10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 000-52073

CATAMARAN CORPORATION

(Exact name of registrant as specified in its charter)

Yukon Territory	98-0167449
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

1600 McConnor Parkway

Schaumburg, Illinois 60173-6801

(Address of principal executive offices, zip code)

(800) 282-3232

(Registrant’s phone number, including area code)

2441 Warrenville Road, Suite 610,

Lisle, IL 60532-3642

(Former address if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of October 31, 2013, there were 206,298,320 of the Registrant’s common shares, no par value per share, outstanding.

TABLE OF CONTENTS

	Page
PART I — FINANCIAL INFORMATION	3
Item 1. Financial Statements (unaudited)	3
Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012	3
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and 2012	4
Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2013 and 2012	5
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012	6
Consolidated Statements of Shareholders’ Equity for the Nine Months Ended September 30, 2013 and 2012	7
Notes to Unaudited Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosures About Market Risk	31
Item 4. Controls and Procedures	31
PART II — OTHER INFORMATION	32
Item 1. Legal Proceedings	32
Item 1A. Risk Factors	32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3. Defaults Upon Senior Securities	32
Item 4. Mine Safety Disclosures	32
Item 5. Other Information	32
Item 6. Exhibits	32
SIGNATURE	33
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Exhibit 101

2

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

CATAMARAN CORPORATION

Consolidated Balance Sheets

(in thousands, except share data)

	September 30, 2013			December 31, 2012
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	436,227		$	370,776
Restricted cash	32,219			52,422
Accounts receivable, net of allowance for doubtful accounts of $6,532 (2012 — $7,899)	847,924			725,809
Rebates receivable	291,182			302,461
Other current assets	113,784			101,311
Total current assets	1,721,336			1,552,779
Property and equipment, net of accumulated depreciation of $91,915 (2012 — $64,048)	172,868			105,201
Goodwill	4,497,621			4,478,038
Other intangible assets, net of accumulated amortization of $307,721 (2012 — $178,188)	1,054,523			1,198,991
Other long-term assets	46,538			50,118
Total assets	$	7,492,886		$	7,385,127
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	693,625		$	644,818
Accrued expenses and other current liabilities	241,452			254,811
Pharmacy benefit management rebates payable	314,565			302,065
Current portion - long-term debt	43,750			41,250
Total current liabilities	1,293,392			1,242,944
Deferred income taxes	302,527			344,232
Long-term debt	976,610			1,132,153
Other long-term liabilities	87,694			55,937
Total liabilities	2,660,223			2,775,266
Commitments and contingencies (Note 11)
Shareholders’ equity
Common shares: no par value, unlimited shares authorized; 206,298,320 shares issued and outstanding, September 30, 2013 (December 31, 2012 — 205,399,102 shares)	4,215,139			4,180,778
Additional paid-in capital	72,825			73,530
Retained earnings	542,755			354,991
Accumulated other comprehensive loss	(1,997		)	(2,191		)
Total shareholders' equity	4,828,722			4,607,108
Non-controlling interest	3,941			2,753
Total equity	4,832,663			4,609,861
Total liabilities and equity	$	7,492,886		$	7,385,127

See accompanying notes to the unaudited consolidated financial statements.

3

CATAMARAN CORPORATION

Consolidated Statements of Operations

(in thousands, except share and per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(unaudited)						(unaudited)
Revenue	$	3,614,148		$	3,190,780		$	10,251,295		$	6,610,580
Cost of revenue	3,326,360			2,955,889			9,450,546			6,142,796
Gross profit	287,788			234,891			800,749			467,784
Expenses:
Selling, general and administrative	110,454			133,716			310,839			255,088
Depreciation of property and equipment	9,979			5,717			24,887			10,552
Amortization of intangible assets	47,220			51,380			147,368			70,710
	167,653			190,813			483,094			336,350
Operating income	120,135			44,078			317,655			131,434
Interest and other expense, net	9,026			11,843			30,972			15,064
Income before income taxes	111,109			32,235			286,683			116,370
Income tax expense (benefit):
Current	38,419			30,816			111,841			62,004
Deferred	(10,438		)	(17,988		)	(36,225		)	(18,693		)
	27,981			12,828			75,616			43,311
Net income	$	83,128		$	19,407		$	211,067		$	73,059
Less: Net income (loss) attributable to non-controlling interest	10,190			(1,070		)	23,303			(1,070		)
Net income attributable to the Company	$	72,938		$	20,477		$	187,764		$	74,129
Earnings per share attributable to the Company:
Basic	$	0.35		$	0.10		$	0.91		$	0.48
Diluted	$	0.35		$	0.10		$	0.91		$	0.48
Weighted average number of shares used in computing earnings per share:
Basic	206,203,263			203,505,355			205,920,803			153,850,043
Diluted	206,824,618			204,439,048			206,636,923			154,977,182

See accompanying notes to the unaudited consolidated financial statements.

4

CATAMARAN CORPORATION

Consolidated Statements of Comprehensive Income

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013		2012
	(unaudited)						(unaudited)
Net income	$	83,128		$	19,407		$	211,067	$	73,059
Other comprehensive income, net of tax
Unrealized income (loss) on cash flow hedge, net of income tax expense of $368 for the nine month period ended September 30, 2013	(853		)	(2,504		)	194		(2,504		)
Comprehensive income	$	82,275		$	16,903		211,261		$	70,555
Less: Comprehensive income (loss) attributable to non-controlling interest	$	10,190		$	(1,070	)	23,303		$	(1,070	)
Comprehensive income attributable to the Company	$	72,085		$	17,973		$	187,958	$	71,625

See accompanying notes to the unaudited consolidated financial statements.

5

CATAMARAN CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

	Nine Months Ended September 30,
	2013			2012
	(unaudited)
Cash flows from operating activities:
Net income	$	211,067		$	73,059
Items not involving cash:
Stock-based compensation	19,724			13,161
Depreciation of property and equipment	28,204			12,945
Amortization of intangible assets	147,368			70,710
Deferred lease inducements and rent	24,042			1,409
Deferred income taxes	(36,225		)	(18,693		)
Tax benefit on stock-based compensation plans	(10,469		)	(17,214		)
Amortization of deferred financing fees	6,999			2,689
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	(119,630		)	(86,160		)
Rebates receivable	11,131			6,681
Restricted cash	199			9,338
Other current assets	8,036			29,494
Accounts payable	47,608			59,477
Accrued expenses and other current liabilities	(17,983		)	(24,459		)
Pharmacy benefit management rebates payable	14,022			10,336
Other	1,760			4,741
Net cash provided by operating activities	335,853			147,514
Cash flows from investing activities:
Proceeds from restricted cash	20,004			—
Acquisition, net of cash acquired	(7,076		)	(1,564,385		)
Purchases of property and equipment	(93,272		)	(12,901		)
Net cash used by investing activities	(80,344		)	(1,577,286		)
Cash flows from financing activities:
Proceeds from public offering, net of issuance costs	—			518,813
Proceeds from issuance of debt	100,000			1,470,448
Repayment of debt	(256,250		)	(511,993		)
Tax benefit on stock-based compensation plans	10,469			17,214
Proceeds from exercise of options and warrants	3,463			5,738
Payments of contingent consideration	(23,203		)	—
Debt issuance costs	(2,347		)	(18,806		)
Distribution to non-controlling interest	(22,115		)	—
Net cash (used) provided by financing activities	(189,983		)	1,481,414
Effect of foreign exchange on cash balances	(75		)	8
Increase in cash and cash equivalents	65,451			51,650
Cash and cash equivalents, beginning of period	370,776			341,382
Cash and cash equivalents, end of period	$	436,227		$	393,032

See accompanying notes to the unaudited consolidated financial statements.

6

CATAMARAN CORPORATION

Consolidated Statements of Equity

(in thousands, except share data)

	Common Shares			Additional Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Non-controlling Interest
	Shares	Amount													Total
Balance at December 31, 2012	205,399,102	$	4,180,778	$	73,530		$	354,991	$	(2,191	)	$	2,753		$	4,609,861
Activity during the period (unaudited):
Net income	—	—		—			187,764		—			23,303			211,067
Exercise of stock options	344,254	4,241		(1,265		)	—		—			—			2,976
Exercise of warrants	60,000	2,910		(2,423		)	—		—			—			487
Vesting of restricted stock units	494,964	27,210		(27,210		)	—		—			—			—
Tax benefit on options exercised	—	—		10,469			—		—			—			10,469
Stock-based compensation	—	—		19,724			—		—			—			19,724
Distribution to non-controlling interest	—	—		—			—		—			(22,115		)	(22,115		)
Other comprehensive income, net of tax	—	—		—			—		194			—			194
Balance at September 30, 2013 (unaudited)	206,298,320	$	4,215,139	$	72,825		$	542,755	$	(1,997	)	$	3,941		$	4,832,663
Balance at December 31, 2011	124,767,322	$	394,769	$	37,936		$	238,333	$	—		$	—		$	671,038
Activity during the period (unaudited):
Net income	—	—		—			74,129		—			—			74,129
Net loss attributable to non-controlling interest	—	—		—			—		—			(1,070		)	(1,070		)
Issuance of common shares from public offering	11,960,000	518,813		—			—		—			—			518,813
Issuance of common shares for acquisition	66,779,940	3,238,144		—			—		—			—			3,238,144
Issuance of warrants and stock options for acquisition	—	—		19,824			—		—			—			19,824
Non-controlling interest assumed from acquisition	—	—		—			—		—			(1,610		)	(1,610		)
Exercise of stock options	1,163,624	8,155		(2,417		)	—		—			—			5,738
Vesting of restricted stock units	466,996	17,923		(17,923		)	—		—			—			—
Tax benefit on options exercised	—	—		17,214			—		—			—			17,214
Stock-based compensation	—	—		13,161			—		—			—			13,161
Other comprehensive income, net of tax	—	—		—			—		(2,504		)	—			(2,504		)
Balance at September 30, 2012 (unaudited)	205,137,882	$	4,177,804	$	67,795		$	312,462	$	(2,504	)	$	(2,680	)	$	4,552,877

See accompanying notes to the unaudited consolidated financial statements.

7

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business

Catamaran Corporation (“Catamaran” or the “Company”) is a leading provider of pharmacy benefits management (“PBM”) services and healthcare information technology (“HCIT”) solutions to the healthcare benefits management industry. The Company’s product offerings and solutions combine a wide range of PBM services, software applications, application service provider (“ASP”) processing services and professional services designed for many of the largest organizations in the pharmaceutical supply chain, such as federal, provincial, state and local governments, unions, corporations, pharmacy benefit managers, managed care organizations, retail pharmacy chains and other healthcare intermediaries. The Company is headquartered in Schaumburg, Illinois with several locations in the U.S. and Canada. The Company trades on the Toronto Stock Exchange under ticker symbol “CCT” and on the Nasdaq Global Select Market under ticker symbol “CTRX.”

2. Basis of Presentation

Basis of presentation:

The unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), pursuant to the Securities and Exchange Commission’s (“SEC”) rules and regulations for reporting on Form 10-Q, and following accounting policies consistent with the Company’s audited annual consolidated financial statements for the year ended December 31, 2012. The unaudited consolidated financial statements of the Company include its wholly-owned subsidiaries and all significant intercompany transactions and balances have been eliminated in consolidation. Amounts in the unaudited consolidated financial statements and notes thereto are expressed in U.S. dollars, except where indicated. The financial information included herein reflects all adjustments (consisting only of normal recurring adjustments), which, in the opinion of management, are necessary for a fair presentation of the results for the periods presented. Certain reclassifications have been made to conform the prior year's consolidated financial statements to the current year's presentation. The results of operations for the three and nine month periods ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year ending December 31, 2013. As of the issuance date of the Company’s financial statements, the Company has assessed whether subsequent events have occurred that require adjustment to or disclosure in these unaudited consolidated financial statements in accordance with Financial Accounting Standards Board’s (“FASB”) guidance.

Pursuant to the SEC rules and regulations for reporting on Form 10-Q, certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or excluded. As a result, these unaudited consolidated financial statements do not contain all the disclosures required to be included in the annual consolidated financial statements and should be read in conjunction with the most recent audited annual consolidated financial statements and notes thereto described in our Annual Report on Form 10-K for the year ended December 31, 2012.

Use of estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Significant items subject to such estimates and assumptions include revenue recognition, rebates, purchase price allocation and contingent consideration in connection with acquisitions, valuation of property and equipment, valuation of intangible assets acquired and related amortization periods, impairment of goodwill, income tax uncertainties, contingencies and valuation allowances for receivables and income taxes. Actual results could differ from those estimates.

3. Recent Accounting Pronouncements

a) Recent accounting standards implemented

In February 2013, the FASB issued an update on the reporting of amounts reclassified from accumulated other comprehensive income. An entity is required to present either parenthetically on the face of the financial statements or in the notes, significant amounts reclassified from each component of accumulated other comprehensive income and the income statement line items affected by the reclassification. However, an entity would not need to show the income statement line item affected for certain components that are not required to be reclassified in their entirety to net income, such as amounts amortized into net periodic pension cost. The standard is effective prospectively for public entities for fiscal years, and interim periods with those years, beginning after December 15, 2012. The Company adopted this standard on January 1, 2013; however, the implementation of the amendments did not have a significant impact on its financial results or in the presentation and disclosure of its financial statements.

No other new accounting standards have been adopted during the three and nine month periods ended September 30, 2013.

b) Recent accounting standards issued

In July 2013, the FASB issued authoritative guidance containing changes to the presentation of an unrecognized tax benefit when a loss or credit carryforward exists. The new standard requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in the settlement of the uncertain tax positions. This statement is effective for financial statements issued for annual periods

8

beginning after December 15, 2013, with early adoption permitted. Adoption of the standard is not expected to have a significant impact on the Company's financial results or in the presentation and disclosure of its financial statements.

In July 2013, the FASB issued authoritative guidance allowing the inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a benchmark interest rate for hedge accounting purposes in addition to the interest rates on direct Treasury obligations of the U.S. government and the London Interbank Offered Rate. The update also removes the restriction on using different benchmark rates for similar hedges. The new guidance can be applied by all companies that enter into hedging arrangements and is effective immediately. Adoption of the standard is not expected to have a significant impact on the Company's financial results or in the presentation and disclosure of its financial statements.

No other new standards have been issued during the three and nine month periods ended September 30, 2013 that the Company assessed to have a significant impact on its financial results or in the presentation and disclosure of its financial statements.

4. Stock Split

On September 6, 2012, the Company announced that its board of directors had declared a nominal dividend on the issued and outstanding common shares of the Company to effect a two-for-one stock split. Shareholders of record at the close of business on September 20, 2012 were issued one additional common share for each share owned as of that date. The additional common shares were distributed on October 1, 2012. All share and per share data presented in this report have been retroactively adjusted to reflect this stock split.

5. Business Combinations

Catalyst Health Solutions, Inc. Merger

On July 2, 2012, the Company completed its merger (the “Merger”) with Catalyst Health Solutions, Inc. ( "Catalyst"), a full-service PBM. Each share of Catalyst common stock outstanding immediately prior to the effective time of the Merger (other than shares owned by the Company or Catalyst or any of their respective wholly-owned subsidiaries) was converted in the Merger into the right to receive 1.3212 (0.6606 prior to the October 2012 two-for-one stock split) of a Company common share and $28.00 in cash. This resulted in the Company issuing approximately 66.8 million common shares, issuing 0.5 million warrants, and paying $1.4 billion in cash to Catalyst stockholders to complete the Merger. The results of Catalyst have been included in the Company's results since July 2, 2012. The consolidated statement of operations include total revenues from the Catalyst book of business of $1.9 billion and $5.3 billion, for the three and nine month periods ended September 30, 2013, respectively, and $1.5 billion for the three and nine month periods ended September 30, 2012.

The Merger was accounted for under the acquisition method of accounting with the Company treated as the acquiring entity. Accordingly, the consideration paid by the Company to complete the acquisition has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition. The carrying values for current assets and liabilities were deemed to approximate their fair values due to the short-term nature of their maturities. The fair values for acquired customer relationships intangible asset was valued using an excess earnings model based on expected future revenues derived from the customers acquired. The excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill.

All of the assets and liabilities recorded for the Merger are included within the Company's PBM segment. Goodwill is non-amortizing for financial statement purposes. Goodwill of $525 million related to the Catalyst Merger is tax deductible. The goodwill recognized by the Company represents many of the synergies and business growth opportunities that may be realized from this Merger. The synergies include improved pricing from the Company's suppliers due to the increased volume of prescription drug purchases, pull through opportunities of the combined companies' mail and specialty service offerings, and a more efficient leveraging of resources to achieve operating profits.

The purchase price of the acquired Catalyst operations was comprised of the following (in thousands):

Cash paid to Catalyst shareholders	$	1,415,276
Fair value of common shares issued (a)	3,238,141
Fair value of warrants and stock options issued (b)	19,824
Total purchase price	$	4,673,241

(a) Valued based on the number of outstanding shares immediately prior to the Merger multiplied by the exchange ratio of 1.3212 (0.6606 prior to the October 2012 two-for-one stock split), multiplied by the closing market price of Catamaran shares on July 2, 2012.

(b) The Black-Scholes pricing model was used to calculate the fair value of the replacement warrants and stock options issued.

9

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date (in thousands):

	Initial Amounts Recognized at Acquisition Date (a)			Prior Measurement Period Adjustments (b)			Current Measurement Period Adjustments (c)			Current Amounts Recognized at Acquisition Date
Cash and cash equivalents	$	93,775		$	(315	)	$	—		$	93,460
Other current assets	695,888			5,202			2,411			703,501
Total current assets	789,663			4,887			2,411			796,961
Goodwill	4,010,235			8,492			16,141			4,034,868
Customer relationships intangible	1,184,800			—			—			1,184,800
Other long-term assets	87,174			1,547			8			88,729
Total assets acquired	6,071,872			14,926			18,560			6,105,358
Accounts Payable	338,819			—			5			338,824
Pharmacy benefit management rebates payable	176,202			2,935			(1,522		)	177,615
Accrued expenses and other current liabilities	187,851			1,348			5,473			194,672
Long-term debt	311,994			—			—			311,994
Other long-term liabilities	385,375			10,643			14,604			410,622
Total liabilities assumed	1,400,241			14,926			18,560			1,433,727
Non-controlling interest	(1,610		)	—			—			(1,610		)
Net assets acquired	$	4,673,241		$	—		$	—		$	4,673,241

(a) As previously reported in the Company's Form 10-Q for the period ended September 30, 2012.

(b) These represent measurement period adjustments from the acquisition date through December 31, 2012 and were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

(c) These represent measurement period adjustments during 2013 through the end of the measurement period and were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

During the three and nine month periods ended September 30, 2013, the Company recognized $40.0 million and $126.0 million, respectively, of amortization expense from intangible assets acquired in the Catalyst Merger. Amortization associated with the Catalyst Merger for the remainder of 2013 is expected to be $40.0 million. The estimated fair value of the customer relationship intangible asset on the acquisition date was $1.2 billion with a useful life of 9 years. The intangible asset acquired will not have any residual value at the end of the amortization period. There were no in-process research and development assets acquired.

HealthTran LLC Acquisition

In January 2012, the Company completed the acquisition of all of the outstanding equity interests of HealthTran LLC (“HealthTran”), a full-service PBM, in exchange for $250 million in cash, subject to certain customary post-closing adjustments, in each case upon the terms and subject to the conditions contained in the HealthTran purchase agreement. HealthTran was an existing HCIT client and utilizes a Company platform for its claims adjudication services. The acquisition provides the opportunity to create new revenues from HealthTran's customer base and generate cost savings through purchasing and SG&A synergies. The results of HealthTran have been included in the Company's results since January 1, 2012.

The HealthTran acquisition was accounted for under the acquisition method of accounting with the Company treated as the acquiring entity. Accordingly, the consideration paid by the Company to complete the acquisition has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition.

10

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date (in thousands):

	Initial Amounts Recognized at Acquisition Date (a)		Measurement Period Adjustments (b)			Current Amounts Recognized at Acquisition Date
Current assets	$	30,654	$	245		$	30,899
Property and equipment	2,787		—			2,787
Goodwill	173,642		833			174,475
Intangible assets	77,130		(2,600		)	74,530
Total assets acquired	284,213		(1,522		)	282,691
Current liabilities	36,784		(496		)	36,288
Total liabilities assumed	36,784		(496		)	36,288
Net assets acquired	$	247,429	$	(1,026	)	$	246,403

(a) As previously reported in the Company's Form 10-Q for the period ended March 31, 2012.

