WebMD Announces Fourth Quarter and Year End Financial Results

        WebMD Announces Fourth Quarter and Year End Financial Results

PR Newswire

NEW YORK, Feb. 20, 2014

NEW YORK, Feb. 20, 2014 /PRNewswire/ -- WebMD Health Corp. (NASDAQ: WBMD), the
leading source of health information, today announced fourth quarter and full
year financial results for 2013 that are consistent with the preliminary
results announced on February 10, 2014.

"WebMD's fourth quarter and full year 2013 results reflected an improved macro
environment, our continued progress in becoming a more customer-centricand
efficient company, and a strengthening of our core advertising and sponsorship
business," said David Schlanger, Chief Executive Officer, WebMD. "We expect
growth to continue in 2014 as we introduce new products and services. Looking
ahead, we are investing in longer-term growth opportunities that leverage
WebMD's brand, audience, and industry-leading platform, which should enable us
to expand into new markets and realize new revenue streams."

Financial Highlights
For the three months ended December 31, 2013:

  oRevenue was $146.3 million compared to $132.7 million in the prior year
    period, an increase of 10%. Public portal advertising and sponsorship
    revenue was $124.4 million compared to $112.3 million in the prior year
    period. Private portal services revenue was $21.9 million compared to
    $20.5 million in the prior year period.
  oEarnings before interest, taxes, non-cash and other items ("Adjusted
    EBITDA") was $40.6 million compared to $30.0 million in the prior year
    period, an increase of 35%.
  oNet income was $10.8 million or $0.25 per diluted share compared to net
    loss of $(6.1) million or $(0.12) per diluted share in the prior year
    period. In the current period, net income would have been $11.8 million,
    or $0.27 per diluted share, without the effect of an after-tax loss on
    convertible notes of $1.0 million. In the prior period, net loss would
    have been net income of $4.1 million or $0.08 per diluted share, without
    the effect of an after-tax restructuring expense of $5.5 million and
    non-cash income tax valuation allowance of $4.7 million.

For the twelve months ended December 31, 2013:

  oRevenue was $515.3 million compared to $469.9 million in the prior year
    period, an increase of 10%. Public portal advertising and sponsorship
    revenue was $433.2 million compared to $391.3 million in the prior year
    period. Private portal services revenue was $82.1 million compared to
    $78.5 million in the prior year period.
  oAdjusted EBITDA was $122.9 million compared to $73.1 million in the prior
    year period, an increase of 68%.
  oNet income was $15.1 million or $0.31 per diluted share compared to net
    loss of $(20.3) million or $(0.40) per diluted share in the prior year
    period. In the current period, net income would have been $18.9 million,
    or $0.39 per diluted share, without the effect of an after-tax loss on
    convertible notes of $3.0 million and after-tax severance expenses of $0.8
    million. In the prior period, net loss would have been $(10.6) million or
    $(0.21) per diluted share, without the effect of an after-tax gain on
    investments of $5.2 million, after-tax restructuring expense of $5.5
    million, non-cash income tax valuation allowance of $4.7 million,
    after-tax stock compensation expense related to the voluntary surrender of
    options of $5.8 million, after-tax severance expenses of $1.6 million and
    after-tax income from discontinued operations of $2.7 million.

Traffic Highlights
Traffic to the WebMD Health Network during the fourth quarter reached a record
average of 156 million unique users per month generating 3.17 billion page
views for the quarter, increases of 33% and 23%, respectively, from the prior
year period.

Balance Sheet Highlights
During the fourth quarter, WebMD received net proceeds of $291.8 million in
cash upon issuance of $300 million aggregate principal amount of 1.50%
Convertible Notes due 2020. During the fourth quarter, WebMD utilized: $211.3
million in cash to repurchase approximately 6.5 million shares of its common
stock; and $48.6 million in cash to repurchase $47.8 million principal amount
of its 2.25% Convertible Notes due 2016.

As of December 31, 2013, WebMD had: approximately $825 million in cash and
cash equivalents; $952.2 million in aggregate principal amount of convertible
notes outstanding; and approximately 40.3 million shares of its common stock
outstanding (including approximately 1.2 million unvested shares of restricted
stock).

