##### 



UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
      Form 10-K/A
 Amendment No. 2
    to
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF
    THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number: 0-24975
      Emdeon Corporation
 (Exact name of registrant as
    specified in its charter)
  Delaware

94-3236644(State of
    incorporation)

(I.R.S. employer identification
    no.)669 River Drive, Center 2
    Elmwood Park, New Jersey(Address of principal
    executive office)

07407-1361(Zip code)   (201) 703-3400
 (Registrants telephone
    number including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value
    $0.0001 per share

The Nasdaq Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  þ o o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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Explanatory
    Note
  Form 10-K/A
       1




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Part II
  Item 6 
    Selected Financial Data
  Item 7 
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations
  Item 8 
    Financial Statements and Supplementary Data
  Item 9A 
    Controls and Procedures
  Part IV
  Item 15 
    Exhibits and Financial Statement Schedules
   2




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PART II
  Item 6.
    Selected
    Financial Data    Years Ended December 31, (Restated)2006(1)(2)(3)


2005


2004


2003(4)


2002(In thousands, except per share data)Consolidated Statement of
    Operations Data:Revenue

$
1,098,608


$
1,026,475


$
918,097


$
706,676


$
633,097Costs and expenses:Cost of operations


623,758



595,654



536,289



417,852



376,426Development and engineering


33,649



35,653



33,141



24,774



24,502Sales, marketing, general and
    administrative


288,015



254,887



244,516



208,185



219,230Depreciation and amortization


61,976



60,905



48,707



51,475



114,842Legal expense


2,578



17,835



9,230



3,959



Gain on sale of EBS


352,297















Loss (gain) on investments






6,365



(457
)


(1,659
)


(6,547
)Interest income


32,339



21,527



18,716



22,855



19,578Interest expense


18,779



16,322



19,251



15,201



8,451Other expense (income), net


1,674



3,765



4,535



(4,218
)


(9,694
)Income (loss) from continuing
    operations before income tax provision (benefit)


452,815



56,616



41,601



13,962



(74,535
)Income tax provision (benefit)


52,316



3,295



6,946



5,105



(4,405
)Minority interest in WebMD Health
    Corp. (WHC)


405



775











Equity in earnings of EBS Master LLC


763















Income (loss) from continuing
    operations


400,857



52,546



34,655



8,857



(70,130
)Income (loss) from discontinued
    operations, net of tax


371,060



16,265



1,956



(27,279
)


20,479Net income (loss)

$
771,917


$
68,811


$
36,611


$
(18,422
)

$
(49,651
)Basic income (loss) per common
    share:Income (loss) from continuing
    operations

$
1.44


$
0.15


$
0.11


$
0.03


$
(0.23
)Income (loss) from discontinued
    operations


1.32



0.05



0.00



(0.09
)


0.07Net income (loss)

$
2.76


$
0.20


$
0.11


$
(0.06
)

$
(0.16
)Diluted income (loss) per common
    share:Income (loss) from continuing
    operations

$
1.26


$
0.15


$
0.10


$
0.03


$
(0.23
)Income (loss) from discontinued
    operations


1.12



0.05



0.01



(0.09
)


0.07Net income (loss)

$
2.38


$
0.20


$
0.11


$
(0.06
)

$
(0.16
)Weighted-average shares outstanding
    used in computing income (loss) per common share:Basic


279,234



341,747



320,080



304,858



304,168Diluted


331,642



352,852



333,343



325,811



304,168  3




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As of December 31, (Restated)2006(1)(2)


2005


2004


2003(4)


2002(In thousands)Consolidated Balance Sheet
    Data:Cash, cash equivalents and
    short-term investments

$
648,831


$
423,003


$
101,655


$
266,097


$
181,268Long-term marketable securities


2,633



4,430



515,838



456,034



456,716Working capital (excluding assets
    and liabilities of discontinued operations)


638,339



413,816



63,221



207,273



116,268Total assets


1,451,943



2,195,683



2,292,234



2,129,642



1,766,248Convertible notes


650,000



650,000



649,999



649,999



300,000Minority interest in WHC


101,860



43,096











Convertible redeemable
    exchangeable preferred stock


98,768



98,533



98,299







Stockholders equity


372,527



1,061,233



1,214,876



1,171,980



1,148,600     (1)
    
    For the year ended
    December 31, 2006, the consolidated financial position and
    results of operations reflect the sale of a 52% interest in our
    Emdeon Business Services segment, excluding the ViPS business
    unit (which we refer to as EBS) as of November 16, 2006.
    Accordingly, the consolidated balance sheet as of
    December 31, 2006 excludes the assets and liabilities of
    EBS and the consolidated statement of operations for the year
    ended December 31, 2006 include the operations of EBS for
    the period January 1, 2006 through November 16, 2006.(2)
    
    On September 14, 2006, we
    completed the sale of the Emdeon Practice Services segment.
    Accordingly, the following selected consolidated financial data
    has been reclassified to reflect the historical results of the
    Emdeon Practice Services segment as discontinued operations for
    this and all prior periods presented.(3)
    
    On January 1, 2006, we adopted
    Statement of Financial Accounting Standards No. 123
    (Revised 2004): Share Based Payment that resulted in
    additional non-cash stock-based compensation expense during
    2006. See Results of Operations included in
    Item 7-Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.(4)
    
    On August 1, 2003, we
    completed the sale of two operating units of our Porex segment.
    Accordingly, the following selected consolidated financial data
    has been reclassified to reflect the historical results of these
    two operating units as discontinued operations for this and all
    prior periods presented. 4




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Item 7.  Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations
      Overview
  page F-1
  
    Introduction.  This section provides a general
    description of our company, a brief discussion of our operating
    segments, a description of certain recent developments, a
    description of significant transactions completed during 2006, a
    summary of the acquisitions we completed during the last three
    years and background information on certain trends, strategies
    and other matters discussed in this MD&A.
    Critical Accounting Estimates and
    Policies.  This section discusses those accounting
    policies that both are considered important to our financial
    condition and results of operations, and require us to exercise
    subjective or complex judgments in making estimates and
    assumptions. In addition, all of our significant accounting
    policies, including our critical accounting policies, are
    summarized in Note 1 to the Consolidated Financial
    Statements included in this Annual Report.
    Results of Operations and Results of Operations by Operating
    Segment. These sections provide our analysis and outlook for
    the significant line items on our consolidated statements of
    operations, as well as other information that we deem meaningful
    to understand our results of operations on both a company-wide
    and a
    segment-by-segment
    basis.
    Liquidity and Capital Resources.  This section
    provides an analysis of our liquidity and cash flows and
    discussions of our contractual obligations and commitments, as
    well as our outlook on our available liquidity as of
    December 31, 2006.
    Recent Accounting Pronouncements.  This section
    provides a summary of the most recent authoritative accounting
    standards and guidance that have either been recently adopted or
    may be adopted in the future.    Introduction
   5




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Operating
    Segments
    
    WebMD.  WebMD provides both public and
    private online portals. WebMDs public portals for
    consumers enable them to obtain detailed information on a
    particular disease or condition, analyze symptoms, locate
    physicians, store individual healthcare information, receive
    periodic e-newsletters on topics of individual interest, enroll
    in interactive courses and participate in online communities
    with peers and experts. WebMDs public portals for
    physicians and healthcare professionals make it easier for them
    to access clinical reference sources, stay abreast of the latest
    clinical information, learn about new treatment options, earn
    continuing medical education (which we refer to as CME) credit
    and communicate with peers. WebMDs private portals enable
    employers and health plans to provide their employees and plan
    members with access to personalized health and benefit
    information and decision-support technology that helps them make
    more informed benefit, provider and treatment choices. In
    addition, WebMD publishes: medical reference textbooks; The
    Little Blue Book,a physician directory; and, since 2005,
    WebMD the Magazine, a consumer magazine distributed to
    physician office waiting rooms. WebMD also conducts in-person
    CME as a result of the acquisition of the assets of Conceptis
    Technologies, Inc. in December 2005.
    ViPS.  ViPS provides healthcare data
    management, analytics, decision-support and process automation
    solutions and related information technology services to
    governmental, Blue Cross Blue Shield and commercial healthcare
    payers. ViPS develops tools for disease management, predictive
    modeling, provider performance,
    HEDIS®
    quality improvement, healthcare fraud detection and financial
    management. Consultants and outsourcing services are also
    provided to assess workflow, perform software maintenance,
    design complex database architectures and perform data analysis
    and analytic reporting functions.
    Porex.  Porex develops, manufactures and
    distributes proprietary porous plastic products and components
    used in healthcare, industrial and consumer applications, which
    include porous components and finished products for both
    business-to-business
    and OEM applications. Porex also provides technologically
    advanced sterile surgical products used in
    craniofacial/oculoplastic reconstruction and aesthetic/cosmetic
    surgery in hospitals, clinics and private practice surgical
    offices.
    Emdeon Business Service.  EBS provides
    solutions that automate key business and administrative
    functions for healthcare payers and providers, including:
    electronic patient eligibility and benefit verification;
    electronic and paper claims processing; electronic and paper
    paid-claims
    communication 6




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services; and patient billing, payment and communications
    services. In addition, EBS provides clinical communications
    services that improve the delivery of healthcare by enabling
    physicians to manage laboratory orders and results, hospital
    reports and electronic prescriptions. As a result of the EBS
    Sale, beginning November 17, 2006, the results of EBS are
    no longer included in the segment results. See
     Significant Transactions Completed During
    2006.  
    Corporate.  The Corporate segment provides
    shared services across all our operating segments. These
    services include executive personnel, accounting, tax, treasury,
    legal, human resources, risk management and certain information
    technology functions. Corporate service costs include
    compensation related costs, insurance and audit fees, leased
    property, facilities cost, legal and other professional fees,
    software maintenance and telecommunication costs. Additionally,
    in connection with the EPS Sale and EBS Sale, we entered into
    transition services agreements whereby we have agreed to provide
    EPS and EBS with certain administrative services, including
    payroll, accounting, purchasing and procurement, tax, and human
    resource services, as well as information technology (which we
    refer to as IT) support. Additionally, EBS will provide us
    certain administrative services. These services will be provided
    through the Corporate segment, and the related transition
    services fee we charge to EBS and EPS, net of the fee we will
    pay to EBS, will also be included in the Corporate segment,
    partially offsetting the cost of providing these services. In
    addition, under the transition services agreement related to
    EBS, EBS provides certain administrative services to Emdeon,
    including telecommunication infrastructure and management
    services, data center support and purchasing and procurement
    services. Some of the services provided by EBS to Emdeon are, in
    turn, used to fulfill Emdeons obligations to provide
    transition services to EPS. See  Significant
    Transactions Completed During 2006.  Significant
    Transactions Completed During 2006
  EPS Sale. One-third
    EBS Sale.
 7




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de-identified
  Tender Offer.
  New Stock Repurchase Plan.
  Acquisitions
    
