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8-K - FORM 8-K - WebMD Health Corp.g21057e8vk.htm
EX-99.4 - EX-99.4 - WebMD Health Corp.g21057exv99w4.htm
EX-99.1 - EX-99.1 - WebMD Health Corp.g21057exv99w1.htm
EX-99.2 - EX-99.2 - WebMD Health Corp.g21057exv99w2.htm
EX-99.3 - EX-99.3 - WebMD Health Corp.g21057exv99w3.htm
Exhibit 99.5
HLTH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
            (a)             (a)  
Revenue
  $ 111,568     $ 96,777     $ 300,463     $ 263,391  
Cost of operations
    41,965       34,225       117,759       97,120  
Sales and marketing
    26,265       26,021       80,623       76,068  
General and administrative
    21,967       22,493       65,818       66,120  
Depreciation and amortization
    7,134       7,188       21,193       21,177  
Interest income
    1,840       9,386       6,060       29,384  
Interest expense
    5,541       6,636       17,858       19,746  
Gain on repurchases of convertible notes
                10,120        
Gain on sale of EBS Master LLC
                      538,024  
Impairment of auction rate securities
                      60,108  
Other expense, net
    123       997       944       5,807  
 
                       
Income from continuing operations before income tax provision
    10,413       8,603       12,448       484,653  
Income tax provision
    5,389       3,493       4,922       29,664  
Equity in earnings of EBS Master LLC
                      4,007  
 
                       
Consolidated income from continuing operations
    5,024       5,110       7,526       458,996  
Consolidated income from discontinued operations, net of tax
    27,462       92,647       14,695       92,641  
 
                       
Consolidated net income inclusive of noncontrolling interest
    32,486       97,757       22,221       551,637  
(Income) loss attributable to noncontrolling interest
    (2,184 )     (1,845 )     (3,181 )     929  
 
                       
Net income attributable to HLTH stockholders
  $ 30,302     $ 95,912     $ 19,040     $ 552,566  
 
                       
 
                               
Amounts attributable to HLTH stockholders:
                               
Income from continuing operations
  $ 2,872     $ 3,403     $ 3,381     $ 460,114  
Income from discontinued operations
    27,430       92,509       15,659       92,452  
 
                       
Net income attributable to HLTH stockholders
  $ 30,302     $ 95,912     $ 19,040     $ 552,566  
 
                       
 
                               
Basic income per common share:
                               
Income from continuing operations
  $ 0.03     $ 0.02     $ 0.03     $ 2.52  
Income from discontinued operations
    0.26       0.50       0.15       0.50  
 
                       
Net income attributable to HLTH stockholders
  $ 0.29     $ 0.52     $ 0.18     $ 3.02  
 
                       
 
                               
Diluted income per common share:
                               
Income from continuing operations
  $ 0.02     $ 0.02     $ 0.03     $ 2.06  
Income from discontinued operations
    0.25       0.49       0.15       0.41  
 
                       
Net income attributable to HLTH stockholders
  $ 0.27     $ 0.51     $ 0.18     $ 2.47  
 
                       
 
                               
Weighted-average shares outstanding used in computing income per common share:
                               
Basic
    103,727       183,716       102,695       182,838  
 
                       
Diluted
    109,380       187,527       106,136       228,653  
 
                       
 
(a)   The consolidated financial statements for the three and nine months ended September 30, 2008 have been adjusted to reflect (i) the required adoption, effective January 1, 2009, of new authoritative guidance and (ii) the reclassification of WebMD’s Little Blue Book print directory business to discontinued operations.

