WebMD Health (WBMD)

 

As of December 31, 2008, we had $191,659 in cash and cash equivalents and investments in ARS with a face amount of $164,800 and a fair value of $133,563. The ARS investments are discussed in more detail earlier in this MD&A under “Introduction — Background Information on Certain Trends and Developments — Certain Developments — Impairment of Auction Rate Securities; Non-Recourse Credit Facility.” Based on our plans and expectations as of the date of the filing of our 2008 Form 10-K and taking into consideration issues relating to the liquidity of our ARS investments, we believe that our available cash resources and future cash flow from operations, will provide sufficient cash resources to meet the commitments described above and to fund our currently anticipated working capital and capital expenditure requirements for up to twenty-four months. Our future liquidity and capital requirements will depend upon numerous factors, including retention of customers at current volume and revenue levels, our existing and new application and service offerings, competing technological and market developments, and potential future acquisitions. In addition, our ability to generate cash flow is subject to numerous factors beyond our control, including general economic, regulatory and other matters affecting us and our customers. We plan to continue to enhance the relevance of our online services to our audience and sponsors and expect to continue to invest in acquisitions, strategic relationships, facilities and technological infrastructure and product development. We may need to raise additional funds to support expansion, develop new or enhanced applications and services, respond to competitive pressures, acquire complementary businesses or technologies or take advantage of unanticipated opportunities. If required, we may raise such additional funds through public or private debt or equity financing, strategic relationships or other arrangements. We cannot assure you that such financing will be available on acceptable terms, if at all, or that such financing will not be dilutive to our stockholders. Future indebtedness may impose various restrictions and covenants on us that could limit our ability to respond to market conditions, to provide for unanticipated capital investments or to take advantage of business opportunities.

 

 

As of December 31, 2008, we had $191,659 in cash and cash equivalents and investments in ARS with a face amount of $164,800 and a fair value of $133,563. The ARS investments are discussed in more detail earlier in this MD&A under “Introduction — Background Information on Certain Trends and Developments — Certain Developments — Impairment of Auction Rate Securities; Non-Recourse Credit Facility.” Based on our plans and expectations as of the date of this Annual Report and taking into consideration issues relating to the liquidity of our ARS investments, we believe that our available cash resources and future cash flow from operations, will provide sufficient cash resources to meet the commitments described above and to fund our currently anticipated working capital and capital expenditure requirements for up to twenty-four months. Our future liquidity and capital requirements will depend upon numerous factors, including retention of customers at current volume and revenue levels, our existing and new application and service offerings, competing technological and market developments, and potential future acquisitions. In addition, our ability to generate cash flow is subject to numerous factors beyond our control, including general economic, regulatory and other matters affecting us and our customers. We plan to continue to enhance the relevance of our online services to our audience and sponsors and expect to continue to invest in acquisitions, strategic relationships, facilities and technological infrastructure and product development. We may need to raise additional funds to support expansion, develop new or enhanced applications and services, respond to competitive pressures, acquire complementary businesses or technologies or take advantage of unanticipated opportunities. If required, we may raise such additional funds through public or private debt or equity financing, strategic relationships or other arrangements. We cannot assure you that such financing will be available on acceptable terms, if at all, or that such financing will not be dilutive to our stockholders. Future indebtedness may impose various restrictions and covenants on us that could limit our ability to respond to market conditions, to provide for unanticipated capital investments or to take advantage of business opportunities.

 

 

