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

May 6, 2008

Date of Report (Date of earliest event reported)

HLTH 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))

          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 future financial results and other projections or measures of future performance; 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 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; changes in the markets for ARS; 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 May 6, 2008, we issued a press release announcing our results for the quarter ended March 31, 2008. 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 May 6, 2008, WebMD Health Corp. (which we refer to as WHC) issued a press release announcing its results for the quarter ended March 31, 2008. HLTH owns approximately 83.4% 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 99.7 hereto, from Exhibit 99.4 to the Current Report on Form 8-K filed today by WHC. Exhibits 99.4, 99.5 and 99.7 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.

Item 2.06. Material Impairments

     At March 31, 2008, HLTH held student loan related auction rate securities (ARS) with a face amount of $362.9 million. 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. Since mid-February, all auctions involving these securities have failed. The result of a failed auction is that these ARS continue to pay interest in accordance with their terms until the next successful

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auction; however liquidity will be limited until there is a successful auction or until such time as other markets for these ARS investments develop. It is uncertain when an auction market or other markets will develop. HLTH has determined that the fair value of the ARS as of March 31, 2008 was $302.8 million. Accordingly, HLTH has recorded a charge of $60.1 million to reflect a loss on these securities in its results for the quarter ended March 31, 2008.

Item 7.01. Regulation FD Disclosure

     A copy of certain forward-looking financial information that accompanied Exhibit 99.4 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. Exhibit 99.6 is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall it 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.

Item 9.01. Financial Statements and Exhibits

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

Exhibit
Number	Description
99.1	Press Release, dated May 6, 2008, regarding the Registrant’s results for the quarter ended March 31, 2008 and other matters
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Annex A to Exhibits 99.1 and 99.2
99.4	Press Release, dated May 6, 2008, regarding WebMD Health Corp.’s results for the quarter ended March 31, 2008 and other matters (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by WebMD Health Corp. on May 6, 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 May 6, 2008)
99.6	WebMD Health Corp. Financial Guidance Summary (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K filed by WebMD Health Corp. on May 6, 2008)
99.7	Annex A to Exhibits 99.4 through 99.6 (incorporated by reference to Exhibit 99.4 to the Current Report on Form 8-K filed by WebMD Health Corp. on May 6, 2008)

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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.

	HLTH CORPORATION
Dated: May 6, 2008	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 May 6, 2008, regarding the Registrant’s results for the quarter ended March 31, 2008 and other matters
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Annex A to Exhibits 99.1 and 99.2
99.4	Press Release, dated May 6, 2008, regarding WebMD Health Corp.’s results for the quarter ended March 31, 2008 and other matters (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by WebMD Health Corp. on May 6, 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 May 6, 2008)
99.6	WebMD Health Corp. Financial Guidance Summary (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K filed by WebMD Health Corp. on May 6, 2008)
99.7	Annex A to Exhibits 99.4 through 99.6 (incorporated by reference to Exhibit 99.4 to the Current Report on Form 8-K filed by WebMD Health Corp. on May 6, 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 FIRST QUARTER FINANCIAL RESULTS

ELMWOOD PARK, NJ (May 6, 2008) — HLTH Corporation (Nasdaq: HLTH) today announced financial results for the three months ended March 31, 2008.

Martin J. Wygod, Chairman and Acting Chief Executive Officer of HLTH Corporation, said: “With over 51 million unique monthly users and over 1 billion quarterly page views, WebMD has again achieved record traffic levels and continues to demonstrate its market leadership. The long-term value of the WebMD franchise continues to increase.”

Consolidated Financial Highlights
Revenue for the first quarter was $81.7 million, an increase of 14% over the prior year. Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) for the first quarter was $10.7 million, an increase of 81% over the prior year. Income from continuing operations for the first quarter was $459.6 million or $2.03 per share and net income was $463.2 million or $2.04 per share, both of which include a gain of $538 million, or approximately $514 million net of tax, from the sale of HLTH’s 48% minority interest in Emdeon Business Services and a $60.1 million impairment charge related to a reduction in fair value of the Company’s auction rate securities (ARS) investments.

HLTH’s financial results present the ViPS and Porex businesses as discontinued operations in the current and prior year periods, reflecting the decision to divest these businesses. WebMD’s offline professional medical reference and textbook publication business is presented as a discontinued operation in the prior year period, reflecting the sale of that business on December 31, 2007.

Segment Operating Results
WebMD’s Online Services segment revenue was $78.4 million for the first quarter compared to $68.4 million in the prior year period, an increase of 15%. Advertising and sponsorship revenue increased 18% to $56.1 million. Private portal licensing revenue increased 9% to $21.9 million. Online Services segment Adjusted EBITDA increased 27% to $16.5 million compared to $13.0 million in the prior year period.

WebMD’s Publishing and Other Services segment revenue was $3.3 million for the first quarter compared to $3.5 million in the prior year period, a decrease of 7%. Publishing and Other Services segment Adjusted EBITDA was a loss of ($0.8) million compared to a loss of ($0.4) million in the prior year period.

