WebMD Health Corp. - FORM 8-K - EX-99.2

Exhibit 99.2

WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data, unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Revenue	$	167,583	$	148,320	$	326,136	$	291,663
Cost of operations		65,788		60,407		128,301		118,284
Sales and marketing		35,614		32,570		69,370		65,046
General and administrative		23,983		23,002		47,739		44,455
Depreciation and amortization		7,672		7,592		15,159		15,837
Interest income		367		9		573		26
Interest expense		5,265		6,171		10,365		12,343
Gain on investments		—		139		—		139
Other expense		—		4,100		—		4,100

Income before income tax provision		29,628		14,626		55,775		31,763
Income tax provision		11,848		1,255		22,277		8,388

Net income	$	17,780	$	13,371	$	33,498	$	23,375


Net income per common share:
Basic	$	0.47	$	0.36	$	0.89	$	0.64

Diluted	$	0.39	$	0.32	$	0.75	$	0.57

Weighted-average shares outstanding used in computing income per common share:
Basic		38,041		36,705		37,654		36,549

Diluted		51,948		53,618		52,142		43,684

WEBMD HEALTH CORP.

CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands, unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Revenue
Advertising and sponsorship
Biopharma and medical device	$	100,620		$	85,977		$	189,305		$	161,822
OTC, CPG and other		31,127			30,249			64,881			60,197

		131,747			116,226			254,186			222,019
Health services		28,632			26,441			56,887			55,763
Information services		7,204			5,653			15,063			13,881

	$	167,583		$	148,320		$	326,136		$	291,663


Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)	$	50,070		$	40,549		$	97,126		$	79,467

Interest, taxes, non-cash and other items (b)
Interest income		367			9			573			26
Interest expense		(5,265	)		(6,171	)		(10,365	)		(12,343	)
Income tax provision		(11,848	)		(1,255	)		(22,277	)		(8,388	)
Depreciation and amortization		(7,672	)		(7,592	)		(15,159	)		(15,837	)
Non-cash stock-based compensation		(7,872	)		(8,208	)		(16,400	)		(15,589	)
Gain on investments		—			139			—			139
Other expense		—			(4,100	)		—			(4,100	)

Net income	$	17,780		$	13,371		$	33,498		$	23,375

(a)	See Annex A-Explanation of Non-GAAP Financial Measures.

(b)	Reconciliation of Adjusted EBITDA to net income.

WEBMD HEALTH CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)


	June 30, 2016		December 31, 2015
	(unaudited)
Assets
Cash and cash equivalents	$	69,545	$	641,165
Accounts receivable, net		158,489		174,313
Investments		948,661		—
Prepaid expenses and other current assets		16,570		18,998

Total current assets		1,193,265		834,476

Property and equipment, net		87,198		81,027
Goodwill		202,980		202,980
Intangible assets, net		9,334		10,894
Deferred tax assets, net		12,217		15,694
Other assets		10,606		10,852

Total Assets	$	1,515,600	$	1,155,923


Liabilities and Stockholders’ Equity
Accrued expenses	$	65,235	$	80,664
Deferred revenue		117,301		102,715
2.25% convertible notes due 2016, net		—		102,523

Total current liabilities		182,536		285,902

2.50% convertible notes due 2018, net		397,174		396,281
1.50% convertible notes due 2020, net		294,849		294,266
2.625% convertible notes due 2023, net		350,369		—
Other long-term liabilities		23,572		23,246

Stockholders’ equity		267,100		156,228

Total Liabilities and Stockholders’ Equity	$	1,515,600	$	1,155,923

WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)


	Six Months Ended June 30,
	2016			2015
Cash flows from operating activities:
Net income	$	33,498		$	23,375
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		15,159			15,837
Non-cash interest, net		1,750			2,256
Non-cash stock-based compensation		16,400			15,589
Deferred income taxes		3,309			(6,476	)
Gain on investments		—			(139	)
Changes in operating assets and liabilities:
Accounts receivable		15,824			(12,282	)
Prepaid expenses and other, net		785			(6,130	)
Accrued expenses and other long-term liabilities		(15,152	)		(14,465	)
Deferred revenue		14,586			25,080

Net cash provided by operating activities		86,159			42,645

Cash flows from investing activities:
Purchases of property and equipment		(19,858	)		(8,711	)
Purchase of investments		(948,078	)		—
Partial redemption of cost-method investment		526			—
Proceeds from sale of investments		—			139

Net cash used in investing activities		(967,410	)		(8,572	)

Cash flows from financing activities:
Proceeds from exercise of stock options		49,412			11,653
Cash used for withholding taxes due on stock-based awards		(3,810	)		(2,960	)
Net proceeds from issuance of convertible notes		350,254			—
Maturity of convertible notes		(102,682	)		—
Purchases of treasury stock		—			(5,351	)
Excess tax benefit on stock-based awards		16,457			13,191

Net cash provided by financing activities		309,631			16,533

Net (decrease) increase in cash and cash equivalents		(571,620	)		50,606
Cash and cash equivalents at beginning of period		641,165			706,776

Cash and cash equivalents at end of period	$	69,545		$	757,382

WEBMD HEALTH CORP.

NET INCOME PER COMMON SHARE

(In thousands, except per share data, unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Numerator:
Net income – Basic	$	17,780	$	13,371	$	33,498	$	23,375
Interest expense on 1.50% convertible notes, net of tax		878		864		1,757		1,728
Interest expense on 2.50% convertible notes, net of tax		1,827		1,797		3,653		—
Interest expense on 2.25% convertible notes, net of tax		—		1,103		457		—

Net income – Diluted	$	20,485	$	17,135	$	39,365	$	25,103


Denominator:
Weighted-average shares – Basic		38,041		36,705		37,654		36,549
Stock options and restricted stock		2,008		1,503		1,882		1,441
1.50% convertible notes		5,694		5,694		5,694		5,694
2.50% convertible notes		6,205		6,205		6,205		—
2.25% convertible notes		—		3,511		707		—

Adjusted weighted-average shares after assumed conversions – Diluted		51,948		53,618		52,142		43,684


Net income per common share:
Basic	$	0.47	$	0.36	$	0.89	$	0.64

Diluted	$	0.39	$	0.32	$	0.75	$	0.57

WebMD Health Corp. - FORM 8-K - EX-99.2 - August 8, 2016