    On December 15, 2006, through WHC, we acquired Subimo, a
    privately held provider of healthcare decision support
    applications to large employers, health plans and financial
    institutions. The total purchase consideration for Subimo was
    approximately $59,320, comprised of $32,820 in cash paid at
    closing, net of cash acquired, $26,000 of WHC equity and $500 of
    estimated acquisition costs. The $26,000 of WHC equity, equal to
    640,930 shares of WHC Class A Common Stock, will not
    be issued until December 2008, subject to certain conditions.
    While a maximum of 246,508 of these shares may be used to settle
    any outstanding claims or warranties against the sellers, the
    remaining 394,422 of these shares will be issued with certainty.
    Accordingly, we recorded a gain to equity of $11,627, in
    connection with the issuance of these 394,422 WHC shares. The
    results of operations of Subimo have been included in our
    financial statements from December 15, 2006, the closing
    date of the acquisition, and are included in the WebMD segment.
    On September 11, 2006, through WHC, we acquired the
    interactive medical education, promotion and physician
    recruitment businesses of Medsite. The total purchase
    consideration for Medsite was approximately $31,467, comprised
    of $30,682 in cash, net of cash acquired, and $785 of estimated 8




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acquisition costs. The results of operations of Medsite have
    been included in our financial statements from
    September 11, 2006, the closing date of the acquisition,
    and are included in the WebMD segment.  
    On July 18, 2006, we acquired IPN, a privately held
    provider of healthcare electronic data interchange services. The
    total purchase consideration for IPN was approximately $3,907,
    comprised of $3,799 in cash, net of cash acquired, and $108 of
    estimated acquisition costs. In addition, we agreed to pay up to
    an additional $3,000 in cash over a two-year period beginning in
    August 2007 if certain financial milestones are achieved. The
    IPN business is part of the EBS businesses that were sold on
    November 16, 2006. Accordingly, the results of operations
    of IPN have been included in our financial statements,
    specifically within our EBS segment, from July 18, 2006,
    the closing date of the acquisition, through November 16,
    2006, the closing date of the EBS Sale. The obligation to pay up
    to $3,000 in earn out payments was transferred in connection
    with the EBS Sale and is no longer our obligation.
    On June 13, 2006, through WHC, we acquired Summex, a
    provider of health and wellness programs that include online and
    offline health risk assessments, lifestyle education and
    personalized telephonic health coaching. The total purchase
    consideration for Summex was approximately $30,191, comprised of
    $29,691 in cash, net of cash acquired, and $500 of estimated
    acquisition costs. In addition, we have agreed to pay up to an
    additional $10,000 in cash over a two-year period if certain
    financial milestones are achieved. The results of operations of
    Summex have been included in our financial statements from
    June 13, 2006, the closing date of the acquisition, and are
    included in the WebMD segment.
    On January 17, 2006, through WHC, we acquired eMedicine, a
    privately held online publisher of medical reference information
    for physicians and other healthcare professionals. The total
    purchase consideration for eMedicine was approximately $25,195,
    comprised of $24,495 in cash, net of cash acquired, and $700 of
    estimated acquisition costs. The results of operations of
    eMedicine have been included in our financial statements from
    January 17, 2006, the closing date of the acquisition, and
    are included in the WebMD segment.    
    On December 2, 2005, through WHC, we acquired the assets of
    and assumed certain liabilities of Conceptis, a privately held
    Montreal-based
    provider of online and offline medical education and promotion
    aimed at physicians and other healthcare professionals. The
    total purchase consideration for Conceptis was approximately
    $19,859, comprised of $19,256 in cash and $603 of estimated
    acquisition costs. The results of operations of Conceptis have
    been included in our financial statements from December 2,
    2005, the closing date of the acquisition, and are included in
    the WebMD segment.
    On March 14, 2005, through WHC, we acquired HealthShare, a
    privately held company that provides online tools that compare
    cost and quality measures of hospitals for use by consumers,
    providers and health plans. The total purchase consideration for
    HealthShare was approximately $29,985, comprised of $29,533 in
    cash, net of cash acquired, and $452 of estimated acquisition
    costs. The results of operations of HealthShare have been
    included in our financial statements from March 14, 2005,
    the closing date of the acquisition, and are included in the
    WebMD segment.    
    On December 24, 2004, through WHC, we acquired MedicineNet,
    a privately held health information Web site for consumers. The
    total purchase consideration for MedicineNet was approximately
    $17,223, comprised of $16,732 in cash, net of cash acquired, and
    $491 of acquisition costs. In addition, we have agreed to pay up
    to an additional $15,000 during the three months ended
    March 31, 2006, if the number of page views on
    MedicineNets Web sites exceeds certain thresholds for the
    year ended 9




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December 31, 2005. We paid $7,250 in April 2006 as a result
    of these thresholds being met. The results of operations of
    MedicineNet have been included in the WebMD segment.  
    During October 2004, we acquired Esters, a privately held
    distributor of porous plastic products and components. The total
    purchase consideration for Esters was approximately $3,333,
    comprised of $3,160 in cash, net of cash acquired, and $173 of
    acquisition costs. The results of operations of Esters have been
    included in our financial statements from the closing date of
    the acquisition and are included in the Porex segment.
    On October 1, 2004, through WHC, we acquired RxList, a
    privately held provider of an online drug directory for
    consumers and healthcare professionals. The total purchase
    consideration for RxList was approximately $5,216, comprised of
    $4,500 in cash at the time of acquisition, $500 paid in 2006 and
    $216 of acquisition costs. In addition, we have agreed to pay up
    to an additional $2,500 during each of the three month periods
    ended March 31, 2006 and 2007, if the number of page views
    on RxLists Web sites exceeds certain thresholds for each
    of the three month periods ended December 31, 2005 and
    2006, respectively. We paid $2,387 in February 2006 as a result
    of the achievement of those page views exceeding certain
    thresholds. The results of operations of RxList have been
    included in our financial statements from October 1, 2004,
    the closing date of the acquisition, and are included in the
    WebMD segment.
    On August 11, 2004, we completed the acquisition of ViPS, a
    privately held provider of information technology, decision
    support solutions and consulting services to government, Blue
    Cross Blue Shield and commercial healthcare payers. The total
    purchase consideration for ViPS was approximately $166,588,
    comprised of $165,208 in cash, net of cash acquired, and $1,380
    of acquisition costs. The results of operations of ViPS have
    been included in our financial statements from August 11,
    2004, the closing date of the acquisition, and are reflected as
    its own operating segment.
    On July 15, 2004, we acquired the assets of Epor, a
    privately held company based in Los Angeles, California. Epor
    manufactures porous plastic implant products for use in
    aesthetic and reconstructive surgery of the head and face. The
    total purchase consideration for Epor was approximately $2,547,
    comprised of $2,000 in cash at the time of acquisition, $490 to
    be paid over five years, of which $90 was paid during 2005 and
    an additional $100 was paid during 2006, and $57 of acquisition
    costs. The results of operations of Epor have been included in
    our financial statements from July 15, 2004, the closing
    date of the acquisition, and are included in the Porex segment.
    On April 30, 2004, we acquired Dakota, a privately held
    provider of automated healthcare claims processing technology
    and business process outsourcing services. We paid approximately
    $38,979 in cash, net of cash acquired, $527 of acquisition costs
    and agreed to pay up to an additional $25,000 in cash over a
    three-year
    period beginning in April 2005 if certain financial milestones
    are achieved. No payment was made in April 2005 or April 2006 in
    connection with the first and second earn out years ending March
    2005 and March 2006, respectively. The Dakota business is part
    of the EBS businesses that were sold on November 16, 2006.
    Accordingly, the results of operations of Dakota have been
    included in our financial statements, specifically within our
    EBS segment from April 30, 2004, the closing date of the
    acquisition, through November 16, 2006, the closing date of
    the EBS Sale. The obligation to pay up to $25,000 in earn out
    payments is the obligation of Emdeon and was not transferred in
    connection with the EBS Sale.  Background
    Information on Certain Trends and Strategies
  Increased Online Marketing and Education Spending for
    Healthcare Products. product-related
 10




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Changes in Health Plan Design; Health Management
    Initiatives.
  Changes in CMS Procurement Procedures.
  Critical
    Accounting Estimates and Policies
  Critical
    Accounting Estimates
     11




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Critical
    Accounting Policies
    
    Revenue  Our revenue recognition
    policies for each reportable operating segment are as follows:  WebMD.
  ViPS.
  Porex.
  Emdeon Business Services. paid-claims
  
    Long-Lived Assets  Our long-lived
    assets consist of property and equipment, goodwill and other
    intangible assets. Goodwill and other intangible assets arise
    from the acquisitions we have made. The amount assigned to
    intangible assets is subjective and based on our estimates of
    the future benefit of the intangible asset using accepted
    valuation techniques, such as discounted cash flow and
    replacement cost models. Our long-lived assets, excluding
    goodwill, are amortized over their estimated useful lives, which
    we determined based on the consideration of several factors,
    including the period of time the 12




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asset is expected to remain in service. We evaluate the carrying
    value and remaining useful lives of
    long-lived
    assets, excluding goodwill, whenever indicators of impairment
    are present. We evaluate the carrying value of goodwill
    annually, or whenever indicators of impairment are present. We
    use a discounted cash flow approach to determine the fair value
    of goodwill. There was no impairment of goodwill noted as a
    result of our impairment testing in 2006, 2005 or 2004.  
    Investments  Our investments, at
    December 31, 2006, consisted principally of certificates of
    deposit, auction rate securities, money market funds, asset back
    securities and U.S. Treasury Notes. Each reporting period
    we evaluate the carrying value of our investments and record a
    loss on investments when we believe an investment has
    experienced a decline in value that is other than temporary. Our
    investments are classified as
    available-for-sale
    and are carried at fair value. We do not recognize gains on an
    investment until sold. Unrealized gains and losses are recorded
    as a component of accumulated other comprehensive income. Once
    realized, the gains and losses and declines in value determined
    to be
    other-than-temporary
    are recorded. A decline in value is deemed to be
    other-than-temporary
    if we do not have the intent and ability to retain the
    investment until any anticipated recovery in market value, the
    extent and length of the time to which the market value has been
    less than cost and the financial condition and near-term
    prospects of the investment.
    Sale of Subsidiary Stock  Our WHC
    subsidiary issues their Class A Common Stock in various
    transactions, which results in a dilution of our percentage
    ownership in WHC. We account for the sale of WHC Class A
    Common Stock in accordance with the Securities and Exchange
    Commissions Staff Accounting Bulletin No. 51
    Accounting for Sales of Stock by a Subsidiary. The
    difference between the carrying amount of our investment in WHC
    before and after the issuance of WHC Class A Common Stock is
    considered either a gain or loss and is reflected as a component
    of our stockholders equity. During 2006, WHC issued
    Class A Common Stock for the following transactions, which
    resulted in our ownership in WHC decreasing to 84.6%, as of
    December 31, 2006, from 85.8%, as of December 31, 2005:  
    Acquisition of Subimo.  During the fourth
    quarter of 2006, WHC purchased Subimo for cash and agreed to the
    future issuance of WHC Class A Common Stock (see
     Introduction  Acquisitions above
    for further details) and, accordingly, we recorded a gain to
    equity of $11,627 in connection with the issuance of the
    non-contingent portion of this WHC Class A Common Stock.
    Other issuances.  During 2006, WHC stock
    options were exercised and restricted stock awards were released
    in accordance with WHCs 2005 Long-Term Incentive Plan and
    WHC issued WHC Class A Common Stock to its Board of
    Directors as payment for their services. The issuance of these
    shares resulted in an aggregate gain of $5,152. We expect to
    continue to record gains in the future related to the future
    issuances of WHC Class A Common Stock in these types of
    transactions.  
    Equity Investment in EBSCo  We account
    for our equity investment in EBSCo in accordance with APB
    Opinion No. 18, The Equity Method of Accounting for
    Investments in Common Stock (which we refer to as
    APB 18), which stipulates that the equity method should be
    used to account for investments whereby an investor has
    the ability to exercise significant influence over
    operating and financial policies of an investee, but does
    not exercise control. APB 18 generally considers an
    investor to have the ability to exercise significant influence
    when it owns 20% or more of the voting stock of an investee. We
    believe our equity investment in EBSCo meets these criteria. We
    assess the recoverability of the carrying value of our
    investment whenever events or changes in circumstances indicate
    a loss in value that is other than a temporary decline. A
    decline in value is deemed to be
    other-than-temporary,
    but not limited to, if we do not have the intent and ability to
    retain the investment until any anticipated recovery in carrying
    amount of the investment, inability of the investment to sustain
    an earnings capacity which would justify the carrying amount or
    the current fair value of the investment is less than its
    carrying amount. The current fair value of our equity investment
    in EBSCo exceeds its carrying amount.
    Stock-Based Compensation  In December
    2004, the Financial Accounting Standards Board (which we refer
    to as FASB) issued Statement of Financial Accounting Standard
    (which we refer to as 13




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##### 



SFAS) No. 123, (Revised 2004): Share-Based
    Payment (which we refer to as SFAS 123R), which
    replaces SFAS No. 123, Accounting for
    Stock-Based Compensation, (which we refer to as
    SFAS 123) and supersedes APB Opinion No. 25,
    Accounting for Stock Issued to Employees.
    SFAS 123R requires all
    share-based
    payments to employees, including grants of employee stock
    options, to be recognized as compensation expense over the
    service period (generally the vesting period) in the
    consolidated financial statements based on their fair values. We
    adopted SFAS 123R on January 1, 2006, and elected to
    use the modified prospective transition method and as a result,
    prior period results were not restated. Under the modified
    prospective method, awards that were granted or modified on or
    after January 1, 2006, are measured and accounted for in
    accordance with SFAS 123R. Unvested stock options and
    restricted stock awards that were granted prior to
    January 1, 2006, will continue to be accounted for in
    accordance with SFAS 123, using the same grant date fair
    value and same expense attribution method used under
    SFAS 123, except that all awards are recognized in the
    results of operations over the remaining vesting periods. The
    impact of forfeitures that may occur prior to vesting is also
    estimated and considered in the amount recognized for all
    stock-based compensation beginning January 1, 2006. As of
    December 31, 2006, approximately $40,709 and $46,383 of
    unrecognized stock-based compensation expense related to
    unvested awards (net of estimated forfeitures) is expected to be
    recognized over a weighted-average period of approximately 1.48
    years and 2.04 years, related to the Emdeon and WHC stock-based
    compensation plans. The total recognition period for the
    remaining unrecognized stock-based compensation expense for both
    the Emdeon and WHC stock-based compensation plans is
    approximately four years; however, the majority of this cost
    will be recognized over the next two years, in accordance with
    our vesting provisions.    
    Deferred Taxes  Our deferred tax assets
    are comprised primarily of net operating loss (which we refer to
    as NOL) carryforwards. At December 31, 2006, we had NOL
    carryforwards of approximately $1.2 billion, which expire
    at varying dates from 2011 through 2026. These loss
    carryforwards may be used to offset taxable income in future
    periods, reducing the amount of taxes we might otherwise be
    required to pay. As of December 31, 2006, a valuation
    allowance has been provided against all domestic net deferred
    taxes, except for a deferred tax liability originating from
    business combinations that resulted in tax-deductible goodwill,
    as well as a deferred tax liability established in purchase
    accounting that is not expected to reverse prior to the
    expiration of our net operating losses. The valuation allowance
    was established because of the uncertainty of realization of the
    deferred tax assets due to lack of sufficient history of
    generating taxable income. Realization is dependent upon
    generating sufficient taxable income prior to the expiration of
    the NOL carryforwards in future periods. Although realization is
    not currently assured, management evaluates the need for a
    valuation allowance each quarter, and in the future, should
    management determine that realization of net deferred tax assets
    is more likely than not, some or all of the valuation allowance
    will be reversed, and our effective tax rate may be reduced as a
    result of such reversal. The valuation allowance also excludes
    the impact of any deferred items related to certain of our
    foreign operations as the realization of the deferred items for
    these operations is likely.
    Tax Contingencies  Our tax
    contingencies are recorded to address potential exposures
    involving tax positions we have taken that could be challenged
    by tax authorities. These potential exposures result from
    applications of various statutes, rules, regulations and
    interpretations. Our estimates of tax contingencies reflect
    assumptions and judgments about potential actions by taxing
    jurisdictions. We believe that these assumptions and judgments
    are reasonable; however, our accruals may change in the 14




---



##### 



future due to new developments in each matter and the ultimate
    resolution of these matters may be greater or less than the
    amount that we have accrued.  Results
    of Operations
    Years Ended December 31,2006


2005


2004(Restated)


(Restated)


(Restated)$


%


$


%


$


%Revenue

$
1,098,608



100.0


$
1,026,475



100.0


$
918,097



100.0Costs and expenses:Cost of operations


623,758



56.8



595,654



58.0



536,289



58.4Development and engineering


33,649



3.1



35,653



3.5



33,141



3.6Sales, marketing, general and
    administrative


288,015



26.2



254,887



24.9



244,516



26.6Depreciation and amortization


61,976



5.6



60,905



5.9



48,707



5.3Legal expense


2,578



0.2



17,835



1.7



9,230



1.0Gain on sale of EBS


352,297



32.1















Loss (gain) on investments










6,365



0.6



(457
)


Interest income


32,339



2.9



21,527



2.1



18,716



2.0Interest expense


18,779



1.7



16,322



1.6



19,251



2.1Other expense, net


1,674



0.2



3,765



0.4



4,535



0.5Income from continuing operations
    before income tax provision


452,815



41.2



56,616



5.5



41,601



4.5Income tax provision


52,316



4.8



3,295



0.3



6,946



0.7Minority interest in WHC


405



0.0



775



0.1







Equity in earnings of EBS Master LLC


763



0.1















Income from continuing operations


400,857



36.5



52,546



5.1



34,655



3.8Income from discontinued
    operations, net of tax


371,060



33.8



16,265



1.6



1,956



0.2Net income

$
771,917



70.3


$
68,811



6.7


$
36,611



4.0   WebMD the
    Magazine.
 15




---



##### 



print-and-mail
                
    Non-cash stock-based compensation
    expense.  Expense for 2006 reflects the adoption
    of SFAS 123R on January 1, 2006, which requires all
    share-based
    payments to employees, including grants of employee stock
    options, to be recognized as compensation expense over the
    service period (generally the vesting period) in the
    consolidated financial statements based on their fair values.
    Expense for 2005 and 2004 primarily related to restricted stock
    awards and stock option modifications, as well as the
    amortization of deferred compensation related to certain
    acquisitions in 2000. The following table summarizes the
    non-cash
    stock-based
    compensation expense included in cost of operations, development
    and engineering, and sales, marketing, general and
    administrative expense in 2006, 2005 and 2004:  Years Ended December 31,2006


2005


2004Stock-based compensation expense
    included in:Cost of operations

$
11,280


$



$
Development and engineering


993







Sales, marketing, general and
    administrative


32,682



4,880



7,860Total

$
44,955


$
4,880


$
7,860  16




---



##### 




    Non-cash advertising expense.  Expense related
    to the use of WHCs prepaid advertising inventory that WHC
    received from News Corporation in exchange for equity
    instruments Emdeon issued in connection with an agreement Emdeon
    entered into with News Corporation in 1999 and subsequently
    amended in 2000. This
    non-cash
    advertising expense is included in cost of operations when we
    utilize this advertising inventory in conjunction with offline
    advertising and sponsorship programs and is included in sales,
    marketing, general and administrative expense when WHC uses the
    asset for promotion of WHCs brand or the brand of one of
    Emdeons other subsidiaries.
    Non-cash distribution expense.  Expense related
    to the amortization of a warrant that Emdeon issued to AOL as
    part of a strategic alliance Emdeon entered into with Time
    Warner in May 2001 under which WebMD became the primary provider
    of healthcare content, tools and services for use on certain AOL
    properties. The value of the warrant was amortized over the
    original three-year term of the strategic alliance and
    accordingly we have not recorded any non-cash distribution
    expense since April 2004. Non-cash distribution expense is
    reflected in sales, marketing, general and administrative
    expense within the accompanying consolidated statements of
    operations.  Modification
    to the Classification of Results
  print-and-mail
    2006
    and 2005
    Revenue
   17




---



##### 



Costs and
    Expenses
  Cost of Operations.
  WebMD the Magazine
    Development and Engineering.
  Sales, Marketing, General and
    Administrative.
   18




---



##### 



Depreciation and Amortization.
  Legal Expense.
  Gain on Sale of EBS.
  Loss (Gain) on Investments. 1 4 1 4
  Interest Income.
  Interest Expense.
  Other Expense, Net.
 19




---



##### 



1 4
  Income Tax Provision.
  Minority Interest in WHC.
  Income from Discontinued Operations, Net of
    Tax.
  2005
    and 2004
    Revenue
    paid-claims
  Costs and
    Expenses
  Cost of Operations.
 20




---



##### 



WebMD the Magazine.
  Development and Engineering.
  Sales, Marketing, General and
    Administrative. stock-based
    Depreciation and Amortization.
 21




---



##### 



Legal Expense.
   Loss (Gain) on Investments. 1 4
  Interest Income.
  Interest Expense.
  Other Expense, Net. 1 4
  Income Tax Provision.
  Minority Interest in WHC.
  Income from Discontinued Operations, Net of
    Tax.
  Results
    of Operations by Operating Segment
   22




---



##### 



1 4 stock-based
  Reclassification of Segment Information.
    Years Ended December 31,2006(a)


2005


2004(Restated)


(Restated)


(Restated)RevenueEmdeon Business Services

$
661,090


$
689,305


$
682,100WebMD


253,881



168,238



134,317ViPS


98,874



90,313



24,693Porex


85,702



79,124



77,099Inter-segment eliminations


(939
)


(505
)


(112
)$
1,098,608


$
1,026,475


$
918,097Earnings before interest,
    taxes, non-cash and other itemsEmdeon Business Services

$
152,911


$
138,529


$
128,361WebMD


53,079



27,546



26,307ViPS


20,529



16,913



4,277Porex


24,974



22,524



22,650Corporate


(43,414
)


(49,481
)


(50,758
)208,079



156,031



130,837Interest, taxes, non-cash and
    other itemsDepreciation and amortization


(61,976
)


(60,905
)


(48,707
)Non-cash stock-based compensation


(44,955
)


(4,880
)


(7,860
)Non-cash advertising and
    distribution


(7,414
)


(10,870
)


(18,826
)Legal expense


(2,578
)


(17,835
)


(9,230
)Interest income


32,339



21,527



18,716Interest expense


(18,779
)


(16,322
)


(19,251
)Income tax provision


(52,316
)


(3,295
)


(6,946
)Minority interest in WHC


(405
)


(775
)


Equity in earnings of EBS Master
    LLC


763







Gain on sale of EBS


352,297







(Loss) gain on investments






(6,365
)


457Other expense


(4,198
)


(3,765
)


(4,535
)Income from continuing operations


400,857



52,546



34,655Income from discontinued
    operations, net of tax


371,060



16,265



1,956Net income

$
771,917


$
68,811


$
36,611     (a)
    
