8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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

February 19, 2009

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 incorporation)	(Commission File Number)	(I.R.S. Employer Identification 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 February 19, 2009, we issued a press release announcing our results for the quarter ended December 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 99.4 to this Current Report contains an Annex to the press release entitled “Explanation of Non-GAAP Financial Measures.” Exhibits 99.1, 99.2 and 99.4 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 7.01. Regulation FD Disclosure

     Exhibit 99.3 to this Current Report includes forward-looking financial information that accompanied Exhibit 99.1. Exhibit 99.3 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 February 19, 2009, regarding the Registrant’s results for the quarter ended December 31, 2008
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Financial Guidance Summary accompanying Exhibit 99.1
99.4	Annex A to Exhibits 99.1 through 99.3

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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: February 19, 2009	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 February 19, 2009, regarding the Registrant’s results for the quarter ended December 31, 2008
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Financial Guidance Summary accompanying Exhibit 99.1
99.4	Annex A to Exhibits 99.1 through 99.3

EX-99.1

Exhibit 99.1

Contacts:
Investors:	Media:
Risa Fisher	Kate Hahn
rfisher@webmd.net	khahn@webmd.net
212-624-3817	212-624-3760

WebMD Announces Fourth Quarter Financial Results

Total Revenue Increased 15%; Online Ad Revenue Increased 21%

WebMD Achieves Record Traffic with 54 Million Unique Monthly Users
and 1.3 Billion Quarterly Page Views

New York, NY (February 19, 2009) - WebMD Health Corp. (Nasdaq: WBMD) today announced financial results for the three months ended December 31, 2008.

“Our fourth quarter results confirm WebMD’s market leadership in a challenging business environment. The size and breadth of the overall market opportunity for WebMD remains unchanged,” said Wayne Gattinella, President and CEO. “We remain confident in our ability to continue to deliver strong results over the long term.”

Financial Summary
Revenue for the fourth quarter was $111.5 million compared to $96.6 million in the prior year period, an increase of 15%. Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) for the fourth quarter was $33.8 million or $0.58 per share compared to $33.1 million or $0.55 per share in the prior year period.

Income from continuing operations for the fourth quarter was $33.1 million or $0.57 per share, compared to $45.1 million or $0.75 per share in the prior year period.

Net income for the fourth quarter was $32.9 million or $0.56 per share, compared to $48.3 million or $0.81 per share in the prior year period. Net income in the fourth quarter of 2008 included a $21.5 million tax benefit relating to the reversal of reserves related to deferred tax assets and a restructuring charge of $2.9 million. Net income in the fourth quarter of 2007 included a tax benefit of $24.7 million relating to the reversal of reserves related to deferred tax assets and a gain of $3.6 million related to the sale of a business.

WebMD had approximately $325 million in cash and investments at December 31, 2008.

Segment Operating Highlights
Online Services segment revenue was $108.8 million for the fourth quarter compared to $92.3 million in the prior year period, an increase of 18%. Advertising and sponsorship revenue increased 21%, from the prior year period, to $85.3 million. Private portal licensing revenue increased 8%, from the prior year period, to $23.2 million. Online Services segment Adjusted EBITDA was $34.1 million compared to $31.6 million in the prior year period.

Traffic to the WebMD Health Network continued to grow strongly, reaching a record average of 54 million unique users per month and total traffic of 1.3 billion page views during the fourth quarter, increases of 21% and 30%, respectively, from a year ago. In the fourth quarter, 1.5 million continuing medical education (CME) programs were completed on the WebMD Professional Network, an increase of 60% from the prior year period.

The base of large employers and health plans utilizing WebMD’s private Health and Benefits portals during the fourth quarter was 134 as compared to 117 a year ago. The installed base of customers licensing the WebMD private portal platform now includes: Blue Cross Blue Shield of North Carolina, Hewlett Packard Company, International Union of Operating Engineers and Ohio State University.

