The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2015 and 2016 (in thousands, except per share amounts):


	For the Quarter Ended
	March 31,		June 30,		September 30,		December 31,
	2015		2015		2015		2015
Year Ended December 31, 2015
Net revenue:
Managed care and other	$	748,650	$	776,240	$	809,249	$	863,506
PBM and dispensing		232,318		381,367		380,833		405,237
Total net revenue		980,968		1,157,607		1,190,082		1,268,743
Costs and expenses:
Cost of care		522,328		568,288		596,323		587,816
Cost of goods sold		218,207		361,409		360,444		381,817
Direct service costs and other operating expenses (1) (2)		204,450		191,455		220,586		205,901
Depreciation and amortization		23,496		25,022		26,721		27,605
Interest expense		1,626		1,653		1,654		1,648
Interest and other income		(466)		(500)		(631)		(568)
Total costs and expenses		969,641		1,147,327		1,205,097		1,204,219
Income (loss) before income taxes		11,327		10,280		(15,015)		64,524
Provision (benefit) for income taxes		4,133		5,987		(7,254)		39,543
Net income (loss)		7,194		4,293		(7,761)		24,981
Less: net income (loss) attributable to non-controlling interest		(94)		(350)		47		(2,309)
Net income (loss) attributable to Magellan Health, Inc.	$	7,288	$	4,643	$	(7,808)	$	27,290
Weighted average number of common shares outstanding—basic		25,319		25,684		24,892		23,582
Weighted average number of common shares outstanding—diluted		26,399		26,776		24,892		24,402
Net income (loss) per common share attributable to Magellan Health, Inc.:
Net income (loss) per common share—basic:	$	0.29	$	0.18	$	(0.31)	$	1.16
Net income (loss) per common share—diluted:	$	0.28	$	0.17	$	(0.31)	$	1.12


	For the Quarter Ended
	March 31,		June 30,		September 30,		December 31,
	2016		2016		2016		2016
Year Ended December 31, 2016
Net revenue:
Managed care and other	$	676,461	$	699,861	$	751,589	$	775,031
PBM and dispensing		440,561		464,484		540,543		488,354
Total net revenue		1,117,022		1,164,345		1,292,132		1,263,385
Costs and expenses:
Cost of care		457,631		472,529		480,243		472,211
Cost of goods sold		415,459		436,930		509,673		456,658
Direct service costs and other operating expenses (3) (4) (5)		192,456		214,077		229,094		240,985
Depreciation and amortization		25,007		25,580		26,885		28,574
Interest expense		1,748		1,994		3,038		3,413
Interest and other income		(683)		(692)		(741)		(702)
Total costs and expenses		1,091,618		1,150,418		1,248,192		1,201,139
Income before income taxes		25,404		13,927		43,940		62,246
Provision for income taxes		12,013		12,615		18,631		26,469
Net income		13,391		1,312		25,309		35,777
Less: net income attributable to non-controlling interest		154		(2,646)		(200)		602
Net income attributable to Magellan Health, Inc.	$	13,237	$	3,958	$	25,509	$	35,175
Weighted average number of common shares outstanding—basic		23,631		23,516		23,052		22,556
Weighted average number of common shares outstanding—diluted (6)		24,511		24,643		24,009		23,493
Net income per common share attributable to Magellan Health, Inc.:
Net income per common share—basic:	$	0.56	$	0.17	$	1.11	$	1.56
Net income per common share—diluted:	$	0.54	$	0.16	$	1.06	$	1.50

(1)

Includes stock compensation expense of $13,901, $13,795, $12,897 and $9,791 for the quarters ended March 31, June 30, September 30 and December 31, 2015, respectively.

(2)

Includes changes in fair value of contingent consideration of $14,969, $2,567, $29,738 and $(3,017) for the quarters ended March 31, June 30, September 30 and December 31, 2015, respectively.

(3)

Includes stock compensation expense of $8,887, $9,510, $9,176 and $9,849 for the quarters ended March 31, June 30, September 30 and December 31, 2016, respectively.

(4)

Includes changes in fair value of contingent consideration of $(266), $463, $313 and $(614) for the quarters ended March 31, June 30, September 30 and December 31, 2016, respectively.

(5)

Includes impairment of intangible assets of $4,800 for the quarter ended June 30, 2016.

During the quarter ended December 31, 2016 the Company early adopted ASU 2016-09. As a result, the diluted weighted average shares outstanding as of March 31, June 30 and September 30, 2016 have been adjusted. There was no impact to the net income per common share – diluted.