    The EBS segment was sold on
    November 16, 2006 and, therefore, the operations of the EBS
    segment are included only for the period January 1, 2006
    through November 16, 2006. 23




---



##### 



2006
    and 2005
    Emdeon Business Services.
    WebMD.
    ViPS.
    Porex.
 24




---



##### 



Corporate.
  Inter-Segment Eliminations.
  2005
    and 2004
    Emdeon Business Services.
    WebMD.
   25




---



##### 



ViPS.
    Porex.
    Corporate. Sarbanes-Oxley
  Inter-Segment Eliminations.
  Liquidity
    and Capital Resources
    Cash
    Flow
  available-for-sale.
   26




---



##### 



available-for-sale available-for-sale
  1 4 1 8 1 8
    Contractual
    Obligations and Commitments
   Less Than








More ThanTotal


1 Year


1-3 Years


4-5 Years


5 Years(In thousands)Long-term
    debt(a)

$
727,688


$
15,500


$
31,000


$
371,813


$
309,375Leases(b)


60,870



11,580



19,311



14,782



15,197Purchase
    obligations(c)


4,047



4,047











Other long term liabilities


730



289



441







Total

$
793,335


$
31,416


$
50,752


$
386,595


$
324,572     (a)
    
    Long-term debt includes our
    31/8% Notes,
    and our 1.75% Convertible Subordinated Notes due 2023,
    which are first puttable at the option of the holders in 2012
    and 2010, respectively. Amounts include our contractual interest
    payments through the earliest date at which these notes are
    puttable by the holder.(b)
    
    The lease amounts are net of
    sublease income.(c)
    
    Purchase obligations include
    amounts committed under legally enforceable contracts or
    purchase orders for goods and services with defined terms as to
    price, quantity and delivery. 27




---



##### 



Off-Balance
    Sheet Arrangements
    Outlook
    on Future Liquidity
    roll-out
  Recent
    Accounting Pronouncements
  available-for-sale
 28




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  Financial
    Statements
  Form 10-K.
  Item 9A.
    Controls
    and Procedures      Form 10-K,
 29




---



##### 



Rule 13a-15(d), Rule 13(a)-15(f),
 30




---



##### 



PART IV
  Item 15.
    Exhibits
    and Financial Statement Schedules  (a)(1)-(2)
    Financial Statements and Schedules
  page F-1
  (a)(3)
    Exhibits
  page E-1,
 31




---



##### 



SIGNATURES
    EMDEON CORPORATION
  By:
    /s/  Mark
    D. Funston   Executive Vice President and
 Chief Financial Officer
 32




---



##### 



Emdeon
    Corporation
    Index to Consolidated Financial Statements and Supplemental
    Data  Form 10-K
  PageHistorical Financial
    Statements:Report of
    Management on Internal Control Over Financial Reporting
    (Restated)


F-2Report of
    Independent Registered Public Accounting Firm on Internal
    Control Over Financial Reporting


F-3Report of
    Independent Registered Public Accounting Firm


F-5Consolidated
    Balance Sheets at December 31, 2006 and 2005
    (Restated)


F-6Consolidated
    Statements of Operations for the Years Ended December 31,
    2006, 2005 and 2004 (Restated)


F-7Consolidated
    Statements of Stockholders Equity for the Years Ended
    December 31, 2006, 2005 and 2004 (Restated)


F-8Consolidated
    Statements of Cash Flows for the Years Ended December 31,
    2006, 2005 and 2004 (Restated)


F-9Notes to
    Consolidated Financial Statements


F-11Supplemental Financial
    Data:The following supplementary
    financial data of the Registrant and its subsidiaries required
    to be included in Item 15(a)(2) of
    Form 10-K
    are listed below:Schedule II 
    Valuation and Qualifying Accounts


S-1     F-1




---



##### 



REPORT OF
    MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
    (RESTATED)    Form 10-K
  Form 10-K
    Form 10-K
  page F-3.
     F-2




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON
    INTERNAL CONTROL OVER FINANCIAL REPORTING   
             F-3




---



##### 



F-4




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                 
   
 F-5




---



##### 



EMDEON
    CORPORATION
  CONSOLIDATED BALANCE SHEETS
 (In thousands, except share and per share data)
  December 31,2006


2005(Restated)


(Restated)ASSETSCurrent assets:Cash and cash equivalents

$
614,691


$
155,616Short-term investments


34,140



267,387Accounts receivable, net of
    allowance for doubtful accounts of $1,296 at December 31,
    2006 and $6,909 at December 31, 2005


121,608



195,317Inventory


9,922



10,791Due from EBS Master LLC


30,716



Prepaid expenses and other current
    assets


31,871



30,936Assets of discontinued operations






254,247Total current assets


842,948



914,294Marketable equity securities


2,633



4,430Property and equipment, net


72,040



95,686Goodwill


337,669



895,975Intangible assets, net


129,473



235,271Investment in EBS Master LLC


1,521



Other assets


65,659



50,027TOTAL ASSETS

$
1,451,943


$
2,195,683LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
3,996


$
7,739Accrued expenses


113,175



170,102Deferred revenue


87,438



68,390Liabilities of discontinued
    operations






68,436Total current liabilities


204,609



314,6671.75% convertible subordinated
    notes due 2023


350,000



350,00031/8% convertible
    notes due 2025


300,000



300,000Other long-term liabilities


24,179



28,154Minority interest in WebMD Health
    Corp. (WHC)


101,860



43,096Convertible redeemable exchangeable
    preferred stock, $0.0001 par value; 10,000 shares
    authorized, issued and outstanding at December 31, 2006 and
    December 31, 2005


98,768



98,533Commitments and contingenciesStockholders equity:Preferred stock, $0.0001 par
    value; 4,990,000 shares authorized; no shares issued






Common stock, $0.0001 par
    value; 900,000,000 shares authorized;
    449,600,747 shares issued at December 31, 2006;
    428,624,239 shares issued at December 31, 2005


45



43Additional paid-in capital


12,290,126



12,121,431Deferred stock compensation






(3,699
)Treasury stock, at cost;
    287,770,823 shares at December 31, 2006;
    150,296,414 shares at December 31, 2005


(2,585,769
)


(950,482
)Accumulated deficit


(9,341,985
)


(10,113,667
)Accumulated other comprehensive
    income


10,110



7,607Total stockholders equity


372,527



1,061,233TOTAL LIABILITIES AND
    STOCKHOLDERS EQUITY

$
1,451,943


$
2,195,683    F-6




---



##### 



EMDEON
    CORPORATION
  CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
  Years Ended December 31,2006


2005


2004(Restated)


(Restated)


(Restated)Revenue:Services

$
998,252


$
932,273


$
825,405Products


100,356



94,202



92,692Total revenue


1,098,608



1,026,475



918,097Cost of operations:Services


581,108



555,208



497,644Products


42,650



40,446



38,645Total cost of operations


623,758



595,654



536,289Development and engineering


33,649



35,653



33,141Sales, marketing, general and
    administrative


288,015



254,887



244,516Depreciation and amortization


61,976



60,905



48,707Legal expense


2,578



17,835



9,230Gain on sale of EBS


352,297







Loss (gain) on investments






6,365



(457
)Interest income


32,339



21,527



18,716Interest expense


18,779



16,322



19,251Other expense, net


1,674



3,765



4,535Income from continuing operations
    before income tax provision


452,815



56,616



41,601Income tax provision


52,316



3,295



6,946Minority interest in WHC


405



775



Equity in earnings of EBS Master
    LLC


763







Income from continuing operations


400,857



52,546



34,655Income from discontinued
    operations, net of tax


371,060



16,265



1,956Net income

$
771,917


$
68,811


$
36,611Basic income per common share:Income from continuing operations

$
1.44


$
0.15


$
0.11Income from discontinued operations


1.32



0.05



0.00Net income

$
2.76


$
0.20


$
0.11Diluted income per common share:Income from continuing operations

$
1.26


$
0.15


$
0.10Income from discontinued operations


1.12



0.05



0.01Net income

$
2.38


$
0.20


$
0.11Weighted-average shares
    outstanding used in computing income per common share:Basic


279,234



341,747



320,080Diluted


331,642



352,852



333,343    F-7




---



##### 



EMDEON
    CORPORATION
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY
 (In thousands, except share data)
  Stockholders EquityAccumulatedAdditional


Deferred











Other


TotalCommon Stock


Paid-In


Stock


Treasury Stock


Accumulated


Comprehensive


StockholdersShares


Amount


Capital


Compensation


Shares


Amount


Deficit


Income


Equity(Restated)





(Restated)Balances at December 31,
    2003


384,751,705


$
38


$
11,726,734


$
(4,683
)


76,576,865


$
(347,858
)

$
(10,218,671
)

$
16,420


$
1,171,980Net income


























36,611







36,611Net decrease in unrealized gains on
    securities






























(10,581
)


(10,581
)Foreign currency translation
    adjustment






























2,118



2,118Comprehensive income


































28,148Issuance of common stock for option
    exercises, ESPP, 401(k) and other issuances


9,289,615



1



38,051























38,052Issuance of warrants in connection
    with strategic alliances and services










15























15Accretion of convertible redeemable
    exchangeable preferred stock


























(184
)






(184
)Deferred stock compensation










13,001



(13,001
)


















Stock compensation expense










70



8,905



















8,975Purchase of treasury stock


















4,272,630



(32,110
)










(32,110
)Adjustment to deferred stock
    compensation for terminations










(960
)


960



















Balances at December 31,
    2004


394,041,320



39



11,776,911



(7,819
)


80,849,495



(379,968
)


(10,182,244
)


7,957



1,214,876Net income


























68,811







68,811Net increase in unrealized gains on
    securities






























2,976



2,976Foreign currency translation
    adjustment






























(3,326
)


(3,326
)Comprehensive income


































68,461Issuance of common stock for option
    exercises, ESPP, 401(k) and other issuances


11,385,269



1



48,570























48,571Gain on issuance of WHC
    Class A Common Stock










82,275























82,275Conversion of
    31/4% convertible
    subordinated notes


23,197,650



3



214,014























214,017Accretion of convertible redeemable
    exchangeable preferred stock


























(234
)






(234
)Deferred stock compensation










2,241



(2,241
)


















Stock compensation expense










330



3,451



















3,781Purchase of treasury stock under
    repurchase program


















2,541,000



(21,246
)










(21,246
)Purchase of treasury stock in
    tender offer


















66,905,919



(549,268
)










(549,268
)Adjustment to deferred stock
    compensation for terminations










(2,910
)


2,910



















Balances at December 31,
    2005


428,624,239



43



12,121,431



(3,699
)


150,296,414



(950,482
)


(10,113,667
)


7,607



1,061,233Net income


























771,917







771,917Net decrease in unrealized gains on
    securities






























(1,108
)


(1,108
)Foreign currency translation
    adjustment






























3,611



3,611Comprehensive income


































774,420Issuance of common stock for option
    exercises, ESPP and other issuances


20,976,508



2



151,237























151,239Accretion of convertible redeemable
    exchangeable preferred stock


























(235
)






(235
)Reversal of deferred stock
    compensation  adoption of SFAS 123R










(3,699
)


3,699



















Stock compensation expense










26,720























26,720Purchase of treasury stock under
    repurchase program


















8,240,245



(83,167
)










(83,167
)Purchase of treasury stock in
    tender offer


















129,234,164



(1,552,120
)