(b) These measurement period adjustments were recorded to reflect an additional $1.0 million paid to the former HealthTran owners for the working capital reconciliation and changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

During the three and nine month periods ended September 30, 2013, the Company recognized $3.6 million and $10.9 million, respectively, of amortization expense from intangible assets acquired in the HealthTran acquisition. Amortization associated with the HealthTran acquisition for the remainder of 2013 is expected to be $3.6 million.

The estimated fair values and useful lives of intangible assets acquired are as follows (dollars in thousands):

	Fair Value		Useful Life
Trademarks/Trade names	$	1,750	6 months
Customer relationships	69,800		4-9 years
Non-compete agreements	2,600		5 years
License	380		3 years
Total	$	74,530

None of the acquired intangible assets will have any residual value at the end of the amortization periods. There were no in-process research and development assets acquired.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the combined historical results of operations of the Company and Catalyst as if the Merger had occurred on January 1, 2012. The unaudited pro forma financial information includes certain adjustments related to the acquisitions, such as increased amortization from the fair value of intangible assets acquired, income tax effects related to the acquisition and the elimination of transactions between the Company and Catalyst. Unaudited pro forma results of operations are as follows (in thousands, except share and per share amounts):

	Nine Months Ended September 30, 2012
Revenue	$	9,609,135
Gross profit	$	654,852
Net income	$	79,424
Earnings per share:
Basic	$	0.39
Diluted	$	0.39
Weighted average shares outstanding:
Basic	204,350,003
Diluted	205,477,142

This unaudited pro forma financial information is not intended to represent or be indicative of what would have occurred if these transactions had taken place on the date presented and is not indicative of what the Company's actual results of operations would have been had the acquisitions been completed at the beginning of the period indicated above. Further, the pro forma combined results do not reflect one-time costs to fully

11

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

integrate and operate the combined organization more efficiently or anticipated synergies expected to result from the combinations and should not be relied upon as being indicative of the future results that the Company will experience.

Restat, LLC Acquisition

On October 1, 2013, the Company completed the previously announced acquisition of Restat, LLC, a privately held pharmacy benefit manager based in Milwaukee, Wisconsin, for a purchase price of $409.5 million in cash subject to certain customary post-closing adjustments. The purchase price was funded from Catamaran’s existing cash balance and $350 million in borrowings under its Revolving Facility.

The acquisition provides the Company the opportunity to bring Catamaran's full suite of technology and clinical services to Restat's clients, including mail order and specialty pharmacy services. The initial accounting for this acquisition was incomplete at the time these financial statements were available for issuance. The Company expects to finalize the accounting for the acquisition as soon as practicable, but no later than one year from the acquisition closing date.

6. Goodwill and Other Intangible Assets

Goodwill is reviewed for impairment annually or more frequently if impairment indicators arise. The Company allocates goodwill to both the PBM and HCIT segments. There were no impairments of goodwill during the three and nine months ended September 30, 2013 and 2012.

The changes in the carrying amounts of goodwill by reportable segment for the nine months ended September 30, 2013 are as follows (in thousands):

	PBM	HCIT	Total
Balance at December 31, 2012	4,458,373	19,665	4,478,038
Measurement period adjustments (a)	16,472	—	16,472
Acquisitions	3,111	—	3,111
Balance at September 30, 2013	4,477,956	19,665	4,497,621

a) Adjustments to the fair value of assets acquired and liabilities assumed for recent acquisitions during the measurement period. The measurement period adjustments were not recast to the 2012 consolidated financial statements as they were not deemed material.

Definite-lived intangible assets are amortized over the useful lives of the related assets. The components of intangible assets were as follows (in thousands):

	September 30, 2013						December 31, 2012
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	$	1,349,774	$	300,899	$	1,048,875	$	1,346,874	$	155,343	$	1,191,531
Acquired software	—		—		—		3,765		3,765		—
Trademarks/Tradenames	—		—		—		14,070		14,070		—
Non-compete agreements	10,410		5,821		4,589		10,410		4,294		6,116
Licenses	2,060		1,001		1,059		2,060		716		1,344
Total	$	1,362,244	$	307,721	$	1,054,523	$	1,377,179	$	178,188	$	1,198,991

Total amortization associated with intangible assets at September 30, 2013 is estimated to be $47.1 million for the remainder of 2013, $179.5 million in 2014, $164.4 million in 2015, $142.9 million in 2016, $131.5 million in 2017, $122.4 million in 2018 and $266.7 million in total for years 2019 through 2023.

12

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Debt

The following table sets forth the components of our long-term debt (in thousands) as of September 30, 2013 and December 31, 2012.

	September 30, 2013			December 31, 2012
Senior secured term loan facility with an interest rate of 1.81% and 2.25% at September 30, 2013 and December 31, 2012, respectively	$	970,360		$	1,073,403
Senior secured revolving credit facility due June 1, 2018 with an interest rate of 1.81% and 2.25% at September 30, 2013 and December 31, 2012, respectively	50,000			100,000
Less current maturities	(43,750		)	(41,250		)
Long-term debt	$	976,610		$	1,132,153

On June 3, 2013, the Company entered into an Amendment (the “Amendment”) to the Credit Agreement dated July 2, 2012 (the "Credit Agreement"), with JPMorgan Chase Bank, N.A. ("JPMCB"), as administrative agent, and a syndicate of lenders. The Credit Agreement initially provided for a senior secured credit facility in an aggregate amount of $1.8 billion consisting of (i) a five-year senior secured term loan facility in the amount of $1.1 billion (the “Term Loan Facility”) and (ii) a five-year senior secured revolving credit facility in the amount of $700 million (the “Revolving Facility”).

Pursuant to the Amendment, the following key terms of the Credit Agreement were modified:

• an extension of the maturity date for the Term Loan Facility and the Revolving Facility from July 2, 2017 to June 1, 2018;

• an increase in the commitments under the Revolving Facility from $700 million to $800 million;

• a decrease in the commitments under the Term Loan Facility from $1.1 billion to $1.0 billion;

• additional flexibility for the Company and its subsidiaries to (i) make certain permitted acquisitions, (ii) create liens, (iii) make investments, loans, advances or guarantees, and (iv) pay dividends and distributions or repurchase its own capital stock; and

• modifications to the interest rates and financial covenants applicable to the Company and its subsidiaries as described further below.

After giving effect to the Amendment, the interest rates applicable to the Term Loan Facility and the Revolving Facility will continue to be based on a fluctuating rate of interest measured by reference to either, at the Company's option, (i) a base rate, plus an applicable margin, or (ii) an adjusted London interbank offered rate (adjusted for maximum reserves) (“LIBOR”), plus an applicable margin. The applicable margin, in each case, will continue to be adjusted from time to time based on the Company's consolidated leverage ratio for the previous fiscal quarter. The Amendment provides for a reduction in the applicable margins that would be in effect at any time when the Company's consolidated leverage ratio is greater than 1.50 to 1 and less than 2.50 to 1. After giving effect to the Amendment, the initial applicable margin for all borrowings is 0.625% per annum with respect to base rate borrowings and 1.625% per annum with respect to LIBOR borrowings. The Company intends to continue to elect the LIBOR rate as it has previously done during the term of the loan. This resulted in the applicable interest rate decreasing to 1.81% at September 30, 2013 from 2.25% prior to the Amendment. See Note 12 — Financial Instruments for information on the Company's interest rate swap agreements.

In connection with the Amendment, the Company made a $100 million prepayment on the Term Loan Facility to reduce its outstanding balance to $1.0 billion from $1.1 billion. The Company utilized funds from its Revolving Facility to make the prepayment, leaving the Company with $700 million of remaining available borrowing capacity under the Revolving Facility at the time of the Amendment execution. In June 2013, the Company repaid $50 million of the amount borrowed under the Revolving Facility, leaving the Company with $750 million of borrowing capacity under the Revolving Facility as of September 30, 2013. On October 1, 2013, the Company utilized $350 million under the Revolving Facility to partially fund the acquisition of Restat. The Company made a principal repayment of $6.3 million in July 2013 on the Term Loan facility leaving the Company with $993.8 million outstanding as of September 30, 2013. In connection with executing the Amendment, the Company paid $2.3 million in direct lender fees to the syndication of banks providing credit to the Company. The fees consisted of a $1.3 million debt discount related to the Term Loan Facility and $1.0 million of debt issuance costs related to the Revolving Facility. The $1.3 million debt discount incurred in connection with the Amendment is presented on the consolidated balance sheet as a reduction to long-term debt, along with the $24.1 million of unamortized debt discount incurred in connection with the execution of the Credit Agreement. The debt discount amounts are being amortized to interest expense over the amended life of the Term Loan Facility. The Company uses the straight-line method to amortize the debt discount as it does not result in a materially different amount of interest expense than the effective interest rate method. The additional $1.0 million debt issue cost incurred in connection with the execution of the Amendment related to the Revolving Facility, along with $16.6 million of unamortized debt issuance costs incurred in connection with the execution of the Credit Agreement, are presented on the consolidated balance sheet as other assets. The debt issuance costs are being amortized to interest expense over the amended life of the Revolving Facility using the straight-line method. The amortization related to financing costs and debt discounts totaled $2.1 million and $7.0 million for the three and nine month periods ended September 30, 2013, respectively.

Upon executing the Amendment, the Company assessed whether the modifications to the Credit Agreement were substantial and should be accounted for using extinguishment accounting. The Company made its assessment both on a total basis and on an individual basis for each member of the syndication. The Company performed separate assessments for the Term Loan Facility and the Revolving Facility. As a result of the assessments, the Company recorded an additional interest expense charge of $0.4 million from unamortized debt discount and debt issuance costs during the nine months ended September 30, 2013.

13

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As previously disclosed, the Credit Agreement prior to giving effect to the Amendment required the Company to maintain a consolidated leverage ratio at all times less than or equal to 3.75 to 1 initially, with step-downs to (i) 3.50 to 1 beginning with the fiscal quarter ending December 31, 2012, (ii) 3.25 to 1 beginning with the fiscal quarter ending December 31, 2013 and (iii) 3.00 to 1 beginning with the fiscal quarter ending December 31, 2014. The Credit Agreement, as amended by the Amendment, requires the Company to maintain a consolidated leverage ratio at all times less than or equal to 4.00 to 1 and a consolidated senior secured leverage ratio at all times less than or equal to 3.25 to 1. As previously disclosed, the Company's consolidated leverage ratio is defined as the ratio of (1) consolidated total debt to (2) consolidated EBITDA (with add-backs permitted to consolidated EBITDA for (a) fees and expenses related to the Merger, the closing of the Credit Agreement, a specified historic acquisition and future permitted acquisitions, (b) synergies projected by the Company in good faith to be realized as a result of the Merger in an aggregate amount not to exceed a specified threshold and (c) fees and expenses and integration costs related to historical acquisitions by Catalyst in an aggregate amount not to exceed a specified threshold). The Company's new consolidated senior secured leverage ratio is defined as the ratio of (1) (a) consolidated total debt minus (b) any portion of consolidated total debt that is subordinated or not secured by a lien upon the assets of the Company or its subsidiaries to (2) consolidated EBITDA (subject to the permitted add-backs noted above). The Credit Agreement, as amended by the Amendment, continues to require the Company to maintain an interest coverage ratio greater than or equal to 4.00 to 1. As previously disclosed, the interest coverage ratio is defined as the ratio of (1) consolidated EBIT (subject to the permitted add-backs noted above) to (2) consolidated interest expense, tested at the end of each fiscal quarter for the rolling four fiscal quarter period then most recently ended. As of September 30, 2013, the Company was in compliance with the covenants of the Credit Agreement, as amended by the Amendment.

Principal amounts outstanding under the Revolving Facility of the Amendment are due and payable in full on June 1, 2018. Principal repayments on the Term Loan Facility will be due as follows (in thousands):

Year	Amount due
2013	$	12,500
2014	43,750
2015	68,750
2016	93,750
2017	118,750
2018	656,250
Total	$	993,750

The Credit Agreement also contains a number of covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to: incur additional indebtedness; create liens; make investments, loans, advances or guarantees; sell or transfer assets; pay dividends and distributions or repurchase its own capital stock; prepay certain indebtedness; engage in mergers, acquisitions or consolidations (subject to exceptions for certain permitted acquisitions); change its lines of business or enter into new lines of business; engage in certain transactions with affiliates; enter into agreements restricting the ability to grant liens in favor of the collateral agent for the benefit of the secured parties; engage in sale and leaseback transactions; or enter into swap, forward, future or derivative transaction or option or similar agreements. In addition, the Credit Agreement includes various (i) customary affirmative covenants and other reporting requirements and (ii) customary events of default, including, without limitation, payment defaults, violation of covenants, material inaccuracy of representations or warranties, cross-defaults to other material agreements evidencing indebtedness, bankruptcy events, certain ERISA events, material judgments, invalidity of guarantees or security documents and change of control. Drawings under the Revolving Facility are subject to certain conditions precedent, including material accuracy of representations and warranties and absence of default.

The Company’s obligations under the Credit Agreement are guaranteed by all existing and future, direct and indirect, material subsidiaries of the Company (collectively, the “Subsidiary Guarantors”).  In addition, the Company and each Subsidiary Guarantor have pledged substantially all of their assets, subject to certain exceptions, to secure the Company’s obligations under the Credit Agreement. 

The carrying value of the Company's debt at September 30, 2013 approximates its fair value.

8. Common Shares and Stock-Based Compensation

(a) Issuance of common shares

On May 16, 2012, the Company completed a public offering of 12.0 million of its common shares at a price to the public of $45.30 per share. The net proceeds to the Company from the offering were approximately $519.1 million, after deducting the underwriting discounts and commissions and offering expenses. The Company used part of the net proceeds from the offering to pay a portion of the cash component of the Merger consideration and other related fees and expenses in connection with the Merger and the balance for general corporate purposes.

On July 2, 2012, the Company issued 66.8 million common shares and 0.5 million warrants in connection with the Catalyst Merger. See Note 5— Business Combinations for further information related to the Merger.

(b) Equity incentive plans

14

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In July 2012, the maximum common shares of the Company allowed to be issued under the Catamaran Corporation Long-Term Incentive Plan (“LTIP”) was increased by 5 million, after the Company's shareholders approved an amendment to the LTIP at a Special Meeting of Shareholders of the Company on July 2, 2012.

In connection with the closing of the Merger with Catalyst on July 2, 2012, the Company assumed two stock incentive plans (together the "Assumed Plans") each as amended and adjusted for the purpose of granting awards to individuals who became employees of the Company subsequent to the close of the Merger or to newly hired employees of the Company who were not employed with the Company as of the close of the Merger. The maximum common shares of the Company allowed to be issued under the Assumed Plans is 1,480,936.

(c) Stock-based compensation

During the three-month periods ended September 30, 2013 and 2012, the Company recorded stock-based compensation expense of $6.6 million and $6.3 million, respectively. During the nine months ended September 30, 2013 and 2012 the Company recorded stock-based compensation expense of $19.7 million and $13.2 million, respectively. There were 6,867,399 and 1,053,891 stock-based awards available for grant under the LTIP and the Assumed Plans, respectively, as of September 30, 2013.

(i) Stock options

The Black-Scholes option-pricing model was used to estimate the fair value of the stock options issued in each period at the grant date. Below is a summary of options granted and the assumptions utilized to derive fair value of the stock options under the Black-Scholes option-pricing model:

	Nine Months Ended September 30,
	2013		2012
Total stock options granted	367,195		404,652
Volatility	41.8% - 45.4%		47.2% - 49.2%
Risk-free interest rate	0.81% - 1.74%		0.65% - 0.83%
Expected life (in years)	4.5		4.5
Dividend yield	—		—
Weighted-average grant date fair value	$	21.44	$	29.40

The table below summarizes the stock options outstanding as of September 30, 2013 under both plans.

	Options Outstanding	Weighted Average Exercise Price		Unrecognized compensation cost		Weighted Average Period
				(in thousands)
LTIP Plan
Canadian Options	3,064	$	3.35
U.S.Options	1,373,474	$	30.84	$	10,140	2.72
Assumed Plans
U.S.Options	49,665	$	56.21	$	876	$	3.45

(ii) Restricted stock units

During the three and nine months ended September 30, 2013, the Company granted time-based RSUs and performance-based RSUs to its employees and non-employee directors under both the LTIP and the Assumed Plans. Time-based RSUs vest on a straight-line basis over a range of two to four years. The Company also granted time-based RSUs that cliff vest after a three to four year period. Performance-based RSUs cliff vest based upon reaching agreed upon three-year performance conditions. The number of outstanding performance-based RSUs as of September 30, 2013 stated below assumes the associated performance targets will be met at the maximum level.

15

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The table below summarizes the number of time-based and performance-based RSUs that were granted and outstanding under both plans for the nine months ended September 30, 2013:

	LTIP Plan				Assumed Plans
	Number of Restricted Stock Units				Number of Restricted Stock Units
	Time-Based	Performance - Based	Weighted Average Grant Date Fair Value Per Unit		Time-Based	Performance - Based	Weighted Average Grant Date Fair Value Per Unit
Granted	251,970	253,980	$	56.25	130,320	25,570	$	55.78
Outstanding	702,978	674,496			205,830	17,510

The table below summarizes the unrecognized compensation cost related to the outstanding RSUs at September 30, 2013.

	Unrecognized Compensation Cost		Weighted Average Period
	(in thousands)
LTIP	$	35,200	2.37
Assumed Plans	$	9,832	3.16

9. Segment Information

The Company reports in two operating segments: PBM and HCIT. The Company evaluates segment performance based upon revenue and gross profit. Financial information by segment is presented below (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
PBM:
Revenue	$	3,578,767	$	3,150,755	$	10,142,515	$	6,493,029
Cost of revenue	3,310,636		2,940,060		9,399,949		6,094,664
Gross profit	$	268,131	$	210,695	$	742,566	$	398,365
Total assets at September 30	$	7,115,563	$	7,146,899	$	7,115,563	$	7,146,899
HCIT:
Revenue	$	35,381	$	40,025	$	108,780	$	117,551
Cost of revenue	15,724		15,829		50,597		48,132
Gross profit	$	19,657	$	24,196	$	58,183	$	69,419
Total assets at September 30	$	377,323	$	226,309	$	377,323	$	226,309
Consolidated:
Revenue	$	3,614,148	$	3,190,780	$	10,251,295	$	6,610,580
Cost of revenue	3,326,360		2,955,889		9,450,546		6,142,796
Gross profit	$	287,788	$	234,891	$	800,749	$	467,784
Total assets at September 30	$	7,492,886	$	7,373,208	$	7,492,886	$	7,373,208

10. Income Taxes

The Company’s effective tax rate for the three months ended September 30, 2013 and 2012 was 25.2% and 39.8%, respectively. The Company’s effective tax rate for the nine months ended September 30, 2013 and 2012 was 26.4% and 37.2%, respectively. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions including Canada. With a few exceptions, the Company is no longer subject to tax examinations by tax authorities for years prior to 2007. The Company's effective tax rate decreased during the three and nine months ended September 30, 2013 primarily due to tax benefits related to cross-jurisdictional financing as well as expenses incurred during the three and nine months ended September 30, 2012 related to the Merger that were not tax deductible.

11. Commitments and Contingencies

From time to time in connection with its operations, the Company is named as a defendant in actions for damages and costs allegedly sustained by third party plaintiffs. The Company has considered these proceedings and disputes in determining the necessity of any accruals for losses that are probable and reasonably estimable. In addition, various aspects of the Company’s business may subject it to litigation and liability for damages arising from errors in processing the pricing of prescription drug claims, failure to meet performance measures within certain contracts relating

16

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

to its services performed, its ability to obtain certain levels of discounts or rebates on prescription purchases from retail pharmacies and drug manufacturers or other actions or omissions. The Company’s recorded accruals are based on estimates developed with consideration given to the potential merits of claims or quantification of any performance obligations. The Company takes into account its history of claims, the limitations of any insurance coverage, advice from outside counsel, and management’s strategy with regard to the settlement or defense of such claims and obligations. While the ultimate outcome of those claims, lawsuits or performance obligations cannot be predicted with certainty, the Company believes, based on its understanding of the facts of these claims and performance obligations, that adequate provisions have been recorded in the accounts where required.