As of today, WebMD has approximately $70 million currently available for
repurchases in its authorized share buyback program.

Financial Guidance
WebMD's financial guidance provided today is consistent with the preliminary
outlook for 2014 provided in our February 10, 2014 press release.

For the first quarter of 2014:

  oRevenue is expected to be approximately $130 million to $133 million, an
    increase of approximately 15% to 18% from the prior year period.
  oAdjusted EBITDA is expected to be approximately $28.5 million to $30.5
    million, an increase of approximately 34% to 43% from the prior year
    period.
  oNet income as a percentage of revenue is expected to be approximately 3%
    to 4%.

For the full year 2014:

  oRevenue is expected to be approximately $545 million to $575 million, an
    increase of approximately 6% to 12% from the prior year. Approximately
    $450 million to $475 million of revenue is expected to be from public
    portals advertising and sponsorship and $95 million to $100 million of
    revenue is expected to be from private portal services.
  oAdjusted EBITDA is expected to be approximately $140 million to $155
    million, an increase of approximately 14% to 26% from the prior year.
  oNet income is expected to be approximately $27 million to $39 million.

A schedule summarizing the Company's financial guidance is attached to this
press release.

Analyst and Investor Conference Call
WebMD will hold a conference call with investors and analysts at 4:45 p.m.
(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,
mobile platforms and health-focused publications.

The WebMD Health Network includes WebMD Health, Medscape, MedicineNet,
eMedicineHealth, RxList, theheart.org, Medscape Education and other owned
WebMD sites.

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

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: guidance on our
future financial results and other projections or measures of our future
performance; market opportunities and our ability to capitalize on them; and
the benefits expected from new or expected contracts with customers, new or
updated products or services and from other potential sources of additional
revenue. 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 our
products and services; our relationships with customers and other factors
affecting their use of our products and services, including regulatory matters
affecting their products; our ability to successfully implement changes to,
among other things, our product and service offerings, capital allocation
plans and cost structure; our ability to attract and retain qualified
personnel; 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 and this press release is intended
to be read in conjunction with information contained in those 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.

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

WebMD®, Medscape®, CME Circle®, Medpulse®, eMedicine®, MedicineNet®,
theheart.org® and RxList® are among the trademarks of WebMD Health Corp. or
its subsidiaries.



WEBMD HEALTH CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data, unaudited)
                             Three Months Ended        Years Ended
                             December 31,              December 31,
                             2013         2012         2013       2012
Revenue                      $         $        $       $   
                             146,277      132,738      515,293    469,866
Cost of operations           57,763       55,352       209,740    216,361
Sales and marketing          33,081       32,598       127,997    127,659
General and administrative   22,715       23,767       93,220     97,618
Depreciation and             6,566        8,248        26,606     28,399
amortization
Interest income              22           22           76         86
Interest expense             5,329        5,834        22,826     23,334
Loss on convertible notes    1,575        -            4,871      -
Gain on investments          -            -            -          8,074
Restructuring                -            7,579        -          7,579
Other expense                -            -            1,353      2,297
Income (loss) from
continuing operations
before income
     tax provision           19,270       (618)        28,756     (25,221)
     (benefit)
     Income tax provision    8,458        5,470        13,640     (2,134)
     (benefit)
Income (loss) from           10,812       (6,088)      15,116     (23,087)
continuing operations
     Income from
     discontinued            -            -            -          2,743
     operations, net of tax
Net income (loss)            $        $       $      $   
                             10,812       (6,088)      15,116     (20,344)
Basic income (loss) per
common share:
     Income (loss) from      $       $       $      $     
     continuing operations    0.27        (0.12)       0.32   (0.45)
     Income from
     discontinued            -            -            -          0.05
     operations
Net income (loss)            $       $       $      $     
                              0.27        (0.12)       0.32   (0.40)
Diluted income (loss) per
common share (a):
     Income (loss) from      $       $       $      $     
     continuing operations    0.25        (0.12)       0.31   (0.45)
     Income from
     discontinued            -            -            -          0.05
     operations
Net income (loss)            $       $       $      $     
                              0.25        (0.12)       0.31   (0.40)
Weighted-average shares
outstanding used in
     computing income
     (loss) per common
     share:
     Basic                   40,457       49,041       46,830     50,862
     Diluted                 44,872       49,041       48,398     50,862
(a)  See schedule of Net Income (Loss) Per Common Share below.





