8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

October 30, 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))

TABLE OF CONTENTS

EX-99.1

EX-99.2

EX-99.3

Item 2.02. Results of Operations and Financial Condition

     On October 30, 2008, HLTH Corporation issued a press release announcing its results for the quarter ended September 30, 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 October 30, 2008, WebMD Health Corp. (which we refer to as WHC), a publicly-traded subsidiary of HLTH, issued a press release announcing its results for the quarter ended September 30, 2008. 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 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 8.01. Other Events

     On October 27, 2008, HLTH Corporation issued a press release announcing that it has commenced a tender offer to purchase up to 80 million shares of its common stock at a price per share of $8.80. A copy of the press release is filed as Exhibit 99.8 hereto.

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Item 9.01. Financial Statements and Exhibits

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

Exhibit
Number	Description
99.1	Press Release, dated October 30, 2008, regarding the Registrant’s results for the quarter ended September 30, 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 October 30, 2008, regarding WebMD Health Corp.’s results for the quarter ended September 30, 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 October 30, 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 October 30, 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 October 30, 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 October 30, 2008)
99.8	Press Release, dated October 27, 2008, announcing commencement of tender offer by HLTH Corporation for its common stock (incorporated by reference to Exhibit (a)(1)(G) to the Schedule TO filed by HLTH Corporation on October 27, 2008)

3

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: October 30, 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 October 30, 2008, regarding the Registrant’s results for the quarter ended September 30, 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 October 30, 2008, regarding WebMD Health Corp.’s results for the quarter ended September 30, 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 October 30, 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 October 30, 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 October 30, 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 October 30, 2008)
99.8	Press Release, dated October 27, 2008, announcing commencement of tender offer by HLTH Corporation for its common stock (incorporated by reference to Exhibit (a)(1)(G) to the Schedule TO filed by HLTH Corporation on October 27, 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 THIRD QUARTER FINANCIAL RESULTS

ELMWOOD PARK, NJ (October 30, 2008) – HLTH Corporation (Nasdaq: HLTH) today announced financial results for the three months ended September 30, 2008.

Martin J. Wygod, Chairman and Acting Chief Executive Officer of HLTH Corporation, said: “WebMD, HLTH’s 84% owned subsidiary, continues to demonstrate its strength as the leading source of health information for consumers and health care professionals. WebMD’s third quarter advertising sales, which we believe is an early indicator for 2009 growth, suggests our customers are looking to more aggressively integrate online strategies into their core marketing mix to both consumer and healthcare professionals in 2009.”

Consolidated Financial Highlights

Revenue for the third quarter was $100.4 million, an increase of 17% over the prior year. Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) for the third quarter was $22.5 million, an increase of 23% over the prior year. Income from continuing operations for the third quarter was $2.6 million or $0.01 per share. Income from discontinued operations was $93.2 million or $0.50 per share and net income was $95.9 million or $0.51 per share.

At September 30, 2008, HLTH had approximately $1.66 billion in cash and investments, of which $332.6 million is attributable to WebMD.

Segment Operating Results

Online Services segment revenue was $94.6 million for the third quarter compared to $79.6 million in the prior year period, an increase of 19%. Advertising and sponsorship revenue increased 22%, from the prior year period, to $72.0 million. Private portal licensing revenue increased 11%, from the prior year period, to $22.1 million. Online Services segment Adjusted EBITDA increased 18% to $26.0 million compared to $21.9 million in the prior year period.

Traffic to the WebMD Health Network continued to grow strongly with an average of 49.9 million unique users per month and total traffic of 1.14 billion page views during the third quarter, increases of 22% and 33%, respectively, from a year ago. In the third quarter, 1.3 million continuing medical education (CME) programs were completed on the WebMD Professional Network, an increase of 76% from the prior year period.

The base of large employers and health plans utilizing WebMD’s private Health and Benefits portals during the third quarter was 129 as compared to 112 a year ago. During the quarter, WebMD significantly expanded its relationship with Wal-Mart Stores, Inc. and added Tyco International Management Company, Viacom, Inc., Presbyterian Health Plan, Inc. and Golden Living to its customer base.

Publishing and Other Services segment revenue was $5.8 million for the third quarter compared to $6.5 million in the prior year period, a decrease of 11% primarily related to weakness in the Company’s Little Blue Book print

product for physicians. Publishing and Other Services segment Adjusted EBITDA was $1.2 million compared to $2.1 million in the prior year period.

Discontinued Operations

HLTH’s financial results present the ViPS and Porex businesses as discontinued operations in the current and prior year periods, reflecting the sale of ViPS and the decision to divest Porex. The sale of the ViPS business was completed on July 22, 2008 for $225 million in cash, which resulted in a gain of approximately $92 million, net of income taxes during the current quarter. 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.

Financial Guidance

WebMD provided financial guidance for the three months ending December 31, 2008 and for the year ending December 31, 2009 in a separate press release issued by WebMD and in a Form 8-K filed by WebMD today. HLTH is not providing consolidated financial guidance at this time.