12. Financial Instruments

The Company used variable rate debt to partially finance its Merger with Catalyst. The Company is subject to interest rate risk related to the variable rate debt. When interest rates increase, interest expense would increase. Conversely, when interest rates decrease, interest expense would also decrease.

In order to manage fluctuations in cash flows resulting from interest rate risk attributable to changes in the benchmark interest rates, in September 2012 the Company entered into 3-year interest rate swap agreements with a total notional amount of $500 million to fix the variable LIBOR rate on the Company's Term Loan Facility to 0.52%, resulting in a current effective rate of 2.14% after taking into account the 1.625% margin per the Credit Agreement, as amended. Under the interest rate swap, the Company receives LIBOR-based variable interest rate payments and makes fixed interest rate payments, thereby creating the equivalent to fixed-rate debt with respect to the notional amount of such swap agreements. These interest rate contract derivative instruments were designated as cash flow hedges upon inception in September 2012.

The Company assesses interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company does not enter into derivative instruments for any purpose other than hedging identified exposures. That is, the Company does not speculate using derivative instruments and has not designated any instruments as fair value hedges or hedges of the foreign currency exposure of a net investment in foreign operations.

The fair value of the interest rate swap liability as of September 30, 2013 was $1.8 million. Interest expense for the three and nine months ended September 30, 2013 includes $0.4 million and $1.1 million, respectively, of expense reclassified from other comprehensive income into current earnings. As of September 30, 2013, approximately $1.7 million of deferred expenses related to the derivative instruments accumulated in other comprehensive income is expected to be reclassified as interest expense during the next twelve months. This expectation is based on the expected timing of the occurrence of the hedged forecasted transactions and assumes the current LIBOR rate will remain consistent. Fluctuations in the market LIBOR rate will have an impact on the amount of expense reclassified from accumulated other comprehensive income to interest expense, as well as the overall fair value of the derivative instrument.

13. Fair Value

Fair value measurement guidance defines a three-level hierarchy to prioritize the inputs to valuation techniques used to measure fair value into three broad levels, with Level 1 considered the most reliable. During the three and nine month periods ended September 30, 2013, there were no movements of fair value measurements between Levels 1, 2 and 3. For assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets, the table below categorizes fair value measurements across the three levels as of September 30, 2013 and December 31, 2012 (in thousands):

	September 30, 2013
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	19,840	$	19,840
Derivative	$	—	$	1,751	$	—	$	1,751

	December 31, 2012
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	49,183	$	49,183
Derivative	$	—	$	2,639	$	—	$	2,639

When available and appropriate, the Company uses quoted market prices in active markets to determine fair value, and classifies such items within Level 1. Level 1 values only include instruments traded on a public exchange. Level 2 inputs are inputs other than quoted prices included

17

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability or can be derived principally from or corroborated by observable market data. If the Company were to use one or more significant unobservable inputs for a model-derived valuation, the resulting valuation would be classified in Level 3.

Contingent purchase price consideration

The contingent purchase price consideration liability reflects the fair values of potential future payments related to certain legacy acquisitions. The potential future payments are contingent upon the acquired entities meeting certain revenue, gross margin and client retention milestones through March 31, 2014. As of September 30, 2013, the fair value of the contingent purchase price consideration was $19.8 million and was recorded as accrued expenses and other current liabilities in the consolidated balance sheet. The contingent purchase price consideration decreased for the three and nine months ended September 30, 2013 as compared to the fair value reported for the year ended December 31, 2012 due to payments of $25.5 million and an adjustment of $4.5 million which was recognized in SG&A in the consolidated statement of operations.

The change in the present value of the amount expected to be paid in the future for the contingent purchase price consideration was $0.1 million and $0.5 million for the three and nine months ended September 30, 2013, respectively, and was recorded as interest expense in the consolidated statement of operations. The Company utilized a probability weighted discounted cash flow method to arrive at the fair value of the contingent consideration based on the expected results or the achievement of client retention milestones.

As the fair value measurement for the contingent consideration is based on inputs not observed in the market, these measurements are classified as Level 3 measurements as defined by fair value measurements guidance.

Derivatives

Derivative liabilities relate to the interest rate swap agreements (refer to Note 12 — Financial Instruments for further information), which had a fair value of $1.8 million as of September 30, 2013. As the fair value measurement for the derivative instruments are based on quoted prices from a financial institution, these measurements are classified as Level 2 measurements as defined by fair value measurements guidance.

14. Lease Exit Costs

In August 2013, the Company executed a plan to exit a portion of space it had leased in Maryland and entered into a sub-lease agreement with a third-party tenant that was coterminous with the Company's remaining lease term. As a result of this exit, the Company recorded a charge and corresponding lease loss accrual equal to the present value of the amount by which the net future lease obligations exceed the remaining rent-related deferred balances. The net future lease obligations were calculated by taking the remaining contractual rent obligation less the amount the Company will receive from the sub-lease agreement and recorded at its present value based on the Company's credit adjusted risk-free interest rate. During the three and nine month periods ended September 30, 2013, the Company recorded approximately $5.6 million of lease loss expense as a result of this exit in SG&A expense in the consolidated statements of operations.

As of September 30, 2013, the Company had a lease loss accrual of approximately $5.6 million, which is included in accrued expenses and other current liabilities in the consolidated balance sheets. Remaining lease payments, and remaining sub-lease receipts, associated with the Maryland lease loss accrual are expected to be paid and received over the remaining lease term. Based on the Company's current assumptions as of September 30, 2013, expected lease payments, net of sub-lease receipts, are expected to result in a total net cash outlay of approximately $7.2 million for the remaining lease term. The partial exit from the space in Maryland did not involve any employee termination costs or trigger any material asset impairment charges.

15. Earnings Per Share

The Company calculates basic EPS using the weighted average number of common shares outstanding during the period. Diluted EPS is calculated using the same method as basic EPS, but the Company adds the number of additional common shares that would have been outstanding for the period if the potential dilutive common shares had been issued. The following is the reconciliation between the number of weighted average shares used in the basic and diluted EPS calculations for the three and nine month periods ended September 30, 2013 and 2012:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Weighted average number of shares used in computing basic EPS	206,203,263	203,505,355	205,920,803	153,850,043
Add dilutive common stock equivalents:
Outstanding stock options and restricted stock units (a)	621,355	933,693	716,120	1,127,139
Weighted average number of shares used in computing diluted EPS	206,824,618	204,439,048	206,636,923	154,977,182

(a) Excludes 746,691 and 1,212,910 common stock equivalents for the three-month periods ended September 30, 2013 and 2012 because their effect was anti-dilutive. Excludes 633,407 and 1,021,501 common stock equivalents for the nine-month periods ended September 30, 2013 and 2012 because their effect was anti-dilutive.

18

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Concentration Risk

For the three month periods ended September 30, 2013 and 2012, one client accounted for 19% and 24% of total revenues, respectively. For the nine-month period ended September 30, 2013 and 2012, one client accounted for 19% and 35% of total revenues, respectively.

At September 30, 2013, one client accounted for 10% of the outstanding accounts receivable balance. At December 31, 2012, one client accounted for 13% of the outstanding accounts receivable balance and a separate client accounted for 12% of the outstanding receivable balance.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Management’s Discussion and Analysis (“MD&A”) section of the Company’s 2012 Annual Report on Form 10-K. Results of the periods presented are not necessarily indicative of the results to be expected for the full year ending December 31, 2013.

Caution Concerning Forward-Looking Statements

Certain statements included in this MD&A, including those that express management's objectives and the strategies to achieve those objectives, as well as information with respect to the Company's beliefs, plans, expectations, anticipations, estimates and intentions, constitute “forward-looking statements” within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. We caution that such forward-looking statements involve known and unknown risks, uncertainties and other risks that may cause our actual financial results, performance, or achievements to be materially different from our estimated future results, performance or achievements expressed or implied by those forward-looking statements. Numerous factors could cause actual results to differ materially from those in the forward-looking statements, including without limitation, the risks and challenges associated with our PBM partnering agreement with Cigna Corporation due to the size of the client and the complexity and term of the agreement; our dependence on, and ability to retain, key customers; our ability to achieve increased market acceptance for our product offerings and penetrate new markets; consolidation in the healthcare industry; the existence of undetected errors or similar problems in our software products; our ability to identify and complete acquisitions, manage our growth, integrate acquisitions and achieve expected synergies from acquisitions; our ability to compete successfully; potential liability for the use of incorrect or incomplete data; the length of the sales cycle for our solutions and services; interruption of our operations due to outside sources; maintaining our intellectual property rights and litigation involving intellectual property rights; our ability to obtain, use or successfully integrate third-party licensed technology; compliance with existing laws, regulations and industry initiatives and future change in laws or regulations in the healthcare industry; breach of our security by third parties; our dependence on the expertise of our key personnel; our access to sufficient capital to fund our future requirements; potential write-offs of goodwill or other intangible assets; and the outcome of any legal proceeding that has been or may be instituted against us. This list is not exhaustive of the factors that may affect any of our forward-looking statements and is subject to change. For additional information with respect to certain of these and other factors, refer to the Risk Factors section contained in Item 1A of the Company’s 2012 Annual Report onForm 10-K and subsequent filings on Form 10-Q.

In addition, numerous factors could cause actual results with respect to the merger with Catalyst Health Solutions, Inc. ("Catalyst" or the "Merger") or the acquisition of Restat,LLC ("Restat") to differ materially from those in the forward-looking statements, including without limitation, the possibility that the expected efficiencies and cost savings from these transactions will not be realized, or will not be realized within the expected time period; the risk that the Company will not successfully integrate the businesses of Catalyst or Restat; disruption from the Merger or Restat acquisition making it more difficult to maintain business and operational relationships; the risk of customer attrition from the Catalyst or Restat businesses; and the impact on the availability of funds for other business purposes due to our debt service obligations and funds required to integrate Catalyst and Restat.

When relying on forward-looking information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. In making the forward-looking statements contained in this MD&A, the Company does not assume any future significant acquisitions, dispositions or one-time items. It does assume, however, the renewal of certain customer contracts. Every year, the Company has major customer contracts that come up for renewal. In addition, the Company also assumes new customer contracts. In this regard, the Company is pursuing large opportunities that present a very long and complex sales cycle which substantially affects its forecasting abilities. The Company has assumed certain timing for the realization of these opportunities which it believes is reasonable but which may not be achieved. Furthermore, the pursuit of these larger opportunities does not ensure a linear progression of revenue and earnings since they may involve significant up-front costs followed by renewals and cancellations of existing contracts. The Company has assumed certain revenues which may not be realized. The Company has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking information to differ materially from actual results or events. There can be no assurance that such assumptions will reflect the actual outcome of such items or factors. Accordingly, investors are cautioned not to put undue reliance on forward-looking statements.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS MD&A REPRESENTS THE COMPANY’S CURRENT EXPECTATIONS AND, ACCORDINGLY, IS SUBJECT TO CHANGE. HOWEVER, THE COMPANY EXPRESSLY DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING INFORMATION, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT AS REQUIRED BY APPLICABLE LAW.

Overview

PBM Business

The Company provides comprehensive PBM services to customers, which include managed care organizations, local governments, unions, corporations, HMOs, employers, workers’ compensation plans, third party health care plan administrators and federal and state government programs through its network of licensed pharmacies throughout the United States. The PBM services include electronic point-of-sale pharmacy claims management, retail pharmacy network management, mail service pharmacy, specialty service pharmacy, Medicare Part D services, benefit design consultation, preferred drug management programs, drug review and analysis, consulting services, data access and reporting and information analysis. Included in the Company's PBM offerings are the fulfillment of prescriptions through the Company's own mail and specialty

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pharmacies. In addition, the Company is a national provider of drug benefits to its customers under the federal government’s Medicare Part D program.

Revenue primarily consists of sales of prescription drugs, together with any associated administrative fees, to customers and participants, either through the Company’s nationwide network of participating pharmacies or its own mail and specialty pharmacies. Revenue related to the sale of prescription drugs is recognized when the claims are adjudicated and the prescription drugs are shipped. Claims are adjudicated at the point-of-sale using an on-line processing system. Profitability of the PBM segment is largely dependent on the volume and type of prescription drug claims adjudicated and sold. Growth in revenue and profitability of the PBM segment is dependent upon attracting new customers, retaining the Company’s current customers and providing additional services to the Company’s current customer base by offering a flexible and cost-effective alternative to traditional PBM offerings. The Company’s PBM offerings allow its customers to gain increased control of their pharmacy benefit cost and maximize savings and quality of care through a full range of pharmacy spend management services, including: formulary administration, benefit plan design and management, pharmacy network management, drug utilization review, clinical services and consulting, reporting and information analysis solutions, mail and specialty pharmacy services and consumer web services.

Under the Company’s customer contracts, the pharmacy is solely obligated to collect the co-payments from the participants. As such, the Company does not include participant co-payments paid to non-Company owned pharmacies in revenue or cost of revenue.During the three months ended September 30, 2013 and 2012, pharmacies, excluding the Company's internally owned mail and specialty pharmacy locations, collected approximately $0.6 billion, respectively, in co-payments from the participants. During the nine months ended September 30, 2013 and 2012, pharmacies, excluding the Company's internally owned mail and specialty pharmacy locations, collected approximately $2.0 billion and $1.1 billion, respectively, in co-payments from the participants. If we had included these co-payments collected at non-Company owned pharmacies in our reported revenue and direct expenses, our operating and net income would not have been affected.

The Company evaluates customer contracts to determine whether it acts as a principal or as an agent in the fulfillment of prescriptions through its participating pharmacy network. The Company acts as a principal in most of its transactions with customers, and revenue is recognized at the prescription price (ingredient cost plus dispensing fee) negotiated with customers, plus an administrative fee, if applicable (“gross reporting”). Gross reporting is appropriate when the Company (i) has separate contractual relationships with customers and with pharmacies, (ii) has responsibility for validating and managing a claim through the claims adjudication process, (iii) commits to set prescription prices for the pharmacy, including instructing the pharmacy as to how that price is to be settled (co-payment requirements), (iv) manages the overall prescription drug relationship with the patients, who are participants of customers’ plans, and (v) has credit risk for the price due from the customer. In instances where the Company merely administers a customer’s network pharmacy contract to which the Company is not a party and under which the Company does not assume pricing risk and credit risk, among other factors, the Company only records an administrative fee as revenue. For these customers, the Company earns an administrative fee for collecting payments from the customer and remitting the corresponding amount to the pharmacies in the customer’s network. In these transactions, the Company acts as an agent for the customer. As the Company is not the principal in these transactions, the drug ingredient cost is not included in revenue or in cost of revenue (“net reporting”). As such, there is no impact to gross profit based upon whether gross or net reporting is used.

HCIT Business

The Company is also a leading provider of HCIT solutions and services to providers, payors, and other participants in the pharmaceutical supply chain in the U.S. and Canada. The Company’s product offerings include a wide range of software products for managing prescription drug programs and for drug prescribing and dispensing. The Company’s solutions are available on a license basis with on-going maintenance and support or on a transaction fee basis using an ASP model. The Company’s payor customers include managed care organizations, health plans, government agencies, employers and intermediaries such as pharmacy benefit managers. The solutions offered by the Company’s services assist both payors and providers in managing the complexity and reducing the cost of their prescription drug programs and dispensing activities.

Profitability of the HCIT business depends primarily on revenue derived from transaction processing services, software license sales, hardware sales, and maintenance and professional services. Recurring revenue remains a cornerstone of the Company’s business model and consists of transaction processing services and maintenance. Growth in revenue from recurring sources has been driven primarily by growth in the Company’s transaction processing business in the form of claims processing for its payor customers and switching services for its provider customers. Through the Company’s transaction processing business, where the Company is generally paid based on the volume of transactions processed, the Company continues to benefit from the growth in pharmaceutical drug use in the United States. The Company believes that aging demographics and increased use of prescription drugs will continue to generate demand in the transaction processing business. In addition to benefiting from this industry growth, the Company continues to focus on increasing recurring revenue in the transaction processing area by adding new transaction processing customers to its existing customer base. The recognition of revenue in the HCIT business depends on various factors, including the type of service provided, contract parameters and any undelivered elements.

Industry Overview

The PBM industry is intensely competitive, generally resulting in continuous pressure on gross profit as a percentage of total revenue. In recent years, industry consolidation and dramatic growth in managed healthcare have led to increasingly aggressive pricing of PBM services. Given the pressure on all parties to reduce healthcare costs, the Company expects this competitive environment to continue for the foreseeable future. In order to remain competitive, the Company looks to continue to drive purchasing efficiencies of pharmaceuticals to improve operating margins and target the acquisition of other businesses to achieve its strategy of expanding its product offerings and customer base. The Company also looks to retain and expand its customer base by improving the quality of service provided by enhancing its solutions and lowering the total drug spend for customers.

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The HCIT industry is increasingly competitive as technologies continue to advance and new products continue to emerge. This rapidly developing industry requires the Company to perpetually improve its offerings to meet customers’ rising product standards. Governmental initiatives to improve the country’s electronic health records should assist the growth of the industry in addition to increased regulatory reporting forecasted by the recent healthcare reform legislation. However, it may also increase competition as more players enter the expanding market.

The complicated environment in which the Company operates presents it with opportunities, challenges, and risks. The Company’s customers are paramount to its success; the retention of existing customers and winning of new customers and members pose the greatest opportunities; and the loss thereof represents an ongoing risk. The preservation of the Company’s relationships with pharmaceutical manufacturers and the Company's network of participating retail pharmacies is very important to the execution of its business strategies. The Company’s future success will be influenced by its ability to drive volume at its specialty and mail order pharmacies and increase generic dispensing rates in light of the significant brand-name drug patent expirations expected to occur over the next several years. The Company’s ability to continue to provide innovative and competitive clinical and other services to customers and patients, including the Company’s active participation in the Medicare Part D benefit and the rapidly growing specialty pharmacy industry, also plays an important part in the Company’s future success.

Competitive Strengths

The Company has demonstrated its ability to serve a broad range of clients from large managed care organizations and state governments to employer groups with fewer than a thousand members. The Company believes its principal competitive strengths are:

Flexible, customized and independent services:  The Company believes a key differentiator between itself and its competitors is not only the Company's ability to provide innovative PBM services, but also to deliver these services on an à la carte basis. The Catamaran suite offers the flexibility of broad product choice along the entire PBM continuum, enabling enhanced customer control, solutions tailored to the Company's customers’ specific requirements, and flexible pricing. The market for the Company's products is divided between large customers that have the sophisticated technology infrastructure and staff required to operate a 24-hour data center and other customers that are not able or willing to operate these sophisticated systems.

The Company’s business model allows its large customers to license the Company’s products and operate the Company’s systems themselves (with or without taking advantage of the Company’s significant customization, consulting and systems implementation services) and allows its other customers to utilize the Company’s systems’ capabilities on a fee-per-transaction or subscription basis through ASP processing from the Company’s data center.

Leading technology and platform:  The Company’s technology is robust, scalable, and web-enabled. The platform is able to instantly cross-check multiple processes, such as reviewing claim eligibility, adverse drug reaction and properly calculating member, pharmacy and payor payments. The Company’s technology is built on flexible, database-driven rule sets and broad functionality applicable for most any type of business. The Company believes it has one of the most comprehensive claims processing platforms in the market.

The Company’s technology platform allows it to provide more comprehensive PBM services by offering customers a selection of services to choose from to meet their unique needs versus requiring them to accept a one-size-fits-all solution. The Company believes this à la carte offering is a key differentiator from its competitors.

Measurable cost savings for customers:  The Company provides its customers with increased control over prescription drug costs and drug benefit programs. The Company’s pricing model and flexible product offerings are designed to deliver measurable cost savings to the Company’s customers. The Company believes its pricing model is a key differentiator from its competitors for the Company’s customers who want to gain control of their prescription drug costs. For customers who select the Company’s pharmacy network and manufacturer rebate services on a fixed fee per transaction basis, there is clarity to the rebates and other fees payable to the client. The Company believes that its pricing model together with the flexibility to select from a broad range of customizable services helps the customers realize measurable results and cost savings.

Selected Trends and Highlights for the Three and Nine Months Ended September 30, 2013 and 2012

Business trends

Our results for the three and nine months ended September 30, 2013 reflect the successful execution of our business model, which emphasizes the alignment of our financial interests with those of our clients through greater use of generics and low-cost brands, as well as our mail and specialty pharmacies. The positive trends we observed in 2012, including drug purchasing improvements from increased scale due to acquisitions and growth in our customer base and increased generic usage, have continued in 2013 to offset the negative impact of various marketplace forces affecting pricing and plan structure, among other items, and thus continue to generate improvements in our results of operations. Additionally, as the regulatory environment evolves, we will continue to make significant investments in our systems and product offerings in order to provide compliance solutions to our clients.

