8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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

May 5, 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 May 5, 2009, we issued a press release announcing our results for the quarter ended March 31, 2009. 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 8.01. Other Events

     The Board of Directors of WebMD has changed the scheduled date for WebMD’s 2009 Annual Meeting of Stockholders from Thursday, September 24, 2009 to Friday, September 25, 2009. The meeting will be held at the W New York Union Square Hotel, 201 Park Avenue South, New York, NY 10003. The 2009 Annual Meeting of Stockholders of HLTH Corporation, which owns approximately 83% of WebMD’s outstanding common stock, is scheduled to be held at the same location on the same date.

     The Board of Directors of WebMD has set Friday, August 7, 2009 as the record date for determining the stockholders entitled to vote at WebMD’s 2009 Annual Meeting.

Item 9.01. Financial Statements and Exhibits

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

Exhibit
Number	Description
99.1	Press Release, dated May 5, 2009, regarding the Registrant’s results for the quarter ended March 31, 2009
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: May 5, 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 May 5, 2009, regarding the Registrant’s results for the quarter ended March 31, 2009
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 First Quarter Financial Results

Total Revenue Increased 12%; Online Advertising Increased 16%

WebMD Achieves Record Traffic with 61.6 Million Unique Monthly Users and 1.5 Billion
Quarterly Page Views

New York, NY (May 5, 2009) - WebMD Health Corp. (Nasdaq: WBMD) today announced financial results for the three months ended March 31, 2009.

“We are pleased that even in this economic environment WebMD continues to deliver strong results” said Wayne Gattinella, President and CEO. “Our network traffic from both consumers and physicians continues to expand organically. Advertising demand on WebMD remains strong and our advertising revenue is growing significantly faster than the market overall. Even as many large biotechnology, pharmaceutical and consumer products companies are reducing their overall ad budgets this year, WebMD is benefiting as these companies consolidate their spending with fewer, high quality media properties.”

Financial Summary
Revenue for the first quarter was $90.3 million, compared to $80.7 million in the prior year period, an increase of 12%. Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) for the first quarter was $18.7 million or $0.32 per share, compared to $16.3 million or $0.28 per share in the prior year period, an increase of 14%.

Income from continuing operations for the first quarter was $3.2 million or $0.06 per share, compared to a loss of $(23.0) million or $(0.40) per share in the prior year period. Loss from discontinued operations was $(423) thousand in the first quarter, compared to $(372) thousand in the prior year. Net income for the first quarter was $2.8 million or $0.05 per share, compared to a net loss of $(23.3) million or $(0.40) per share in the prior year period. Loss from continuing operations and net loss for the prior year period include an impairment charge of $27.4 million related to auction rate securities.

WebMD has decided to divest its Little Blue Book print directory business which is not strategic to its business. Accordingly, the Little Blue Book print directory business is now reflected as discontinued operations in the Company’s financial statements for current and prior periods. WebMD had anticipated in its previously issued financial guidance that the Little Blue Book print directory business would have contributed $1.5 million in revenue and reduced Adjusted EBITDA by $(300) thousand in the first quarter of 2009.

WebMD had approximately $332 million in cash and investments at March 31, 2009.

Operating Highlights
As a result of WebMD’s decision to divest the Little Blue Book print directory business, WebMD is no longer presenting a stand-alone publishing segment in its financial statements. WebMD the Magazine and other print products are reflected in Print revenue. Content syndication and other revenues are now included in Advertising and Sponsorship revenue.

Advertising and sponsorship revenue was $65.4 million for the first quarter, compared to $56.5 million in the prior year period, an increase of 16%. Traffic to the WebMD Health Network continued to grow strongly, reaching a record average of 61.6 million unique users per month and total traffic of 1.5 billion page views during the first quarter, increases of 19% and 24%, respectively, from a year ago. In the first quarter, 1.5 million continuing medical education (CME) programs were completed on the WebMD Professional Network, an increase of 29% from the prior year period.

Private portal licensing revenue was $23.0 million for the first quarter compared to $21.9 million in the prior year period, an increase of 5%. The base of large employers and health plans utilizing WebMD’s private Health and Benefits portals during the first quarter was 134 as compared to 122 a year ago. During the quarter, WebMD launched integrated platform and coaching services for Mississippi State and School Employees Health Insurance Management Board and the Carolinas Healthcare System.

