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

August 5, 2008

Date of Report (Date of earliest event reported)

WEBMD HEALTH CORP.

(Exact name of registrant as specified in its charter)

Delaware	0-51547	20-2783228
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer Identification
incorporation)		No.)

111 Eighth Avenue
New York, New York 10011

(Address of principal executive offices, including zip code)

(212) 624-3700

(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))

Item 2.02. Results of Operations and Financial Condition

     On August 5, 2008, we issued a press release announcing our results for the quarter ended June 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.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

The following exhibits are furnished herewith:

Exhibit
Number	Description
99.1	Press Release, dated August 5, 2008, regarding the Registrant’s results for the quarter ended June 30, 2008
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Annex A to Exhibits 99.1 and 99.2

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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.

	WEBMD HEALTH CORP.
Dated: August 5, 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 August 5, 2008, regarding the Registrant’s results for the quarter ended June 30, 2008 and other matters
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Annex A to Exhibits 99.1 through 99.3

EX-99.1

Exhibit 99.1

Contacts:
Investors:	Media:
Risa Fisher	Jennifer Newman
rfisher@webmd.net	jnewman@webmd.net
212-624-3817	212-624-3912

WebMD Announces Second Quarter Financial Results

Total Revenue Increased 15%; Advertising Revenue Increased 19%

Adjusted EBITDA Increased 33%; Net Income Increased 18%

WebMD Leads Online Health Information Sector with 48.4 Million Unique Monthly Users and
1.1 Billion Quarterly Page Views

New York, NY (August 5, 2008) - WebMD Health Corp. (Nasdaq: WBMD) today announced financial results for the three months ended June 30, 2008.

“The growing strength of the WebMD franchise was demonstrated again this quarter by WebMD’s leadership, strong year-over-year traffic growth and continued new product innovation,” said Wayne Gattinella, President and CEO. “WebMD is uniquely situated to capitalize on the shift to web-based marketing and education to both consumers as well as physicians both here in the U.S. and abroad.”

Financial Summary
Revenue for the second quarter was $89.2 million compared to $77.3 million in the prior year period, an increase of 15%. Earnings before interest, taxes, depreciation, amortization, and other non-cash items (“Adjusted EBITDA”) for the second quarter increased 33% to $19.8 million or $0.34 per share compared to $14.9 million or $0.25 per share in the prior year period.

Income from continuing operations and net income for the second quarter was $6.4 million or $0.11 per share, compared to income from continuing operations of $5.1 million or $0.09 per share, and net income of $5.4 million or $0.09 per share, in the prior year period.

WebMD had approximately $325 million in cash and investments at June 30, 2008.

Segment Operating Highlights
Online Services segment revenue was $84.6 million for the second quarter compared to $72.9 million in the prior year period, an increase of 16%. Advertising and sponsorship revenue increased 19% to $62.4 million. Private portal licensing revenue increased 10% to $21.9 million. Online Services segment Adjusted EBITDA increased 34% to $18.8 million compared to $14.0 million in the prior year period.

Traffic to the WebMD Health Network continued to grow strongly with an average of 48.4 million unique users per month and total traffic of 1.1 billion page views during the second quarter, increases of 20% and 24%, respectively, from a year ago. In the second quarter, 1.3 million continuing medical education (CME) programs were completed on the WebMD Professional Network, an increase of 74% from the prior year period.

The base of large employers and health plans utilizing WebMD’s private Health and Benefits portals during the second quarter was 123 as compared to 108 a year ago.

Publishing and Other Services segment revenue was $4.6 million for the second quarter compared to $4.4 million in the prior year period, an increase of 5%. Publishing and Other Services segment Adjusted EBITDA was $1.0 million compared to $0.86 million in the prior year period. WebMD’s offline professional medical reference and textbook publication business was sold on December 31, 2007 and is reflected as a discontinued operation in the Company’s financial statements for prior periods.