As of December 31, 2008, we had $191,659 in cash and cash
equivalents and investments in ARS with a face amount of
$164,800 and a fair value of $133,563. The ARS investments are
discussed in more detail earlier in this MD&A under
“Introduction — Background Information on Certain
Trends and Developments — Certain
Developments — Impairment of Auction Rate Securities;
Non-Recourse Credit Facility.” Based on our plans and
expectations as of the date of this Annual Report and taking
into consideration issues relating to the liquidity of our ARS
investments, we believe that our available cash resources and
future cash flow from operations, will provide sufficient cash
resources to meet the commitments described above and to fund
our currently anticipated working capital and capital
expenditure requirements for up to twenty-four months. Our
future liquidity and capital requirements will depend upon
numerous factors, including retention of customers at current
volume and revenue levels, our existing and new application and
service offerings, competing technological and market
developments, and potential future acquisitions. In addition,
our ability to generate cash flow is subject to numerous factors
beyond our control, including general economic, regulatory and
other matters affecting us and our customers. We plan to
continue to enhance the relevance of our online services to our
audience and sponsors and expect to continue to invest in
acquisitions, strategic relationships, facilities and
technological infrastructure and product development. We may
need to raise additional funds to support expansion, develop new
or enhanced applications and services, respond to competitive
pressures, acquire complementary businesses or technologies or
take advantage of unanticipated opportunities. If required, we
may raise such additional funds through public or private debt
or equity financing, strategic relationships or other
arrangements. We cannot assure you that such financing will be
available on acceptable terms, if at all, or that such financing
will not be dilutive to our stockholders. Future indebtedness
may impose various restrictions and covenants on us that could
limit our ability to respond to market conditions, to provide
for unanticipated capital investments or to take advantage of
business opportunities.

 

 

Our liquidity during 2008 is expected to be significantly impacted as a result of the planned HLTH Merger see “— Introduction — Significant Developments.” The planned merger with HLTH will result in the payment of up to $6.89 in cash for each outstanding share of HLTH Corporation as of the closing date of the merger. The cash portion of the merger consideration will be funded from cash and investments at the Company and HLTH, as well as cash proceeds from HLTH’s anticipated divestitures of Porex and ViPS. Additionally, if either Porex or ViPS has not been sold at the time the HLTH Merger is ready to be consummated, the Company could issue up to $250,000 in redeemable notes to the HLTH stockholders in lieu of a portion of the cash consideration otherwise payable in the merger.

 

As of February 21, 2008, the Company and HLTH had approximately $1.45 billion in consolidated cash, cash equivalents and marketable securities of which we had approximately $327,000 in consolidated cash, cash equivalents and marketable securities. Also as of February 21, 2008, and as discussed in more detail in the beginning of Management’s Discussion and Analysis of Financial Condition and Results of Operations (see “— Introduction — Significant Developments”), the Company and HLTH owned approximately $364,000 of ARS investments, of which we owned approximately $169,000 of ARS investments. In mid-February 2008, auctions for ARS investments backed by student loans failed, including auctions for the ARS investments we held. The result of a failed auction is that these ARS investments continue to bear interest in accordance with their terms until the next successful auction; however, liquidity will be limited until there is a successful auction or until such time as other markets for these ARS investments develop. We believe that any lack of liquidity relating to our ARS investments will not have an impact on our ability to fund our operations.

 

We believe that our available cash resources and future cash flow from operations, will provide sufficient cash resources to meet the commitments described above and to fund our currently anticipated working capital and capital expenditure requirements for up to twenty-four months. Our future liquidity and capital requirements will depend upon numerous factors, including retention of customers at current volume and

 

WebMD 2007 Annual Report — MD&A Annex

 

ANNEX B-3 – PAGE 21

 

Our liquidity during 2008 is expected to be significantly impacted as a result of the planned HLTH Merger see “— Introduction — Significant Developments.” The planned merger with HLTH will result in the payment of up to $6.89 in cash for each outstanding share of HLTH Corporation as of the closing date of the merger. The cash portion of the merger consideration will be funded from cash and investments at the Company and HLTH, as well as cash proceeds from HLTH’s anticipated divestitures of Porex and ViPS. Additionally, if either Porex or ViPS has not been sold at the time the HLTH Merger is ready to be consummated, the Company could issue up to $250,000 in redeemable notes to the HLTH stockholders in lieu of a portion of the cash consideration otherwise payable in the merger.

 

As of February 21, 2008, the Company and HLTH had approximately $1.45 billion in consolidated cash, cash equivalents and marketable securities of which we had approximately $327,000 in consolidated cash, cash equivalents and marketable securities. Also as of February 21, 2008, and as discussed in more detail in the beginning of Management’s Discussion and Analysis of Financial Condition and Results of Operations (see “— Introduction — Significant Developments”), the Company and HLTH owned approximately $364,000 of ARS investments, of which we owned approximately $169,000 of ARS investments. In mid-February 2008, auctions for ARS investments backed by student loans failed, including auctions for the ARS investments we held. The result of a failed auction is that these ARS investments continue to bear interest in accordance with their terms until the next successful auction; however, liquidity will be limited until there is a successful auction or until such time as other markets for these ARS investments develop. We believe that any lack of liquidity relating to our ARS investments will not have an impact on our ability to fund our operations.