Publishing and Other Services segment revenue was $2.8 million for the fourth quarter compared to $4.3 million in the prior year period. The decrease is primarily related to a decline in advertising in WebMD’s Little Blue Book print products. Publishing and Other Services segment Adjusted EBITDA was a loss of $(338) thousand compared to a profit of $1.5 million in the prior year period.

Financial Guidance
WebMD reaffirmed its financial guidance for 2009 today. WebMD expects 2009 revenue to be $420 million to $450 million, an increase of 10% to 18% over 2008; Adjusted EBITDA to be $107 million to $122 million, an increase of 11% to 26% over 2008; income from continuing operations and net income of $30 million to $43 million, or $0.48 to $0.69 per share.

WebMD expects revenue to be in the range of $90 million to $92 million with Adjusted EBITDA representing approximately 19% of revenue for the first quarter of 2009. These amounts represent growth rates at the lower end of the annual financial guidance range and contemplate revenue growth of approximately 15% in advertising and sponsorship revenue and 4% in licensing revenue for the first quarter of 2009. Net income is estimated to be in the range of 2% to 3% of revenue for the first quarter of 2009.

Additional detail is provided in a schedule attached to this release.

Analyst and Investor Conference Call
As previously announced, WebMD will hold a conference call with investors and analysts to discuss its fourth 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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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 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; and expectations regarding the market for

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WebMD’s investments in auction rate securities (ARS). 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: 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 and information technology industries. Further information about these matters can be found in our Securities and Exchange Commission filings. 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.

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

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^®, Medscape^®, eMedicine^®, MedicineNet^®, RxList^®, Subimo^®, Medsite^®, The Little Blue Book^® and Summex^®, are trademarks of WebMD Health Corp. or its subsidiaries.

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EX-99.2

Exhibit 99.2

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

	Three Months Ended						Years Ended
	December 31,						December 31,
	2008			2007			2008			2007
Revenue	$	111,532		$	96,642		$	382,777		$	331,954
Costs and expenses:
Cost of operations		38,708			29,645			138,363			117,281
Sales and marketing		30,585			26,387			108,316			93,645
General and administrative		14,487			14,112			58,085			60,986
Depreciation and amortization		7,185			7,216			28,291			27,233
Interest income		2,033			3,856			10,452			12,378
Impairment of auction rate securities		—			—			27,406			—
Restructuring		2,910			—			2,910			—
Income from continuing operations before income tax (benefit) provision		19,690			23,138			29,858			45,187
Income tax (benefit) provision		(13,364	)		(21,926	)		3,021			(17,255	)
Income from continuing operations		33,054			45,064			26,837			62,442
(Loss) income from discontinued operations, net of tax		(135	)		3,232			(135	)		3,442
Net income	$	32,919		$	48,296		$	26,702		$	65,884
Basic income per common share:
Income from continuing operations	$	0.57		$	0.78		$	0.46		$	1.09
(Loss) income from discontinued operations		(0.00	)		0.06			(0.00	)		0.06
Net income	$	0.57		$	0.84		$	0.46		$	1.15
Diluted income per common share:
Income from continuing operations	$	0.57		$	0.75		$	0.46		$	1.05
(Loss) income from discontinued operations		(0.01	)		0.06			(0.01	)		0.05
Net income	$	0.56		$	0.81		$	0.45		$	1.10
Weighted-average shares outstanding used in computing basic and diluted net income per common share:
Basic		57,771			57,534			57,717			57,184
Diluted		58,384			59,748			58,925			59,743