Merger with HLTH
As previously announced, HLTH and WebMD entered into a definitive merger agreement on February 20, 2008. Completion of the merger is conditioned upon, among other things, approval of the stockholders of both HLTH and WebMD. HLTH and WebMD expect to file a joint preliminary proxy statement/prospectus relating to the merger shortly after the filing of their respective second quarter Form 10-Q filings. Assuming that timely clearance is received from the SEC, HLTH and WebMD expect to be in a position to hold stockholder meetings in October 2008 to seek the necessary stockholder approvals. Those meetings would also be the Annual Meetings for HLTH and WebMD.

Financial Guidance
WebMD reaffirmed its financial guidance for the remainder of 2008 today. This guidance was provided on May 6, 2008 and can be found in a press release and Form 8-K issued on that date.

Analyst and Investor Conference Call
As previously announced, WebMD will hold a conference call with investors and analysts to discuss its second quarter results at 4:45 pm (eastern) today. The call can be accessed at www.wbmd.com (in the Investor Relations section). A replay of the audio webcast will be available at the same web address.

About WebMD
WebMD Health Corp. (Nasdaq: WBMD) is the leading provider of health information services, serving consumers, physicians, healthcare professionals, employers and health plans through our public and private online portals and health-focused publications. WebMD Health Corp. is a subsidiary of HLTH Corporation (Nasdaq: HLTH).

The WebMD Health Network includes WebMD Health, Medscape, MedicineNet, eMedicine, eMedicine Health, RxList and theHeart.org.

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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 and the related analyst and investor conference call, other than statements of historical fact, are forward-looking statements, including those regarding: expectations regarding the market for WebMD’s and HLTH’s investments in auction rate securities (ARS); our guidance on WebMD’s future financial results and other projections or 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 transaction with respect to Porex (the “Potential Sale Transaction”). These statements speak only as of the date of this press release, are based on our 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 Sale 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^®, Medscape^®, eMedicine^®, MedicineNet^®, RxList^®, Subimo^®, Medsite^®, The Little Blue Book^® and Summex^®, are trademarks of WebMD Health Corp. or its subsidiaries.

EX-99.2

Exhibit 99.2

WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2008		2007		2008			2007
Revenue	$	89,176	$	77,270	$	170,858		$	149,214
Costs and expenses:
Cost of operations		32,763		28,997		64,333			57,615
Sales and marketing		25,460		21,929		51,290			44,799
General and administrative		14,614		15,981		28,389			31,486
Impairment of auction rate securities		—		—		27,406			—
Depreciation and amortization		7,188		6,941		13,973			12,932
Interest income		2,350		3,051		5,803			5,036
Income (loss) from continuing operations before income tax provision		11,501		6,473		(8,730	)		7,418
Income tax provision		5,149		1,332		8,253			1,542
Income (loss) from continuing operations		6,352		5,141		(16,983	)		5,876
Income from discontinued operations, net of tax		—		249		—			220
Net income (loss)	$	6,352	$	5,390	$	(16,983	)	$	6,096
Basic income (loss) per common share:
Income (loss) from continuing operations	$	0.11	$	0.09	$	(0.29	)	$	0.10
Income from discontinued operations		—		—		—			0.01
Net Income (loss)	$	0.11	$	0.09	$	(0.29	)	$	0.11
Diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.11	$	0.09	$	(0.29	)	$	0.10
Income from discontinued operations		—		—		—			—
Net Income (loss)	$	0.11	$	0.09	$	(0.29	)	$	0.10
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share:
Basic		57,693		57,071		57,664			57,023
Diluted		59,061		59,748		57,664			59,689