The continued integration of Catalyst, as well as new client implementations during 2013, have driven overall growth in our top line revenue as well as overall operating results. We also continue to benefit from better management of drug ingredient costs through increased competition among generic manufacturers. The average generic dispensing rate (GDR) or the number of generic prescriptions as a percentage of the total number of prescriptions dispensed for our PBM clients for the nine months ended September 30, 2013 increased from the same period in 2012.

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This increase was achieved through a broad range of plan design solutions, helped considerably by a continuing wave of major generic releases. This trend is expected to continue throughout 2013.

Financial results

Total revenue for the three months ended September 30, 2013 increased $0.4 billion or 13.3% to $3.6 billion as compared to $3.2 billion for the same period in 2012. Total revenue for the nine months ended September 30, 2013 increased $3.6 billion or 55.1% to $10.3 billion compared to $6.6 billion for the same period in 2012. The increase during the three month period is mainly due to organic growth driven by increased demand and claim volume from the Company's PBM customers. The increase during the nine month period is largely attributable to the Merger with Catalyst, which was completed on July 2, 2012, as well as successful implementation of new customer contracts in 2013. Catalyst contributed $1.9 billion and $5.3 billion in revenue during the three and nine months ended September 30, 2013, respectively. As a result of these items, the Company's adjusted prescription claim volume increased 8.6% to 69.5 million for the third quarter of 2013, as compared to 64.0 million for the third quarter of 2012. Adjusted prescription claim volume increased 55.3% to 203.9 million for the nine months ended September 30, 2013 compared to 131.3 million for the same period in 2012. Adjusted prescription claim volume equals the Company's retail and specialty prescriptions, plus mail pharmacy prescriptions multiplied by three. The mail pharmacy prescriptions are multiplied by three to adjust for the fact that they typically include approximately three times the amount of product days supplied compared with retail and specialty prescriptions.

Operating income increased $76.1 million, or 172.6%, for the three months ended September 30, 2013, to $120.1 million as compared to $44.1 million for the same period in 2012. Operating income increased $186.2 million or 141.7% to $317.7 million for the nine months ended September 30, 2013 compared to $131.4 million for the same period in 2012. The increase during the three month period was largely due to organic growth driven mainly by increased demand and claim volume in the PBM segment and a decrease in SG&A expenses. The increase during the nine month period is largely attributable to an increase in gross profit due to the book of business acquired in the Merger with Catalyst, as well as the successful implementation of new customer contracts in 2013, offset by an increase in SG&A expenses due to additional costs to support and integrate the business acquired from Catalyst, including an increase in depreciation as a result of assets acquired in the Merger, as well as an increase in amortization expense primarily due to the intangible asset acquired in the Merger.

The Company reported net income attributable to the Company of $72.9 million, or $0.35 per share (fully-diluted), for the three months ended September 30, 2013, as compared to $20.5 million, or $0.10 per share (fully-diluted), for the same period in 2012. Net income attributable to the Company was $187.8 million, or $0.91 per share (fully-diluted), for the nine months ended September 30, 2013, as compared to $74.1 million, or $0.48 per share (fully-diluted), for the same period in 2012. Net income attributable to the Company increased during the three month period ended September 30, 2013 as compared to the same period in 2012 mainly due to increased revenue as a result of new customer contract implementations in 2013, as well as a decrease in the transaction and integration costs related to the Company's Merger with Catalyst that closed in Q3 2012. Q3 2012 included $19.8 million in transaction and integration cost related to the Catalyst Merger. Net income attributable to the Company increased during the nine month period due to increased revenues and operating income as a result of the addition of the Catalyst business and other new customer implementations. The increases were partially offset by an increase in interest expense as a result of the Company's borrowings utilized to partially finance the merger with Catalyst, an increase in amortization expense as a result of intangible assets acquired in the Merger and an increase in depreciation as a result of assets acquired in the Merger.

Earnings per share (fully-diluted) attributable to the Company increased $0.25 or 250.0% to $0.35 in the three-month period ended September 30, 2013 as compared to the same period in 2012. The increase is due primarily to the increase in net income attributable to the Company as previously noted. Earnings per share attributable (fully-diluted) to the Company increased $0.43 or 89.6% to $0.91 in the nine month period ended September 30, 2013 as compared to the same period in 2012. The increase is due primarily to the increase in net income attributable to the Company.

Amortization expense included in net income decreased by $4.2 million to $47.2 million during the three months ended September 30, 2013 as compared to $51.4 million for the same period in 2012. The decrease is mainly due to a decline in the estimated remaining benefits of the intangible assets, which are greater at the beginning of their useful lives and diminish over time. Amortization expense included in net income increased by $76.7 million to $147.4 million during the nine months ended September 30, 2013 as compared to $70.7 million for the same period in 2012. The increase is primarily due to the intangible asset acquired in the Merger with Catalyst.

Business combinations

On October 1, 2013, the Company completed its previously announced acquisition of Restat, LLC,a privately held pharmacy benefit managers based in Milwaukee, Wisconsin, for a purchase price of $409.5 million in cash subject to certain customary post-closing adjustments. The purchase price was funded from Catamaran’s existing cash balance and $350 million in borrowings under its Revolving Facility. The acquisition provides the Company the opportunity to bring Catamaran's full suite of technology and clinical services to Restat's clients, including mail order and specialty pharmacy services.

On July 2, 2012, the Company completed the previously disclosed Merger with Catalyst, a full-service PBM serving members in the United States and Puerto Rico and creating the fourth largest PBM in the U.S. Each share of Catalyst common stock outstanding immediately prior to the effective time of the Merger (other than shares held by the Company, Catalyst or any of their respective wholly-owned subsidiaries) was converted in the Merger into the right to receive 1.3212 (0.6606 prior to the October 2012 two-for-one stock split) of a Company common share and $28.00 in cash. This resulted in the Company issuing approximately 66.8 million shares of common stock, issuing approximately 0.5 million warrants and paying $1.4 billion in cash to Catalyst shareholders to complete the Merger.

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In January 2012, the Company completed the acquisition of all of the outstanding equity interests of HealthTran, in exchange for $250 million in cash, subject to certain customary post-closing adjustments, in each case upon the terms and subject to the conditions contained in the HealthTran purchase agreement. HealthTran was an existing HCIT customer and utilizes one of the Company's platforms for its claims adjudication services. The acquisition provides an opportunity to create new revenue streams and generate cost savings through purchasing synergies.

Recent developments

On June 10, 2013, Cigna Corporation ("Cigna") announced that it had selected Catamaran to be its exclusive pharmacy benefit partner in a strategic 10-year agreement to service the more than 8 million Cigna members. The two organizations will partner on sourcing, fulfillment and clinical services. The partnership combines Cigna's significant clinical management and customer engagement capabilities with Catamaran's innovative technology solutions, while seeking to leverage the two companies' scale for network choice and efficient procurement to deliver value to Cigna's clients and members. The Company anticipates that gross profit percentage related to the Cigna contract will be significantly lower than historical gross profit percentages due to the related transaction volume.

Results of Operations

Three and nine months ended September 30, 2013 as compared to the three and nine months ended September 30, 2012

	Three Months Ended September 30,					Nine Months Ended September 30,
In thousands, except per share data	2013		2012			2013		2012
Revenue	$	3,614,148	$	3,190,780		$	10,251,295	$	6,610,580
Cost of revenue	3,326,360		2,955,889			9,450,546		6,142,796
Gross profit	287,788		234,891			800,749		467,784
SG&A	110,454		133,716			310,839		255,088
Depreciation of property and equipment	9,979		5,717			24,887		10,552
Amortization of intangible assets	47,220		51,380			147,368		70,710
Operating income	120,135		44,078			317,655		131,434
Interest and other expense, net	9,026		11,843			30,972		15,064
Income before income taxes	111,109		32,235			286,683		116,370
Income tax expense	27,981		12,828			75,616		43,311
Net income	83,128		19,407			211,067		73,059
Less: Net loss attributable to non-controlling interest	10,190		(1,070		)	23,303		(1,070		)
Net income attributable to the Company	$	72,938	$	20,477		$	187,764	$	74,129
Diluted earnings per share	$	0.35	$	0.10		$	0.91	$	0.48

Revenue

Revenue increased $0.4 billion, or 13.3%, to $3.6 billion for the three months ended September 30, 2013 as compared to $3.2 billion for the three months ended September 30, 2012. The increase is mainly due to organic growth driven by increased demand and claim volume from the Company's PBM customers. Revenue increased $3.6 billion, or 55.1%, to $10.3 billion for the nine months ended September 30, 2013 as compared to $6.6 billion for the nine months ended September 30, 2012. The increase in revenue during the nine months ended September 30, 2013 compared to the same period in 2012 is primarily due to the Merger with Catalyst, which was completed on July 2, 2012. Catalyst contributed $1.9 billion and $5.3 billion in revenue during the three and nine months ended September 30, 2013, respectively, which included the base book of business acquired as well as new customer contracts implemented subsequent to the acquisition close. As a result of these items, the Company's adjusted prescription claim volume increased 8.6% to 69.5 million for the third quarter of 2013, as compared to 64.0 million for the third quarter of 2012. Adjusted prescription claim volume increased 55.3% to 203.9 million for the nine months ended September 30, 2013 compared to 131.3 million for the same period in 2012.

Cost of Revenue

Cost of revenue increased $0.4 billion, or 12.5%, to $3.3 billion for the three months ended September 30, 2013 compared to $3.0 billion for the three months ended September 30, 2012. Cost of revenue increased $3.3 billion, or 53.8%, to $9.5 billion for the nine months ended September 30, 2013 compared to $6.1 billion for the nine months ended September 30, 2012.The increases for the three and nine month periods are in line with the increase in revenues and are primarily due to increased PBM transaction volumes in 2013 as noted above in the revenue discussion, as well as the Merger with Catalyst, respectively . During the three and nine months ended September 30, 2013, the cost of prescriptions dispensed from the Company's PBM segment accounted for 97.8% and 97.6% of the cost of revenue, respectively. The cost of prescriptions dispensed is substantially comprised of the actual cost of the prescription drugs sold, plus any applicable shipping or dispensing costs.

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Gross Profit

Gross profit increased $52.9 million, or 22.5%, to $287.8 million for the three months ended September 30, 2013 as compared to $234.9 million for the same period in 2012. The increase during this period is mostly due to successful implementation of new customer contracts in 2013. Gross profit has increased from 7.4% of revenue to 8.0% of revenueduring the three months ended September 30, 2013 as compared to the same period in 2012. Gross profit increased $333.0 million, or 71.2%, to $800.7 million for the nine months ended September 30, 2013 as compared to $467.8 million for the same period in 2012. The increase during this period is mostly due to incremental PBM revenues generated from the Merger with Catalyst and new customer implementations in 2013. Gross profit has increased from 7.1% of revenue to 7.8% of revenueduring the nine months ended September 30, 2013 as compared to the same period in 2012. The gross profit percentage increased during both the three and nine month periods primarily as a result of synergies realized from the integrations of Catalyst and HealthTran customers.

SG&A Costs

SG&A costs for the three months ended September 30, 2013 were $110.5 million as compared to $133.7 million for the three months ended September 30, 2012, a decrease of $23.3 million, or 17.4%. The decrease is mainly due to a decline in transaction and integration costs as compared to Q3 2012 as well as certain operational synergies realized from acquisitions. SG&A costs increased $55.8 million, or 21.9% to $310.8 million for the nine months ended September 30, 2013 as compared to $255.1 million for the nine months ended September 30, 2012. SG&A costs consist primarily of employee costs in addition to professional services costs, facilities and costs not related to revenue. SG&A costs during the nine month period ended September 30, 2013 as compared to the same period in 2012 have increased due to the addition of operating costs related to the Company's Merger with Catalyst that were not present during the nine months ended September 30, 2012, as well as additional resources added to support the growth of the PBM segment. In addition, SG&A costs include stock-based compensation cost of $6.2 million and $18.7 million for the three and nine months ended September 30, 2013. SG&A costs include stock-based compensation cost of $6.1 million and $12.6 million for the three and nine months ended September 30, 2012. The increase in the stock-based compensation between the two periods is primarily due to increased grant date fair value per share as well as increased headcount as a result of the Merger with Catalyst.

Depreciation

Depreciation expense relates to property and equipment used by the Company, except for those depreciable assets directly related to the generation of revenue, which is included in cost of revenue in the consolidated statements of operations. Depreciation expense was $10.0 million and $5.7 million for the three months ended September 30, 2013 and 2012, respectively. Depreciation expense was $24.9 million and $10.6 million for the nine months ended September 30, 2013 and 2012, respectively. Depreciation expense will fluctuate based on the level of new asset purchases, as well as the timing of assets becoming fully depreciated. Depreciation expense increased during the three and nine months ended September 30, 2013 mainly as a result of fixed assets acquired from the Catalyst Merger, as well as new asset purchases made by the Company in 2013 and 2012.

Amortization

Total amortization expense for the three months ended September 30, 2013 and 2012 was $47.2 million and $51.4 million, respectively, a decrease of $4.2 million. The decrease is mainly due to a decline in the estimated remaining benefits of the intangible assets, which are greater at the beginning of their useful lives and diminish over time. Amortization expense increased $76.7 million to $147.4 million for the nine months ended September 30, 2013 compared to $70.7 million for the same period in 2012. The increase during this period in amortization expense was driven mainly by the amortization of intangible assets acquired in the Merger with Catalyst. Amortization expense on all the Company’s intangible assets held as of September 30, 2013 is expected to be approximately $47.1 million for the remainder of 2013. Refer to Note 6 — Goodwill and Other Intangible Assets in the notes to the unaudited consolidated financial statements for more information on amortization expected in future years.

Interest and other expense, net

Interest and other expense, net decreased $2.8 million to $9.0 million for the three months ended September 30, 2013 from $11.8 million for the same period in 2012. This decrease is mainly due to a decrease in the principal amount outstanding under the Credit Agreement along with a decline in the interest rate applicable to the Company during Q3 2013 as compared to Q3 2012, as a result of the Company's recent Credit Agreement amendment. Interest and other expense, net increased $15.9 million to $31.0 million for the nine months ended September 30, 2013 from $15.1 million for the same period in 2012. The increase is primarily due to additional interest expense related to the Credit Agreement entered into in connection with the Merger with Catalyst. The Company initially utilized $1.4 billion of its available Credit Agreement borrowings to partially finance the Merger with Catalyst and had $1.0 billion outstanding as of September 30, 2013. Refer to Note 7 — Debt in the notes to the unaudited consolidated financial statements for more information related to the Company's Credit Agreement.

Income Taxes

The Company recognized income tax expense of $28.0 million for the three months ended September 30, 2013, representing an effective tax rate of 25.2%, as compared to $12.8 million, representing an effective tax rate of 39.8%, for the same period in 2012. The Company recognized income tax expense of $75.6 million for the nine months ended September 30, 2013, representing an effective tax rate of 26.4%, as compared to $43.3 million, representing an effective tax rate of 37.2%, for the same period in 2012. The increase in tax expense during both periods was mainly due to higher taxable income as a result of the Merger with Catalyst as well as new customer implementations during the periods. The Company's effective tax rate decreased during the three and nine months ended September 30, 2013 primarily due to tax benefits related to cross

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jurisdictional financing as well as a reduction of expenses incurred during 2012 related to the Merger that were not tax deductible which increased the effective rate for the three and nine months ended September 30, 2012.

Segment Analysis

The Company reports in two operating segments: PBM and HCIT. The Company evaluates segment performance based on revenue and gross profit. Below is a reconciliation of the Company’s business segments to the unaudited consolidated financial statements.

Three months ended September 30, 2013 as compared to the three months ended September 30, 2012 (in thousands)

	PBM						HCIT						Consolidated
	2013			2012			2013			2012			2013			2012
Revenue	$	3,578,767		$	3,150,755		$	35,381		$	40,025		$	3,614,148		$	3,190,780
Cost of revenue	3,310,636			2,940,060			15,724			15,829			3,326,360			2,955,889
Gross profit	$	268,131		$	210,695		$	19,657		$	24,196		$	287,788		$	234,891
Gross profit %	7.5		%	6.7		%	55.6		%	60.5		%	8.0		%	7.4		%

Nine months ended September 30, 2013 as compared to the nine months ended September 30, 2012 (in thousands)

	PBM						HCIT						Consolidated
	2013			2012			2013			2012			2013			2012
Revenue	$	10,142,515		$	6,493,029		$	108,780		$	117,551		$	10,251,295		$	6,610,580
Cost of revenue	9,399,949			6,094,664			50,597			48,132			9,450,546			6,142,796
Gross profit	$	742,566		$	398,365		$	58,183		$	69,419		$	800,749		$	467,784
Gross profit %	7.3		%	6.1		%	53.5		%	59.1		%	7.8		%	7.1		%

PBM

Revenue was $3.6 billion for the three months ended September 30, 2013, an increase of $0.4 billion, or 13.6%, as compared to the same period in 2012. The increase is mainly due to organic growth driven by increased demand and claim volume from the Company's PBM customers. Revenue was $10.1 billion for the nine months ended September 30, 2013, an increase of $3.6 billion, or 56.2%, as compared to the same period in 2012. The increase in revenue during the nine months ended September 30, 2013 compared to the same period in 2012 is primarily due to the Merger with Catalyst, which was completed on July 2, 2012 as well as the implementation of new customer contracts in 2013. As a result of these customer additions, adjusted prescription claim volume for the PBM segment was 69.5 million for the third quarter of 2013 as compared to 64.0 million for the third quarter of 2012. Adjusted prescription claim volume increased 55.3% to 203.9 million for the nine months ended September 30, 2013 compared to 131.3 million for the same period in 2012.

Cost of revenue was $3.3 billion for the three months ended September 30, 2013 as compared to $2.9 billion for the same period in 2012. Cost of revenue was $9.4 billion for the nine months ended September 30, 2013 as compared to $6.1 billion for the same period in 2012. Cost of revenue has increased in line with the increase in PBM revenue and is driven by the increase in prescriptions processed. Cost of revenue in the PBM segment is predominantly comprised of the cost of prescription drugs from retail network transactions, and the cost of prescriptions dispensed at the Company's mail and specialty pharmacies.

Gross profit increased $57.4 million or 27.3% to $268.1 million for the three months ended September 30, 2013 as compared to $210.7 million for the same period in 2012. The increase during this period is mostly due to successful implementation of new customer contracts in 2013. Gross profit increased $344.2 million or 86.4% to $742.6 million for the nine months ended September 30, 2013 as compared to $398.4 million for the same period in 2012. Gross profit increased during the nine months ended September 30, 2013 as compared to the same period in 2012 due to the the integration of Catalyst customers acquired as of July 2, 2012 as well as incremental revenue as a result of new customer contract implementations. Gross profit percentage was 7.5% and 6.7% for the three months ended September 30, 2013 and 2012, respectively. Gross profit percentage was 7.3% and 6.1% for the nine months ended September 30, 2013 and 2012, respectively. As noted previously, the gross profit percentage has increased for the three and nine months ended September 30, 2013 as compared to the same period in 2012 primarily as a result of synergies realized from the integration of Catalyst and HealthTran customers.

HCIT

HCIT revenue consists of transaction processing, professional services, system sales and maintenance contracts on system sales. Total HCIT revenue decreased $4.6 million, or 11.6%, to $35.4 million for the three months ended September 30, 2013, as compared to $40.0 million for the same period in 2012. The decrease during the three months ended September 30, 2013 compared to the same period in 2012 is mainly due to a decrease in the transaction processing revenue as a result from lower transaction volume. Total HCIT revenue decreased $8.8 million, or 7.5%, to $108.8 million for the nine months ended September 30, 2013, as compared to $117.6 million for the same period in 2012. The decrease during the nine months ended September 30, 2013 as compared to the same period in 2012 was primarily due to a decrease in revenues earned

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from system sales as well as transaction processing due to decreased volume as a result of the Merger with Catalyst, as Catalyst was a former HCIT customer.