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

	Three Months Ended						Years Ended
	December 31,						December 31,
	2008			2007			2008			2007
Revenue
Online Services:
Advertising and sponsorship	$	85,296		$	70,389		$	275,790		$	229,333
Licensing		23,198			21,556			89,126			81,471
Content syndication and other		280			351			1,434			2,378
Total Online Services		108,774			92,296			366,350			313,182
Publishing and Other Services		2,758			4,346			16,427			18,772
	$	111,532		$	96,642		$	382,777		$	331,954
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)
Online Services	$	34,148		$	31,612		$	95,435		$	80,594
Publishing and Other Services		(338	)		1,460			1,147			4,103
		33,810			33,072			96,582			84,697
Adjusted EBITDA per basic common share	$	0.59		$	0.57		$	1.67		$	1.48
Adjusted EBITDA per diluted common share	$	0.58		$	0.55		$	1.64		$	1.42
Interest, taxes, non-cash and other items (b)
Interest income		2,033			3,856			10,452			12,378
Depreciation and amortization		(7,185	)		(7,216	)		(28,291	)		(27,233	)
Non-cash advertising		(3,361	)		(2,775	)		(5,097	)		(5,264	)
Non-cash stock-based compensation		(2,697	)		(3,799	)		(13,472	)		(19,391	)
Impairment of auction rate securities		—			—			(27,406	)		—
Restructuring		(2,910	)		—			(2,910	)		—
Income tax benefit (provision)		13,364			21,926			(3,021	)		17,255
Income from continuing operations		33,054			45,064			26,837			62,442
(Loss) income from discontinued operations, net of tax		(135	)		3,232			(135	)		3,442
Net income	$	32,919		$	48,296		$	26,702		$	65,884
Basic income per common share:
Income from continuing operations	$	0.57		$	0.78		$	0.46		$	1.09
(Loss) income from discontinued operations		(0.00	)		0.06			(0.00	)		0.06
Net income	$	0.57		$	0.84		$	0.46		$	1.15
Diluted income per common share:
Income from continuing operations	$	0.57		$	0.75		$	0.46		$	1.05
(Loss) income from discontinued operations		(0.01	)		0.06			(0.01	)		0.05
Net income	$	0.56		$	0.81		$	0.45		$	1.10
Weighted-average shares outstanding used in computing basic and diluted net income per common share:
Basic		57,771			57,534			57,717			57,184
Diluted		58,384			59,748			58,925			59,743

(a)	See Annex A — Explanation of Non-GAAP Financial Measures
(b)	Reconciliation of Adjusted EBITDA to income from continuing operations

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

	December 31,
	2008		2007
ASSETS
Current assets:
Cash and cash equivalents	$	191,659	$	213,753
Short-term investments		—		80,900
Accounts receivable, net		94,140		86,081
Current portion of prepaid advertising		1,753		2,329
Due from HLTH		—		1,153
Other current assets		11,371		10,840
Total current assets		298,923		395,056
Investments		133,563		—
Property and equipment, net		54,263		48,589
Prepaid advertising		—		4,521
Goodwill		220,011		221,429
Intangible assets, net		26,599		36,314
Other assets		20,963		12,955
	$	754,322	$	718,864
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accrued expenses	$	31,354	$	26,498
Deferred revenue		80,489		76,401
Due to HLTH		427		—
Total current liabilities		112,270		102,899
Other long-term liabilities		8,334		9,210
Stockholders’ equity		633,718		606,755
	$	754,322	$	718,864