 


 

HLTH CORPORATION
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
            (c)             (c)  
Revenue
                               
WebMD:
                               
Public portal advertising and sponsorship
  $ 89,414     $ 74,658     $ 232,695     $ 197,523  
Private portal services
    22,154       22,139       67,768       65,928  
Inter-segment eliminations
          (20 )           (60 )
 
                       
 
  $ 111,568     $ 96,777     $ 300,463     $ 263,391  
 
                       
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)
                               
WebMD
  $ 33,123     $ 25,467     $ 75,029     $ 60,191  
Corporate
    (2,559 )     (4,679 )     (9,183 )     (15,311 )
 
                       
 
    30,564       20,788       65,846       44,880  
 
                               
Adjusted EBITDA per basic common share
  $ 0.29     $ 0.11     $ 0.64     $ 0.25  
 
                       
Adjusted EBITDA per diluted common share
  $ 0.28     $ 0.11     $ 0.62     $ 0.20  
 
                       
 
                               
Interest, taxes, non-cash and other items (b)
                               
Interest income
    1,840       9,386       6,060       29,384  
Interest expense
    (5,541 )     (6,636 )     (17,858 )     (19,746 )
Income tax provision
    (5,389 )     (3,493 )     (4,922 )     (29,664 )
Depreciation and amortization
    (7,134 )     (7,188 )     (21,193 )     (21,177 )
Non-cash stock-based compensation
    (9,217 )     (6,468 )     (27,783 )     (18,856 )
Non-cash advertising
          (178 )     (1,753 )     (1,736 )
Gain on repurchases of convertible notes
                10,120        
Equity in earnings of EBS Master LLC
                      4,007  
Gain on sale of EBS Master LLC
                      538,024  
Impairment of auction rate securities
                      (60,108 )
Other expense, net
    (99 )     (1,101 )     (991 )     (6,012 )
 
                       
Consolidated income from continuing operations
    5,024       5,110       7,526       458,996  
Consolidated income from discontinued operations, net of tax
    27,462       92,647       14,695       92,641  
 
                       
Consolidated net income inclusive of noncontrolling interest
    32,486       97,757       22,221       551,637  
(Income) loss attributable to noncontrolling interest
    (2,184 )     (1,845 )     (3,181 )     929  
 
                       
Net income attributable to HLTH stockholders
  $ 30,302     $ 95,912     $ 19,040     $ 552,566  
 
                       
 
                               
Amounts attributable to HLTH stockholders:
                               
Income from continuing operations
  $ 2,872     $ 3,403     $ 3,381     $ 460,114  
Income from discontinued operations
    27,430       92,509       15,659       92,452  
 
                       
Net income attributable to HLTH stockholders
  $ 30,302     $ 95,912     $ 19,040     $ 552,566  
 
                       
 
                               
Basic income per common share:
                               
Income from continuing operations
  $ 0.03     $ 0.02     $ 0.03     $ 2.52  
Income from discontinued operations
    0.26       0.50       0.15       0.50  
 
                       
Net income attributable to HLTH stockholders
  $ 0.29     $ 0.52     $ 0.18     $ 3.02  
 
                       
 
                               
Diluted income per common share:
                               
Income from continuing operations
  $ 0.02     $ 0.02     $ 0.03     $ 2.06  
Income from discontinued operations
    0.25       0.49       0.15       0.41  
 
                       
Net income attributable to HLTH stockholders
  $ 0.27     $ 0.51     $ 0.18     $ 2.47  
 
                       
 
                               
Weighted-average shares outstanding used in computing income per common share:
                               
Basic
    103,727       183,716       102,695       182,838  
 
                       
Diluted
    109,380       187,527       106,136       228,653  
 
                       
 
(a)   See Annex A-Explanation of Non-GAAP Financial Measures.
 
(b)   Reconciliation of Adjusted EBITDA to consolidated income from continuing operations.
 
(c)   The consolidated financial statements for the three and nine months ended September 30, 2008 have been adjusted to reflect (i) the required adoption, effective January 1, 2009, of new authoritative guidance and (ii) the reclassification of WebMD’s Little Blue Book print directory business to discontinued operations.