(1,552,120
)Gain on issuances of WHC
    Class A Common Stock










16,779























16,779Minority interest impact of cash
    transferred to WHC










(22,342
)






















(22,342
)Balances at December 31,
    2006


449,600,747


$
45


$
12,290,126


$




287,770,823


$
(2,585,769
)

$
(9,341,985
)

$
10,110


$
372,527




---



##### 



EMDEON
    CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
  Years Ended December 31,2006


2005


2004(Restated)


(Restated)


(Restated)Cash flows from operating
    activities:Net income

$
771,917


$
68,811


$
36,611Adjustments to reconcile net
    income to net cash provided byoperating activities:Income from discontinued
    operations, net of tax


(371,060
)


(16,265
)


(1,956
)Depreciation and amortization


61,976



60,905



48,707Minority interest in WHC


405



775



Equity in earnings of EBS Master
    LLC


(763
)






Amortization of debt issuance costs


2,906



2,541



2,975Non-cash advertising and
    distribution


7,414



10,870



18,826Non-cash stock-based compensation


44,955



4,880



7,860Deferred income taxes


(3,877
)


4,296



2,723Bad debt expense


1,627



2,527



(1,653
)Loss (gain) on investments






6,365



(457
)Gain on sale of EBS


(352,297
)






Loss on redemption of convertible
    debt






1,902



Reversal of income tax valuation
    allowance applied to goodwill


30,770



174



Changes in operating assets and
    liabilities:Accounts receivable


(45,434
)


(30,021
)


(23,156
)Inventory


190



(755
)


(761
)Prepaid expenses and other, net


(12,131
)


2,629



2,746Accounts payable


162



(6,212
)


6,418Accrued expenses and other
    long-term liabilities


20,621



7,480



(47,647
)Deferred revenue


15,654



7,954



8,817Net cash provided by continuing
    operations


173,035



128,856



60,053Net cash provided by discontinued
    operations


25,985



32,430



29,991Net cash provided by operating
    activities


199,020



161,286



90,044Cash flows from investing
    activities:Proceeds from maturities and sales
    of
    available-for-sale
    securities


928,284



1,063,606



1,408,091Purchases of
    available-for-sale
    securities


(686,815
)


(758,687
)


(1,308,303
)Purchases of property and equipment


(54,885
)


(50,876
)


(29,629
)Cash paid in business
    combinations, net of cash acquired


(152,772
)


(93,712
)


(249,332
)Proceeds from the sale of EBS


1,199,872







Advances to EBS Master LLC


(20,016
)






Proceeds from the sale of
    discontinued operations


522,604







Other changes in equity of
    discontinued operations


28,279



23,176



19,557Net cash provided by (used in)
    continuing operations


1,764,551



183,507



(159,616
)Net cash used in discontinued
    operations


(26,010
)


(34,575
)


(28,536
)Net cash provided by (used in)
    investing activities


1,738,541



148,932



(188,152
)  F-9




---



##### 



Years Ended December 31,2006


2005


2004(Restated)


(Restated)


(Restated)Cash flows from financing
    activities:Proceeds from issuance of Emdeon
    and WHC common stock


156,078



48,571



38,052Purchases of treasury stock under
    repurchase program


(83,167
)


(21,246
)


(32,110
)Purchases of treasury stock in
    tender offer


(1,552,120
)


(549,268
)


Payments of notes payable and other


(437
)


(631
)


(602
)Net proceeds from issuance of
    convertible debt






289,875



Issuance of WHC common stock in
    initial public offering






123,344



Redemption of convertible debt






(86,694
)


Net proceeds from issuance of
    preferred shares










98,115Net cash (used in) provided by
    continuing operations


(1,479,646
)


(196,049
)


103,455Net cash used in discontinued
    operations










Net cash (used in) provided by
    financing activities


(1,479,646
)


(196,049
)


103,455Effect of exchange rates on cash


1,135



(678
)


1,024Net increase in cash and cash
    equivalents


459,050



113,491



6,371Changes in cash attributable to
    discontinued operations


25



2,145



(1,455
)Cash and cash equivalents at
    beginning of period


155,616



39,980



35,064Cash and cash equivalents at end
    of period

$
614,691


$
155,616


$
39,980   F-10




---



##### 



EMDEON
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
 (In thousands, except share and per share data)
  1.
    Summary
    of Significant Accounting Policies  Background
      Basis of
    Presentation
        Business
    
    WebMDprovides both public and private online portals.
    WebMDs public portals for consumers enable them to obtain
    detailed information on a particular disease or condition,
    analyze symptoms, locate physicians, store individual healthcare
    information, receive periodic
    e-newsletters
    on topics of individual interest, enroll in interactive courses
    and participate in online communities with peers and experts.
    WebMDs public portals for physicians and healthcare
    professionals make it easier for them to access clinical
    reference sources, stay abreast of the latest clinical
    information, learn about new treatment options, earn continuing
    medical education (CME) credit and communicate with
    peers. WebMDs private portals enable employers and health
    plans to provide their employees and plan members with access to
    personalized health and benefit information and decision-support
    technology that helps them make more informed benefit, provider
    and treatment choices. In addition, WebMD publishes: medical F-11




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  reference textbooks; The Little Blue Book, a physician
    directory; and, since 2005, WebMD the Magazine,a
    consumer magazine distributed to physician office waiting rooms.
    WebMD also conducts in-person CME as a result of the acquisition
    of the assets of Conceptis Technologies, Inc. in December 2005.  
    ViPS (formerly a business unit of EBS)provides
    healthcare data management, analytics, decision-support and
    process automation solutions and related information technology
    services to governmental, Blue Cross Blue Shield and commercial
    healthcare payers. ViPS develops tools for disease management,
    predictive modeling, provider performance,
    HEDIS®
    quality improvement, healthcare fraud detection and financial
    management. Consultants and outsourcing services are also
    provided to assess workflow, perform software maintenance,
    design complex database architectures and perform data analysis
    and analytic reporting functions.
    Porexdevelops, manufactures and distributes proprietary
    porous plastic products and components used in healthcare,
    industrial and consumer applications, which include porous
    components and finished products for both
    business-to-business
    and OEM applications. Porex also provides technologically
    advanced sterile surgical products used in
    craniofacial/oculoplastic reconstruction and aesthetic/ cosmetic
    surgery in hospitals, clinics and private practice surgical
    offices.
    Emdeon Business Servicesprovides solutions that automate
    key business and administrative functions for healthcare payers
    and providers, including electronic patient eligibility and
    benefit verification; electronic and paper claims processing;
    electronic and paper paid-claims communication services; and
    patient billing, payment and communications services. In
    addition, EBS provides clinical communications services that
    improve the delivery of healthcare by enabling physicians to
    manage laboratory orders and results, hospital reports and
    electronic prescriptions. As a result of the EBS Sale, beginning
    November 17, 2006, the results of EBS are no longer
    included in the segment results. See Note 3.
    Corporateincludes services shared across all operating
    segments, such as executive personnel, accounting, tax,
    treasury, legal, human resources, risk management and certain
    information technology functions. Corporate service costs
    include compensation related costs, insurance and audit fees,
    leased property, facilities cost, legal and other professional
    fees, software maintenance and telecommunication costs.
    Additionally, in connection with the EBS Sale and EPS Sale, the
    Company entered into transition services agreements whereby the
    Company will provide EPS and EBS certain administrative
    services, including payroll, accounting, purchasing and
    procurement, tax, and human resource services, as well as
    information technology (IT) support. Additionally,
    EBS will provide certain administrative services to the Company.
    See Note 2 and Note 3. These services will be provided
    through the Corporate segment, and the related transition
    services fee the Company charges to EBS and EPS, net of the fee
    the Company will pay to EBS will also be included in the
    Corporate segment, which approximates the cost of providing
    these services.  Principles
    of Consolidation
    Accounting
    Estimates
   F-12




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Minority
    Interest
    Sale of
    Stock by a Subsidiary
   F-13




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Cash and
    Cash Equivalents
    Marketable
    Securities
  available-for-sale held-to-maturity held-to-maturity; available-for-sale. available-for-sale. Held-to-maturity available-for-sale
  other-than-temporary available-for-sale other-than-temporary
  Equity
    Investment in EBS Master LLC
    other-than-temporary,
  Allowance
    for Doubtful Accounts
    Inventory
  first-in, work-in-process
 F-14




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  work-in-process work-in-process
  Long-Lived
    Assets
  Property
    and Equipment
    Computer equipment

3 to 5 yearsBuildings

Up to 40 yearsOffice equipment, furniture and
    fixtures

3 to 7 yearsSoftware and Web site development
    costs

3 yearsLeasehold improvements

Shorter of useful life or lease
    term     Goodwill
    and Intangible Assets
    Customer relationships

2 to 15 yearsTrade names

3 to 10 yearsTechnology and patents

3 to 40 yearsNon-compete agreements, content
    and other

2 to 5 years   Recoverability
      Software
    Development Costs
  Software
    to be Sold, Leased or Otherwise Marketed
   F-15




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Internal
    Use Software
  No. 98-1, (SOP 98-1). SOP 98-1
  Web
    Site Development Costs
  No. 00-2
  Restricted
    Cash
    Deferred
    Charges
  1 8
  Revenue
  Recognition
     F-16




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    decision-support
          Products
    and Services
   F-17




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Sales,
    Use and Value Added Tax
    Advertising
    Costs
    Foreign
    Currency
    Concentration
    of Credit Risk
    Income
    Taxes and Tax Contingencies
   F-18




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Accounting
    for Stock-Based Compensation
      Net
    Income Per Common Share
   F-19




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2006


2005


2004(Restated)


(Restated)


(Restated)Numerator:Income from continuing
    operations  Basic

$
400,857


$
52,546


$
34,655Interest expense on convertible
    notes


18,406







Income from continuing
    operations  Diluted

$
419,263


$
52,546


$
34,655Income from discontinued
    operations, net of tax

$
371,060


$
16,265


$
1,956Denominator:Common stock


268,596



331,109



311,721Convertible redeemable
    exchangeable preferred stock


10,638



10,638



8,359Weighted-average
    shares  Basic


279,234



341,747



320,080Employee stock options, restricted
    stock and warrants


10,392



11,105



13,263Convertible notes


42,016







Weighted-average
    shares  Diluted


331,642



352,852



333,343Basic income per common share:Income from continuing operations

$
1.44


$
0.15


$
0.11Income from discontinued operations


1.32



0.05



0.00Net income

$
2.76


$
0.20


$
0.11Diluted income per common share:Income from continuing operations

$
1.26


$
0.15


$
0.10Income from discontinued operations


1.12



0.05



0.01Net income

$
2.38


$
0.20


$
0.11     Years Ended December 31,2006


2005


2004Options and warrants


50,505



60,007



83,986Convertible notes






42,016



55,12950,505



102,023



139,115   Discontinued
    Operations
   F-20




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Recent
    Accounting Pronouncements
  available-for-sale
      Reclassifications
    2.
    Discontinued
    Operations   F-21




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended December 31,2006


2005


2004Revenue

$
212,329


$
304,175


$
296,115Earnings before taxes


19,469



16,909



2,643Taxes on earnings


1,567



644



687Gain on disposal, net of tax


353,158







Income from discontinued
    operations, net of tax

$
371,060


$
16,265


$
1,956     December 31,2005Assets of discontinued operations:Goodwill

$
179,574Accounts receivable, net


37,753Property and equipment, net


20,346Other assets


16,574Total

$
254,247Liabilities of discontinued
    operations:Deferred revenue

$
47,450Accounts payable and accrued
    liabilities


20,151Other liabilities


835Total

$
68,436    F-22




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      3.
    Sale of
    Interest in Emdeon Business Services       F-23