Cost of revenue was $15.7 million and $15.8 million for the three months ended September 30, 2013 and 2012, respectively. The cost of revenue remained relatively flat during the three months ended September 30, 2013 and September 30, 2012 and did not decrease in line with the decrease in revenue as HCIT costs are generally fixed and do not typically fluctuate directly with movements in transactions and revenues. Cost of revenue was $50.6 million and $48.1 million for the nine months ended September 30, 2013 and 2012, respectively. Cost of revenue includes the direct support costs for the HCIT business, as well as depreciation expense of $1.1 million and $0.9 million for the three-month periods ended September 30, 2013 and 2012, respectively. Depreciation expense was $3.3 million and $2.4 million for the nine months ended September 30, 2013 and 2012, respectively. Cost of revenue increased for the nine month periods ended September 30, 2013 as compared to the same period in 2012, primarily due to costs associated with Catalyst customers as a result of the Company's Merger with Catalyst.

Gross profit decreased by $4.5 million, or 18.8%, to $19.7 million for the three months ended September 30, 2013 as compared to $24.2 million for the same period in 2012. Gross profit decreased by $11.2 million, or 16.2%, to $58.2 million for the nine months ended September 30, 2013 as compared to $69.4 million for the same period in 2012. The gross profit percentage was 55.6% for the three months ended September 30, 2013 as compared to 60.5% for the three months ended September 30, 2012. The gross profit percentage was 53.5% for the nine months ended September 30, 2013 as compared to 59.1% for the nine months ended September 30, 2012. The decreases in gross profit and gross profit percentage are attributable to revenue decreases in transaction processing volumes as discussed above as well as a decrease in system sales.

Non-GAAP Measures

The Company reports its financial results in accordance with GAAP, but Company management also evaluates and makes operating decisions using EBITDA and Adjusted EPS. The Company's management believes that these measures provide useful supplemental information regarding the performance of business operations and facilitate comparisons to its historical operating results. The Company also uses this information internally for forecasting and budgeting as it believes that the measures are indicative of the Company's core operating results. Note, however, that these items are performance measures only, and do not provide any measure of the Company's cash flow or liquidity. Non-GAAP financial measures should not be considered as a substitute for measures of financial performance in accordance with GAAP, and investors and potential investors are encouraged to review the reconciliations of EBITDA and Adjusted EPS.

EBITDA Reconciliation

EBITDA is a non-GAAP measure that management believes is a useful supplemental measure of operating performance. EBITDA consists of earnings attributable to the Company prior to amortization, depreciation, interest and other expense, net, income taxes and adjustments to remove the applicable impact of any non-controlling interest. Management believes it is useful to exclude these items, as they are essentially fixed amounts that cannot be influenced by management in the short term.

Below is a reconciliation of the Company's reported net income to EBITDA for the three and nine month periods ended September 30, 2013 and 2012.

EBITDA Reconciliation	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2013			2012			2013			2012
	(unaudited)						(unaudited)
Net income attributable to the Company (GAAP)	$	72,938		$	20,477		$	187,764		$	74,129
Add:
Depreciation of property and equipment	11,059			6,649			28,204			12,945
Amortization of intangible assets	47,220			51,380			147,368			70,710
Interest and other expense, net	9,026			11,843			30,972			15,064
Income tax expense	27,981			12,828			75,616			43,311
Adjustments related to non-controlling interest	(673		)	(17		)	(771		)	(17		)
EBITDA	$	167,551		$	103,160		$	469,153		$	216,142

EBITDA for the three months ended September 30, 2013 was $167.6 million, compared to $103.2 million for the same period of 2012. The increase during this period is mainly due to increased net income attributable to the Company as a result of increased revenue and lower SG&A cost as noted previously. EBITDA for the nine months ended September 30, 2013 was $469.2 million, compared to $216.1 million for the same period of 2012. The EBITDA growth during this period was primarily due to additional business generated from the Merger with Catalyst as well as new customer contract implementations during 2013. This was partially offset by increased costs incurred to support the Company's business growth and Merger with Catalyst as well as prior acquisitions.

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Adjusted EPS Reconciliation

Adjusted EPS adds back the impact of all amortization of intangible assets, net of tax. Amortization of intangible assets arises from the acquisition of intangible assets in connection with the Company's business acquisitions. The Company excludes amortization of intangible assets from non-GAAP Adjusted EPS because it believes (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of the Company's business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired intangible assets. Investors should note that the use of these intangible assets contributes to revenue in the period presented as well as future periods and should also note that such expenses will recur in future periods.

Below is a reconciliation of the Company's reported net income to Adjusted EPS for the three and nine month periods ended September 30, 2013 and 2012.

Adjusted EPS Reconciliation
(in thousands, except per share data)
	Three Months Ended September 30,												Nine Months Ended September 30,
	2013						2012						2013						2012
	Operational Results			Per Diluted Share			Operational Results			Per Diluted Share			Operational Results			Per Diluted Share			Operational Results			Per Diluted Share
	(unaudited)												(unaudited)
Net income attributable to the Company (GAAP)	$	72,938		$	0.35		$	20,477		$	0.10		$	187,764		$	0.91		$	74,129		$	0.48
Amortization of intangible assets	47,220			0.23			51,380			0.25			147,368			0.71			70,710			0.45
Tax effect of reconciling item	(11,899		)	(0.06		)	(20,449		)	(0.10		)	(38,905		)	(0.19		)	(26,304		)	(0.17		)
Non-GAAP net income attributable to the Company	$	108,259		$	0.52		$	51,408		$	0.25		$	296,227		$	1.43		$	118,535		$	0.76

Adjusted EPS for the three months ended September 30, 2013 was $0.52 as compared to $0.25 in the corresponding period of 2012. The increase during the three months ended September 30, 2013 as compared to the same period in 2012 is mainly due to increased gross profit as a result of organic growth along with a decrease in the Company's SG&A costs due to lower transaction and integration cost. Adjusted EPS for the nine months ended September 30, 2013 was $1.43 as compared to $0.76 in the corresponding period of 2012. Increased gross profit as a result of new customer contract implementations, as well as increased business due to recent acquisitions, drove the increase in Adjusted EPS during this period. This was partially offset by increased costs incurred to support the Company's business growth and recent acquisitions.

Liquidity and Capital Resources

The Company’s sources of liquidity have primarily been cash provided by operating activities, proceeds from its public offerings, proceeds from credit facilities and stock option exercises. As of September 30, 2013, the Company had approximately $1.0 billion of outstanding debt under the Term Loan Facility and $50 million borrowed under the Revolving Facility. As of September 30, 2013, the Company had $750.0 million of available borrowing capacity under the Revolving Facility. On October 1, 2013, the Company utilized $350 million under the revolving facility to partially fund the acquisition of Restat. Due to the borrowings from the Credit Agreement utilized to complete the Merger with Catalyst, the Company incurred a significant increase in its interest expense as compared to prior years and expects this expense and the related principal payments to continue for the remainder of 2013 and throughout the remaining term of the Credit Agreement, as amended in June 2013. Refer to Note 7 — Debt in the notes to the unaudited consolidated financial statements for more information regarding the Credit Agreement and the recent amendment.

At September 30, 2013 and December 31, 2012, the Company had cash and cash equivalents totalling $436.2 million and $370.8 million, respectively. The Company believes that its cash on hand, together with cash generated from operating activities and cash available through the Credit Agreement, as amended, will be sufficient to support planned operations for the foreseeable future, service our outstanding debt obligations, and support the completion of the integration of Catalyst. At September 30, 2013, cash and cash equivalents consist of cash on hand, deposits in banks, and bank term deposits with original maturities of 90 days or less.

As of September 30, 2013, all of the Company’s cash and cash equivalents were exposed to market risks, primarily changes in U.S. interest rates. Declines in interest rates over time would reduce interest income related to these balances.

Consolidated Balance Sheets

Selected balance sheet highlights at September 30, 2013 are as follows:

• Accounts receivable are comprised of trade accounts receivable from both the PBM and HCIT segments' customers. Accounts receivable increased by $122.1 million to $847.9 million at September 30, 2013, from $725.8 million at December 31, 2012. The account receivables balance increased mainly due to an increase in revenue in Q3 2013 compared to Q4 2012.The accounts receivable balance is impacted by changes in revenues, as well as the timing of collections, and is continually monitored by the Company to ensure timely collections and to assess the need for any changes to the allowance for doubtful accounts.

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• Rebates receivable of $291.2 million at September 30, 2013 relate to billed and unbilled PBM receivables from pharmaceutical manufacturers and third party administrators in connection with the administration of the rebate program where the Company is the principal contracting party. The receivable and related payable are based on estimates, which are subject to final settlement. Rebates receivable decreased $11.3 million from $302.5 million at December 31, 2012. The decrease in the rebate receivable balance was mostly attributable to the timing of receipts from pharmaceutical manufacturers and third party administrators.

• As of September 30, 2013, goodwill and other intangible assets were $4.5 billion and $1.1 billion, respectively, which were comprised mainly of assets recorded as a result of the merger with Catalyst. Amortization expense related to the other intangible assets recorded on the Company's balance sheet as of September 30, 2013 is expected to be approximately $47 million for the remainder of 2013.

• Accounts payable predominantly relates to amounts owed to retail pharmacies for prescription drug costs and dispensing fees in connection with prescriptions dispensed by the retail pharmacies to the members of the Company’s customers when the Company is the principal contracting party with the pharmacy. Accounts payable increased $48.8 million to $693.6 million, from $644.8 million at December 31, 2012, due to the timing of payments made for purchases from the Company's suppliers as well as payments made to participating pharmacies in the Company's retail pharmacy network.

• Pharmacy benefit management rebates payable represents amounts owed to customers for rebates from pharmaceutical manufacturers and third party administrators where the Company administers the rebate program on the customer’s behalf, and the Company is the principal contracting party. The payable is based on estimates, which are subject to final settlement. Pharmacy benefit management rebates payable increased $12.5 million to $314.6 million from $302.1 million at December 31, 2012, due to higher rebate volume.

• Accrued liabilities are mainly comprised of customer deposits, salaries and wages payables, contingent consideration and other accrued liabilities related to operating expenses of the Company. Accrued liabilities decreased by $13.4 million to $241.5 million at September 30, 2013 from $254.8 million at December 31, 2012. The decrease was driven primarily by the payments of certain contingent purchase price consideration offset by increased operating expenses of the Company.

Cash flows from operating activities

For the nine months ended September 30, 2013, the Company generated $335.9 million of cash from operating activities, an increase of $188.3 million as compared to the amount of cash provided from operations for the same period in 2012. Cash from operating activities increased during the nine months ended September 30, 2013 as compared to the same period in 2012 mainly due to an increase in net income of $138.0 million, an increase in non-cash amortization expense of $76.7 million as a result of the customer list intangible asset recorded in the merger with Catalyst, and a net cash inflow of $8.1 million due to the increased volume and timing of receipts and payments associated with the Company's rebate program. These increases in cash flows were partially offset by a cash outflow of $33.5 million due to the timing of receipts on the Company's outstanding accounts receivable balance.

Changes in the Company’s cash from operations result primarily from increased net income and the timing of payments on accounts receivable, rebates receivable, and the payment or processing of its various accounts payable and accrued liabilities. The Company continually monitors its balance of trade accounts receivable and devotes ample resources to collection efforts on those balances. Rebates receivable and the related payables are primarily estimates based on claims submitted. Rebates are typically paid to customers on a quarterly basis upon receipt of the billed funds from third-party rebate administrators and pharmaceutical manufacturers. The timing of the rebate payments to customers and collections of rebates from third-party rebate administrators and pharmaceutical manufacturers causes fluctuations on the balance sheet, as well as in the Company’s cash from operating activities.

Changes in non-cash items such as depreciation and amortization are caused by the purchase and acquisition of capital and intangible assets. In addition, as assets become fully depreciated or amortized, the related expenses will decrease.

Changes in operating assets and liabilities, as well as non-cash items related to income taxes, will fluctuate based on working capital requirements and the tax provision, which is determined by examining taxes actually paid or owed, as well as amounts expected to be paid or owed in the future.

Cash flows from investing activities

For the nine months ended September 30, 2013, the Company used $80.3 million of cash from investing activities, a decrease of $1.5 billion as compared to the nine months ended September 30, 2012. This decrease was driven by the cash consideration paid to acquire Catalyst and HealthTran in 2012, causing the use of approximately $1.6 billion in cash. During the nine months ended September 30, 2013, the Company utilized $93.3 million for purchases of property and equipment to support growth in the business and the integration of the Company's acquisitions. The cash used was partially offset by proceeds from restricted cash of $20.0 million. As the Company grows, it continues to purchase capital assets to support increases in network capacity and personnel. The Company monitors and budgets these costs to ensure that the expenditures aid in its strategic growth plan.

Cash flows from financing activities

For the nine months ended September 30, 2013, the Company used $190.0 million of cash for financing activities as compared to $1.5 billion of cash provided from financing activities in the nine months ended September 30, 2012. The year over year decrease is attributable to the Company's borrowings in 2012 totaling approximately $1.5 billion which was utilized to partially finance the Merger with Catalyst. During the nine months ended September 30, 2013, the Company's financing activities consisted primarily of $256.3 million of repayments on the Company's

29

Credit Agreement, payments of contingent purchase price consideration related to certain legacy acquisitions and distributions for its share of earnings in respect of a non-controlling interest, offset by $100 million in borrowings under the Revolving Facility.

Cash flows from financing activities generally fluctuate based on payments for acquisitions, proceeds from or payments on debt borrowings and the timing of option exercises by the Company’s employees.

Future Capital Requirements

The Company’s future capital requirements depend on many factors, including servicing its outstanding debt and the integration of its acquisitions. The Company expects to fund its operating and working capital needs and business growth requirements through cash flow from operations, its cash and cash equivalents on hand and available borrowings under its Credit Agreement, as amended. Refer to Note 7 — Debt in the notesto the unaudited consolidated financial statements for more information on the Credit Agreement and related amendments.

On October 1, 2013, the Company completed the previously announced acquisition of Restat, LLC and disbursed approximately $382.6 million in cash on hand and borrowings under the Company's Revolving Facility. As a result of the utilization of the Company's Revolving Facility, its interest expense and cash required to service its debt will increase in future periods. Additionally, the Company's availability on its Revolving Facility will decrease.

The Company expects that purchases of property and equipment in 2013 will increase in comparison with prior years due to the completion of the Merger with Catalyst and growth of the business. The Company cannot provide assurance that its actual cash requirements will not be greater than expected as of the date of this quarterly report. In order to meet business growth goals, the Company will, from time to time, consider the acquisition of, or investment in, complementary businesses, products, services and technologies, which might impact liquidity requirements or cause the issuance of additional equity or debt securities. Any issuance of additional equity or debt securities may result in dilution to shareholders, and the Company cannot be certain that additional public or private financing will be available in amounts or on terms acceptable to the Company, or at all.

If sources of liquidity are not available or if it cannot generate sufficient cash flow from operations during the next twelve months, the Company may be required to obtain additional funds through operating improvements, capital markets transactions, asset sales or financing from third parties or a combination thereof. The Company cannot provide assurance that these additional sources of funds will be available in amounts or on terms acceptable to the Company, or at all.

If adequate funds are not available to finance the Company's business growth goals,the Company may have to substantially reduce or eliminate expenditures for expanding operations, marketing, and research and development, or obtain funds through arrangements with partners that require the Company to relinquish rights to certain of its technologies or products. There can be no assurance that the Company will be able to raise additional capital if its capital resources are exhausted. A lack of liquidity and an inability to raise capital when needed may have a material adverse impact on the Company’s ability to continue its operations or expand its business.

Contingencies

For information on legal proceedings and contingencies, refer to Note 11 — Commitments and Contingencies in the notes to the unaudited consolidated financial statements.

Contractual Obligations

For the nine months ended September 30, 2013, there have been no significant changes to the Company’s contractual obligations as disclosed in its 2012 Annual Report on Form 10-K other than as disclosed below with respect to the required principal payments under the Credit Agreement as amended in June 2013.

	Payments due by period (in millions)
	Total		Less than one year		1-3 years		4-5 years*		More than 5 years
Long-Term Debt Obligations**	$	1,043.8	$	43.8	$	150.0	$	850.0	$	—

* The Revolving Credit Facility is due on its maturity date, June 1, 2018. The amount noted consists of the amounts borrowed under the Term Loan and Revolving Credit Facility as of September 30, 2013 by the Company. This amount will fluctuate based on the principal amounts outstanding under the Term Loan and Revolving Credit Facility.

**The commitment amounts are exclusive of interest payments. Currently, the Company's long-term debt obligations carry an annual interest rate of 2.14% on $500 million which has been fixed through the Company's interest rate swap agreements and 1.81% on the remaining $544 million of its long-term debt obligations. The interest rate applicable to the Company's long-term debt may fluctuate in the future based on changes in the LIBOR rate. See Note 7 — Debt for further information on the terms of the Company's long-term debt obligations.

Outstanding Securities

As of October 31, 2013, the Company had 206,298,320 common shares outstanding, 1,421,811 stock options outstanding, 1,583,254 RSUs outstanding and426,160warrants outstanding. The options and warrants are exercisable on a one-for-one basis into common shares.The outstanding RSUs are subject to time-based and performance-based vesting restrictions. The number of outstanding RSUs as of October 31,

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2013 assumes the associated performance targets will be met at the maximum level for the performance-based RSUs. Upon vesting, the RSUs convert into common shares on a one-for-one basis.

Critical Accounting Policies and Estimates

Refer to Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates in the 2012 Annual Report on Form 10-K for a discussion of the Company’s critical accounting policies and estimates.

Recent Accounting Standards

Refer to Note 3 — Recent Accounting Pronouncements in the notes to the unaudited consolidated financial statements for information on recent updates to accounting guidance that the Company has assessed for any impact to the Company's financial statements.

ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk in the normal course of its business operations, primarily the risk of loss arising from adverse changes in interest rates. In addition, the Company is subject to interest rate risk related to approximately $540 million of the $1.0 billion drawn under the Credit Agreement, as amended, as of September 30, 2013, as $500 million is not impacted due to the interest rate swap agreements the Company maintains which fix the interest rate on that portion of the Term Loan Facility. See Note 12 — Financial Instruments to the Company's unaudited consolidated financial statements included herein for additional information regarding the Company's interest rate swap agreements. As of September 30, 2013, assuming a hypothetical 1% fluctuation in the interest rate of the loan, the Company's pre-tax income would vary by approximately $5.5 million on an annual basis. Actual increases or decreases in earnings in the future could differ materially from this assumption based on the timing and amount of both interest rate changes and the levels of cash held by the Company. The interest rates applicable to borrowings under the Credit Agreement are based on a fluctuating rate and are described in more detail in Note 7 — Debt to the Company's unaudited consolidated financial statements included herein.

The Company is also subject to foreign exchange rate risk related to its operations in Canada, as disclosed in Item 7A — Quantitative and Qualitative Disclosures About Market Risk - Foreign Exchange Rate Risk in the 2012 Annual Report on Form 10-K. In the three and nine months ended September 30, 2013, there have been no material changes in the Company's foreign exchange rate risk as disclosed in its 2012 Annual Report on Form 10-K.

ITEM 4. Controls and Procedures

We conducted an evaluation (under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer), pursuant to Rule 13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2013 (the “Evaluation Date”), which is the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the design and operation of such disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and were effective to ensure that the information required to be disclosed in the reports filed or submitted by the Company under the Exchange Act was accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There has been no change in the Company's internal controls over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f) during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

For information on legal proceedings, refer to Note 11 —Commitments and Contingencies in the notes to the unaudited consolidated financial statements.

ITEM 1A. Risk Factors

Our Annual Report on Form 10-K for the year ended December 31, 2012 includes a detailed discussion of certain material risk factors facing us. In the three months ended September 30, 2013, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012 as updated by the risk factors presented in Part II, Item 1A of our Quarterly Report on Form 10-Q for the three and six months ended June 30, 2013. 

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

None

ITEM 6.    Exhibits

Exhibit Number	Description of Document	Reference
2.1	Membership Interest Purchase Agreement, dated July 31, 2013, by and between Catamaran LLC and The F. Dohmen Co.	Incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on October 4, 2013
31.1	Rule 13a-14(a)/15d-14(a) Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act.	Filed herewith.
31.2	Rule 13a-14(a)/15d-14(a) Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act.	Filed herewith.
32.1	Section 1350 Certification of CEO as adopted by Section 906 of the Sarbanes-Oxley Act.	Filed herewith.
32.2	Section 1350 Certification of CFO as adopted by Section 906 of the Sarbanes-Oxley Act.	Filed herewith.
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012, (ii) the Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012, (iii) the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 and 2012, (iv) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012, (v) the Consolidated Statements of Shareholders' Equity for the nine months ended September 30, 2013 and 2012, and (vi) the notes to the Unaudited Consolidated Financial Statements.	Filed herewith.