Analyst and Investor Conference Call

As previously announced, HLTH and WebMD will host a conference call at 4:45 pm (Eastern) today to discuss their respective third 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) owns approximately 84% of WebMD Health Corp. (NASDAQ: WBMD). WebMD is the leading provider of health information services, serving consumers, physicians, healthcare professionals, employers and health plans through its public and private online portals and health-focused publications. HLTH also owns Porex, a developer, manufacturer and distributor of proprietary porous plastic products and components used in healthcare, industrial and consumer applications.

*****************************

All statements contained in this press release and the related analyst and investor conference call, other than statements of historical fact, are forward-looking statements, including those regarding: our guidance on HLTH’s and WebMD’s future financial results and other projections or measures of their 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; expectations regarding the market for WebMD’s and HLTH’s investments in auction rate securities (ARS); and the potential sale transaction with respect to Porex (the “Potential Porex Transaction”). 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: market acceptance of WebMD’s products and services; WebMD’s relationships with customers and strategic partners; changes in the markets for ARS; and changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet, information technology and plastics 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 will be able to complete the Potential Porex Transaction or as to the timing or terms of such transaction. 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® and POREX® are trademarks of HLTH Corporation or its subsidiaries.

-Tables Follow-

2

EX-99.2

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,
	2008			2007		2008			2007
Revenue	$	100,367		$	86,034	$	271,185		$	235,112
Costs and expenses:
Cost of operations		35,323			30,021		99,656			87,636
Sales and marketing		26,439			22,459		77,729			67,258
General and administrative		22,929			25,718		67,254			81,111
Depreciation and amortization		7,265			7,390		21,468			20,954
Interest income		9,386			10,864		29,384			30,638
Interest expense		4,636			4,660		13,871			13,985
Gain on sale of EBS Master LLC		—			—		538,024			—
Impairment of auction rate securities		—			—		60,108			—
Other (expense) income, net		(997	)		989		(5,807	)		5,267
Income from continuing operations before income tax provision		12,164			7,639		492,700			73
Income tax provision		7,679			2,977		34,623			4,404
Minority interest in WHC income (loss)		1,845			1,800		(929	)		2,758
Equity in earnings of EBS Master LLC		—			8,005		4,007			22,679
Income from continuing operations		2,640			10,867		463,013			15,590
Income (loss) from discontinued operations, net of tax		93,241			5,704		93,159			(38,780	)
Net income (loss)	$	95,881		$	16,571	$	556,172		$	(23,190	)
Basic income (loss) per common share:
Income from continuing operations	$	0.01		$	0.06	$	2.53		$	0.09
Income (loss) from discontinued operations		0.51			0.03		0.51			(0.22	)
Net income (loss)	$	0.52		$	0.09	$	3.04		$	(0.13	)
Diluted income (loss) per common share:
Income from continuing operations	$	0.01		$	0.06	$	2.06		$	0.08
Income (loss) from discontinued operations		0.50			0.03		0.41			(0.21	)
Net income (loss)	$	0.51		$	0.09	$	2.47		$	(0.13	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		183,716			179,811		182,838			178,681
Diluted		187,527			188,071		228,653			188,486

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
Revenue
WebMD Online Services:
Advertising and sponsorship	$	72,046		$	59,087		$	190,494		$	158,944
Licensing		22,139			20,001			65,928			59,915
Content syndication and other		392			490			1,154			2,027
Total WebMD Online Services		94,577			79,578			257,576			220,886
WebMD Publishing and Other Services		5,810			6,520			13,669			14,426
Inter-segment eliminations		(20	)		(64	)		(60	)		(200	)
	$	100,367		$	86,034		$	271,185		$	235,112
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)
WebMD Online Services	$	25,956		$	21,948		$	61,287		$	48,982
WebMD Publishing and Other Services		1,212			2,138			1,485			2,643
Corporate		(4,679	)		(5,811	)		(15,311	)		(18,874	)
	$	22,489		$	18,275		$	47,461		$	32,751
Adjusted EBITDA per diluted common share (b)	$	0.12		$	0.10		$	0.21		$	0.17
Interest, taxes, non-cash and other items (c)
Interest income	$	9,386		$	10,864		$	29,384		$	30,638
Interest expense		(4,636	)		(4,660	)		(13,871	)		(13,985	)
Income tax provision		(7,679	)		(2,977	)		(34,623	)		(4,404	)
Depreciation and amortization		(7,265	)		(7,390	)		(21,468	)		(20,954	)
Non-cash stock-based compensation		(6,531	)		(9,285	)		(18,974	)		(26,246	)
Non-cash advertising		(178	)		(169	)		(1,736	)		(2,489	)
Minority interest in WHC (income) loss		(1,845	)		(1,800	)		929			(2,758	)
Equity in earnings of EBS Master LLC		—			8,005			4,007			22,679
Gain on sale of EBS Master LLC		—			—			538,024			—
Impairment of auction rate securities		—			—			(60,108	)		—
Other (expense) income, net		(1,101	)		4			(6,012	)		358
Income from continuing operations		2,640			10,867			463,013			15,590
Income (loss) from discontinued operations, net of tax		93,241			5,704			93,159			(38,780	)
Net income (loss)	$	95,881		$	16,571		$	556,172		$	(23,190	)
Basic income (loss) per common share:
Income from continuing operations	$	0.01		$	0.06		$	2.53		$	0.09
Income (loss) from discontinued operations		0.51			0.03			0.51			(0.22	)
Net income (loss)	$	0.52		$	0.09		$	3.04		$	(0.13	)
Diluted income (loss) per common share:
Income from continuing operations	$	0.01		$	0.06		$	2.06		$	0.08
Income (loss) from discontinued operations		0.50			0.03			0.41			(0.21	)
Net income (loss)	$	0.51		$	0.09		$	2.47		$	(0.13	)
Weighted-average shares outstanding used in computing income (loss) per common share:
Basic		183,716			179,811			182,838			178,681
Diluted		187,527			188,071			228,653			188,486

