339
Interest expense		(4,610	)		(4,697	)		(18,519	)		(18,779	)
Income tax benefit (provision)		20,554			(37,193	)		13,598			(52,316	)
Minority interest in WHC		(7,909	)		(929	)		(10,667	)		(405	)
Equity in earnings of EBS Master LLC		5,887			763			28,566			763
Gain on sale of EBS		—			352,297			399			352,297
Other expense, net		(2,728	)		(738	)		(2,769	)		(6,776	)
Income from continuing operations		41,489			352,976			74,325			400,472
Income (loss) from discontinued operations, net of tax		1,580			798			(54,446	)		371,445
Net income	$	43,069		$	353,774		$	19,879		$	771,917
Basic income (loss) per common share:
Income from continuing operations	$	0.23		$	1.38		$	0.42		$	1.44
Income (loss) from discontinued operations		0.01			0.00			(0.31	)		1.33
Net income	$	0.24		$	1.38		$	0.11		$	2.77
Diluted income (loss) per common share:
Income from continuing operations	$	0.19		$	1.16		$	0.38		$	1.26
Income (loss) from discontinued operations		0.01			0.00			(0.26	)		1.12
Net income	$	0.20		$	1.16		$	0.12		$	2.38
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		181,280			256,688			179,330			279,234
Diluted		231,609			308,295			211,505			331,642

(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 (see Annex A — Explanation of Non-GAAP Financial Measures).

HLTH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)

	December 31,
	2007		2006
Assets
Cash and cash equivalents	$	536,879	$	614,691
Short-term investments		290,858		34,140
Accounts receivable, net		116,243		121,608
Inventory		11,772		9,922
Due from EBS Master LLC		1,224		30,716
Prepaid expenses and other current assets		74,794		31,871
Total current assets		1,031,770		842,948
Marketable equity securities		2,383		2,633
Property and equipment, net		74,750		72,040
Goodwill		331,859		337,669
Intangible assets, net		109,001		129,473
Investment in EBS Master LLC		25,261		1,521
Other assets		35,541		65,659
Total Assets	$	1,610,565	$	1,451,943
Liabilities and Stockholders’ Equity
Accounts payable	$	3,280	$	3,996
Accrued expenses		61,427		113,175
Deferred revenue		87,384		85,793
Liabilities of discontinued operations		55,563		1,645
Total current liabilities		207,654		204,609
Convertible notes		650,000		650,000
Other long-term liabilities		21,781		24,179
Minority interest in WHC		131,353		101,860
Convertible redeemable exchangeable preferred stock		—		98,768
Stockholders’ equity		599,777		372,527
Total Liabilities and Stockholders’ Equity	$	1,610,565	$	1,451,943

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

	Years Ended
	December 31,
	2007			2006
Cash flows from operating activities:
Net income	$	19,879		$	771,917
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (income) from discontinued operations, net of tax		54,446			(371,445	)
Depreciation and amortization		46,023			61,968
Minority interest in WHC		10,667			405
Equity in earnings of EBS Master LLC		(28,566	)		(763	)
Amortization of debt issuance costs		2,916			2,906
Non-cash advertising		5,264			7,414
Non-cash stock-based compensation		34,703			44,955
Deferred income taxes		(18,228	)		26,893
Gain on sale of EBS		(399	)		(352,297	)
Changes in operating assets and liabilities:
Accounts receivable		5,928			(43,807	)
Inventory		(1,611	)		190
Prepaid expenses and other, net		4,559			(12,302	)
Accounts payable		(716	)		162
Accrued expenses and other long-term liabilities		(42,888	)		20,621
Deferred revenue		1,590			15,913
Net cash provided by continuing operations		93,567			172,730
Net cash (used in) provided by discontinued operations		(18,174	)		26,290
Net cash provided by operating activities		75,393			199,020
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		670,326			928,284
Purchases of available-for-sale securities		(927,038	)		(686,815	)
Purchases of property and equipment		(23,694	)		(54,885	)
Cash paid in business combinations, net of cash acquired		(100	)		(152,772	)
Proceeds from the sale of EBS, net		2,898			1,199,872
Proceeds from advances to EBS Master LLC		18,792			(20,016	)
Proceeds from the sale of discontinued operations		11,667			522,604
Other changes in equity of discontinued operations		—			28,279
Net cash (used in) provided by continuing operations		(247,149	)		1,764,551
Net cash used in discontinued operations		—			(26,010	)
Net cash (used in) provided by investing activities		(247,149	)		1,738,541
Cash flows from financing activities:
Proceeds from issuance of HLTH and WHC common stock		133,033			156,078
Tax benefit on stock-based awards		6,601			—
Purchases of treasury stock under repurchase program		(47,102	)		(83,167	)
Purchases of treasury stock in tender offer		—			(1,552,120	)
Payments of notes payable and other		(195	)		(437	)
Net cash provided by (used in) financing activities		92,337			(1,479,646	)
Effect of exchange rates on cash		1,607			1,135
Net (decrease) increase in cash and cash equivalents		(77,812	)		459,050
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	$	536,879		$	614,691

EX-99.3

Exhibit 99.3

ANNEX A

Explanation of Non-GAAP Financial Measures

     The accompanying HLTH Corporation press release and financial tables include 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. The tables attached to the accompanying press release include reconciliations of non-GAAP financial measures to GAAP financial measures.