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SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Catamaran Corporation
November 1, 2013	By:	/s/ Jeffrey Park
		Jeffrey Park
		Executive Vice President and Chief Financial Officer (on behalf of the registrant and as principal financial and accounting officer)

33

EXHIBIT INDEX

Exhibit Number	Description of Document	Reference
2.1	Membership Interest Purchase Agreement, dated July 31, 2013, by and between Catamaran LLC and The F. Dohmen Co.	Incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on October 4, 2013
31.1	Rule 13a-14(a)/15d-14(a) Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act.	Filed herewith.
31.2	Rule 13a-14(a)/15d-14(a) Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act.	Filed herewith.
32.1	Section 1350 Certification of CEO as adopted by Section 906 of the Sarbanes-Oxley Act.	Filed herewith.
32.2	Section 1350 Certification of CFO as adopted by Section 906 of the Sarbanes-Oxley Act.	Filed herewith.
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012, (ii) the Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012, (iii) the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 and 2012, (iv) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012, (v) the Consolidated Statements of Shareholders' Equity for the nine months ended September 30, 2013 and 2012, and (vi) the notes to the Unaudited Consolidated Financial Statements.	Filed herewith.

34

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Mark Thierer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Catamaran Corporation.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	November 1, 2013
By:	/s/ Mark Thierer
	Mark Thierer
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Jeffrey Park, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Catamaran Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	November 1, 2013
By:	/s/ Jeffrey Park
	Jeffrey Park
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark Thierer, the chief executive officer of Catamaran Corporation, certify that (i) the Quarterly Report on Form 10-Q of Catamaran Corporation for the quarter ended September 30, 2013 (the “Form 10-Q”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Catamaran Corporation.

/s/ Mark Thierer  

Mark Thierer 

Chief Executive Officer 

November 1, 2013

EX-32.2

Exhibit 32.2

CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey Park, the chief financial officer of Catamaran Corporation, certify that (i) the Quarterly Report on Form 10-Q of Catamaran Corporation for the quarter ended September 30, 2013 (the “Form 10-Q”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Catamaran Corporation.

/s/ Jeffrey Park  

Jeffrey Park 

Chief Financial Officer 

November 1, 2013

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Segment Information

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company reports in two operating segments: PBM and HCIT. The Company evaluates segment performance based upon revenue and gross profit. Financial information by segment is presented below (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
PBM:
Revenue	$	3,578,767	$	3,150,755	$	10,142,515	$	6,493,029
Cost of revenue	3,310,636		2,940,060		9,399,949		6,094,664
Gross profit	$	268,131	$	210,695	$	742,566	$	398,365
Total assets at September 30	$	7,115,563	$	7,146,899	$	7,115,563	$	7,146,899
HCIT:
Revenue	$	35,381	$	40,025	$	108,780	$	117,551
Cost of revenue	15,724		15,829		50,597		48,132
Gross profit	$	19,657	$	24,196	$	58,183	$	69,419
Total assets at September 30	$	377,323	$	226,309	$	377,323	$	226,309
Consolidated:
Revenue	$	3,614,148	$	3,190,780	$	10,251,295	$	6,610,580
Cost of revenue	3,326,360		2,955,889		9,450,546		6,142,796
Gross profit	$	287,788	$	234,891	$	800,749	$	467,784
Total assets at September 30	$	7,492,886	$	7,373,208	$	7,492,886	$	7,373,208

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Earnings Per Share (Details) 1	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
Earnings Per Share [Abstract]
Weighted average number of shares used in computing basic EPS	206,203,263		203,505,355		205,920,803		153,850,043
Add dilutive common stock equivalents:
Outstanding stock options and restricted stock units	621,355	[1]	933,693	[1]	716,120	[1]	1,127,139	[1]
Weighted average number of shares used in computing diluted EPS	206,824,618		204,439,048		206,636,923		154,977,182

[1] Excludes 746,691 and 1,212,910 common stock equivalents for the three-month periods ended September 30, 2013 and 2012 because their effect was anti-dilutive. Excludes 633,407 and 1,021,501 common stock equivalents for the nine-month periods ended September 30, 2013 and 2012 because their effect was anti-dilutive.

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Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenue	$ 3,614,148	$ 3,190,780	$ 10,251,295	$ 6,610,580
Cost of revenue	3,326,360	2,955,889	9,450,546	6,142,796
Gross profit	287,788	234,891	800,749	467,784
Expenses:
Selling, general and administrative	110,454	133,716	310,839	255,088
Depreciation of property and equipment	9,979	5,717	24,887	10,552
Amortization of intangible assets	47,220	51,380	147,368	70,710
Total operating expenses	167,653	190,813	483,094	336,350
Operating income	120,135	44,078	317,655	131,434
Interest and other expense, net	9,026	11,843	30,972	15,064
Income before income taxes	111,109	32,235	286,683	116,370
Income tax expense (benefit):
Current	38,419	30,816	111,841	62,004
Deferred	(10,438)	(17,988)	(36,225)	(18,693)
Total income tax expense (benefit)	27,981	12,828	75,616	43,311
Net income	83,128	19,407	211,067	73,059
Less: Net income (loss) attributable to non-controlling interest	10,190	(1,070)	23,303	(1,070)
Net income attributable to the Company	$ 72,938	$ 20,477	$ 187,764	$ 74,129
Earnings per share attributable to the Company:
Basic (in dollars per share)	$ 0.35	$ 0.10	$ 0.91	$ 0.48
Diluted (in dollars per share)	$ 0.35	$ 0.10	$ 0.91	$ 0.48
Weighted average number of shares used in computing earnings per share:
Basic (in shares)	206,203,263	203,505,355	205,920,803	153,850,043
Diluted (in shares)	206,824,618	204,439,048	206,636,923	154,977,182

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Basis of Presentation

9 Months Ended

Sep. 30, 2013

Basis of Presentation [Abstract]

Basis of Presentation

Basis of Presentation

Basis of presentation:

The unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), pursuant to the Securities and Exchange Commission’s (“SEC”) rules and regulations for reporting on Form 10-Q, and following accounting policies consistent with the Company’s audited annual consolidated financial statements for the year ended December 31, 2012. The unaudited consolidated financial statements of the Company include its wholly-owned subsidiaries and all significant intercompany transactions and balances have been eliminated in consolidation. Amounts in the unaudited consolidated financial statements and notes thereto are expressed in U.S. dollars, except where indicated. The financial information included herein reflects all adjustments (consisting only of normal recurring adjustments), which, in the opinion of management, are necessary for a fair presentation of the results for the periods presented. Certain reclassifications have been made to conform the prior year's consolidated financial statements to the current year's presentation. The results of operations for the three and nine month periods ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year ending December 31, 2013. As of the issuance date of the Company’s financial statements, the Company has assessed whether subsequent events have occurred that require adjustment to or disclosure in these unaudited consolidated financial statements in accordance with Financial Accounting Standards Board’s (“FASB”) guidance.

Pursuant to the SEC rules and regulations for reporting on Form 10-Q, certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or excluded. As a result, these unaudited consolidated financial statements do not contain all the disclosures required to be included in the annual consolidated financial statements and should be read in conjunction with the most recent audited annual consolidated financial statements and notes thereto described in our Annual Report on Form 10-K for the year ended December 31, 2012.

Use of estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Significant items subject to such estimates and assumptions include revenue recognition, rebates, purchase price allocation and contingent consideration in connection with acquisitions, valuation of property and equipment, valuation of intangible assets acquired and related amortization periods, impairment of goodwill, income tax uncertainties, contingencies and valuation allowances for receivables and income taxes. Actual results could differ from those estimates.

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Concentration Risk

9 Months Ended

Sep. 30, 2013

Risks and Uncertainties [Abstract]

Concentration Risk

Concentration Risk

For the three month periods ended September 30, 2013 and 2012, one client accounted for 19% and 24% of total revenues, respectively. For the nine-month period ended September 30, 2013 and 2012, one client accounted for 19% and 35% of total revenues, respectively.

At September 30, 2013, one client accounted for 10% of the outstanding accounts receivable balance. At December 31, 2012, one client accounted for 13% of the outstanding accounts receivable balance and a separate client accounted for 12% of the outstanding receivable balance.

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Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s effective tax rate for the three months ended September 30, 2013 and 2012 was 25.2% and 39.8%, respectively. The Company’s effective tax rate for the nine months ended September 30, 2013 and 2012 was 26.4% and 37.2%, respectively. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions including Canada. With a few exceptions, the Company is no longer subject to tax examinations by tax authorities for years prior to 2007. The Company's effective tax rate decreased during the three and nine months ended September 30, 2013 primarily due to tax benefits related to cross-jurisdictional financing as well as expenses incurred during the three and nine months ended September 30, 2012 related to the Merger that were not tax deductible.

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 segment	Sep. 30, 2012	Dec. 31, 2012
Segment Reporting Information [Line Items]
Number of operating segments			2
Revenues	$ 3,614,148	$ 3,190,780	$ 10,251,295	$ 6,610,580
Cost of revenue	3,326,360	2,955,889	9,450,546	6,142,796
Gross profit	287,788	234,891	800,749	467,784
Total assets	7,492,886	7,373,208	7,492,886	7,373,208	7,385,127
P B M
Segment Reporting Information [Line Items]
Revenues	3,578,767	3,150,755	10,142,515	6,493,029
Cost of revenue	3,310,636	2,940,060	9,399,949	6,094,664
Gross profit	268,131	210,695	742,566	398,365
Total assets	7,115,563	7,146,899	7,115,563	7,146,899
H C I T
Segment Reporting Information [Line Items]
Revenues	35,381	40,025	108,780	117,551
Cost of revenue	15,724	15,829	50,597	48,132
Gross profit	19,657	24,196	58,183	69,419
Total assets	$ 377,323	$ 226,309	$ 377,323	$ 226,309

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Goodwill and Other Intangible Assets (Details) 1 (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013		Sep. 30, 2013 P B M		Sep. 30, 2013 H C I T	Dec. 31, 2012 H C I T
Goodwill [Roll Forward]
Goodwill, Beginning Balance	$ 4,478,038		$ 4,458,373		$ 19,665	$ 19,665
Goodwill, Measurement period adjustment	16,472	[1]	16,472	[1]
Goodwill, Acquisitions	3,111		3,111
Goodwill, Ending Balance	$ 4,497,621		$ 4,477,956		$ 19,665	$ 19,665

[1] Adjustments to the fair value of assets acquired and liabilities assumed for recent acquisitions during the measurement period. The measurement period adjustments were not recast to the 2012 consolidated financial statements as they were not deemed material.

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in carrying amounts of goodwill by reportable segments

The changes in the carrying amounts of goodwill by reportable segment for the nine months ended September 30, 2013 are as follows (in thousands):

	PBM	HCIT	Total
Balance at December 31, 2012	4,458,373	19,665	4,478,038
Measurement period adjustments (a)	16,472	—	16,472
Acquisitions	3,111	—	3,111
Balance at September 30, 2013	4,477,956	19,665	4,497,621

a) Adjustments to the fair value of assets acquired and liabilities assumed for recent acquisitions during the measurement period. The measurement period adjustments were not recast to the 2012 consolidated financial statements as they were not deemed material.

Components of intangible assets

Definite-lived intangible assets are amortized over the useful lives of the related assets. The components of intangible assets were as follows (in thousands):

	September 30, 2013						December 31, 2012
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	$	1,349,774	$	300,899	$	1,048,875	$	1,346,874	$	155,343	$	1,191,531
Acquired software	—		—		—		3,765		3,765		—
Trademarks/Tradenames	—		—		—		14,070		14,070		—
Non-compete agreements	10,410		5,821		4,589		10,410		4,294		6,116
Licenses	2,060		1,001		1,059		2,060		716		1,344
Total	$	1,362,244	$	307,721	$	1,054,523	$	1,377,179	$	178,188	$	1,198,991

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Business Combinations (Tables)

9 Months Ended

Sep. 30, 2013

Business Acquisition [Line Items]

Unaudited pro forma results of operations

Unaudited pro forma results of operations are as follows (in thousands, except share and per share amounts):

	Nine Months Ended September 30, 2012
Revenue	$	9,609,135
Gross profit	$	654,852
Net income	$	79,424
Earnings per share:
Basic	$	0.39
Diluted	$	0.39
Weighted average shares outstanding:
Basic	204,350,003
Diluted	205,477,142

Catalyst

Business Acquisition [Line Items]

Schedule of total purchase price

The purchase price of the acquired Catalyst operations was comprised of the following (in thousands):

Cash paid to Catalyst shareholders	$	1,415,276
Fair value of common shares issued (a)	3,238,141
Fair value of warrants and stock options issued (b)	19,824
Total purchase price	$	4,673,241

(a) Valued based on the number of outstanding shares immediately prior to the Merger multiplied by the exchange ratio of 1.3212 (0.6606 prior to the October 2012 two-for-one stock split), multiplied by the closing market price of Catamaran shares on July 2, 2012.

(b) The Black-Scholes pricing model was used to calculate the fair value of the replacement warrants and stock options issued.

Schedule of fair values assigned to assets acquired and liabilities assumed at the acquisition date

The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date (in thousands):

	Initial Amounts Recognized at Acquisition Date (a)			Prior Measurement Period Adjustments (b)			Current Measurement Period Adjustments (c)			Current Amounts Recognized at Acquisition Date
Cash and cash equivalents	$	93,775		$	(315	)	$	—		$	93,460
Other current assets	695,888			5,202			2,411			703,501
Total current assets	789,663			4,887			2,411			796,961
Goodwill	4,010,235			8,492			16,141			4,034,868
Customer relationships intangible	1,184,800			—			—			1,184,800
Other long-term assets	87,174			1,547			8			88,729
Total assets acquired	6,071,872			14,926			18,560			6,105,358
Accounts Payable	338,819			—			5			338,824
Pharmacy benefit management rebates payable	176,202			2,935			(1,522		)	177,615
Accrued expenses and other current liabilities	187,851			1,348			5,473			194,672
Long-term debt	311,994			—			—			311,994
Other long-term liabilities	385,375			10,643			14,604			410,622
Total liabilities assumed	1,400,241			14,926			18,560			1,433,727
Non-controlling interest	(1,610		)	—			—			(1,610		)
Net assets acquired	$	4,673,241		$	—		$	—		$	4,673,241

(a) As previously reported in the Company's Form 10-Q for the period ended September 30, 2012.

(b) These represent measurement period adjustments from the acquisition date through December 31, 2012 and were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

(c) These represent measurement period adjustments during 2013 through the end of the measurement period and were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

HealthTran

Business Acquisition [Line Items]

Schedule of fair values assigned to assets acquired and liabilities assumed at the acquisition date

The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date (in thousands):

	Initial Amounts Recognized at Acquisition Date (a)		Measurement Period Adjustments (b)			Current Amounts Recognized at Acquisition Date
Current assets	$	30,654	$	245		$	30,899
Property and equipment	2,787		—			2,787
Goodwill	173,642		833			174,475
Intangible assets	77,130		(2,600		)	74,530
Total assets acquired	284,213		(1,522		)	282,691
Current liabilities	36,784		(496		)	36,288
Total liabilities assumed	36,784		(496		)	36,288
Net assets acquired	$	247,429	$	(1,026	)	$	246,403

(a) As previously reported in the Company's Form 10-Q for the period ended March 31, 2012.

(b) These measurement period adjustments were recorded to reflect an additional $1.0 million paid to the former HealthTran owners for the working capital reconciliation and changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

Schedule of estimated fair values and useful lives of intangible assets acquired

The estimated fair values and useful lives of intangible assets acquired are as follows (dollars in thousands):

	Fair Value		Useful Life
Trademarks/Trade names	$	1,750	6 months
Customer relationships	69,800		4-9 years
Non-compete agreements	2,600		5 years
License	380		3 years
Total	$	74,530

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Common Shares and Stock-Based Compensation (Details) 4 (USD $)	9 Months Ended
	Sep. 30, 2013
Restricted Stock Units Performance Based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
LTIP Plan | Restricted Stock Units Time Based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted units granted	251,970
Number of restricted units outstanding	702,978
LTIP Plan | Restricted Stock Units Performance Based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted units granted	253,980
Number of restricted units outstanding	674,496
LTIP Plan | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date value of restricted units granted (per unit)	$ 56.25
Catalyst | Restricted Stock Units Time Based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted units granted	130,320
Number of restricted units outstanding	205,830
Catalyst | Restricted Stock Units Performance Based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted units granted	25,570
Number of restricted units outstanding	17,510
Catalyst | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date value of restricted units granted (per unit)	$ 55.78
Straight Line Vesting Basis | Restricted Stock Units Time Based | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years
Straight Line Vesting Basis | Restricted Stock Units Time Based | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Cliff Vesting | Restricted Stock Units Time Based | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Cliff Vesting | Restricted Stock Units Time Based | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years

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Business Combinations Catalyst (Details) (USD $)	0 Months Ended	1 Months Ended	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended				9 Months Ended	0 Months Ended
	Sep. 06, 2012	Oct. 31, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 Catalyst	Sep. 30, 2012 Catalyst	Sep. 30, 2013 Catalyst	Sep. 30, 2012 Catalyst	Jul. 02, 2012 Catalyst		Sep. 30, 2012 Common Stock	Jul. 02, 2012 Common Stock Catalyst	Jul. 02, 2012 Initial Amounts Recognized at Acquisition Date Catalyst		Jul. 02, 2012 Prior Measurement Period Adjustments Catalyst		Jul. 02, 2012 Current Measurement Period Adjustments Catalyst
Merger Agreement [Abstract]
Stock conversion, share received per share converted														1.3212
Stock conversion, cash received per share converted, prior to stock split														0.6606
Number of common shares received after stock split	2	2
Stock conversion, cash received per share converted											$ 28.00
Shares issued													11,960,000	66,800,000
Warrants issued														500,000
Revenue from acquired company included in consolidated statement of operations							$ 1,900,000,000	$ 1,500,000,000	$ 5,300,000,000	$ 1,500,000,000
Goodwill expected to be tax deductible											525,000,000
Amortization of intangible assets			47,220,000	51,380,000	147,368,000	70,710,000	40,000,000		126,000,000
Future amortization expense, remainder of 2013			47,100,000		47,100,000		40,000,000		40,000,000
Fair value of intangible assets							1,200,000,000		1,200,000,000
Customer relationships, weighted average useful life									9 years
Business Acquisition, Cost of Acquired Entity, Purchase Price [Abstract]
Cash paid to shareholders											1,415,276,000
Fair value of common shares issued											3,238,141,000	[1]
Fair value of warrants and stock options issued											19,824,000	[2]
Total purchase price											4,673,241,000
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Cash and cash equivalents											93,460,000				93,775,000	[3]	(315,000)	[4]	0	[5]
Other current assets											703,501,000				695,888,000	[3]	5,202,000	[4]	2,411,000	[5]
Total current assets											796,961,000				789,663,000	[3]	4,887,000	[4]	2,411,000	[5]
Goodwill											4,034,868,000				4,010,235,000	[3]	8,492,000	[4]	16,141,000	[5]
Customer relationships intangible											1,184,800,000				1,184,800,000	[3]	0	[4]	0	[5]
Other long-term assets											88,729,000				87,174,000	[3]	1,547,000	[4]	8,000	[5]
Total assets acquired											6,105,358,000				6,071,872,000	[3]	14,926,000	[4]	18,560,000	[5]
Accounts Payable											338,824,000				338,819,000	[3]	0	[4]	5,000	[5]
Pharmacy benefit management rebates payable											177,615,000				176,202,000	[3]	2,935,000	[4]	(1,522,000)	[5]
Accrued expenses and other current liabilities											194,672,000				187,851,000	[3]	1,348,000	[4]	5,473,000	[5]
Long-term debt											311,994,000				311,994,000	[3]	0	[4]	0	[5]
Other long-term liabilities											410,622,000				385,375,000	[3]	10,643,000	[4]	14,604,000	[5]
Total liabilities assumed											1,433,727,000				1,400,241,000	[3]	14,926,000	[4]	18,560,000	[5]
Non-controlling interest											(1,610,000)				(1,610,000)	[3]	0	[4]	0	[5]
Net assets acquired											$ 4,673,241,000				$ 4,673,241,000	[3]	$ 0	[4]	$ 0	[5]

[1] Valued based on the number of outstanding shares immediately prior to the Merger multiplied by the exchange ratio of 1.3212 (0.6606 prior to the October 2012 two-for-one stock split), multiplied by the closing market price of Catamaran shares on July 2, 2012.