WEBMD HEALTH CORP.
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
Revenue
Online Services:
Advertising and sponsorship	$	62,383		$	52,436		$	118,448		$	99,857
Licensing		21,866			19,799			43,789			39,914
Content syndication and other		345			653			762			1,537
Total Online Services		84,594			72,888			162,999			141,308
Publishing and Other Services		4,582			4,382			7,859			7,906
	$	89,176		$	77,270		$	170,858		$	149,214
Earnings before interest, taxes, depreciation, amortization and other non-cash items (“Adjusted EBITDA”) (a)
Online Services	$	18,800		$	14,042		$	35,331		$	27,034
Publishing and Other Services		1,027			863			273			505
		19,827			14,905			35,604			27,539
Adjusted EBITDA per basic common share	$	0.34		$	0.26		$	0.62		$	0.48
Adjusted EBITDA per diluted common share (b)	$	0.34		$	0.25		$	0.60		$	0.46
Interest, taxes, depreciation, amortization and other non-cash items (c)
Interest income		2,350			3,051			5,803			5,036
Depreciation and amortization		(7,188	)		(6,941	)		(13,973	)		(12,932	)
Non-cash advertising		—			—			(1,558	)		(2,320	)
Non-cash stock-based compensation		(3,488	)		(4,542	)		(7,200	)		(9,905	)
Impairment of auction rate securities investments		—			—			(27,406	)		—
Income tax provision		(5,149	)		(1,332	)		(8,253	)		(1,542	)
Income (loss) from continuing operations		6,352			5,141			(16,983	)		5,876
Income from discontinued operations, net of tax		—			249			—			220
Net income (loss)	$	6,352		$	5,390		$	(16,983	)	$	6,096
Basic income (loss) per common share:
Income (loss) from continuing operations	$	0.11		$	0.09		$	(0.29	)	$	0.10
Income from discontinued operations		—			—			—			0.01
Net income (loss)	$	0.11		$	0.09		$	(0.29	)	$	0.11
Diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.11		$	0.09		$	(0.29	)	$	0.10
Income from discontinued operations		—			—			—			—
Net income (loss)	$	0.11		$	0.09		$	(0.29	)	$	0.10
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share:
Basic		57,693			57,071			57,664			57,023
Diluted		59,061			59,748			57,664			59,689

(a)	See Annex A — Explanation of Non-GAAP Financial Measures
(b)	Six months ended June 30, 2008 Adjusted EBITDA per share is calculated based on 59,103 diluted shares
(c)	Reconciliation of Adjusted EBITDA to income (loss) from continuing operations

WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)

	June 30,		December 31,
	2008		2007
ASSETS
Current assets:
Cash and cash equivalents	$	186,490	$	213,753
Short-term investments		138,753		80,900
Accounts receivable, net		68,865		86,081
Current portion of prepaid advertising		2,275		2,329
Due from HLTH		—		1,153
Other current assets		9,259		10,840
Total current assets		405,642		395,056
Property and equipment, net		46,554		48,589
Prepaid advertising		3,017		4,521
Goodwill		221,281		221,429
Intangible assets, net		31,323		36,314
Other assets		7,317		12,955
	$	715,134	$	718,864
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accrued expenses	$	20,203	$	26,498
Deferred revenue		87,401		76,401
Due to HLTH		72		—
Total current liabilities		107,676		102,899
Other long-term liabilities		8,890		9,210
Stockholders’ equity		598,568		606,755
	$	715,134	$	718,864

WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)

	Six Months Ended
	June 30,
	2008			2007
Cash flows from operating activities:
Net (loss) income	$	(16,983	)	$	6,096
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Income from discontinued operations, net of tax		—			(220	)
Depreciation and amortization		13,973			12,932
Non-cash advertising		1,558			2,320
Non-cash stock-based compensation		7,200			9,905
Deferred income taxes		6,667			577
Impairment of auction rate securities		27,406			—
Changes in operating assets and liabilities:
Accounts receivable		17,216			7,719
Other assets		(1,394	)		74
Accrued expenses and other long-term liabilities		(5,131	)		(7,271	)
Due to HLTH		1,246			2,136
Deferred revenue		11,000			10,576
Net cash provided by continuing operations		62,758			44,844
Net cash provided by discontinued operations		—			48
Net cash provided by operating activities		62,758			44,892
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		41,300			95,256
Purchases of available-for-sale securities		(127,900	)		(112,667	)
Purchases of property and equipment		(6,946	)		(9,764	)
Cash received from sale of business and business combinations, net of fees		1,133			—
Net cash used in investing activities		(92,413	)		(27,175	)
Cash flows from financing activities:
Proceeds from issuance of common stock		2,392			5,723
Net cash transfers with HLTH		—			145,257
Net cash provided by financing activities		2,392			150,980
Net (decrease) increase in cash and cash equivalents		(27,263	)		168,697
Cash and cash equivalents at beginning of period		213,753			44,660
Cash and cash equivalents at end of period	$	186,490		$	213,357