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        December 31, 2005Assets:Goodwill

$
681,612Accounts receivable, net


108,609Intangible assets, net


119,069Property and equipment, net


46,667Other assets


8,441Total

$
964,398Liabilities:Accounts payable and accrued
    liabilities

$
82,476Deferred revenue


20,585Other liabilities


584Total

$
103,645     For the Period fromNovember 17, 2006throughDecember 31,2006Statement of Operations Data:Revenue

$
87,903Cost of operations


56,639Net loss


990   F-24




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2006Balance Sheet Data:Current assets

$
165,218Non-current assets


1,196,825Total Assets

$
1,362,043Current liabilities

$
126,587Non-current liabilities


962,972Shareholders equity


272,484Total Liabilities and
    Shareholders Equity

$
1,362,043   4.
    Stock-Based
    Compensation    Emdeon
    Plans
    Stock
    Options
   F-25




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted


Weighted AverageAverage


RemainingExercise Price


Contractual Life


AggregateShares


Per Share


(In Years)


Intrinsic Value(1)Outstanding at January 1, 2004


104,760,726


$
12.86Granted


19,230,750



8.31Exercised


(7,796,440
)


4.42Cancelled


(9,937,784
)


15.18Outstanding at December 31,
    2004


106,257,252



12.44Granted


3,920,913



9.03Exercised


(9,235,018
)


4.81Cancelled


(12,760,052
)


13.37Outstanding at December 31,
    2005


88,183,095



12.96Granted


9,845,500



10.10Exercised


(20,277,247
)


7.40Cancelled


(14,151,477
)


14.08Outstanding at December 31,
    2006


63,599,871


$
14.04



4.7


$
95,618Vested and exercisable at the end
    of the year


51,760,375


$
15.05



3.9


$
62,585     (1)
    
    The aggregate intrinsic value is
    based on the market price of Emdeons Common Stock on
    December 29, 2006, the last trading day in December, which
    was $12.39, less the applicable exercise price of the underlying
    option. This aggregate intrinsic value represents the amount
    that would have been realized if all of the option holders had
    exercised their options as of December 29, 2006.    Outstanding


ExercisableWeighted


Weighted





WeightedAverage


Average





AverageExercise


Remaining





ExercisePrice


Contractual





PricePer


Life





PerExercise Prices

Shares


Share


(In Years)


Shares


Share$0.25-$7.94


6,635,665


$
5.75



5.32



4,988,153


$
5.29$7.95-$8.77


6,569,077



8.55



7.29



3,481,255



8.54$8.78-$10.00


5,140,623



9.22



7.84



1,978,885



9.20$10.01-$11.55


7,599,535



11.49



3.72



7,285,548



11.53$11.56-$12.50


6,723,599



11.92



7.31



3,095,162



12.04$12.54-$13.50


7,688,665



12.99



3.68



7,688,665



12.99$13.63-$16.06


10,351,540



15.09



3.10



10,351,540



15.09$16.13-$21.69


6,889,317



18.84



3.36



6,889,317



18.84$22.18-$105.00


6,001,850



32.94



2.87



6,001,850



32.9463,599,871


$
14.04



4.74



51,760,375


$
15.05  F-26




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2006


2005


2004Expected dividend yield


0
%


0
%


0
%Expected volatility


0.37



0.50



0.58Risk free interest rate


4.54
%


3.48
%


1.70
%Expected term (years)


4.46



3.25-5.50



3.25-5.50Weighted fair value of options
    granted during the year

$
3.79



$3.68



$3.68   Restricted
    Stock Awards
    Years Ended December 31,2006


2005


2004Weighted





Weighted





WeightedAverage Grant





Average Grant





Average GrantDate Fair





Date Fair





Date FairShares


Value


Shares


Value


Shares


ValueBalance at the beginning of the
    year


1,042,557


$
8.24



1,637,609


$
8.02



214,927


$
6.31Granted


2,298,010



10.66



239,000



9.38



1,584,800



8.20Vested


(562,575
)


8.39



(481,716
)


8.04



(70,532
)


6.31Forfeited


(477,146
)


9.13



(352,336
)


8.26



(91,586
)


8.49Balance at the end of the year


2,300,846


$
10.44



1,042,557


$
8.24



1,637,609


$
8.02     WebMD
    Plans
   F-27




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Options
    WeightedWeighted


AverageAverage


RemainingExercise


Contractual


AggregatePrice


Life


IntrinsicShares


Per Share


(In Years)


Value(1)Outstanding at January 1, 2005





$
Granted


4,574,900



18.31Exercised






Cancelled


(41,800
)


18.31Outstanding at December 31,
    2005


4,533,100



18.31Granted


1,683,700



38.16Exercised


(291,154
)


18.05Cancelled


(523,863
)


27.84Outstanding at December 31,
    2006


5,401,783


$
23.59



9.0


$
89,309Vested and exercisable at the end
    of the year


796,731


$
18.38



8.8


$
17,245     (1)
    
    The aggregate intrinsic value is
    based on the market price of WHCs Class A Common Stock on
    December 29, 2006, the last trading day in December, which
    was $40.02, less the applicable exercise price of the underlying
    option. This aggregate intrinsic value represents the amount
    that would have been realized if all of the option holders had
    exercised their options as of December 29, 2006. F-28




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Outstanding


ExercisableWeighted





WeightedWeighted


Average





AverageAverage


Remaining





ExerciseExercise


Contractual





PricePrice


Life





PerExercise Prices

Shares


Per Share


(In Years)


Shares


Share$17.50


3,673,883


$
17.50



8.70



726,231


$
17.50$24.00-$29.90


337,725



27.70



8.90



68,800



27.32$30.41-$37.97


421,050



36.03



9.60



1,700



30.48$38.01-$39.77


467,075



38.46



9.50







$40.02-$47.30


502,050



41.11



9.80







5,401,783


$
23.59



9.00



796,731


$
18.38     Years Ended December 31,2006


2005Expected dividend yield


0
%


0
%Expected volatility


0.60



0.60Risk free interest rate


4.69
%


4.05
%Expected term (years)


3.24



3.25-5.50Weighted fair value of options
    granted during the year

$
17.33



$8.75  F-29




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restricted
    Stock Awards
    Years Ended December 31,2006


2005Weighted





WeightedAverage





AverageGrant Date





Grant DateShares


Fair Value


Shares


Fair ValueBalance at the beginning of the
    year


376,621


$
17.55






$
Granted


184,710



39.50



376,621



17.55Vested


(94,418
)


17.61







Forfeited


(25,230
)


39.00







Balance at the end of the year


441,683


$
25.49



376,621


$
17.55     Other
      Employee
    Stock Purchase Plan
   F-30




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Summary
    of Stock-Based Compensation Expense
    Years Ended December 31,2006


2005


2004Emdeon Plans:Stock options

$
20,685


$
462


$
3,821Restricted stock


5,635



3,318



5,154WHC Plans:Stock options


17,810







Restricted stock


3,736



874



Employee Stock Purchase Plan


406







Other


409



85



Total stock-based compensation
    expense

$
48,681


$
4,739


$
8,975Included in:Cost of operations

$
11,280


$



$
Development and engineering


993







Sales, marketing, general and
    administrative


32,682



4,880



7,860Gain on sale of EBS


30







Equity in earnings of EBS Master
    LLC


310







Income from continuing operations


45,295



4,880



7,860Income from discontinued
    operations, net of tax


3,386



(141
)


1,115Total stock-based compensation
    expense

$
48,681


$
4,739


$
8,975    F-31




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended December 31,2005


2004(Restated)


(Restated)Net income as reported

$
68,811


$
36,611Add: Non-cash stock-based employee
    compensation expense included in reported net income


4,739



8,975Deduct: Total stock-based employee
    compensation expense determined under fair value based method
    for all awards


(37,218
)


(67,569
)Pro forma net income (loss)

$
36,332


$
(21,983
)Net income (loss) per common share:Basic and diluted  as
    reported

$
0.20


$
0.11Basic  pro forma

$
0.11


$
(0.07
)Diluted  pro forma

$
0.10


$
(0.07
)   5.
    Business
    Combinations  2006
    Acquisitions
    e-detailing
 F-32




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         F-33




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2005
    Acquisitions
      2004
    Acquisitions
   F-34




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         F-35




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      F-36




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Condensed
    Balance Sheet Data
    Other








TotalAccounts


Deferred


Tangible Assets


Intangible





PurchaseReceivable


Revenue


(Liabilities), net


Assets


Goodwill


Price2006Subimo

$
1,725


$
(6,900
)

$
5,284


$
11,300


$
47,911


$
59,320Medsite


2,469



(13,124
)


(826
)


9,000



33,948



31,467IPN


358







(143
)






3,692



3,907Summex


1,064



(1,173
)


(47
)


10,200



20,147



30,191eMedicine


1,717



(2,612
)


(1,076
)


6,390



20,776



25,1952005Conceptis


2,893



(2,866
)


(1,002
)


6,140



14,694



19,859HealthShare


1,925



(4,622
)


(427
)


8,500



24,609



29,9852004MedicineNet


1,081



(64
)


(385
)


6,600



17,241



24,473Esters


151







(199
)


1,200



2,181



3,333RxList










(19
)


1,054



6,568



7,603ViPS


12,573



(5,436
)


4,198



84,000



71,253



166,588Epor










23



200



2,324



2,547Dakota


2,587



(3,894
)


(553
)


13,100



28,266



39,506   Unaudited
    Pro Forma Information
    Years Ended December 31,2006


2005(Restated)


(Restated)Revenue

$
1,123,469


$
1,073,797Income from continuing operations


393,332



42,686Net income


764,392



58,951Basic income per common share:Income from continuing operations

$
1.41


$
0.12Net income

$
2.74


$
0.17Diluted income per common share:Income from continuing operations

$
1.24


$
0.12Net income

$
2.36


$
0.17  F-37




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  6.
    WebMD
    Health Corp. Initial Public Offering; Relationships between the
    Company and WHC  Initial
    Public Offering
    Minority
    Interest
  one-for-one one-for-one
    Relationships
    between the Company and WHC
   F-38




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    paid-in-capital
  Gain Upon
    Sale of WHC Class A Common Stock
          7.
    Significant
    Transactions  America
    Online, Inc.
  agreed-upon
 F-39




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      News
    Corporation
    8.
    Restructuring
    and Integration Charges        9.
    Convertible
    Redeemable Exchangeable Preferred Stock   F-40




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              10.
    Convertible
    Notes  $300,000
    31/8% Convertible
    Notes due 2025
  1 8 1 8 1 8 1 8 1 8
 F-41




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  1 8 1 8 1 8
  1 8 1 8 1 8 1 8 1 8 1 8 1 8 1 8
  $350,000
    1.75% Convertible Subordinated Notes due 2023
      $300,000
    31/4% Convertible
    Subordinated Notes due 2007
  1 4 1 4 1 4 1 4 1 4 1 4 1 4
  1 4 1 4
 F-42




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  1 4 1 4 1 4 1 4 1 4
  11.
    Segment
    Information  1 4
  Reclassification of Segment Information.
 F-43




