SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT

MAGELLAN HEALTH, INC. (Parent Company Only)

CONDENSED BALANCE SHEETS AS OF DECEMBER 31,

(In thousands)


	2016		2017
ASSETS
Current Assets:
Cash and cash equivalents	$	2	$	2
Accounts receivable		—		157
Due from affiliates, net		—		283,802
Other current assets		—		32
Total Current Assets		2		283,993
Investment in subsidiaries		1,206,555		1,830,555
Total Assets	$	1,206,557	$	2,114,548
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accrued liabilities	$	496	$	7,227
Due to affiliates, net		106,342		—
Current debt		—		108,881
Total Current Liabilities		106,838		116,108
Long-term debt		—		721,946
Total Liabilities		106,838		838,054
Preferred stock, par value $.01 per share
Authorized—10,000 shares at December 31, 2016 and December 31, 2017-Issued and outstanding-none		—		—
Ordinary common stock, par value $.01 per share
Authorized—100,000 shares at December 31, 2016 and December 31, 2017-Issued and outstanding-51,993 and 23,517 shares at December 31, 2016, respectively, and 52,973 and 24,202 shares at December 31, 2017, respectively		520		530
Other Stockholders’ Equity:
Additional paid-in capital		1,186,283		1,274,811
Retained earnings		1,289,288		1,399,495
Accumulated other comprehensive loss		(175)		(380)
Treasury stock, at cost, 28,476 and 28,771 shares at December 31, 2016 and December 31, 2017, respectively		(1,376,197)		(1,397,962)
Total Stockholders’ Equity		1,099,719		1,276,494
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity	$	1,206,557	$	2,114,548

See accompanying notes to condensed financial statements.

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT

MAGELLAN HEALTH, INC. (Parent Company Only)

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31,

(In thousands, except per share amounts)


	2015		2016		2017
Costs and expenses:
Direct service costs and other operating expenses	$	26,613	$	41,336	$	38,157
Interest expense		—		—		8,343
Interest and other income		—		—		(157)
Total costs and expenses		26,613		41,336		46,343
Loss before income taxes		(26,613)		(41,336)		(46,343)
Benefit for income taxes		10,045		16,072		17,918
Net loss before equity in subsidiaries		(16,568)		(25,264)		(28,425)
Equity in earnings from subsidiaries		47,981		103,143		138,632
Net income		31,413		77,879		110,207
Other comprehensive income:
Unrealized (loss) gain on available-for-sale securities		(119)		87		(205)
Comprehensive income	$	31,294	$	77,966	$	110,002

See accompanying notes to condensed financial statements.

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT

MAGELLAN HEALTH, INC. (Parent Company Only)

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,

(In thousands)


	2015		2016		2017
Cash flows from operating activities:
Net cash used in operating activities	$	(17,390)	$	(24,283)	$	(21,778)
Cash flows from investing activities:
Dividends received from/(capital contributions to) subsidiaries, net		166,442		106,235		(836,396)
Net cash provided by (used in) investing activities		166,442		106,235		(836,396)
Cash flows from financing activities:
Proceeds from issuance of debt		—		—		841,736
Proceeds from exercise of stock options		54,091		24,547		44,355
Payments to acquire treasury stock		(204,427)		(106,806)		(21,765)
Payments on debt		—		—		(4,375)
Other		1,284		307		(1,777)
Net cash (used in) provided by financing activities		(149,052)		(81,952)		858,174
Net increase (decrease) in cash and cash equivalents		—		—		—
Cash and cash equivalents at beginning of period		2		2		2
Cash and cash equivalents at end of period	$	2	$	2	$	2

See accompanying notes to condensed financial statements.

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT

MAGELLAN HEALTH, INC. (Parent Company Only)

NOTES TO CONDENSED FINANCIAL STATEMENTS

DECEMBER 31, 2017

1. Basis of Presentation

Magellan’s parent company condensed financial statements should be read in conjunction with its consolidated financial statements, and the accompanying notes thereto, included in this Form 10-K.

2. Subsidiary Transactions

Magellan’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries. When Magellan receives dividends from its subsidiaries, such amounts are recorded as a reduction to the investments in the respective subsidiaries. Magellan made capital contributions to certain subsidiaries primarily to comply with minimum net worth requirements and to fund acquisitions. During 2015, 2016 and 2017, Magellan received cash dividends from its subsidiaries of $32.3 million, $29.3 million and $34.7 million, respectively.

3. Long Term Debt

See Note 5—“Long Term Debt and Capital Lease Obligations” to the consolidated financial statements for discussion of Magellan’s long-term debt obligations set forth elsewhere herein.

As of December 31, 2017, the contractual maturities of the term loan under the 2017 Credit Agreement were as follows: 2018—$17.5 million; 2019—$17.5 million; 2020—$17.5 million; 2021—$17.5 million; and 2022—$275.6 million. In 2024, Magellan’s $400.0 million aggregate principal amount of its 4.400% Senior Notes will mature.