     Adjusted EBITDA is used by HLTH’s management as an additional measure of HLTH’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 HLTH’s management identify additional trends in HLTH’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, HLTH uses Adjusted EBITDA in the incentive compensation programs applicable to many of its employees in order to evaluate HLTH’s performance. HLTH 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 amounts of those items are set forth, for the applicable periods, in the reconciliations of Adjusted EBITDA to net income that accompany our press releases containing non-GAAP financial measures, including the reconciliations contained in the tables attached to the accompanying press release.

     HLTH believes that the presentation of Adjusted EBITDA is useful to investors in their analysis of HLTH’s results for reasons similar to the reasons why HLTH’s management finds it useful and because it helps facilitate investor understanding of decisions made by HLTH’s management in light of the performance metrics used in making those decisions. In addition, as more fully described below, HLTH believes that providing Adjusted EBITDA, together with a reconciliation of Adjusted EBITDA to income from continuing operations, helps investors make comparisons between HLTH 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 HLTH with other public companies and is not intended as a substitute for comparisons based on “income from continuing operations” or “net income” 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 measures and the corresponding GAAP measures provided by each company under applicable SEC rules.

     The following is an explanation of the items excluded by HLTH 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. HLTH 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 HLTH’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, HLTH believes this exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that the 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 expense will recur in future periods.

• Stock-Based Compensation Expense. Stock-based compensation expense is a non-cash expense arising from the grant of stock-based awards to employees. HLTH 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 because it believes (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of HLTH’s business operations and (ii) such expenses can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Additionally, HLTH believes that excluding stock-based compensation from Adjusted EBITDA assists management and investors in making meaningful comparisons between HLTH’s operating performance and the operating performance of other companies that may use different forms of employee compensation or different valuation methodologies for their stock-based compensation. 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 HLTH in 2000. The advertising is available only on various Newscorp properties, primarily its television network and cable channels without any cash cost to HLTH. The amount of advertising that can be used in any year is subject to annual contractual limitation and expires in 2010. HLTH does not incur any other cash expenses related to airing of television advertising. HLTH excludes this expense from Adjusted EBITDA (i) because it is a non-cash expense, (ii) because it is incremental to other non-television cash advertising expense that HLTH otherwise incurs, (iii) because HLTH 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 HLTH 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 HLTH invests, as well as with interest expenses arising from the capital structure of HLTH.  Interest income and expense varies over time due to a variety of financing transactions and due to acquisitions and divestitures that HLTH has entered into or may enter into in the future. HLTH has, in the past several years, issued convertible debentures and preferred stock, repurchased shares in cash tender offers and through other repurchase transactions, conducted an initial public offering of equity in its

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	WebMD subsidiary and completed the sale of Emdeon Practice Services and the sale of a 52% interest in Emdeon Business Services. HLTH excludes interest income and interest expense from Adjusted EBITDA (i) because these items are not directly attributable to the performance of HLTH’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.  HLTH had a net operating loss (NOL) carryforward of approximately $1.3 billion as of the year ended December 31, 2007. HLTH has maintained a full valuation allowance on these NOL carryforwards until the fourth quarter of 2007 at which time a portion of the valuation allowance was reversed due to an increased history of generating income. As HLTH reduces 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 has not been consistent and as a result, HLTH’s income tax expense can fluctuate significantly from period to period in a manner not directly related to HLTH’s operating performance.  HLTH 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 HLTH’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 WHC. This represents the minority stockholders’ proportionate share of net income of HLTH’s majority-owned WebMD Health Corp. subsidiary (which we refer to as WHC).  The size of this Minority Interest is related to HLTH’s percentage ownership of WHC. Changes in that percentage ownership may result from changes in WHC’s capital structure, including as a result of sales of WHC equity securities by WHC or HLTH or as a result of exercise of WHC employee stock options. HLTH 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 HLTH’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 WHC will recur in future periods.
•	Other Items. HLTH engages in other activities and transactions that can impact HLTH’s overall income from continuing operations. These other items included, but were not limited to, (i) “Legal Expense,” which relates to the on-going Department of Justice investigation, (ii) equity in earnings of EBS Master LLC, which represents 48% of EBS’s income, (iii) gain on sale and subsequent working capital adjustment from the sale of 52% of the Emdeon Business Services segment on November 16, 2006, (iv) a reduction of certain sales and use tax contingencies resulting from the expiration of certain applicable statutes of limitations and (v) advisory expenses relating to the evaluation, in 2007 and 2006, by HLTH’s Board of Directors of strategic alternatives for HLTH. HLTH excludes these other items from Adjusted EBITDA because it believes these activities or transactions are not directly attributable to the performance of HLTH’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 may recur in future periods.

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