Print revenue was $1.9 million during the first quarter, a decline of $384 thousand from a year ago. As noted above, WebMD’s Little Blue Book print directory business is now reflected as discontinued operations in the Company’s financial statements for current and prior periods.

Financial Guidance
WebMD reaffirmed its financial guidance for 2009 today and adjusted it to reflect the reclassification to discontinued operations of its Little Blue Book print directory business. WebMD had anticipated that the Little Blue Book print directory business would have contributed $10 million in revenue and $2 million in Adjusted EBITDA for 2009 in its previously issued financial guidance.

WebMD expects: 2009 revenue to be $410 million to $440 million, an increase of 10% to 18% over 2008; Adjusted EBITDA for 2009 to be $105 million to $120 million, an increase of 12% to 28% over 2008; and income from continuing operations for 2009 to be $28 million to $41 million, or $0.46 to $0.66 per share.

For the quarter ending June 30, 2009, WebMD expects revenue to be in the range of $97 million to $99 million with Adjusted EBITDA representing approximately 22% of revenue. These amounts represent revenue growth of approximately 17% in advertising and sponsorship and 5% in licensing for the second quarter of 2009. Income from continuing operations is estimated to be in the range of 5% to 6% of revenue for the second 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 first 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.

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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 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.

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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^®, 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
	March 31,
	2009			2008
Revenue	$	90,264		$	80,650
Costs and expenses:
Cost of operations		36,565			30,927
Sales and marketing		27,561			25,149
General and administrative		14,726			13,480
Depreciation and amortization		6,937			6,672
Interest income		975			3,453
Impairment of auction rate securities		—			27,406
Income (loss) from continuing operations before income tax provision		5,450			(19,531	)
Income tax provision		2,211			3,432
Income (loss) from continuing operations		3,239			(22,963	)
Loss from discontinued operations, net of tax		(423	)		(372	)
Net income (loss)	$	2,816		$	(23,335	)
Basic and diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.06		$	(0.40	)
Loss from discontinued operations		(0.01	)		(0.00	)
Net income (loss)	$	0.05		$	(0.40	)
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share:
Basic		57,575			57,636
Diluted		58,109			57,636

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

	Three Months Ended
	March 31,
	2009			2008
Revenue
Advertising and sponsorship	$	65,428		$	56,482
Licensing		22,975			21,923
Print		1,861			2,245
	$	90,264		$	80,650
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	18,688		$	16,332
Adjusted EBITDA per basic and diluted common share	$	0.32		$	0.28
Interest, taxes, non-cash and other items (b)
Interest income		975			3,453
Depreciation and amortization		(6,937	)		(6,672	)
Non-cash advertising		(1,753	)		(1,558	)
Non-cash stock-based compensation		(5,523	)		(3,680	)
Impairment of auction rate securities		—			(27,406	)
Income tax provision		(2,211	)		(3,432	)
Income (loss) from continuing operations		3,239			(22,963	)
Loss from discontinued operations, net of tax		(423	)		(372	)
Net income (loss)	$	2,816		$	(23,335	)
Basic and diluted income (loss) per common share:
Income (loss) from continuing operations	$	0.06		$	(0.40	)
Loss from discontinued operations		(0.01	)		(0.00	)
Net income (loss)	$	0.05		$	(0.40	)
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share:
Basic		57,575			57,636
Diluted		58,109			57,636

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

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

	March 31, 2009		December 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	204,803	$	191,659
Accounts receivable, net		90,835		93,082
Current portion of prepaid advertising		—		1,753
Other current assets		11,319		11,358
Assets of discontinued operations		11,839		12,575
Total current assets		318,796		310,427
Investments		127,033		133,563
Property and equipment, net		54,132		54,165
Goodwill		208,967		208,967
Intangible assets, net		24,520		26,237
Other assets		21,269		22,573
	$	754,717	$	755,932
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accrued expenses	$	20,355	$	31,241
Deferred revenue		84,574		79,613
Due to HLTH		199		427
Liabilities of discontinued operations		3,256		2,599
Total current liabilities		108,384		113,880
Other long-term liabilities		8,081		8,334
Stockholders’ equity		638,252		633,718
	$	754,717	$	755,932

