EX-99.2 3 g10244exv99w2.htm EX-99.2 FINANCIAL TABLES ACCOMPANYING EXHIBIT 99.1 EX-99.2 FINANCIAL TABLES ACCOMPANYING EXHIBIT 99.1
 

Exhibit 99.2
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
Revenue
  $ 87,198     $ 66,645     $ 238,639     $ 173,308  
 
                               
Costs and expenses:
                               
Cost of operations
    30,793       26,945       90,412       77,371  
Sales and marketing
    25,425       20,472       70,224       52,941  
General and administrative
    12,759       13,476       44,245       37,931  
Depreciation and amortization
    7,086       5,085       20,021       12,627  
Interest income
    3,486       1,221       8,522       4,137  
 
                       
Income (loss) before income tax provision
    14,621       1,888       22,259       (3,425 )
Income tax provision (benefit)
    3,129       1,398       4,671       (3 )
 
                       
Net income (loss)
  $ 11,492     $ 490     $ 17,588     $ (3,422 )
 
                       
 
                               
Net income (loss) per common share:
                               
Basic
  $ 0.20     $ 0.01     $ 0.31     $ (0.06 )
 
                       
Diluted
  $ 0.19     $ 0.01     $ 0.29     $ (0.06 )
 
                       
 
                               
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share:
                               
Basic
    57,154       56,059       57,067       56,056  
 
                       
Diluted
    59,848       58,122       59,742       56,056  
 
                       

 


 

WEBMD HEALTH CORP.
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
Revenue
                               
Online Services:
                               
Advertising and sponsorship
  $ 59,087     $ 43,534     $ 158,944     $ 112,513  
Licensing
    20,001       14,569       59,915       38,315  
Content syndication and other
    490       843       2,027       2,815  
 
                       
Total Online Services
    79,578       58,946       220,886       153,643  
Publishing and Other Services
    7,620       7,699       17,753       19,665  
 
                       
 
  $ 87,198     $ 66,645     $ 238,639     $ 173,308  
 
                       
Earnings before interest, taxes, depreciation, amortization and other non-cash items (“Adjusted EBITDA”) (a)
                               
Online Services
  $ 21,948     $ 12,727     $ 48,982     $ 29,594  
Publishing and Other Services
    2,129       1,906       2,857       1,165  
 
                       
 
    24,077       14,633       51,839       30,759  
 
                               
 
                       
Adjusted EBITDA per basic common share
  $ 0.42     $ 0.26     $ 0.91     $ 0.55  
 
                       
Adjusted EBITDA per diluted common share (c)
  $ 0.40     $ 0.25     $ 0.87     $ 0.53  
 
                       
 
                               
Interest, taxes, depreciation, amortization and other non-cash items (b)
                               
Interest income
    3,486       1,221       8,522       4,137  
Depreciation and amortization
    (7,086 )     (5,085 )     (20,021 )     (12,627 )
Non-cash advertising
    (169 )     (1,660 )     (2,489 )     (4,454 )
Non-cash stock-based compensation
    (5,687 )     (7,221 )     (15,592 )     (21,240 )
Income tax (provision) benefit
    (3,129 )     (1,398 )     (4,671 )     3  
 
                       
Net income (loss)
  $ 11,492     $ 490     $ 17,588     $ (3,422 )
 
                       
 
                               
Net income (loss) per common share:
                               
Basic
  $ 0.20     $ 0.01     $ 0.31     $ (0.06 )
 
                       
Diluted
  $ 0.19     $ 0.01     $ 0.29     $ (0.06 )
 
                       
 
                               
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share:
                               
Basic
    57,154       56,059       57,067       56,056  
 
                       
Diluted
    59,848       58,122       59,742       56,056  
 
                       
 
(a)   See Annex A — Explanation of Non-GAAP Financial Measures
 
(b)   Reconciliation of Adjusted EBITDA to net income
 
(c)   Three and nine months ended September 30, 2006 Adjusted EBITDA per share is calculated based on 58,122 and 57,977 diluted shares, respectively

 


 

WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
                         
            September 30,     December 31,  
            2007     2006  
ASSETS
                       
Current assets:
                       
Cash and cash equivalents
          $ 177,714     $ 44,660  
Short-term investments
            99,900       9,490  
Accounts receivable, net
            75,003       89,652  
Current portion of prepaid advertising
            3,150       2,656  
Due from HLTH
                  143,153  
Other current assets
            5,903       5,360  
 
                   
Total current assets
            361,670       294,971  
 
                       
Property and equipment, net
            48,116       44,709  
Prepaid advertising
            6,476       9,459  
Goodwill
            221,271       225,028  
Intangible assets, net
            39,515       45,268  
Other assets
            544       530  
 
                   
 
          $ 677,592     $ 619,965  
 
                   
 
                       
 
                       
LIABILITIES AND STOCKHOLDERS’ EQUITY
                       
Current liabilities:
                       
Accrued expenses
          $ 25,038     $ 32,846  
Deferred revenue
            80,938       77,731  
Due to HLTH
            7,375        
 
                   
Total current liabilities
            113,351       110,577  
 
                       
Deferred tax liability
            7,342       5,367  
Other long-term liabilities
            9,439       7,912  
 
                       
 
                       
Stockholders’ equity
            547,460       496,109  
 
                   
 
          $ 677,592     $ 619,965  
 
                   

 


 

WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
                 
    Nine Months Ended  
    September 30,  
    2007     2006  
Cash flows from operating activities:
               
Net income (loss)
  $ 17,588     $ (3,422 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
               
Depreciation and amortization
    20,021       12,627  
Non-cash advertising
    2,489       4,454  
Non-cash stock-based compensation
    15,592       21,240  
Deferred income taxes
    1,975       (911 )
Changes in operating assets and liabilities:
               
Accounts receivable
    14,648       (8,311 )
Other assets
    (506 )     (4,461 )
Accrued expenses and other long-term liabilities
    (7,463 )     (544 )
Due to HLTH
    5,223       8,213  
Deferred revenue
    3,207       14,517  
 
           
Net cash provided by operating activities
    72,774       43,402  
 
               
Cash flows from investing activities:
               
Proceeds from maturities and sales of available-for-sale securities
    123,885       261,000  
Purchases of available-for-sale securities
    (214,295 )     (222,000 )
Purchases of property and equipment
    (13,574 )     (17,500 )
Cash paid in business combinations, net of cash acquired
          (96,091 )
 
           
Net cash used in investing activities
    (103,984 )     (74,591 )
 
               
Cash flows from financing activities:
               
Proceeds from issuance of common stock
    8,490       649  
Tax benefit on stock-based awards
    655        
Net cash transfers with HLTH
    155,119        
 
           
Net cash provided by financing activities
    164,264       649  
 
           
 
               
Net increase (decrease) in cash and cash equivalents
    133,054       (30,540 )
 
               
Cash and cash equivalents at beginning of period
    44,660       75,704  
 
           
Cash and cash equivalents at end of period
  $ 177,714     $ 45,164