[2] The Black-Scholes pricing model was used to calculate the fair value of the replacement warrants and stock options issued.

[3] As previously reported in the Company's Form 10-Q for the period ended September 30, 2012.

[4] These measurement period adjustments were recorded to reflect an additional $1.0 million paid to the former HealthTran owners for the working capital reconciliation and changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

[5] These represent measurement period adjustments during 2013 through the end of the measurement period and were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

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Goodwill and Other Intangible Assets (Details) 3 (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract]
Future amortization expense, remainder of 2013	$ 47,100,000	$ 47,100,000
Future amortization expense, 2014	179,500,000	179,500,000
Future amortization expense, 2015	164,400,000	164,400,000
Future amortization expense, 2016	142,900,000	142,900,000
Future amortization expense, 2017	131,500,000	131,500,000
Future amortization expense, 2018	122,400,000	122,400,000
Total future amortization expense	266,700,000	266,700,000
Impairment of goodwill	$ 0	$ 0

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Income Taxes (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Tax Disclosure [Abstract]
Effective income tax rate	25.20%	39.80%	26.40%	37.20%

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value, Measurement Inputs, Disclosure [Table Text Block]

For assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets, the table below categorizes fair value measurements across the three levels as of September 30, 2013 and December 31, 2012 (in thousands):

	September 30, 2013
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	19,840	$	19,840
Derivative	$	—	$	1,751	$	—	$	1,751

	December 31, 2012
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	49,183	$	49,183
Derivative	$	—	$	2,639	$	—	$	2,639

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Common Shares and Stock-Based Compensation (Details) 1 (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended			0 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2012 Common Stock	May 16, 2012 Public Offering	May 16, 2012 Public Offering Common Stock	Jul. 02, 2012 Catalyst Common Stock	Sep. 30, 2013 LTIP [Member]	Sep. 30, 2013 Assumed Plans
Stockholders' Equity [Line Items]
Shares from public offering					11,960,000		11,960,000	66,800,000
Share price to public							$ 45.3
Proceeds from public offering, net of issuance costs			$ 0	$ 518,813		$ 519,100
Warrants issued								500,000
Stock-based compensation	$ 6,600	$ 6,300	$ 19,724	$ 13,161
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant									6,867,399	1,053,891

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2013

Basis of Presentation [Abstract]

Consolidation

Basis of presentation:

The unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), pursuant to the Securities and Exchange Commission’s (“SEC”) rules and regulations for reporting on Form 10-Q, and following accounting policies consistent with the Company’s audited annual consolidated financial statements for the year ended December 31, 2012. The unaudited consolidated financial statements of the Company include its wholly-owned subsidiaries and all significant intercompany transactions and balances have been eliminated in consolidation. Amounts in the unaudited consolidated financial statements and notes thereto are expressed in U.S. dollars, except where indicated. The financial information included herein reflects all adjustments (consisting only of normal recurring adjustments), which, in the opinion of management, are necessary for a fair presentation of the results for the periods presented. Certain reclassifications have been made to conform the prior year's consolidated financial statements to the current year's presentation. The results of operations for the three and nine month periods ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year ending December 31, 2013. As of the issuance date of the Company’s financial statements, the Company has assessed whether subsequent events have occurred that require adjustment to or disclosure in these unaudited consolidated financial statements in accordance with Financial Accounting Standards Board’s (“FASB”) guidance.

Pursuant to the SEC rules and regulations for reporting on Form 10-Q, certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or excluded. As a result, these unaudited consolidated financial statements do not contain all the disclosures required to be included in the annual consolidated financial statements and should be read in conjunction with the most recent audited annual consolidated financial statements and notes thereto described in our Annual Report on Form 10-K for the year ended December 31, 2012.

Use of Estimates

Use of estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Significant items subject to such estimates and assumptions include revenue recognition, rebates, purchase price allocation and contingent consideration in connection with acquisitions, valuation of property and equipment, valuation of intangible assets acquired and related amortization periods, impairment of goodwill, income tax uncertainties, contingencies and valuation allowances for receivables and income taxes. Actual results could differ from those estimates.

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Consolidated Statement Of Comprehensive (Parenthetical) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Statement of Other Comprehensive Income [Abstract]
Unrealized income (loss) on cash flow hedge, net of income tax expense of $368 for the nine month period ended September 30, 2013	$ 368

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Consolidated Statements of Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Noncontrolling Interest
Total shareholders’ equity, beginning at Dec. 31, 2011	$ 671,038	$ 394,769	$ 37,936	$ 238,333	$ 0	$ 0
Common stock, shares, beginning at Dec. 31, 2011		124,767,322
Activities during the period (unaudited) [Roll Forward]
Net income attributable to the Company	74,129			74,129
Less: Net income (loss) attributable to non-controlling interest	(1,070)					(1,070)
Net income	73,059
Shares issued		11,960,000
Shares issued, amount	518,813	518,813
Issuance of common shares for acquisition, shares		66,779,940
Issuance of common shares for acquisition, value	3,238,144	3,238,144
Issuance of warrants and stock options for acquisition	19,824		19,824
Non-controlling interest assumed from acquisition	(1,610)					(1,610)
Exercise of stock options, shares		1,163,624
Exercise of stock options, amount	5,738	8,155	(2,417)
Vesting of restricted stock units, shares		466,996
Vesting of restricted stock units, amount	0	17,923	(17,923)
Tax benefit on options exercised	17,214		17,214
Stock-based compensation	13,161		13,161
Other comprehensive income, net of tax	(2,504)				(2,504)
Total shareholders’ equity, ending at Sep. 30, 2012	4,552,877	4,177,804	67,795	312,462	(2,504)	(2,680)
Common stock, shares, ending at Sep. 30, 2012		205,137,882
Total shareholders’ equity, beginning at Dec. 31, 2012	4,609,861	4,180,778	73,530	354,991	(2,191)	2,753
Common stock, shares, beginning at Dec. 31, 2012	205,399,102	205,399,102
Activities during the period (unaudited) [Roll Forward]
Net income attributable to the Company	187,764			187,764
Less: Net income (loss) attributable to non-controlling interest	23,303					23,303
Net income	211,067
Exercise of stock options, shares		344,254
Exercise of stock options, amount	2,976	4,241	(1,265)
Warrants exercised, shares		60,000
Warrants exercised, amount	487	2,910	(2,423)
Vesting of restricted stock units, shares		494,964
Vesting of restricted stock units, amount	0	27,210	(27,210)
Tax benefit on options exercised	10,469		10,469
Stock-based compensation	19,724		19,724
Distribution to non-controlling interest	(22,115)					(22,115)
Other comprehensive income, net of tax	194				194
Total shareholders’ equity, ending at Sep. 30, 2013	$ 4,832,663	$ 4,215,139	$ 72,825	$ 542,755	$ (1,997)	$ 3,941
Common stock, shares, ending at Sep. 30, 2013	206,298,320	206,298,320

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2013

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

a) Recent accounting standards implemented

In February 2013, the FASB issued an update on the reporting of amounts reclassified from accumulated other comprehensive income. An entity is required to present either parenthetically on the face of the financial statements or in the notes, significant amounts reclassified from each component of accumulated other comprehensive income and the income statement line items affected by the reclassification. However, an entity would not need to show the income statement line item affected for certain components that are not required to be reclassified in their entirety to net income, such as amounts amortized into net periodic pension cost. The standard is effective prospectively for public entities for fiscal years, and interim periods with those years, beginning after December 15, 2012. The Company adopted this standard on January 1, 2013; however, the implementation of the amendments did not have a significant impact on its financial results or in the presentation and disclosure of its financial statements.

No other new accounting standards have been adopted during the three and nine month periods ended September 30, 2013.

b) Recent accounting standards issued

In July 2013, the FASB issued authoritative guidance containing changes to the presentation of an unrecognized tax benefit when a loss or credit carryforward exists. The new standard requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in the settlement of the uncertain tax positions. This statement is effective for financial statements issued for annual periods beginning after December 15, 2013, with early adoption permitted. Adoption of the standard is not expected to have a significant impact on the Company's financial results or in the presentation and disclosure of its financial statements.

In July 2013, the FASB issued authoritative guidance allowing the inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a benchmark interest rate for hedge accounting purposes in addition to the interest rates on direct Treasury obligations of the U.S. government and the London Interbank Offered Rate. The update also removes the restriction on using different benchmark rates for similar hedges. The new guidance can be applied by all companies that enter into hedging arrangements and is effective immediately. Adoption of the standard is not expected to have a significant impact on the Company's financial results or in the presentation and disclosure of its financial statements.

No other new standards have been issued during the three and nine month periods ended September 30, 2013 that the Company assessed to have a significant impact on its financial results or in the presentation and disclosure of its financial statements.

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Description of Business

9 Months Ended

Sep. 30, 2013

Description of Business [Abstract]

Description of Business

Description of Business

Catamaran Corporation (“Catamaran” or the “Company”) is a leading provider of pharmacy benefits management (“PBM”) services and healthcare information technology (“HCIT”) solutions to the healthcare benefits management industry. The Company’s product offerings and solutions combine a wide range of PBM services, software applications, application service provider (“ASP”) processing services and professional services designed for many of the largest organizations in the pharmaceutical supply chain, such as federal, provincial, state and local governments, unions, corporations, pharmacy benefit managers, managed care organizations, retail pharmacy chains and other healthcare intermediaries. The Company is headquartered in Schaumburg, Illinois with several locations in the U.S. and Canada. The Company trades on the Toronto Stock Exchange under ticker symbol “CCT” and on the Nasdaq Global Select Market under ticker symbol “CTRX.”

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Debt (Details) (USD $)	3 Months Ended	9 Months Ended		9 Months Ended												9 Months Ended	0 Months Ended						0 Months Ended	1 Months Ended	9 Months Ended	0 Months Ended						3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Credit Agreement	Sep. 30, 2013 Amended Credit Agreement [Member]	Jun. 03, 2013 Amended Credit Agreement [Member] Base Rate Borrowings	Jun. 03, 2013 Amended Credit Agreement [Member] LIBOR Borrowings	Sep. 30, 2013 Revolving Facility [Member] Credit Agreement	Sep. 30, 2013 Revolving Facility [Member] Credit Agreement Beginning With The Fiscal Quarter Ending December 31, 2012	Sep. 30, 2013 Revolving Facility [Member] Credit Agreement Beginning With The Fiscal Quarter Ending December 31, 2013	Sep. 30, 2013 Revolving Facility [Member] Credit Agreement Beginning With The Fiscal Quarter Ending December 31, 2014	Sep. 30, 2013 Revolving Facility [Member] Amended Credit Agreement [Member]	Sep. 30, 2013 Secured Debt	Dec. 31, 2012 Secured Debt	Jul. 02, 2012 Secured Debt	Sep. 30, 2013 Secured Debt Amended Credit Agreement [Member]	Jul. 02, 2012 Secured Debt Term-A Facility	Sep. 30, 2013 Secured Debt Term-A Facility	Dec. 31, 2012 Secured Debt Term-A Facility	Sep. 30, 2013 Secured Debt Term-A Facility Credit Agreement	Dec. 31, 2012 Secured Debt Term-A Facility Credit Agreement	Jul. 02, 2012 Secured Debt Term-A Facility Credit Agreement	Jun. 03, 2013 Secured Debt Term-A Facility Amended Credit Agreement [Member]	Jul. 31, 2013 Secured Debt Term-A Facility Amended Credit Agreement [Member]	Sep. 30, 2013 Secured Debt Term-A Facility Amended Credit Agreement [Member]	Jul. 02, 2012 Secured Debt Revolving Facility [Member]	Sep. 30, 2013 Secured Debt Revolving Facility [Member]	Dec. 31, 2012 Secured Debt Revolving Facility [Member]	Sep. 30, 2013 Secured Debt Revolving Facility [Member] Credit Agreement	Dec. 31, 2012 Secured Debt Revolving Facility [Member] Credit Agreement	Jul. 02, 2012 Secured Debt Revolving Facility [Member] Credit Agreement	Sep. 30, 2013 Secured Debt Revolving Facility [Member] Amended Credit Agreement [Member]	Jun. 03, 2013 Secured Debt Revolving Facility [Member] Amended Credit Agreement [Member]	Sep. 30, 2013 Restat, LLC [Member] Subsequent Event [Member] Revolving Credit Facility [Member]	Sep. 30, 2013 Minimum Amended Credit Agreement [Member] LIBOR Borrowings	Sep. 30, 2013 Maximum Amended Credit Agreement [Member] LIBOR Borrowings
Long-term Debt, by Category, Current and Noncurrent [Abstract]
Long-term Debt												$ 993,750,000						$ 970,360,000	$ 1,073,403,000						$ 993,800,000		$ 50,000,000	$ 100,000,000
Less current maturities	(43,750,000)	(43,750,000)	(41,250,000)										(43,750,000)	(41,250,000)
Long-term debt	976,610,000	976,610,000	1,132,153,000
Stated percentage																				1.81%	2.25%								1.81%	2.25%
Debt amount															1,800,000,000.0							1,100,000,000	1,000,000,000
Line of credit, remaining borrowing capacity																																750,000,000	700,000,000
Proceeds from Lines of Credit																																		350,000,000
Repayments of long-term debt																								6,300,000
Payment of direct lender fees																2,300,000
Payment of debt discount incurred																									1,300,000
Debt issuance cost paid																																1,000,000
Repayment of credit facility																																50,000,000
Term of long-term debt																	5 years									5 years
Line of credit borrowing capacity																										700,000,000							800,000,000
Debt discount																						24,100,000									16,600,000
Amortization related to financing costs and debt discounts	2,100,000	7,000,000
Initial applicable margin for borrowings						0.625%	1.625%
Interest rate on amounts drawn				2.25%	1.81%
Debt prepayment made																							100,000,000
Leverage ratio																																			1.50	2.50
Maximum leverage ratio								3.75	3.50	3.25	3.00	4.00
Maximum consolidated senior secured leverage ratio												3.25
Maximum ratio of EBIT to interest expense												4.00
Interest expense from unamortized debt discount and debt issuance costs		$ 400,000

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Debt (Tables)

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Components of long-term debt

The following table sets forth the components of our long-term debt (in thousands) as of September 30, 2013 and December 31, 2012.

	September 30, 2013			December 31, 2012
Senior secured term loan facility with an interest rate of 1.81% and 2.25% at September 30, 2013 and December 31, 2012, respectively	$	970,360		$	1,073,403
Senior secured revolving credit facility due June 1, 2018 with an interest rate of 1.81% and 2.25% at September 30, 2013 and December 31, 2012, respectively	50,000			100,000
Less current maturities	(43,750		)	(41,250		)
Long-term debt	$	976,610		$	1,132,153

Schedule of maturities of principal amounts outstanding under Revolving Facility

Principal repayments on the Term Loan Facility will be due as follows (in thousands):

Year	Amount due
2013	$	12,500
2014	43,750
2015	68,750
2016	93,750
2017	118,750
2018	656,250
Total	$	993,750

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Schedule of weighted average number of shares

The following is the reconciliation between the number of weighted average shares used in the basic and diluted EPS calculations for the three and nine month periods ended September 30, 2013 and 2012:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Weighted average number of shares used in computing basic EPS	206,203,263	203,505,355	205,920,803	153,850,043
Add dilutive common stock equivalents:
Outstanding stock options and restricted stock units (a)	621,355	933,693	716,120	1,127,139
Weighted average number of shares used in computing diluted EPS	206,824,618	204,439,048	206,636,923	154,977,182

(a) Excludes 746,691 and 1,212,910 common stock equivalents for the three-month periods ended September 30, 2013 and 2012 because their effect was anti-dilutive. Excludes 633,407 and 1,021,501 common stock equivalents for the nine-month periods ended September 30, 2013 and 2012 because their effect was anti-dilutive.

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Business Combinations Restat (Details) (Subsequent Event [Member], Restat, LLC [Member], USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013 Revolving Credit Facility [Member]
Business Acquisition [Line Items]
Purchase price	$ 409,500,000
Line of credit, outstanding balance		$ 350,000,000

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Concentration Risk (Details) (Customer Concentration Risk)	3 Months Ended		9 Months Ended			12 Months Ended
	Sep. 30, 2013 Sales	Sep. 30, 2012 Sales	Sep. 30, 2013 Sales	Sep. 30, 2012 Sales	Sep. 30, 2013 Accounts Receivable Customer One	Dec. 31, 2012 Accounts Receivable Customer One	Dec. 31, 2012 Accounts Receivable Customer Two
Concentration Risk [Line Items]
Concentration risk, percentage, period	19.00%	24.00%	19.00%	35.00%
Concentration risk, percentage					10.00%	13.00%	12.00%

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Financial Instruments (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
Derivative [Line Items]
Length of interest rate swap		3 years
Notional amount of interest rate cash flow hedge derivatives	$ 500,000,000	$ 500,000,000
Deferred expenses related to derivative instruments	1,700,000	1,700,000
Fair Value, Measurements, Recurring
Derivative [Line Items]
Cash flow hedge loss reclassified to interest expense	400,000	1,100,000
Cash Flow Hedging | Interest Rate Contract
Derivative [Line Items]
Libor rate	0.52%	0.52%
Effective interest rate	2.14%	2.14%
Basis spread on variable rate	1.625%	1.625%
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring
Derivative [Line Items]
Fair value of interest rate swap	$ 1,751,000	$ 1,751,000

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Common Shares and Stock-Based Compensation (Details) 3 (Stock Options, USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
CANADA | LTIP Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding (in shares)	3,064
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 3.35
UNITED STATES | LTIP Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years)	2 years 8 months 19 days
Options Outstanding (in shares)	1,373,474
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 30.84
Unrecognized compensation cost	$ 10,140
UNITED STATES | Assumed Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years)	3 years 5 months 12 days
Options Outstanding (in shares)	49,665
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 56.21
Unrecognized compensation cost	$ 876

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Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Allowance for Doubtful Accounts Receivable, Current	$ 6,532	$ 7,899
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	91,915	64,048
Accumulated Amortization	$ 307,721	$ 178,188
Common Stock, Par or Stated Value Per Share	$ 0	$ 0
Common Stock, Shares, Issued	206,298,320	205,399,102
Common Stock, Shares, Outstanding	206,298,320	205,399,102

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill is reviewed for impairment annually or more frequently if impairment indicators arise. The Company allocates goodwill to both the PBM and HCIT segments. There were no impairments of goodwill during the three and nine months ended September 30, 2013 and 2012.

The changes in the carrying amounts of goodwill by reportable segment for the nine months ended September 30, 2013 are as follows (in thousands):

	PBM	HCIT	Total
Balance at December 31, 2012	4,458,373	19,665	4,478,038
Measurement period adjustments (a)	16,472	—	16,472
Acquisitions	3,111	—	3,111
Balance at September 30, 2013	4,477,956	19,665	4,497,621

a) Adjustments to the fair value of assets acquired and liabilities assumed for recent acquisitions during the measurement period. The measurement period adjustments were not recast to the 2012 consolidated financial statements as they were not deemed material.

Definite-lived intangible assets are amortized over the useful lives of the related assets. The components of intangible assets were as follows (in thousands):

	September 30, 2013						December 31, 2012
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	$	1,349,774	$	300,899	$	1,048,875	$	1,346,874	$	155,343	$	1,191,531
Acquired software	—		—		—		3,765		3,765		—
Trademarks/Tradenames	—		—		—		14,070		14,070		—
Non-compete agreements	10,410		5,821		4,589		10,410		4,294		6,116
Licenses	2,060		1,001		1,059		2,060		716		1,344
Total	$	1,362,244	$	307,721	$	1,054,523	$	1,377,179	$	178,188	$	1,198,991

Total amortization associated with intangible assets at September 30, 2013 is estimated to be $47.1 million for the remainder of 2013, $179.5 million in 2014, $164.4 million in 2015, $142.9 million in 2016, $131.5 million in 2017, $122.4 million in 2018 and $266.7 million in total for years 2019 through 2023.