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

	Three Months Ended March 31,
	2009			2008
Cash flows from operating activities:
Net income (loss)	$	2,816		$	(23,335	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss from discontinued operations, net of tax		423			372
Depreciation and amortization		6,937			6,672
Non-cash advertising		1,753			1,558
Non-cash stock-based compensation		5,523			3,680
Deferred and other income taxes		2,097			2,372
Impairment of auction rate securities		—			27,406
Changes in operating assets and liabilities:
Accounts receivable		2,247			10,449
Other assets		(689	)		(164	)
Accrued expenses and other long-term liabilities		(11,140	)		(8,791	)
Due to HLTH		(228	)		1,329
Deferred revenue		4,961			11,231
Net cash provided by continuing operations		14,700			32,779
Net cash provided by discontinued operations		1,062			1,912
Net cash provided by operating activities		15,762			34,691
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		600			40,350
Purchases of available-for-sale securities		—			(127,900	)
Purchases of property and equipment		(5,290	)		(2,626	)
Cash received from sale of business, net of fees		250			985
Net cash used in continuing operations		(4,440	)		(89,191	)
Net cash used by discontinued operations		(5	)		(11	)
Net cash used in investing activities		(4,445	)		(89,202	)
Cash flows from financing activities:
Proceeds from issuance of common stock		1,827			589
Net cash provided by financing activities		1,827			589
Net increase (decrease) in cash and cash equivalents		13,144			(53,922	)
Cash and cash equivalents at beginning of period		191,659			213,753
Cash and cash equivalents at end of period	$	204,803		$	159,831

EX-99.3

Exhibit 99.3

FINANCIAL GUIDANCE SUMMARY

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

	Year Ended			Year Ending
	December 31, 2008			December 31, 2009
	Unaudited (c)			Range (c)
Revenue	$	373.5		$	410.0		$	440.0
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	94.1		$	105.0		$	120.0
Adjusted EBITDA per diluted common share	$	1.60		$	1.69		$	1.94
Interest, taxes, non-cash and other items (b)
Interest income		10.4			4.0			4.0
Depreciation and amortization		(27.9	)		(33.0	)		(30.0	)
Non-cash advertising		(5.1	)		(1.8	)		(1.8	)
Non-cash stock-based compensation		(13.3	)		(26.0	)		(23.0	)
Impairment of auction rate securities		(27.4	)		—			—
Restructuring		(2.9	)		—			—
Income tax provision		(2.2	)		(19.8	)		(28.4	)
Income from continuing operations	$	25.7		$	28.4		$	40.8
Income from continuing operations per common share:
Basic	$	0.45		$	0.48		$	0.69
Diluted	$	0.44		$	0.46		$	0.66
Weighted-average shares outstanding used in computing income from continuing operations per common share:
Basic		57.7			59.0			59.0
Diluted		58.9			62.0			62.0

(a)	See Annex A — Explanation of Non-GAAP Financial Measures
(b)	Reconciliation of Adjusted EBITDA to income from continuing operations
(c)	Results for the year ended December 31, 2008 and the guidance for the year ending December 31, 2009 have been adjusted to exclude the discontinued operations of the Little Blue Book print directory business.
Additional information regarding forecast for second quarter of 2009:

- Revenue is forecasted to be approximately $97 to $99 in quarter ending June 30, 2009

- Adjusted EBITDA as a percentage of revenue is forecasted to be approximately 22% in quarter ending June 30, 2009

- Income from continuing operations as a percentage of revenue is forecasted to be approximately 5% to 6% in quarter ending June 30, 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 76.5% advertising and sponsorship, 21.5% licensing and 2% print. 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 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 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.
•	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 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 and (iii) 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 $1,753 and $1,558 for the three months ended March 31, 2009 and 2008.
•	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 (Benefit) Provision. WebMD maintains a valuation allowance on a portion of its net operating loss carryforwards, the amount of which may change from quarter to quarter based on factors that are not directly related to WebMD’s results for the quarter. The valuation allowance is either reversed through the statement of operations or additional paid-in capital. 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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