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

3 Months Ended

Mar. 31, 2020

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 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 months ended March 31:

	Three Months Ended
	March 31,
	2019		2020
Numerator:
Net income	$	431	$	18,250
Denominator:
Weighted average number of common shares outstanding—basic		23,946		24,728
Common stock equivalents—stock options		111		61
Common stock equivalents—RSAs		7		21
Common stock equivalents—RSUs		19		50
Common stock equivalents—PSUs		124		-
Common stock equivalents—employee stock purchase plan		6		9
Weighted average number of common shares outstanding—diluted		24,213		24,869
Net income per common share—basic	$	0.02	$	0.74
Net income per common share—diluted	$	0.02	$	0.73

The weighted average number of common shares outstanding for the three months ended March 31, 2019 and 2020 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, 2019 and 2020 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 1.2 million and 1.4 million options for the three months ended March 31, 2019 and 2020, 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.