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

6 Months Ended

Jun. 30, 2019

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

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

The following table reconciles 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) for the three and six months ended June 30:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2019		2018		2019
Numerator:
Net income	$	13,551	$	13,613	$	25,003	$	14,044
Denominator:
Weighted average number of common shares outstanding—basic		24,569		24,101		24,460		24,024
Common stock equivalents—stock options		669		153		738		132
Common stock equivalents—RSAs		33		7		28		7
Common stock equivalents—RSUs		23		18		50		19
Common stock equivalents—PSUs		111		130		232		127
Common stock equivalents—employee stock purchase plan		2		7		2		6
Weighted average number of common shares outstanding—diluted		25,407		24,416		25,510		24,315
Net income per common share—basic	$	0.55	$	0.56	$	1.02	$	0.58
Net income per common share—diluted	$	0.53	$	0.56	$	0.98	$	0.58

The weighted average number of common shares outstanding for the three and six months ended June 30, 2018 and 2019 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 and six months ended June 30, 2018 and 2019 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 0.5 million and 0.3 million options for the three and six months ended June 30, 2018, respectively, and 1.1 million and 1.1 million options for the three and six months ended June 30, 2019, 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.