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

	Years Ended December 31,
	2008			2007
Cash flows from operating activities:
Net income	$	26,702		$	65,884
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (income) from discontinued operations, net of tax		135			(3,442	)
Depreciation and amortization		28,291			27,233
Non-cash advertising		5,097			5,264
Non-cash stock-based compensation		13,472			19,391
Deferred and other income taxes		1,476			(20,953	)
Impairment of auction rate securities		27,406			—
Changes in operating assets and liabilities:
Accounts receivable		(8,059	)		3,570
Accrued expenses and other long-term liabilities		4,053			(7,185	)
Due to/from HLTH		1,601			(3,278	)
Deferred revenue		4,088			314
Other		(1,350	)		1,102
Net cash provided by continuing operations		102,912			87,900
Net cash used in discontinued operations		—			(390	)
Net cash provided by operating activities		102,912			87,510
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		44,000			212,923
Purchases of available-for-sale securities		(127,900	)		(284,333	)
Purchases of property and equipment		(24,250	)		(18,058	)
Cash paid in business combinations, net of cash acquired		(1,648	)		—
Purchase of investment in preferred stock		(6,471	)		—
Net cash used in investing activities		(116,269	)		(89,468	)
Cash flows from financing activities:
Proceeds from issuance of common stock		3,797			14,355
Tax benefit on stock-based awards		284			1,577
Net cash transfers with HLTH		—			155,119
Purchases of treasury stock		(12,818	)		—
Net cash (used in) provided by financing activities		(8,737	)		171,051
Net (decrease) increase in cash and cash equivalents		(22,094	)		169,093
Cash and cash equivalents at beginning of period		213,753			44,660
Cash and cash equivalents at end of period	$	191,659		$	213,753

EX-99.3

Exhibit 99.3

FINANCIAL GUIDANCE SUMMARY

2009 Preliminary Financial Guidance
(in millions, except per share amounts)

	Year Ending
	December 31, 2009
	Range
Revenue	$	420.0		$	450.0
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	107.0		$	122.0
Adjusted EBITDA per diluted common share	$	1.73		$	1.97
Interest, taxes, non-cash and other items (b)
Interest income		4.0			5.0
Depreciation and amortization		(33.0	)		(30.0	)
Non-cash advertising		(1.5	)		(1.5	)
Non-cash stock-based compensation		(26.0	)		(23.0	)
Income tax provision		(20.6	)		(29.5	)
Net income	$	29.9		$	43.0
Net income per common share:
Basic	$	0.51		$	0.73
Diluted	$	0.48		$	0.69
Weighted-average shares outstanding used in computing net income per common share:
Basic		59.0			59.0
Diluted		62.0			62.0

(a)	See Annex A — Explanation of Non-GAAP Financial Measures
(b)	Reconciliation of Adjusted EBITDA to net income

Additional information regarding forecast for first quarter of 2009:

     -     Revenue is forecasted to be approximately $90 to $92 in quarter ending March 31, 2009

     -     Adjusted EBITDA as a percentage of revenue is forecasted to be approximately 19% in quarter ending March 31, 2009

     -     Net Income as a percentage of revenue is forecasted to be approximately 2% to 3% in quarter ending March 31, 2009

Additional information regarding full year forecast:

     -     Income tax rate for 2009 is forecasted to be approximately 41% of pretax income. The income tax provision excludes any benefit relating to any reversal in 2009 of the valuation allowance against deferred tax assets.

     -     The distribution of the annual revenue is expected to be approximately 75% advertising and sponsorship, 21% licensing and 4% publishing and other. Quarterly revenue distributions may vary from this annual estimate.

EX-99.4

Exhibit 99.4

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, 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 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						Years Ended
	December 31,						December 31,
	2008			2007			2008			2007
Non-cash stock-based compensation included in:
Cost of operations	$	(893	)	$	(904	)	$	(3,843	)	$	(5,063	)
Sales and marketing		(7	)		(1,167	)		(3,631	)		(5,056	)
General and administrative		(1,797	)		(1,728	)		(5,998	)		(9,272	)

• 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 and will expire later this year. 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. Non-cash advertising expenses included in the Consolidated Statement of Operations in Sales and Marketing expense were $3,361 and $2,775 for the three months ended December 31, 2008 and 2007, respectively, and $5,097 and $5,264 for the year ended December 31, 2008 and 2007, respectively.

• 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

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	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 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 (Benefit) Provision. WebMD has a net operating loss (NOL) carryforward for which it maintained a full valuation allowance until the fourth quarter of 2007. During 2008 and 2007, 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 (benefit) provision from Adjusted EBITDA (i) because it believes that the income tax (benefit) 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 (benefit) 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 and a restructuring charge from Adjusted EBITDA.

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