(a)	See Annex A-Explanation of Non-GAAP Financial Measures.
(b)	Adjusted EBITDA per diluted common share is based on the weighted-average shares outstanding used in computing diluted income (loss) per common share.
(c)	Reconciliation of Adjusted EBITDA to income from continuing operations.

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

	September 30, 2008		December 31, 2007
Assets
Cash and cash equivalents	$	1,380,179	$	536,879
Short-term investments		284,789		290,858
Accounts receivable, net		78,148		86,081
Due from EBS Master LLC		—		1,224
Prepaid expenses and other current assets		27,190		71,090
Assets of discontinued operations		119,891		262,964
Total current assets		1,890,197		1,249,096
Marketable equity securities		2,175		2,383
Property and equipment, net		51,766		49,554
Goodwill		211,414		217,323
Intangible assets, net		28,917		36,314
Investment in EBS Master LLC		—		25,261
Other assets		36,534		71,466
Total Assets	$	2,221,003	$	1,651,397
Liabilities and Stockholders’ Equity
Accrued expenses	$	44,305	$	49,598
Deferred revenue		81,740		76,401
Liabilities of discontinued operations		100,464		123,131
Total current liabilities		226,509		249,130
Convertible notes		650,000		650,000
Other long-term liabilities		21,184		21,137
Minority interest in WHC		139,250		131,353
Stockholders’ equity		1,184,060		599,777
Total Liabilities and Stockholders’ Equity	$	2,221,003	$	1,651,397

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

	Nine Months Ended
	September 30,
	2008			2007
Cash flows from operating activities:
Net income (loss)	$	556,172		$	(23,190	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
(Income) loss from discontinued operations, net of tax		(93,159	)		38,780
Depreciation and amortization		21,468			20,954
Minority interest in WHC (loss) income		(929	)		2,758
Equity in earnings of EBS Master LLC		(4,007	)		(22,679	)
Amortization of debt issuance costs		2,248			2,179
Non-cash advertising		1,736			2,489
Non-cash stock-based compensation		18,974			26,246
Deferred income taxes		11,934			3,710
Gain on sale of EBS Master LLC and 2006 EBS Sale		(538,024	)		(399	)
Impairment of auction rate securities		60,108			—
Changes in operating assets and liabilities:
Accounts receivable		7,932			14,835
Prepaid expenses and other, net		4,174			(198	)
Accrued expenses and other long-term liabilities		(3,639	)		(45,878	)
Deferred revenue		5,340			3,253
Net cash provided by continuing operations		50,328			22,860
Net cash provided by discontinued operations		28,497			24,366
Net cash provided by operating activities		78,825			47,226
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		117,539			356,492
Purchases of available-for-sale securities		(177,150	)		(694,522	)
Purchases of property and equipment		(15,115	)		(14,427	)
Proceeds related to the sales of ViPS, EBS, EPS and ACS/ACP, net of expenses		821,706			14,565
Decreases in net advances to EBS Master LLC		1,224			19,921
Other		148			—
Net cash provided by (used in) continuing operations		748,352			(317,971	)
Net cash used in discontinued operations		(4,265	)		(3,785	)
Net cash provided by (used in ) investing activities		744,087			(321,756	)
Cash flows from financing activities:
Proceeds from issuance of HLTH and WHC common stock		20,725			114,077
Purchases of treasury stock under repurchase program		—			(47,120	)
Other		343			(18	)
Net cash provided by continuing operations		21,068			66,939
Net cash used in discontinued operations		(76	)		(130	)
Net cash provided by financing activities		20,992			66,809
Effect of exchange rates on cash		(604	)		1,042
Net increase (decrease) in cash and cash equivalents		843,300			(206,679	)
Cash and cash equivalents at beginning of period		536,879			614,691
Cash and cash equivalents at end of period	$	1,380,179		$	408,012

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 (loss) from continuing operations” or “net income (loss)” 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 (loss) from continuing operations or net income (loss). 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 (loss) from continuing operations or net income (loss), 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 income (loss) from continuing operations or to net income (loss) 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 (loss) from continuing operations or to net income (loss), 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 (loss) from continuing operations” or “net income (loss)” 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 (loss) from continuing operations in the accompanying press release:

• 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 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 net operating loss (NOL) carryforwards 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

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	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 or loss 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 some of these other items may recur in future periods.

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