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended December 31,2006(a)


2005


2004(Restated)


(Restated)


(Restated)RevenueEmdeon Business Services

$
661,090


$
689,305


$
682,100WebMD


253,881



168,238



134,317ViPS


98,874



90,313



24,693Porex


85,702



79,124



77,099Inter-segment eliminations


(939
)


(505
)


(112
)$
1,098,608


$
1,026,475


$
918,097Earnings before interest,
    taxes, non-cash and other itemsEmdeon Business Services

$
152,911


$
138,529


$
128,361WebMD


53,079



27,546



26,307ViPS


20,529



16,913



4,277Porex


24,974



22,524



22,650Corporate


(43,414
)


(49,481
)


(50,758
)208,079



156,031



130,837Interest, taxes, non-cash and
    other itemsDepreciation and amortization


(61,976
)


(60,905
)


(48,707
)Non-cash stock-based compensation


(44,955
)


(4,880
)


(7,860
)Non-cash advertising and
    distribution


(7,414
)


(10,870
)


(18,826
)Legal expense


(2,578
)


(17,835
)


(9,230
)Interest income


32,339



21,527



18,716Interest expense


(18,779
)


(16,322
)


(19,251
)Income tax provision


(52,316
)


(3,295
)


(6,946
)Minority interest in WHC


(405
)


(775
)


Equity in earnings of EBS Master
    LLC


763







Gain on sale of EBS


352,297







(Loss) gain on investments






(6,365
)


457Other expense


(4,198
)


(3,765
)


(4,535
)Income from continuing operations


400,857



52,546



34,655Income from discontinued
    operations, net of tax


371,060



16,265



1,956Net income

$
771,917


$
68,811


$
36,611     (a)
    
    The EBS segment was sold on
    November 16, 2006 and, therefore, the operations of the EBS
    segment are included only for the period January 1, 2006
    through November 16, 2006. F-44




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     EmdeonBusiness











CorporateServices


WebMD


ViPS


Porex


and Other(a)


Total2006Products revenue

$
6,987


$
8,087


$



$
85,702


$
(420
)

$
100,356Services revenue


654,103



245,794



98,874







(519
)


998,252Capital expenditures


20,835



28,452



2,594



2,871



133



54,885Total assets






475,184



156,465



131,794



688,500



1,451,9432005Products revenue


8,734



7,828







77,924



(284
)


94,202Services revenue


680,571



160,410



90,313



1,200



(221
)


932,273Capital expenditures


28,808



18,126



1,305



2,330



307



50,876Total assets


964,398



376,889



165,424



122,228



566,744



2,195,6832004Products revenue


9,117



7,192



488



75,999



(104
)


92,692Services revenue


672,983



127,125



24,205



1,100



(8
)


825,405Capital expenditures


20,359



4,321







4,825



124



29,629     (a)
    Included in the Corporate column are the following:
    i) eliminations of inter-segment revenue transactions,
    ii) the assets of discontinued operations for 2005, and
    iii) all cash and cash equivalents of all U.S. based
    facilities, except for cash and cash equivalents of WebMD.    12.
    Long-Lived
    Assets  Property
    and Equipment
    December 31,2006


2005Computer equipment

$
21,797


$
60,336Land and buildings


14,901



14,123Office equipment, furniture and
    fixtures


28,782



50,643Software and Web site development
    costs


30,856



36,487Leasehold improvements


14,391



17,904Construction in process


5,379



11,616116,106



191,109Less: accumulated depreciation


(44,066
)


(95,423
)Property and equipment, net

$
72,040


$
95,686    F-45




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Goodwill
    and Intangible Assets
      EmdeonBusinessServices


WebMD


ViPS


Porex


TotalBalance as of January 1, 2005

$
663,018


$
53,169


$
71,449


$
43,384


$
831,020Acquisitions during the period






36,079











36,079Contingent consideration for prior
    period acquisitions


19,379



10,638











30,017Tax reversals


(674
)










(600
)


(1,274
)Adjustments to finalize purchase
    price allocations


(111
)


783



(196
)


383



859Effects of exchange rates














(726
)


(726
)Balance as of January 1, 2006


681,612



100,669



71,253



42,441



895,975Acquisitions during the period


3,692



122,782











126,474Contingent consideration for prior
    period acquisitions (a)


(1,913
)














(1,913
)Tax reversals (b)


(40,522
)


(1,636
)






(298
)


(42,456
)Adjustments to finalize purchase
    price allocations






1,669











1,669Sale of EBS


(642,869
)














(642,869
)Effects of exchange rates














789



789Balance as of December 31,
    2006

$



$
223,484


$
71,253


$
42,932


$
337,669     (a)
    
    The Company adjusted goodwill by
    $2,539 in connection with an over accrual of contingent
    consideration in the Emdeon Business Services segment. In
    addition, the Company made a contingent consideration payment in
    the amount of $626 for a 2003 acquisition within the Emdeon
    Business Services segment.(b)
    
    Represents a reduction to goodwill
    as a result of the reversal of a portion of the income tax
    valuation allowances that were originally established in
    connection with the purchase accounting of prior acquisitions. A
    portion of these income tax valuation allowances, or $11,752,
    was reversed in connection with the utilization of net operating
    losses attributable to the discontinued operations, including
    the gain on disposal. F-46




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31, 2006


December 31, 2005Weighted











WeightedGross








Average


Gross








AverageCarrying


Accumulated





Remaining


Carrying


Accumulated





RemainingAmount


Amortization


Net


Useful Life(a)


Amount


Amortization


Net


Useful Life(a)Customer relationships

$
68,168


$
(13,300
)

$
54,868



11.1


$
382,877


$
(242,494
)

$
140,383



11.3Technology and patents


79,221



(27,453
)


51,768



17.1



176,146



(110,244
)


65,902



15.3Trade names


18,216



(4,443
)


13,773



8.0



40,716



(30,435
)


10,281



8.0Non-compete agreements, content and
    other


17,054



(7,990
)


9,064



2.6



22,254



(3,549
)


18,705



6.7Total

$
182,659


$
(53,186
)

$
129,473



12.6


$
621,993


$
(386,722
)

$
235,271



11.9     (a)
    
    The calculation of the weighted
    average remaining useful life is based on the net book value and
    the remaining amortization period (reflected in years) of each
    respective intangible asset.    Years Ending
    December 31,2007

$
24,4412008


21,0342009


15,0082010


7,6472011


6,884Thereafter


54,459   13.
    Accrued
    Expenses    December 31,2006


2005Accrued outside services

$
18,835


$
11,926Accrued acquisition contingent
    consideration






30,122Accrued compensation


28,504



35,276Accrued customer deposits


139



21,570Accrued income, sales and other
    taxes


35,048



20,678Other accrued liabilities


30,649



50,530$
113,175


$
170,102   14.
    Commitments
    and Contingencies  Legal
    Proceedings
  Investigations
    by United States Attorney for the District of South Carolina and
    the SEC
   F-47




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       F-48




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              F-49




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Litigation
    Regarding Distribution of Shares in Healtheon Initial Public
    Offering
    Rule 10b-5
         F-50




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Dakota
    Imaging, Inc. v. Sandeep Goel and Pradeep
    Goel
    Porex
    Corporation v. Kleanthis Dean Haldopoulos, Benjamin T.
    Hirokawa and Micropore Plastics, Inc.
    Ari
    Weitzner, M.D., P.C. et al. v. National
    Physicians Datasource LLC
  The Little Blue Book
  Anthony
    Vlastaris, et al. v. WebMD Publishing
    Services
  The Little Blue Book
 F-51




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  class-action
  Other
    Legal Proceedings
    Leases
      Years Ending December 31,2007

$
11,5802008


11,0742009


8,2372010


8,1702011


6,612Thereafter


15,197Total minimum lease payments

$
60,870   Other
    Contingencies
    15.
    Retirement
    Plans   F-52




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    16. Stockholders
    Equity
  Common
    Stock
  Tender
    Offers
      Stock
    Repurchase Programs
       F-53




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Preferred
    Stock
    Warrants
    Weighted AverageWeighted


RemainingAverage


Contractual LifeExercise Prices

Shares


Exercise Price


(In Years)$0.67-$9.25


2,417,944


$
9.23



1.35$15.00


3,000,000



15.00



0.13$30.00


42,094



30.00



1.485,460,038


$
12.56



0.68    F-54




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   17.
    Income
    Taxes    December 31,2006


2005(Restated)


(Restated)Deferred tax assets:Federal net operating loss
    carryforwards

$
419,293


$
729,335State net operating loss
    carryforwards


67,521



83,353Federal tax credits


35,390



19,162Other accrued expenses


30,200



31,783Intangible assets






58,171Stock-based compensation


13,362



1,464Investment in EBS Master LLC


30,072



Other


8,355



19,854Total deferred tax assets


604,193



943,122Valuation allowance


(554,204
)


(924,155
)Net deferred tax assets


49,989



18,967Deferred tax liabilities:Goodwill


(5,392
)


(9,269
)Intangible assets


(16,755
)


Convertible notes


(36,506
)


(21,958
)Other


(1,813
)


(2,027
)Total deferred tax liabilities


(60,466
)


(33,254
)Net deferred tax liabilities

$
(10,477
)

$
(14,287
)   December 31,2006


2005(Restated)


(Restated)Reported as:Current deferred tax assets and
    liabilities

$
30,590


$
37,937Valuation allowance


(30,590
)


(37,937
)Current deferred tax assets, net






Non-current deferred tax assets
    and liabilities


513,137



871,931Valuation allowance


(523,614
)


(886,218
)Non-current deferred tax
    liabilities, net


(10,477
)


(14,287
)Net deferred tax liabilities

$
(10,477
)

$
(14,287
)  F-55




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2006


2005


2004(Restated)


(Restated)


(Restated)Current:Federal

$
7,939


$
(5,742
)

$
State


15,499



85



2,186Foreign


1,985



4,482



2,037Current income tax provision
    (benefit)


25,423



(1,175
)


4,223Deferred:Federal


(3,479
)


3,855



2,444State


(398
)


441



279Deferred income tax (benefit)
    provision


(3,877
)


4,296



2,723Reversal of valuation allowance
    applied to goodwill


30,770



174



Total income tax provision

$
52,316


$
3,295


$
6,946     Years Ended December 31,2006


2005


2004(Restated)


(Restated)


(Restated)United States federal statutory
    rate


35.0
%


35.0
%


34.0
%State income taxes (net of federal
    benefit)


1.3



1.5



3.5Goodwill amortization


12.6



(7.5
)


(9.7
)Valuation allowance


(79.9
)


24.0



9.9Cumulative effect of change in tax
    rate






(40.4
)


Settlement of tax contingencies


(0.7
)


(10.2
)


Reversal of valuation allowance
    applied to goodwill


6.8



0.3



Losses benefited to (from)
    discontinued operations


36.7



(2.3
)


(18.2
)Other


(0.3
)


5.5



(2.8
)Effective income tax rate


11.5
%


5.9
%


16.7
%    F-56




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                non-U.S. income non-U.S. income
 F-57




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       18.
    Fair
    Value of Financial Instruments  and/or
  December 31, 2006