WEBMD HEALTH CORP.

CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands, unaudited)
                                       Three Months Ended  Years Ended
                                       December 31,        December 31,
                                       2013      2012      2013      2012
Revenue
    Public portal advertising and      $       $       $       $  
    sponsorship                        124,353  112,257  433,182  391,339
    Private portal services            21,924    20,481    82,111    78,527
                                       $       $       $       $  
                                       146,277  132,738  515,293  469,866
Earnings before interest, taxes,
non-cash
    and other items ("Adjusted        $      $      $       $   
    EBITDA") (a)                       40,636   30,049   122,886  73,149
Interest, taxes, non-cash and other
items (b)
    Interest income                    22        22        76        86
    Interest expense                   (5,329)   (5,834)   (22,826)  (23,334)
    Income tax (provision) benefit     (8,458)   (5,470)   (13,640)  2,134
    Depreciation and amortization     (6,566)   (8,248)   (26,606)  (28,399)
    Non-cash stock-based compensation  (7,918)   (9,028)   (38,550)  (44,921)
    Loss on convertible notes          (1,575)   -         (4,871)   -
    Gain on investments                -         -         -         8,074
    Restructuring                      -         (7,579)   -         (7,579)
    Other expense                      -         -         (1,353)   (2,297)
Income (loss) from continuing          10,812    (6,088)   15,116    (23,087)
operations
    Income from discontinued          -         -         -         2,743
    operations, net of tax
Net income (loss)                    $      $      $      $  
                                       10,812   (6,088)  15,116   (20,344)
(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)
                                  December 31,
                                  2013                 2012
Assets
Cash and cash equivalents         $            $           
                                  824,880              991,835
Accounts receivable, net          124,232              106,622
Prepaid expenses and other        13,243               13,882
current assets
Deferred tax assets               13,620               10,328
 Total current assets      975,975              1,122,667
Property and equipment, net      64,884               66,604
Goodwill                          202,980              202,104
Intangible assets, net            13,834               16,105
Deferred tax assets               38,802               56,039
Other assets                      29,153               27,106
Total Assets                      $              $         
                                  1,325,628           1,490,625
Liabilities and Stockholders'
Equity
Accrued expenses                  $           $           
                                  73,739                64,256
Deferred revenue                  85,148               92,176
Liabilities of discontinued       1,506                1,506
operations
 Total current liabilities   160,393              157,938
2.25% convertible notes due 2016  252,232              400,000
2.50% convertible notes due 2018  400,000              400,000
1.50% convertible notes due 2020  300,000              -
Other long-term liabilities       22,103               22,698
Stockholders' equity              190,900              509,989
Total Liabilities and             $              $         
Stockholders' Equity              1,325,628           1,490,625





WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
                                                  Years Ended
                                                  December 31,
                                                  2013         2012
Cash flows from operating activities:
 Net income (loss)                                $       $   (20,344)
                                                  15,116
 Adjustments to reconcile net income (loss) to
 net cash provided by
  operating activities:
    Income from discontinued operations, net of   -            (2,743)
    tax
    Depreciation and amortization                 26,606       28,399
    Non-cash interest, net                        4,192        4,326
    Non-cash stock-based compensation             38,550       44,921
    Deferred income taxes                         13,070       (2,337)
    Loss on convertible notes                     4,871        -
    Gain on investments                           -            (8,074)
    Changes in operating assets and liabilities:
        Accounts receivable                       (17,610)     14,713
        Prepaid expenses and other, net           266          (1,589)
        Accrued expenses and other long-term      8,061        9,429
        liabilities
        Deferred revenue                          (7,028)      4,121
               Net cash provided by continuing    86,094       70,822
               operations
               Net cash provided by discontinued  -            4,324
               operations
               Net cash provided by operating     86,094       75,146
               activities
Cash flows from investing activities:
 Proceeds received from ARS option                -            9,269
 Purchases of property and equipment              (22,341)     (35,171)
 Proceeds from sale of property and equipment     1,381        -
               Net cash used in investing         (20,960)     (25,902)
               activities
Cash flows from financing activities:
 Proceeds from exercise of stock options          29,724       827
 Cash used for withholding taxes due on           (12,526)     (2,740)
 stock-based awards
 Net proceeds from issuance of convertible notes  291,823      -
 Repurchase of convertible notes                  (150,354)    -
 Repurchase of shares through tender offers       (170,516)    (150,759)
 Purchases of treasury stock                     (220,298)    (26,331)
 Excess tax benefit on stock-based awards         58           377
               Net cash used in financing         (232,089)    (178,626)
               activities
Net decrease in cash and cash equivalents         (166,955)    (129,382)
Cash and cash equivalents at beginning of period  991,835      1,121,217
Cash and cash equivalents at end of period        $        $   991,835
                                                  824,880





WEBMD HEALTH CORP.
NET INCOME (LOSS) PER COMMON SHARE
(In thousands, except per share data, unaudited)
                                  Three Months Ended     Years Ended
                                  December 31,           December 31,
                                  2013       2012        2013       2012
 Numerator:
 Income (loss) from continuing    $        $       $       $  
 operations — Basic               10,812      (6,088)   15,116    (23,087)
      Interest expense on 1.50%
      convertible notes, net of   326        -           -          -
      tax
 Income (loss) from continuing    $        $       $       $  
 operations — Diluted             11,138      (6,088)   15,116    (23,087)
 Income from discontinued         $      $       $      $    
 operations, net of tax — Basic     -          -     -    2,743
 and Diluted
 Denominator:
 Weighted-average shares — Basic  40,457     49,041      46,830     50,862
      Stock options and           2,192      -           1,568      -
      restricted stock
      1.50% convertible notes     2,223      -           -          -
 Adjusted weighted-average
 shares after assumed             44,872     49,041      48,398     50,862
 conversions — Diluted
 Basic income (loss) per common
 share:
      Income (loss) from          $      $       $      $    
      continuing operations       0.27         (0.12)   0.32    (0.45)
      Income from discontinued    -          -           -          0.05
      operations
 Net income (loss)                $      $       $      $    
                                  0.27         (0.12)   0.32    (0.40)
 Diluted income (loss) per
 common share:
      Income (loss) from          $      $       $      $    
      continuing operations       0.25         (0.12)   0.31    (0.45)
      Income from discontinued    -          -           -          0.05
      operations
 Net income (loss)                $      $       $      $    
                                  0.25         (0.12)   0.31    (0.40)





WebMD Health Corp.

Financial Guidance for the Year Ending December 31, 2014

(in millions, except per share amounts)
                                                   Guidance Range
Revenue:
 Public portal advertising and sponsorship       $   450.0   $   475.0
 Private portal services                         95.0          100.0
                                                   $   545.0   $   575.0
Earnings before interest, taxes, non-cash
and other items ("Adjusted EBITDA") (a)          $   140.0   $   155.0
Interest, taxes, non-cash and other items (b)
 Interest expense, net                           (25.0)        (25.0)
 Depreciation and amortization                   (30.0)        (28.0)
 Non-cash stock-based compensation               (35.0)        (32.0)
Pre-tax income                                    50.0          70.0
Income tax provision                               (23.0)        (31.0)
Net income                                         $    27.0  $    39.0
Income per share:
 Basic                                         $    0.68  $    0.95
 Diluted (c)                                  $    0.63  $    0.84
Calculation of income per share:
Net income (numerator for basic income per share)  $    27.0  $    39.0
Add-back of interest expense on 1.50% Notes, net   3.5           3.5
of tax
 Numerator for diluted income per share          $    30.5  $    42.5
Weighted average shares outstanding (denominator   40.0          41.0
for basic income per share)
Stock options and restricted stock                 3.0           4.0
Weighted average shares issuable upon conversion   5.7           5.7
of 1.50% Notes
 Denominator for diluted income per share        48.7          50.7
(a) See Annex A - Explanation of Non-GAAP
Financial Measures.
(b) Reconciliation of Adjusted EBITDA to net
income.
(c) See Supplemental 2014 Guidance for Income Per Share Calculation below.
Additional information regarding forecast for the quarter ending March 31,
2014:
 - Revenue is forecasted to be between $130 million to $133 million.
 - Adjusted EBITDA is forecasted to be between $28.5 million to $30.5
million.
 - Net income as a percentage of revenue is forecasted to be
approximately 3% to 4%.
The above guidance does not include the impact if any, of future deployment of
capital for items such as share repurchases or acquisitions,any future gains
or losses from discontinued operations, and other future non-recurring,
one-time or unusual items.





