Net Income per Common Share Attributable to Magellan Health, Inc.

3 Months Ended

Mar. 31, 2015

Net Income per Common Share Attributable to Magellan Health, Inc.

Net Income per Common Share Attributable to Magellan Health, Inc.

NOTE B—Net Income per Common Share Attributable to Magellan Health, Inc.

        The following tables reconcile income attributable to common shareholders (numerator) and shares (denominator) used in the computations of net income per share attributable to common shareholders (in thousands, except per share data):

	Three Months Ended March 31,
	2014		2015
Numerator:
Net income attributable to Magellan Health, Inc.	$	25,720	$	7,288
Denominator:
Weighted average number of common shares outstanding—basic		27,370		25,319
Common stock equivalents—stock options		594		450
Common stock equivalents—RSAs		32		514
Common stock equivalents—RSUs		54		46
Common stock equivalents—PSUs		—		68
Common stock equivalents—employee stock purchase plan		1		2
Weighted average number of common shares outstanding—diluted		28,051		26,399
Net income attributable to Magellan Health, Inc. per common share—basic	$	0.94	$	0.29
Net income attributable to Magellan Health, Inc. per common share—diluted	$	0.92	$	0.28

        The weighted average number of common shares outstanding for the three months ended March 31, 2014 and 2015 were calculated using outstanding shares of the Company's common stock. Common stock equivalents included in the calculation of diluted weighted average common shares outstanding for the three months ended March 31, 2014 and 2015 represent stock options to purchase shares of the Company's common stock, RSAs, RSUs, PSUs and stock purchased under the Employee Stock Purchase Plan.

        The Company had additional potential dilutive securities outstanding representing 0.3 million and 1.0 million options for the three months ended March 31, 2014 and 2015, respectively, that were not included in the computation of dilutive securities because they were anti-dilutive for the period. Had these shares not been anti-dilutive, all of these shares would not have been included in the net income attributable to common shareholder per common share calculation as the Company uses the treasury stock method of calculating diluted shares.