 


 

HLTH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
                 
    September 30,     December 31,  
    2009     2008  
Assets
               
Cash and cash equivalents
  $ 589,553     $ 629,848  
Accounts receivable, net
    87,072       93,082  
Prepaid expenses and other current assets
    48,102       44,740  
Assets of discontinued operations
    121,413       131,350  
 
           
Total current assets
    846,140       899,020  
 
               
Investments
    275,217       288,049  
Property and equipment, net
    54,530       56,633  
Goodwill
    202,104       202,104  
Intangible assets, net
    27,385       32,328  
Other assets
    19,240       23,600  
 
           
Total Assets
  $ 1,424,616     $ 1,501,734  
 
           
 
               
Liabilities and Equity
               
Accrued expenses
  $ 46,920     $ 54,595  
Deferred revenue
    83,861       79,613  
Liabilities of discontinued operations
    68,383       100,771  
 
           
Total current liabilities
    199,164       234,979  
 
               
1.75% convertible notes
    264,583       350,000  
31/8% convertible notes, net of discount of $24,543 at September 30, 2009 and $35,982 at December 31, 2008
    225,757       264,018  
Other long-term liabilities
    37,857       21,816  
 
HLTH stockholders’ equity
    538,676       496,698  
Noncontrolling interest in WHC
    158,579       134,223  
 
           
Equity
    697,255       630,921  
 
               
 
           
Total Liabilities and Equity
  $ 1,424,616     $ 1,501,734  
 
           

 


 

HLTH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
                 
    Nine Months Ended  
    September 30,  
    2009     2008  
            (a)  
Cash flows from operating activities:
               
Consolidated net income inclusive of noncontrolling interest
  $ 22,221     $ 551,637  
Adjustments to reconcile consolidated net income inclusive of noncontrolling interest to net cash provided by operating activities:
               
Consolidated income from discontinued operations, net of tax
    (14,695 )     (92,641 )
Depreciation and amortization
    21,193       21,177  
Non-cash interest expense
    7,737       8,123  
Non-cash advertising
    1,753       1,736  
Non-cash stock-based compensation
    27,783       18,856  
Deferred income taxes
    7,563       9,448  
Gain on repurchases of convertible notes
    (10,120 )      
Gain on sale of EBS Master LLC
          (538,024 )
Impairment of auction rate securities
          60,108  
Equity in earnings of EBS Master LLC
          (4,007 )
Changes in operating assets and liabilities:
               
Accounts receivable
    6,010       6,275  
Prepaid expenses and other, net
    (8,394 )     (10,450 )
Accrued expenses and other long-term liabilities
    (7,740 )     (3,518 )
Deferred revenue
    4,248       5,367  
 
           
Net cash provided by continuing operations
    57,559       34,087  
Net cash provided by discontinued operations
    9,273       44,738  
 
           
Net cash provided by operating activities
    66,832       78,825  
 
               
Cash flows from investing activities:
               
Proceeds from maturities and sales of available-for-sale securities
    2,200       117,539  
Purchases of available-for-sale securities
          (177,150 )
Purchases of property and equipment
    (14,248 )     (15,075 )
Proceeds related to the sales of EBS Master LLC
          574,617  
Proceeds from the sale of discontinued operations
    2,840       247,089  
Proceeds from advances to EBS Master LLC
          1,224  
Other
          148  
 
           
Net cash (used in) provided by continuing operations
    (9,208 )     748,392  
Net cash used in discontinued operations
    (3,315 )     (4,305 )
 
           
Net cash (used in) provided by investing activities
    (12,523 )     744,087  
 
               
Cash flows from financing activities:
               
Proceeds from issuance of HLTH and WHC common stock
    28,770       20,725  
Repurchases of convertible notes
    (123,857 )      
Other
    63       343  
 
           
Net cash (used in) provided by continuing operations
    (95,024 )     21,068  
Net cash used in discontinued operations
          (76 )
 
           
Net cash (used in) provided by financing activities
    (95,024 )     20,992  
Effect of exchange rates on cash
    420       (604 )
 
           
Net (decrease) increase in cash and cash equivalents
    (40,295 )     843,300  
Cash and cash equivalents at beginning of period
    629,848       536,879  
 
           
Cash and cash equivalents at end of period
  $ 589,553     $ 1,380,179  
 
           
 
(a)   The consolidated financial statements for the nine months ended September 30, 2008 have been adjusted to reflect (i) the required adoption, effective January 1, 2009, of new authoritative guidance and (ii) the reclassification of WebMD’s Little Blue Book print directory business to discontinued operations.