WebMD Health Corp.
Supplemental 2014 Guidance for Income Per Share Calculation
Based on the Company's Financial Guidance for the Year Ending December 31,
2014, the 2.50% Notes and 2.25% Notes are not expected to be dilutive to the
full year. However, the 1.50% Notes are expected to be dilutive to the full
year. Additionally, each of the series of Notes may be dilutive in certain
quarters, depending on the amount of net income for such quarter. The
following table contains the approximate level of net income for an individual
quarter and for the full year 2014 at which each of the series of Notes would
become dilutive to income per share. To the extent this net income is
exceeded for any such period, the table also includes the amounts by which the
numerator and denominator should each be adjusted for purposes of the diluted
income per share calculation. The amounts below assume a weighted-average
diluted share count of 43 million shares (prior to the effect of convertible
notes) and the amounts below are subject to change as such weighted-average
share count changes.
                   Quarterly Amounts                Annual Amounts
All amounts in     1.50%      2.50%      2.25%      1.50%      2.50%    2.25%
millions           Notes      Notes      Notes      Notes      Notes    Notes
Approximate net
income at which    $       $       $       $       $     $  
                    6.5      13.3       14.6       26.2       53.1      58.5
convertible notes
become dilutive:
Interest expense,
net of tax to                                                           $  
add-back to        $       $       $       $       $      
                    0.9       1.8       1.1       3.5       7.2    4.4
net income
(numerator):
Additional shares
to include in
weighted-
                   5.7        6.2        3.5        5.7        6.2      3.5
average diluted
share count
(denominator):





ANNEX A
Explanation of Non-GAAP Financial Measures
The accompanying WebMD Health Corp. press release and attachments 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 net income or loss calculated in accordance with GAAP
(referred to below as "net income") or income or loss from continuing
operations calculated in accordance with GAAP (referred to below as "income
from continuing operations"). The attachments to the press release include
reconciliations of non-GAAP financial measures to GAAP financial measures.
Adjusted EBITDA is used by our management as an additional measure of our
company'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 our management identify additional trends in our company's financial
results that may not be shown solely by period-to-period comparisons of net
income or income from continuing operations. In addition, we may use Adjusted
EBITDA in the incentive compensation programs applicable to some of our
employees in order to evaluate our company's performance. Our 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 net
income or income from continuing operations, 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 net income or income from
continuing operations that accompany our press releases and disclosure
documents containing non-GAAP financial measures, including the
reconciliations contained in the accompanying press release attachments.
We believe that the presentation of Adjusted EBITDA is useful to investors in
their analysis of our results for reasons similar to the reasons why our
management finds it useful and because it helps facilitate investor
understanding of decisions made by management in light of the performance
metrics used in making those decisions. In addition, as more fully described
below, we believe that providing Adjusted EBITDA, together with a
reconciliation of Adjusted EBITDA to net income or income from continuing
operations, helps investors make comparisons between our company 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 our company with other
public companies and is not intended as a substitute for comparisons based on
net income or income from continuing operations. 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 us from Adjusted
EBITDA but included in net income and income from continuing operations:



  oDepreciation 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. We exclude depreciation
    and amortization expense from Adjusted EBITDA because we believe that (i)
    the amount of such expenses in any specific period may not directly
    correlate to the underlying performance of our 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, we believe that this exclusion assists
    management and investors in making period-to-period comparisons of
    operating performance. Investors should note that the 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
    expense will recur in future periods.