Sale of Investment in Emdeon Business Services
As previously reported, HLTH sold its 48% interest in Emdeon Business Services for $575 million in cash on February 8, 2008. HLTH realized a gain of $514 million, net of tax, on the sale.

Investment in Auction Rate Securities
At March 31, 2008, HLTH held auction rate securities with a face amount of $363.0 million. 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. Since February, all auctions involving these securities have failed. 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. It is uncertain when an auction market will develop. HLTH has determined that the fair value of the ARS as of March 31, 2008 was $302.8 million. Accordingly, HLTH has recorded an impairment charge of $60.1 million related to these securities in its results for the quarter ended March 31, 2008.

At March 31, 2008, in addition to HLTH’s $302.8 million in ARS holdings, of which $141 million are attributable to WebMD, HLTH has approximately $1.1 billion in cash and cash equivalents, of which $160 million is attributable to WebMD.

Merger with WebMD
As previously announced, HLTH and WebMD entered into a definitive merger agreement on February 20, 2008. The agreement provided that HLTH will be merged into WebMD, with each outstanding share of HLTH common stock to be converted into 0.1979 shares of WebMD common stock and $6.89 in cash, subject to certain adjustments. Completion of the merger is conditioned upon, among other things, approval of the stockholders of both HLTH and WebMD. HLTH and WebMD currently expect to file a preliminary proxy statement/prospectus relating to the merger in the next few weeks and believe that would likely allow them to hold stockholder meetings in September to seek those approvals. However, the ability to schedule these meetings will depend on the timing for closing the sales of HLTH’s ViPS and Porex businesses, at least one of which must be completed prior to closing the merger, as well as the timing for completion of SEC review of the proxy statement/prospectus. HLTH is currently in the process of selling the ViPS and Porex businesses, with potential purchasers nearing completion of their due diligence investigations.

Financial Guidance
HLTH is not providing financial guidance for 2008 at this time. WebMD provided financial guidance in a separate press release issued today.

Analyst and Investor Conference Call
As previously announced, HLTH Corporation and WebMD Health Corp. will host a conference call at 4:45 pm (Eastern) today to discuss their respective first 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 (NASDAQ: HLTH) is the majority holder of WebMD Health Corp. (NASDAQ: WBMD). WebMD is the leading provider of health information services for consumers, physicians, healthcare professionals, employers and health plans through its public and private online portals and health-focused publications. HLTH also owns ViPS and Porex. 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

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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 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 WebMD’s products and services; 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-

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EX-99.2

EXHIBIT 99.2

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

	Three Months Ended
	March 31,
	2008			2007
Revenue	$	81,682		$	71,881
Costs and expenses:
Cost of operations		31,570			28,618
Sales and marketing		25,830			22,870
General and administrative		21,144			28,443
Depreciation and amortization		6,888			6,325
Interest income		11,936			9,674
Interest expense		4,607			4,709
Gain on sale of EBS Master LLC		538,024			—
Impairment of auction rate securities		60,108			—
Transition services income, net		50			2,456
Other (expense) income, net		(4,194	)		426
Income (loss) from continuing operations before income tax provision (benefit)		477,351			(6,528	)
Income tax provision (benefit)		25,614			(231	)
Minority interest in WHC (loss) income		(3,845	)		115
Equity in earnings of EBS Master LLC		4,007			7,099
Income from continuing operations		459,589			687
Income from discontinued operations (net of tax $2,910 and $1,221 in 2008 and 2007)		3,569			5,015
Net income	$	463,158		$	5,702
Basic income per common share:
Income from continuing operations	$	2.52		$	0.00
Income from discontinued operations		0.02			0.03
Net income	$	2.54		$	0.03
Diluted income per common share:
Income from continuing operations	$	2.03		$	0.00
Income from discontinued operations		0.01			0.03
Net income	$	2.04		$	0.03
Weighted-average shares outstanding used in computing income per common share:
Basic		182,175			176,011
Diluted		228,159			186,355