December 31, 2005Cost Basis


Fair Value


Cost Basis


Fair ValueAssets:Cash and cash equivalents

$
614,691


$
614,691


$
155,616


$
155,616Short-term investments


34,140



34,140



268,109



267,387Marketable securities 
    long term


1,474



2,633



1,477



4,430Liabilities:Convertible notes


650,000



636,996



650,000



537,000Convertible redeemable
    exchangeable preferred stock


98,768



132,500



98,533



96,500   available-for-sale.
 F-58




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31, 2006


December 31, 2005Cost or


Gross


Gross





Cost or


Gross


GrossAmortized


Unrealized


Unrealized





Amortized


Unrealized


UnrealizedCost


Gains


Losses


Fair Value


Cost


Gains


Losses


Fair ValueShort-TermCertificate of deposits and
    marketable debt securities

$
34,140


$



$



$
34,140


$
268,109


$
11


$
733


$
267,387Long-TermEquity securities

$
1,474


$
1,161


$
2


$
2,633


$
1,477


$
2,955


$
2


$
4,430   available-for-sale available-for-sale
  1 4 available-for-sale available-for-sale
  available-for-sale
  19.
    Other
    Expense, Net    Years Ended December 31,2006


2005


2004Transition services income(a)

$
(2,524
)

$



$
Advisory expense(b)


4,198







Loss on redemption of convertible
    debt(c)






1,902



Settlement of litigation(d)






1,863



Restructuring and integration
    charge(e)










4,535Other expense, net

$
1,674


$
3,765


$
4,535     (a)
    
    Represents the net income received
    from Sage Software and EBSCo in relation to the respective
    Transition Services Agreements. See Note 2 and 3. F-59




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (b)
    
    Represents professional fees,
    primarily consisting of legal, accounting and financial advisory
    services related to the EBS Sale through September 26,
    2006, the date the Company entered into a definitive agreement
    with General Atlantic regarding the sale of this business.(c)
    
    Represents a write-off of the
    remaining unamortized deferred issuance costs related to the
    portion of the
    31/4% Notes
    that were redeemed, and the payment of the redemption premium.
    See Note 10.(d)
    
    Represents the settlement of
    litigation in 2005, in which the Company was named as a
    defendant.(e)
    
    Represents a charge related to the
    2000 restructuring plan. See Note 8.  20.
    Related
    Party Transactions      21.
    Comprehensive
    Income  available-for-sale
  Years Ended December 31,2006


2005


2004(Restated)


(Restated)


(Restated)Foreign currency translation gains
    (losses)

$
3,611


$
(3,326
)

$
2,118Unrealized (losses) gains on
    securities:Unrealized holding losses


(1,108
)


(3,389
)


(10,124
)Less: reclassification adjustment
    for net gains (losses) realized in net income






(6,365
)


457Net unrealized (losses) gains on
    securities


(1,108
)


2,976



(10,581
)Other comprehensive income (loss)


2,503



(350
)


(8,463
)Net income


771,917



68,811



36,611Comprehensive income

$
774,420


$
68,461


$
28,148   non-U.S. subsidiaries.
 F-60




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended December 31,2006


2005


2004Unrealized gains (losses) on
    securities

$
1,159


$
2,267


$
(709
)Foreign currency translation gains


8,951



5,340



8,666Total accumulated other
    comprehensive income

$
10,110


$
7,607


$
7,957   22.
    Supplemental
    Disclosures of Cash Flow Information    Years Ended December 31,2006


2005


2004Supplemental Disclosure of Cash
    Flow Information:Interest paid

$
15,802


$
13,131


$
16,190Taxes paid, net of refunds

$
23,210


$
5,727


$
5,635Supplemental Schedule of Non-Cash
    Investing and Financing activities:Conversion of $300,000
    31/4% Convertible
    Subordinated Notes to Emdeon Common Stock

$



$
214,880


$
Accretion of convertible
    redeemable exchangeable preferred stock

$
235


$
234


$
184Deferred stock compensation
    related to restricted stock awards

$



$
2,241


$
13,001SAB 51 gain

$
16,779


$
82,275


$
  F-61




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  23.
    Quarterly
    Financial Data (Unaudited)    2006First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(Restated)


(Restated)


(Restated)


(Restated)Revenue

$
277,194


$
291,631


$
299,732


$
230,051Cost of operations


167,174



169,041



169,710



117,833Development and engineering


8,864



9,057



9,243



6,485Sales, marketing, general and
    administrative


70,180



72,033



74,390



71,412Depreciation and amortization


16,554



17,221



18,189



10,012Legal expense


542



275



1,023



738Interest (expense) income, net


(273
)


(235
)


1,876



12,192Gain on sale of EBS














352,297Other (expense) income, net






(2,072
)


(1,786
)


2,184Income from continuing operations
    before income tax provision


13,607



21,697



27,267



390,244Income tax provision


4,056



6,288



4,779



37,193Minority interest in WHC


(472
)


(121
)


69



929Equity in earnings of EBS Master
    LLC














763Income from continuing operations


10,023



15,530



22,419



352,885Income from discontinued
    operations, net of tax


5,567



6,556



358,048



889Net income

$
15,590


$
22,086


$
380,467


$
353,774Basic income per common share:Income from continuing operations

$
0.04


$
0.05


$
0.08


$
1.38Income from discontinued
    operations, net of tax


0.01



0.03



1.24



0.00Net income

$
0.05


$
0.08


$
1.32


$
1.38Diluted income per common share:Income from continuing operations

$
0.03


$
0.05


$
0.07


$
1.16Income from discontinued
    operations, net of tax


0.02



0.02



1.20



0.00Net income

$
0.05


$
0.07


$
1.27


$
1.16   F-62




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2005First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(Restated)


(Restated)


(Restated)


(Restated)Revenue

$
244,059


$
257,630


$
261,022


$
263,764Cost of operations


141,903



151,126



152,066



150,559Development and engineering


8,895



8,788



8,912



9,058Sales, marketing, general and
    administrative


62,456



62,971



63,865



65,595Depreciation and amortization


14,001



15,024



15,801



16,079Legal expense


4,160



4,283



5,904



3,488Loss (gain) on investments


3,832



(190
)






2,723Interest (expense) income, net


(461
)


43



2,128



3,495Other expense, net






1,902



1,863



Income from continuing operations
    before income tax provision (benefit)


8,351



13,769



14,739



19,757Income tax provision (benefit)


438



2,972



2,977



(3,092
)Minority interest in WHC










35



740Income from continuing operations


7,913



10,797



11,727



22,109Income from discontinued
    operations, net of tax


1,297



4,314



1,257



9,397Net income

$
9,210


$
15,111


$
12,984


$
31,506Basic income per common share:Income from continuing operations

$
0.02


$
0.03


$
0.03


$
0.06Income from discontinued
    operations, net of tax


0.01



0.01



0.01



0.03Net income

$
0.03


$
0.04


$
0.04


$
0.09Diluted income per common share:Income from continuing operations

$
0.02


$
0.03


$
0.03


$
0.06Income from discontinued
    operations, net of tax


0.01



0.01



0.01



0.03Net income

$
0.03


$
0.04


$
0.04


$
0.09   24.
    Restatement
    of Consolidated Financial Statements   F-63




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Consolidated Balance SheetsAs PreviouslyReported


Adjustments


RestatedAs of December 31, 2006:Other long-term liabilities

$
14,420


$
9,759


$
24,179Minority interest in WebMD Health
    Corp.(WHC)


102,294



(434
)


101,860Accumulated deficit


(9,332,660
)


(9,325
)


(9,341,985
)Total stockholders equity


381,852



(9,325
)


372,527As of December 31, 2005:Other long-term liabilities


14,518



13,636



28,154Minority interest in WebMD Health
    Corp.(WHC)


43,229



(133
)


43,096Accumulated deficit


(10,100,164
)


(13,503
)


(10,113,667
)Total stockholders equity


1,074,736



(13,503
)


1,061,233   F-64




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated Statements of OperationsAs PreviouslyReported


Adjustments


RestatedYear Ended December 31, 2006:Income tax provision

$
56,193


$
(3,877
)

$
52,316Minority interest in WHC


706



(301
)


405Income from continuing operations


396,679



4,178



400,857Net income


767,739



4,178



771,917Basic income per common share:Income from continuing operations

$
1.42


$
0.02


$
1.44Income from discontinued operations


1.33



(0.01
)


1.32Net income

$
2.75


$
0.01


$
2.76Diluted income per common share:Income from continuing operations

$
1.25


$
0.01


$
1.26Income from discontinued operations


1.12







1.12Net income

$
2.37


$
0.01


$
2.38Year Ended December 31, 2005:Income tax (benefit) provision

$
(1,001
)

$
4,296


$
3,295Minority interest in WHC


908



(133
)


775Income from continuing operations


56,709



(4,163
)


52,546Net income


72,974



(4,163
)


68,811Basic income per common share:Income from continuing operations

$
0.17


$
(0.02
)

$
0.15Income from discontinued operations


0.04



0.01



0.05Net income

$
0.21


$
(0.01
)

$
0.20Diluted income per common share:Income from continuing operations

$
0.16


$
(0.01
)

$
0.15Income from discontinued operations


0.05







0.05Net income

$
0.21


$
(0.01
)

$
0.20Year Ended December 31, 2004:Income tax provision

$
4,223


$
2,723


$
6,946Income from continuing operations


37,378



(2,723
)


34,655Net income


39,334



(2,723
)


36,611Basic income per common share:Income from continuing operations

$
0.12


$
(0.01
)

$
0.11Income from discontinued operations


0.00







0.00Net income

$
0.12


$
(0.01
)

$
0.11Diluted income per common share:Income from continuing operations

$
0.11


$
(0.01
)

$
0.10Income from discontinued operations


0.01







0.01Net income

$
0.12


$
(0.01
)

$
0.11   F-65




---



##### 



EMDEON CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated Statements of Cash FlowsAs PreviouslyReported


Adjustments


RestatedYear Ended December 31, 2006:Net income

$
767,739


$
4,178


$
771,917Minority interest in WHC


706



(301
)


405Deferred income taxes






(3,877
)


(3,877
)Year Ended December 31, 2005:Net income

$
72,974


$
(4,163
)

$
68,811Minority interest in WHC


908



(133
)


775Deferred income taxes






4,296



4,296Year Ended December 31, 2004:Net income

$
39,334


$
(2,723
)

$
36,611Deferred income taxes






2,723



2,723  F-66




---



##### 



Schedule II.
    Valuation and Qualifying Accounts
  Years Ended December 31, 2006, 2005 and 2004 (Restated)Balance at


Charged toBeginning


Costs and











Balance atof Year


Expenses


Acquired


Write-offs


Other


End of Year(In thousands)December 31, 2006Allowance for Doubtful Accounts

$
6,909


$
1,627


$
229


$
(3,830
)

$
(3,639
)(b)

$
1,296Valuation Allowance for Deferred
    Tax Assets


924,155



(370,313
)


362











554,204December 31, 2005Allowance for Doubtful Accounts


6,420



2,527



60



(2,098
)






6,909Valuation Allowance for Deferred
    Tax Assets


881,438



12,733



12,893







17,091
(a)


924,155December 31, 2004Allowance for Doubtful Accounts


10,593



(1,592
)


152



(2,733
)






6,420Valuation Allowance for Deferred
    Tax Assets


882,817



2,838



(18,189
)






13,972
(a)


881,438     (a)
    
    Represents valuation allowance created through equity as a
    result of stock option and warrant exercises.(b)
    
    Represents the sale of the Emdeon Business Services segment on
    November 16, 2006. S-1