  oStock-Based Compensation Expense. Stock-based compensation expense is a
    non-cash expense arising from the grant of stock-based awards to
    employees. We believe that excluding the effect of stock-based
    compensation from Adjusted EBITDA assists management and investors in
    making period-to-period comparisons in our company's operating performance
    because (i)the amount of such expenses in any specific period may not
    directly correlate to the underlying performance of our 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, we believe that
    excluding stock-based compensation from Adjusted EBITDA assists management
    and investors in making meaningful comparisons between our company'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
    Consolidated Statement of Operations are summarized as follows:



                                    Three Months Ended   Year Ended
                                    December 31,         December 31,
                                    2013      2012       2013       2012
   Non-cash stock-based
   compensation included in:
      Cost of operations            $        $         $  6,762 $  8,160
                                    1,728    1,484
      Sales and marketing           $        $         $  8,395 $  8,201
                                    1,809    1,804
      General and administrative    $        $         $ 23,393  $ 28,560
                                    4,381    5,740



  oInterest Income and Expense. Interest income is associated with the level
    of marketable debt securities and other interest bearing accounts in which
    we invest, and interest expense is related to our company's capital
    structure (including non-cash interest expense relating to our convertible
    notes). Interest income and expense varies over time due to a variety of
    financing transactions and due to acquisitions and divestitures that we
    have entered into or may enter into in the future. We have, in the past,
    issued convertible debentures, repurchased shares in cash tender offers
    and repurchased shares and convertible debentures through other repurchase
    transactions, and completed the divestiture of certain businesses. We
    exclude interest income and interest expense from Adjusted EBITDA (i)
    because these items are not directly attributable to the performance of
    our business operations and, accordingly, their 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 and expense will recur in
    future periods. The following provides detail regarding the components of
    interest expense of our convertible notes:



                             Three Months Ended         Year Ended
                             December 31,               December 31,
                             2013          2012         2013        2012
   Non-cash interest expense
    2.50% Convertible Notes  $     446 $    452  $  1,802  $  1,807
    2.25% Convertible Notes  $     390 $    630  $  2,279  $  2,519
    1.50% Convertible Notes  $     111 $  —       $    111 $  —
   

   Cash interest expense
    2.50% Convertible Notes  $   2,500   $  2,500    $ 10,000   $ 10,000
    2.25% Convertible Notes  $   1,457   $  2,250    $  8,207  $  9,000
    1.50% Convertible Notes  $    425  $  —       $    425 $  —



  oIncome Tax Provision (Benefit). We maintain a valuation allowance on a
    portion of our net deferred tax assets (including our net operating loss
    carryforwards), the amount of which may change from quarter to quarter
    based on factors that are not directly related to our results for the
    quarter. The valuation allowance is either adjusted through the statement
    of operations or additional paid-in capital. The timing of such
    adjustments has not been consistent and as a result, our income tax
    expense can fluctuate significantly from period to period in a manner not
    directly related to our operating performance. We exclude the income tax
    provision (benefit) from Adjusted EBITDA (i) because we believe that the
    income tax provision (benefit) is not directly attributable to the
    underlying performance of our 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 (benefit)
    will recur in future periods.

  oOther Items. We engage in other activities and transactions that can
    impact our net income or income from continuing operations. In recent
    periods, these other items included, but were not limited to: (i) gain or
    loss on investments; (ii) a restructuring charge; (iii) severance expense;
    and (iv) loss on repurchases of our convertible notes. We exclude these
    other items from Adjusted EBITDA because we believe these activities or
    transactions are not directly attributable to the performance of our
    business operations and, accordingly, their exclusion assists management
    and investors in making period-to-period comparisons of operating
    performance. Investors should note that some of these other items may
    recur in future periods.



SOURCE WebMD Health Corp.

Website: http://www.wbmd.com
Contact: Investors: Risa Fisher, rfisher@webmd.net, 212-624-3817, or Media:
Adam Grossberg, agrossberg@webmd.net, 212-624-3790
 
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