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

	Three Months Ended
	March 31,
	2008			2007
Revenue
WebMD Online Services:
Advertising and sponsorship	$	56,065		$	47,421
Licensing		21,923			20,115
Content syndication and other		417			884
Total WebMD Online Services		78,405			68,420
WebMD Publishing and Other Services		3,277			3,524
Inter-segment eliminations		—			(63	)
	$	81,682		$	71,881
Earnings (loss) before interest, taxes, non-cash and other items (“Adjusted EBITDA”)
WebMD Online Services	$	16,531		$	12,992
WebMD Publishing and Other Services		(754	)		(358	)
Corporate		(5,059	)		(6,726	)
	$	10,718		$	5,908
Adjusted EBITDA per diluted common share (a)	$	0.05		$	0.03
Interest, taxes, non-cash and other items (b)
Depreciation and amortization	$	(6,888	)	$	(6,325	)
Non-cash stock-based compensation		(5,972	)		(9,182	)
Non-cash advertising		(1,558	)		(2,320	)
Interest income		11,936			9,674
Interest expense		(4,607	)		(4,709	)
Gain on sale of EBS Master LLC		538,024			—
Income tax (provision) benefit		(25,614	)		231
Minority interest in WHC loss (income)		3,845			(115	)
Equity in earnings of EBS Master LLC		4,007			7,099
Impairment of auction rate securities		(60,108	)		—
Other (expense) income, net		(4,194	)		426
Income from continuing operations		459,589			687
Income from discontinued operations, net of tax		3,569			5,015
Net income	$	463,158		$	5,702
Basic income per common share:
Income from continuing operations	$	2.52		$	0.00
Income from discontinued operations		0.02			0.03
Net income	$	2.54		$	0.03
Diluted income per common share:
Income from continuing operations	$	2.03		$	0.00
Income from discontinued operations		0.01			0.03
Net income	$	2.04		$	0.03
Weighted-average shares outstanding used in computing income per common share:
Basic		182,175			176,011
Diluted		228,159			186,355

(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).

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

	Three Months Ended
	March 31,
	2008			2007
Cash flows from operating activities:
Net income	$	463,158		$	5,702
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Income from discontinued operations, net of tax		(3,569	)		(5,015	)
Depreciation and amortization		6,888			6,325
Minority interest in WHC (loss) income		(3,845	)		115
Equity in earnings of EBS Master LLC		(4,007	)		(7,099	)
Amortization of debt issuance costs		743			721
Non-cash advertising		1,558			2,320
Non-cash stock-based compensation		5,972			9,182
Deferred income taxes		5,389			2
Gain on sale of EBS		(538,024	)		(399	)
Impairment of auction rate securities		60,108			—
Changes in operating assets and liabilities:
Accounts receivable		12,220			2,185
Prepaid expenses and other, net		17,493			421
Accrued expenses and other long-term liabilities		10,320			(46,158	)
Deferred revenue		11,714			7,678
Net cash provided by (used in) continuing operations		46,118			(24,020	)
Net cash (used in) provided by discontinued operations		(3,751	)		6,712
Net cash provided by (used in) operating activities		42,367			(17,308	)
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		104,518			67,922
Purchases of available-for-sale securities		(177,150	)		(65,932	)
Purchases of property and equipment		(2,662	)		(4,780	)
Proceeds related to sales of EBS, EPS and ACS/ACP, net of fees		598,935			2,898
Decrease in net advances to EBS Master LLC		1,195			19,691
Net cash provided by continuing operations		524,836			19,799
Net cash used in discontinued operations		(1,438	)		(847	)
Net cash provided by investing activities		523,398			18,952
Cash flows from financing activities:
Proceeds from issuance of HLTH and WHC common stock		1,777			63,404
Purchases of treasury stock under repurchase program		—			(11,322	)
Net cash provided by continuing operations		1,777			52,082
Net cash used in discontinued operations		(46	)		(43	)
Net cash provided by financing activities		1,731			52,039
Effect of exchange rates on cash		1,753			184
Net increase in cash and cash equivalents		569,249			53,867
Cash and cash equivalents at beginning of period		536,879			614,691
Cash and cash equivalents at end of period	$	1,106,128		$	668,558

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

	March 31, 2008		December 31, 2007
Assets
Cash and cash equivalents	$	1,106,128	$	536,879
Marketable securities		309,256		290,858
Accounts receivable, net		73,861		86,081
Due from EBS Master LLC		28		1,224
Prepaid expenses and other current assets		27,781		71,090
Assets of discontinued operations		266,591		262,964
Total current assets		1,783,645		1,249,096
Marketable equity securities		2,036		2,383
Property and equipment, net		47,883		49,554
Goodwill		214,623		217,323
Intangible assets, net		33,766		36,314
Investment in EBS Master LLC		—		25,261
Other assets		59,922		71,466
Total Assets	$	2,141,875	$	1,651,397
Liabilities and Stockholders’ Equity
Accrued expenses	$	59,002	$	49,598
Deferred revenue		88,114		76,401
Liabilities of discontinued operations		113,397		123,131
Total current liabilities		260,513		249,130
Convertible notes		650,000		650,000
Other long-term liabilities		21,214		21,137
Minority interest in WHC		130,231		131,353
Stockholders’ equity		1,079,917		599,777
Total Liabilities and Stockholders’ Equity	$	2,141,875	$	1,651,397

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 divestiture of certain businesses. 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 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 after consideration of the relevant factors. The related valuation allowances are either reversed through the income statement, additional paid-in capital, 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 expenses relating to the on-going Department of Justice investigation, (ii) equity in earnings of EBS Master LLC, which represents 48% of EBS’s income through February 8, 2008, (iii) 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, (v) advisory expenses relating to the evaluation, in 2008 and 2007, by HLTH’s Board of Directors of strategic alternatives for HLTH, (vi) gain on sale from the sale of the remaining 48% ownership interest in EBS Master LLC and (vii) loss on the impairment of auction rate securities. 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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