 

We believe that our available cash resources and future cash flow from operations, will provide sufficient cash resources to meet the commitments described above and to fund our currently anticipated working capital and capital expenditure requirements for up to twenty-four months. Our future liquidity and capital requirements will depend upon numerous factors, including retention of customers at current volume and revenue levels, our existing and new application and service offerings, competing technological and market developments, and potential future acquisitions. In addition, our ability to generate cash flow is subject to numerous factors beyond our control, including general economic, regulatory and other matters affecting us and our customers. We plan to continue to enhance the relevance of our online services to our audience and sponsors and continue to invest in acquisitions, strategic relationships, facilities and technological infrastructure and product development. We may need to raise additional funds to support expansion, develop new or enhanced applications and services, respond to competitive pressures, acquire complementary businesses or technologies or take advantage of unanticipated opportunities. If required, we may raise such additional funds through public or private debt or equity financing, strategic relationships or other arrangements. We cannot assure you that such financing will be available on acceptable terms, if at all, or that such financing will not be dilutive to our stockholders. Future indebtedness may impose various restrictions and covenants on us that could limit our ability to respond to market conditions, to provide for unanticipated capital investments or to take advantage of business opportunities.

 

 

Our liquidity during 2008 is expected to be significantly
impacted as a result of the planned HLTH Merger see
“— Introduction — Significant
Developments.” The planned merger with HLTH will result in
the payment of up to $6.89 in cash for each outstanding share of
HLTH Corporation as of the closing date of the merger. The cash
portion of the merger consideration will be funded from cash and
investments at the Company and HLTH, as well as cash proceeds
from HLTH’s anticipated divestitures of Porex and ViPS.
Additionally, if either Porex or ViPS has not been sold at the
time the HLTH Merger is ready to be consummated, the Company
could issue up to $250,000 in redeemable notes to the HLTH
stockholders in lieu of a portion of the cash consideration
otherwise payable in the merger.

 

As of February 21, 2008, the Company and HLTH had
approximately $1.45 billion in consolidated cash, cash
equivalents and marketable securities of which we had
approximately $327,000 in consolidated cash, cash equivalents
and marketable securities. Also as of February 21, 2008,
and as discussed in more detail in the beginning of
Management’s Discussion and Analysis of Financial Condition
and Results of Operations (see
“— Introduction — Significant
Developments”), the Company and HLTH owned approximately
$364,000 of ARS investments, of which we owned
approximately $169,000 of ARS investments. In
mid-February
2008, auctions for ARS investments backed by student loans
failed, including auctions for the ARS investments we held. The
result of a failed auction is that these ARS investments
continue to bear interest in accordance with their terms until
the next successful auction; however, liquidity will be limited
until there is a successful auction or until such time as other
markets for these ARS investments develop. We believe that any
lack of liquidity relating to our ARS investments will not have
an impact on our ability to fund our operations.

 

We believe that our available cash resources and future cash
flow from operations, will provide sufficient cash resources to
meet the commitments described above and to fund our currently
anticipated working capital and capital expenditure requirements
for up to twenty-four months. Our future liquidity and capital
requirements will depend upon numerous factors, including
retention of customers at current volume and revenue levels, our
existing and new application and service offerings, competing
technological and market developments, and potential future
acquisitions. In addition, our ability to generate cash flow is
subject to numerous factors beyond our control, including
general economic, regulatory and other matters affecting us and
our customers. We plan to continue to enhance the relevance of
our online services to our audience and sponsors and continue to
invest in acquisitions, strategic relationships, facilities and
technological infrastructure and product development. We may
need to raise additional funds to support expansion, develop new
or enhanced applications and services, respond to competitive
pressures, acquire complementary businesses or technologies or
take advantage of unanticipated opportunities. If required, we
may raise such additional funds through public or private debt
or equity financing, strategic relationships or other
arrangements. We cannot assure you that such financing will be
available on acceptable terms, if at all, or that such financing
will not be dilutive to our stockholders. Future indebtedness
may impose various restrictions and covenants on us that could
limit our ability to respond to market conditions, to provide
for unanticipated capital investments or to take advantage of
business opportunities.