EX-99.3

Exhibit 99.3

ANNEX A

Explanation of Non-GAAP Financial Measures
(All dollar amounts in thousands)

     The accompanying WebMD Health Corp. 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, depreciation, amortization and other non-cash 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” 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 WebMD’s management as an additional measure of WebMD’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 WebMD’s management identify additional trends in WebMD’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, WebMD uses Adjusted EBITDA in the incentive compensation programs applicable to many of its employees in order to evaluate WebMD’s performance. WebMD 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.

     WebMD believes that the presentation of Adjusted EBITDA is useful to investors in their analysis of WebMD’s results for reasons similar to the reasons why WebMD’s management finds it useful and because it helps facilitate investor understanding of decisions made by WebMD’s management in light of the performance metrics used in making those decisions. In addition, as more fully described below, WebMD 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 WebMD 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 WebMD 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 WebMD from Adjusted EBITDA but included in income (loss) 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. WebMD 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 WebMD’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, WebMD believes this exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that 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 expenses 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. WebMD 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 WebMD’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, WebMD believes that excluding stock-based compensation from Adjusted EBITDA assists management and investors in making meaningful comparisons between WebMD’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. Stock-based compensation expenses included in the Statement of Operations are summarized as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
Non-cash stock-based compensation included in:
Cost of operations	$	(826	)	$	(984	)	$	(1,945	)	$	(2,562	)
Sales and marketing	$	(1,264	)	$	(1,379	)	$	(2,402	)	$	(2,637	)
General and administrative	$	(1,398	)	$	(2,179	)	$	(2,853	)	$	(4,706	)

• 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 our parent, HLTH Corporation in 2000. The advertising is available only on various Newscorp properties, primarily its television network and cable channels without any cash cost to WebMD. The amount of advertising that can be used in any year is subject to annual contractual limitation and expires in 2009. WebMD does not incur any other cash expenses related to airing of television advertising. WebMD 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 WebMD otherwise incurs, (iii) because WebMD 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 WebMD derives some benefit from such advertising and that such expenses will recur in the future. Non-cash advertising expenses included in the Consolidated Statement of Operations in Sales and Marketing expense were $1,558 and $2,320 for the six months ended June 30, 2008 and 2007, respectively. There were no non-cash advertising expenses for the three months ended June 30, 2008 and 2007.

• Interest Income. Interest income is associated with the level of marketable debt securities and other interest bearing accounts in which WebMD invests.  Interest income varies over time due to varying levels of securities available for investment. Transactions that WebMD has entered into in recent periods that have impacted securities available for investment include the initial public offering of equity in WebMD and acquisitions of other companies for varying amounts of cash since our initial public offering. Additional financing transactions as well as potential acquisitions that WebMD may enter into in the future could impact the levels and timing of securities available for investment. WebMD excludes interest income from Adjusted EBITDA (i) because it is not directly attributable to the performance of

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	WebMD’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 interest income will recur in future periods.
•	Income Tax Provision.  WebMD had a net operating loss (NOL) carryforward of approximately $270,000 as of the year ended December 31, 2007.  WebMD 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, WebMD’s income tax expense can fluctuate significantly from period to period in a manner not directly related to WebMD’s operating performance.  WebMD 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 WebMD’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.
•	Other Items. WebMD engages in other activities and transactions that can impact WebMD’s overall income (loss) from continuing operations. WebMD excludes these other items from Adjusted EBITDA when it believes these activities or transactions are not directly attributable to the performance of WebMD’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. In the accompanying press release and financial tables, WebMD has excluded loss on the impairment of auction rate securities from Adjusted EBITDA.

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