This excerpt taken from the WBMD 8-K filed Nov 21, 2006.
Note 1 Basis of Pro Forma Presentation
WebMD Health Corp. (the Company) is a Delaware corporation that was incorporated on May 3, 2005. The Company completed an initial public offering (IPO) of Class A Common Stock on September 28, 2005. On September 11, 2006, the Company acquired the interactive medical education, promotion and physician recruitment businesses of Medsite, Inc. (which we refer to as the Acquired Business or Medsite). This acquisition is being accounted for as purchase business combinations under U.S. generally accepted accounting principles.
The Unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2006 combines the historical statement of operations of the Company for the six months ended June 30, 2006 with the historical statement of operations of Medsite for the six months ended June 30, 2006, and reflects the acquisition of Medsite as if it had occurred on January 1, 2005. The Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2005 combines the historical statement of operations of the Company for the year ended December 31, 2005, and the historical statement of operations of Medsite for the year ended December 31, 2005, and reflects the acquisition of Medsite as if it had occurred on January 1, 2005. Additionally, certain amounts in the historical financial statements of Medsite have been reclassified to conform to the Companys financial statement presentation.
The pro forma condensed consolidated statements of operations presented herein are not necessarily indicative of the results of operations that would have resulted had the acquisition been completed at the date indicated, nor is it necessarily indicative of the results of operations of the combined companies in future periods.
The unaudited pro forma adjustments represent managements estimates based on information available at this time. Additionally, the total estimated purchase price of the acquisition of Medsite has been allocated on a preliminary basis to assets and liabilities based on managements current estimate of their fair values. These allocations are subject to change pending the completion of the final analyses of the purchase prices and fair values of assets acquired and liabilities assumed. Also, the total purchase price is subject to customary closing conditions which have not been finalized as of the date of this filing. Accordingly, the final purchase accounting adjustments may be materially different from the unaudited pro forma adjustments presented herein. In connection with the preliminary allocation of the purchase price and intangible asset valuation, intangible assets subject to amortization were recorded as follows: