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Ira Sohn Contest 2012
Andrew Diaz

2. Disclaimer
2
 Please note that this presentation and the information contained herein represents my own personal
views and not the views of Prudential Financial, Prudential Capital Group or any affiliates.
 The information contained in this presentation is based solely on publicly available information
 This presentation and the information contained herein is not a recommendation or solicitation to
buy or sell any securities.
 This presentation contains historical and anticipated operating performance, as well as discussions
on access to capital markets, market conditions and the values of assets and liabilities of certain
companies. Actual results may vary materially from the estimates and projected results contained
herein.
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3. WebMD Health Corp (“WebMD”)
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 WebMD is a provider of health information
 Recent stock services online to:
price: $21.431  Consumers
 Physicians
 Ticker:
“WBMD”  Employers and Health Plans
(1) As of close 05/15/2012
 Market Value of Equity ~$1.1 billion
 Enterprise Value of ~$0.9 billion
Pro Forma for 5.77 million shares purchased @ $26 per for an aggregate cash use of $150 million on 4/10/12. Source: Company
10Q filed on 5/10/12
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4. Strong Collection of Online Brands
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5. Investment Highlights
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Secular Winner
 Favorable long-term trends for online pharma ad spending
 Projected to grow at 13% CAGR to ~$2 billion by 2015
Strong Competitive Advantages
 110 million unique users; 2.6 million physicians
 #1 player with ~40% market share
Strong Catalysts for Realization Within 6 – 12 Months
 Poison pill expires on November 1, 2012
 Upsize to existing $86 million share repurchase program
 Normalization of ad spending
Source: WebMD 10-K for the year ended 12/31/11, eMarketer April 2011
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6. Why Does it Trade at ~$22 Today?
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 Failed Sales Process
 Temporary decline in pharmaceutical ad spending during 2012
 FDA regulations for online advertising TBD
 Patent expirations (e.g. Lipitor ~$10 billion)
$70
$60
$50
Failed Sales Process
$40
$30
$20 Icahn Reveals ~8% Stake
$10
$0
WebMD 5 Year Stock Price
Source: Yahoo! Finance, SEC Schedule 13D filed on 10/11/2011
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7. Public Portal
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 ~110 million users / ~10 billion page views
 User is already engaged in researching ADHD
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8. Physicians Portal
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 ~2.6 million physicians
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9. Private Portal
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Company Name
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10. Pharmaceutical Ad Spending
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 North American Market of $28 billion is roughly 1/3 of
promotional spending in the world
 Online spending is anticipated to reach ~$2 billion by 2015
Source: eMarketer, April 2011 & CSD Promotion Database
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11. Pharma Relying Less on Sales Reps
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 Secular decline of U.S. sales reps
 105K peaked in 2005, ~75K by 2015
 Physician Payments Sunshine Act, 2013
Source: IMS Health, The Global Use of Medicines: Outlook Through 2015 & Wall Street Journal, Drugs Reps Soften Their Sales Pitches
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12. Long-Term Shift Towards Online Advertising
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2011 Market Size 2020 Projected Market Size
 ~$28 billion Total Advertising  ~$14 billion Total Advertising
 ~$1 billion market size  ~$4 billion market size
2011 % Online Advertising of Total Budget 2020 % Online Advertising of Total Budget
3.6%
29%
71%
96.4%
Source: CSD Promotion Database
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13. Historical Financials
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WebMD Health Corp
2007 2008 2009 2010 2011 LTM 3/30
Public Portal Advertising $238,022 $284,416 $347,570 $446,969 $477,325 $454,738
% Growth 19.5% 22.2% 28.6% 6.8% -4.7%
Unique Monthly Users (Millions) 51 51 61 83 85 110
% Growth 0.0% 19.6% 36.1% 2.4% 29.4%
Revenues Per User $4.67 $5.58 $5.70 $5.39 $5.62 $4.13
EBITDA Per User $1.08 $1.46 $1.84 $2.09 $2.13 $1.41
Private Portal Services $81,210 $89,046 $90,966 $87,500 $81,450 $79,375
% Growth 9.6% 2.2% -3.8% -6.9% -2.5%
Total Revenues $319,232 $373,462 $438,536 $534,469 $558,775 $534,113
% Growth 17.0% 17.4% 21.9% 4.5% -4.4%
 ~15% Revenue CAGR since 2007
Source: Company 10Ks and 10Qs
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14. Historical Financials Cont’d
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WebMD Health Corp
2007 2008 2009 2010 2011 LTM 3/30
A
EBITDA 54,969 74,255 112,274 173,618 181,238 154,631
% Margin 17.2% 19.9% 25.6% 32.5% 32.4% 29.0%
Less Capex (19,041) (24,265) (17,886) (32,254) (20,911) (19,439)
Less Work ing Capital B (34,317) 2,298 8,444 (12,893) 8,052 15,042
Free Cash Flow 1,611 52,288 102,832 128,471 168,379 150,234
Less Interest Expense (25,887) (26,428) (23,515) (11,453) (20,645) (23,340)
Cash EarningsC (24,276) 25,860 79,317 117,018 147,734 126,894
ROIC D 4% 5% 15% 25% 27%
(A) Defined as operating income + D&A + non-cash stock based comp
(B) Defined as change in AR + Prepaid - Accrued - Deferred Revenue
(C) Excludes taxes due to the Company's NOLs
(D) Defined as EBIT T axed @ 35% / (T otal Assets - Current Liabilities - Cash)
 ~12% Free Cash Flow Yield
 ~5.8x LTM EBITDA and ~7.8x NTM EBITDA
Source: Company 10Ks and 10Qs
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15. Attractive Valuation With Limited Downside
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 Conservative DCF ~$31 per share
 ~$530 million revenues per year & 20% EBITDA margin
 Market share falls from ~40% to ~20% while industry
grows at a 13% CAGR
 12% Cost of Capital and 2% Terminal Growth
Relevant Comps
Company WebMD (WBMD) Epocrates (EPOC) HealthStream (HSTM)
Epocrates provides healthcare
WebMD is a provider of health HealthStream provides learning and
information services primarily in the
Description information services to consumers, research solutions for the healthcare
mobile space to 1.4 million physician
physicians and employers. industry.
members.
LTM Revenues (000s) $534,113 $111,700 $87,234
LTM EBITDA (000s ) $154,631 $9,503 $17,865
A
EV / LTM EBITDA 5.8x 11.7x 25.5x
A
EV / LTM Revenues 1.7x 1.0x 5.2x
5 Year Revenue CAGR 15% 15% 19%
(A) As of close 05/15/2012
Source: Company 10Ks and 10Qs
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16. Additional Upside Opportunities
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 ~$250 million NPV of Federal NOLs
 ~$5 per share
 May remain in CoC according to management
 Monetize Mobile Growth
 11.5 million consumer app downloads
 2.0 million physician app downloads
 International Opportunities
 French and German physician sites
Source: WebMD 10-K for the year ended 12/31/11, WebMD Conference Call Transcripts
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