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Consolidated Statement of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net income	$ 83,128	$ 19,407	$ 211,067	$ 73,059
Other comprehensive income, net of tax
Unrealized income (loss) on cash flow hedge, net of income tax expense of $368 for the nine month period ended September 30, 2013	(853)	(2,504)	194	(2,504)
Comprehensive income	82,275	16,903	211,261	70,555
Less: Comprehensive income (loss) attributable to non-controlling interest	10,190	(1,070)	23,303	(1,070)
Comprehensive income attributable to the Company	$ 72,085	$ 17,973	$ 187,958	$ 71,625

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 436,227	$ 370,776
Restricted cash	32,219	52,422
Accounts receivable, net of allowance for doubtful accounts of $6,532 (2012 — $7,899)	847,924	725,809
Rebates receivable	291,182	302,461
Other current assets	113,784	101,311
Total current assets	1,721,336	1,552,779
Property and equipment, net of accumulated depreciation of $91,915 (2012 — $64,048)	172,868	105,201
Goodwill	4,497,621	4,478,038
Other intangible assets, net of accumulated amortization of $307,721 (2012 — $178,188)	1,054,523	1,198,991
Other long-term assets	46,538	50,118
Total assets	7,492,886	7,385,127
Current liabilities
Accounts payable	693,625	644,818
Accrued expenses and other current liabilities	241,452	254,811
Pharmacy benefit management rebates payable	314,565	302,065
Current portion - long-term debt	43,750	41,250
Total current liabilities	1,293,392	1,242,944
Deferred income taxes	302,527	344,232
Long-term debt	976,610	1,132,153
Other long-term liabilities	87,694	55,937
Total liabilities	2,660,223	2,775,266
Commitments and contingencies (Note 11)
Shareholders’ equity
Common shares: no par value, unlimited shares authorized; 206,298,320 shares issued and outstanding, September 30, 2013 (December 31, 2012 — 205,399,102 shares)	4,215,139	4,180,778
Additional paid-in capital	72,825	73,530
Retained earnings	542,755	354,991
Accumulated other comprehensive loss	(1,997)	(2,191)
Total shareholders' equity	4,828,722	4,607,108
Non-controlling interest	3,941	2,753
Total equity	4,832,663	4,609,861
Total liabilities and equity	$ 7,492,886	$ 7,385,127

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Fair Value (Details) (USD $)	3 Months Ended	9 Months Ended			9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2013 Fair Value, Measurements, Recurring Fair Value, Inputs, Level 2	Dec. 31, 2012 Fair Value, Measurements, Recurring Fair Value, Inputs, Level 2	Sep. 30, 2013 Fair Value, Measurements, Recurring Fair Value, Inputs, Level 3	Dec. 31, 2012 Fair Value, Measurements, Recurring Fair Value, Inputs, Level 3	Sep. 30, 2013 Fair Value, Measurements, Recurring Estimate of Fair Value, Fair Value Disclosure	Dec. 31, 2012 Fair Value, Measurements, Recurring Estimate of Fair Value, Fair Value Disclosure
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contingent purchase price consideration					$ 19,840,000	$ 49,183,000	$ 19,840,000	$ 49,183,000
Derivative				2,639,000			1,751,000	2,639,000
Payments made to reduce the fair value or contingent purchase price considerations					25,500,000
Adjustments made to reduce the fair value of contingent purchase price considerations					4,500,000
Contingent consideration, change in value of contingent purchase price	(100,000)	(500,000)
Fair value of interest rate swap			$ 1,751,000

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Common Shares and Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of fair value assumptions

The Black-Scholes option-pricing model was used to estimate the fair value of the stock options issued in each period at the grant date. Below is a summary of options granted and the assumptions utilized to derive fair value of the stock options under the Black-Scholes option-pricing model:

	Nine Months Ended September 30,
	2013		2012
Total stock options granted	367,195		404,652
Volatility	41.8% - 45.4%		47.2% - 49.2%
Risk-free interest rate	0.81% - 1.74%		0.65% - 0.83%
Expected life (in years)	4.5		4.5
Dividend yield	—		—
Weighted-average grant date fair value	$	21.44	$	29.40

Schedule of stock option activity

The table below summarizes the stock options outstanding as of September 30, 2013 under both plans.

	Options Outstanding	Weighted Average Exercise Price		Unrecognized compensation cost		Weighted Average Period
				(in thousands)
LTIP Plan
Canadian Options	3,064	$	3.35
U.S.Options	1,373,474	$	30.84	$	10,140	2.72
Assumed Plans
U.S.Options	49,665	$	56.21	$	876	$	3.45

Schedule of restricted stock units activity

The table below summarizes the number of time-based and performance-based RSUs that were granted and outstanding under both plans for the nine months ended September 30, 2013:

	LTIP Plan				Assumed Plans
	Number of Restricted Stock Units				Number of Restricted Stock Units
	Time-Based	Performance - Based	Weighted Average Grant Date Fair Value Per Unit		Time-Based	Performance - Based	Weighted Average Grant Date Fair Value Per Unit
Granted	251,970	253,980	$	56.25	130,320	25,570	$	55.78
Outstanding	702,978	674,496			205,830	17,510

Schedule of unrecognized compensation expenses

The table below summarizes the unrecognized compensation cost related to the outstanding RSUs at September 30, 2013.

	Unrecognized Compensation Cost		Weighted Average Period
	(in thousands)
LTIP	$	35,200	2.37
Assumed Plans	$	9,832	3.16

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Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The Company calculates basic EPS using the weighted average number of common shares outstanding during the period. Diluted EPS is calculated using the same method as basic EPS, but the Company adds the number of additional common shares that would have been outstanding for the period if the potential dilutive common shares had been issued. The following is the reconciliation between the number of weighted average shares used in the basic and diluted EPS calculations for the three and nine month periods ended September 30, 2013 and 2012:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Weighted average number of shares used in computing basic EPS	206,203,263	203,505,355	205,920,803	153,850,043
Add dilutive common stock equivalents:
Outstanding stock options and restricted stock units (a)	621,355	933,693	716,120	1,127,139
Weighted average number of shares used in computing diluted EPS	206,824,618	204,439,048	206,636,923	154,977,182

(a) Excludes 746,691 and 1,212,910 common stock equivalents for the three-month periods ended September 30, 2013 and 2012 because their effect was anti-dilutive. Excludes 633,407 and 1,021,501 common stock equivalents for the nine-month periods ended September 30, 2013 and 2012 because their effect was anti-dilutive.

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Common Shares and Stock-Based Compensation (Details) 2 (USD $)	9 Months Ended		1 Months Ended		9 Months Ended
	Sep. 30, 2013 Stock Options	Sep. 30, 2012 Stock Options	Jul. 31, 2012 LTIP Plan	Sep. 30, 2013 Assumed Plans	Sep. 30, 2013 Minimum	Sep. 30, 2012 Minimum	Sep. 30, 2013 Minimum Stock Options	Sep. 30, 2012 Minimum Stock Options	Sep. 30, 2013 Maximum	Sep. 30, 2012 Maximum	Sep. 30, 2013 Maximum Stock Options	Sep. 30, 2012 Maximum Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Incremental number of shares authorized			5,000,000
Maximum common shares issued under plan				1,480,936
Stock-based awards available for grant				1,053,891
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Total stock options granted	367,195	404,652
Volatility					41.80%	47.20%			45.40%	49.23%
Risk-free interest rate							0.81%	0.65%			1.74%	0.83%
Expected life (in years)	4 years 6 months	4 years 6 months
Dividend yield	0.00%	0.00%
Weighted-average grant date fair value (in dollars per share)	$ 21.44	$ 29.40

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Earnings Per Share (Details) 2 (Anti-dilutive Stock Options and RSU)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Anti-dilutive Stock Options and RSU
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	746,691	1,212,910	633,407	1,021,501

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Goodwill and Other Intangible Assets (Details) 2 (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 1,362,244	$ 1,377,179
Accumulated Amortization	307,721	178,188
Net	1,054,523	1,198,991
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,349,774	1,346,874
Accumulated Amortization	300,899	155,343
Net	1,048,875	1,191,531
Acquired software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	0	3,765
Accumulated Amortization	0	3,765
Net	0	0
Trademarks/Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	0	14,070
Accumulated Amortization	0	14,070
Net	0	0
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	10,410	10,410
Accumulated Amortization	5,821	4,294
Net	4,589	6,116
License
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	2,060	2,060
Accumulated Amortization	1,001	716
Net	$ 1,059	$ 1,344

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Business Combinations HealthTran (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Jan. 31, 2012
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Future amortization expense, remainder of 2013	$ 47,100,000	$ 47,100,000
HealthTran
Business Acquisition [Line Items]
Cash paid to shareholders			250,000,000
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Customer relationships intangible	74,530,000	74,530,000
Amortization of Acquired Intangible Assets	3,600,000	10,900,000
Future amortization expense, remainder of 2013	3,600,000	3,600,000
Initial Amounts Recognized at Acquisition Date | HealthTran
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Total current assets			30,654,000	[1]
Property and equipment			2,787,000	[1]
Goodwill			173,642,000	[1]
Customer relationships intangible			77,130,000	[1]
Total assets acquired			284,213,000	[1]
Current liabilities			36,784,000	[1]
Total liabilities assumed			36,784,000	[1]
Net assets acquired			247,429,000	[1]
Measurement Period Adjustments | HealthTran
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Total current assets			245,000	[2]
Goodwill			833,000	[2]
Customer relationships intangible			(2,600,000)	[2]
Total assets acquired			(1,522,000)	[2]
Current liabilities			(496,000)	[2]
Total liabilities assumed			(496,000)	[2]
Net assets acquired			(1,026,000)	[2]
Payments due to previous owners		1,000,000
Current Amounts Recognized at Acquisition Date | HealthTran
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Total current assets			30,899,000
Property and equipment			2,787,000
Goodwill			174,475,000
Customer relationships intangible			74,530,000
Total assets acquired			282,691,000
Current liabilities			36,288,000
Total liabilities assumed			36,288,000
Net assets acquired			246,403,000
Trademarks/Trade names | HealthTran
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Customer relationships intangible	1,750,000	1,750,000
Customer relationships, weighted average useful life		6 months
Customer relationships | HealthTran
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Customer relationships intangible	69,800,000	69,800,000
Non-compete agreements | HealthTran
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Customer relationships intangible	2,600,000	2,600,000
Customer relationships, weighted average useful life		5 years
License | HealthTran
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Customer relationships intangible	$ 380,000	$ 380,000
Customer relationships, weighted average useful life		3 years
Minimum | Customer relationships | HealthTran
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Customer relationships, weighted average useful life		4 years
Maximum | Customer relationships | HealthTran
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net [Abstract]
Customer relationships, weighted average useful life		9 years

[1] As previously reported in the Company's Form 10-Q for the period ended March 31, 2012.

[2] These represent measurement period adjustments from the acquisition date through December 31, 2012 and were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

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Business Combinations Pro Forma Information (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Business Acquisition, Pro Forma Information [Abstract]
Revenue	$ 9,609,135
Gross profit	654,852
Net income	$ 79,424
Earnings per share attributable to the Company:
Basic (in dollars per share)	$ 0.39
Diluted (in dollars per share)	$ 0.39
Weighted average number of shares used in computing earnings per share:
Basic (in shares)	204,350,003
Diluted (in shares)	205,477,142

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Business Combinations

9 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

Business Combinations

Business Combinations

Catalyst Health Solutions, Inc. Merger

On July 2, 2012, the Company completed its merger (the “Merger”) with Catalyst Health Solutions, Inc. ( "Catalyst"), a full-service PBM. Each share of Catalyst common stock outstanding immediately prior to the effective time of the Merger (other than shares owned by the Company or Catalyst or any of their respective wholly-owned subsidiaries) was converted in the Merger into the right to receive 1.3212 (0.6606 prior to the October 2012 two-for-one stock split) of a Company common share and $28.00 in cash. This resulted in the Company issuing approximately 66.8 million common shares, issuing 0.5 million warrants, and paying $1.4 billion in cash to Catalyst stockholders to complete the Merger. The results of Catalyst have been included in the Company's results since July 2, 2012. The consolidated statement of operations include total revenues from the Catalyst book of business of $1.9 billion and $5.3 billion, for the three and nine month periods ended September 30, 2013, respectively, and $1.5 billion for the three and nine month periods ended September 30, 2012.

The Merger was accounted for under the acquisition method of accounting with the Company treated as the acquiring entity. Accordingly, the consideration paid by the Company to complete the acquisition has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition. The carrying values for current assets and liabilities were deemed to approximate their fair values due to the short-term nature of their maturities. The fair values for acquired customer relationships intangible asset was valued using an excess earnings model based on expected future revenues derived from the customers acquired. The excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill.

All of the assets and liabilities recorded for the Merger are included within the Company's PBM segment. Goodwill is non-amortizing for financial statement purposes. Goodwill of $525 million related to the Catalyst Merger is tax deductible. The goodwill recognized by the Company represents many of the synergies and business growth opportunities that may be realized from this Merger. The synergies include improved pricing from the Company's suppliers due to the increased volume of prescription drug purchases, pull through opportunities of the combined companies' mail and specialty service offerings, and a more efficient leveraging of resources to achieve operating profits.

The purchase price of the acquired Catalyst operations was comprised of the following (in thousands):

Cash paid to Catalyst shareholders	$	1,415,276
Fair value of common shares issued (a)	3,238,141
Fair value of warrants and stock options issued (b)	19,824
Total purchase price	$	4,673,241

(a) Valued based on the number of outstanding shares immediately prior to the Merger multiplied by the exchange ratio of 1.3212 (0.6606 prior to the October 2012 two-for-one stock split), multiplied by the closing market price of Catamaran shares on July 2, 2012.

(b) The Black-Scholes pricing model was used to calculate the fair value of the replacement warrants and stock options issued.

The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date (in thousands):

	Initial Amounts Recognized at Acquisition Date (a)			Prior Measurement Period Adjustments (b)			Current Measurement Period Adjustments (c)			Current Amounts Recognized at Acquisition Date
Cash and cash equivalents	$	93,775		$	(315	)	$	—		$	93,460
Other current assets	695,888			5,202			2,411			703,501
Total current assets	789,663			4,887			2,411			796,961
Goodwill	4,010,235			8,492			16,141			4,034,868
Customer relationships intangible	1,184,800			—			—			1,184,800
Other long-term assets	87,174			1,547			8			88,729
Total assets acquired	6,071,872			14,926			18,560			6,105,358
Accounts Payable	338,819			—			5			338,824
Pharmacy benefit management rebates payable	176,202			2,935			(1,522		)	177,615
Accrued expenses and other current liabilities	187,851			1,348			5,473			194,672
Long-term debt	311,994			—			—			311,994
Other long-term liabilities	385,375			10,643			14,604			410,622
Total liabilities assumed	1,400,241			14,926			18,560			1,433,727
Non-controlling interest	(1,610		)	—			—			(1,610		)
Net assets acquired	$	4,673,241		$	—		$	—		$	4,673,241

(a) As previously reported in the Company's Form 10-Q for the period ended September 30, 2012.

(b) These represent measurement period adjustments from the acquisition date through December 31, 2012 and were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

(c) These represent measurement period adjustments during 2013 through the end of the measurement period and were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

During the three and nine month periods ended September 30, 2013, the Company recognized $40.0 million and $126.0 million, respectively, of amortization expense from intangible assets acquired in the Catalyst Merger. Amortization associated with the Catalyst Merger for the remainder of 2013 is expected to be $40.0 million. The estimated fair value of the customer relationship intangible asset on the acquisition date was $1.2 billion with a useful life of 9 years. The intangible asset acquired will not have any residual value at the end of the amortization period. There were no in-process research and development assets acquired.

HealthTran LLC Acquisition

In January 2012, the Company completed the acquisition of all of the outstanding equity interests of HealthTran LLC (“HealthTran”), a full-service PBM, in exchange for $250 million in cash, subject to certain customary post-closing adjustments, in each case upon the terms and subject to the conditions contained in the HealthTran purchase agreement. HealthTran was an existing HCIT client and utilizes a Company platform for its claims adjudication services. The acquisition provides the opportunity to create new revenues from HealthTran's customer base and generate cost savings through purchasing and SG&A synergies. The results of HealthTran have been included in the Company's results since January 1, 2012.

The HealthTran acquisition was accounted for under the acquisition method of accounting with the Company treated as the acquiring entity. Accordingly, the consideration paid by the Company to complete the acquisition has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition.

The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date (in thousands):

	Initial Amounts Recognized at Acquisition Date (a)		Measurement Period Adjustments (b)			Current Amounts Recognized at Acquisition Date
Current assets	$	30,654	$	245		$	30,899
Property and equipment	2,787		—			2,787
Goodwill	173,642		833			174,475
Intangible assets	77,130		(2,600		)	74,530
Total assets acquired	284,213		(1,522		)	282,691
Current liabilities	36,784		(496		)	36,288
Total liabilities assumed	36,784		(496		)	36,288
Net assets acquired	$	247,429	$	(1,026	)	$	246,403

(a) As previously reported in the Company's Form 10-Q for the period ended March 31, 2012.

(b) These measurement period adjustments were recorded to reflect an additional $1.0 million paid to the former HealthTran owners for the working capital reconciliation and changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date.

During the three and nine month periods ended September 30, 2013, the Company recognized $3.6 million and $10.9 million, respectively, of amortization expense from intangible assets acquired in the HealthTran acquisition. Amortization associated with the HealthTran acquisition for the remainder of 2013 is expected to be $3.6 million.

The estimated fair values and useful lives of intangible assets acquired are as follows (dollars in thousands):

	Fair Value		Useful Life
Trademarks/Trade names	$	1,750	6 months
Customer relationships	69,800		4-9 years
Non-compete agreements	2,600		5 years
License	380		3 years
Total	$	74,530

None of the acquired intangible assets will have any residual value at the end of the amortization periods. There were no in-process research and development assets acquired.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the combined historical results of operations of the Company and Catalyst as if the Merger had occurred on January 1, 2012. The unaudited pro forma financial information includes certain adjustments related to the acquisitions, such as increased amortization from the fair value of intangible assets acquired, income tax effects related to the acquisition and the elimination of transactions between the Company and Catalyst. Unaudited pro forma results of operations are as follows (in thousands, except share and per share amounts):

	Nine Months Ended September 30, 2012
Revenue	$	9,609,135
Gross profit	$	654,852
Net income	$	79,424
Earnings per share:
Basic	$	0.39
Diluted	$	0.39
Weighted average shares outstanding:
Basic	204,350,003
Diluted	205,477,142

This unaudited pro forma financial information is not intended to represent or be indicative of what would have occurred if these transactions had taken place on the date presented and is not indicative of what the Company's actual results of operations would have been had the acquisitions been completed at the beginning of the period indicated above. Further, the pro forma combined results do not reflect one-time costs to fully integrate and operate the combined organization more efficiently or anticipated synergies expected to result from the combinations and should not be relied upon as being indicative of the future results that the Company will experience.

Restat, LLC Acquisition

On October 1, 2013, the Company completed the previously announced acquisition of Restat, LLC, a privately held pharmacy benefit manager based in Milwaukee, Wisconsin, for a purchase price of $409.5 million in cash subject to certain customary post-closing adjustments. The purchase price was funded from Catamaran’s existing cash balance and $350 million in borrowings under its Revolving Facility.

The acquisition provides the Company the opportunity to bring Catamaran's full suite of technology and clinical services to Restat's clients, including mail order and specialty pharmacy services. The initial accounting for this acquisition was incomplete at the time these financial statements were available for issuance. The Company expects to finalize the accounting for the acquisition as soon as practicable, but no later than one year from the acquisition closing date.

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Schedule of financial information by segment

The Company reports in two operating segments: PBM and HCIT. The Company evaluates segment performance based upon revenue and gross profit. Financial information by segment is presented below (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
PBM:
Revenue	$	3,578,767	$	3,150,755	$	10,142,515	$	6,493,029
Cost of revenue	3,310,636		2,940,060		9,399,949		6,094,664
Gross profit	$	268,131	$	210,695	$	742,566	$	398,365
Total assets at September 30	$	7,115,563	$	7,146,899	$	7,115,563	$	7,146,899
HCIT:
Revenue	$	35,381	$	40,025	$	108,780	$	117,551
Cost of revenue	15,724		15,829		50,597		48,132
Gross profit	$	19,657	$	24,196	$	58,183	$	69,419
Total assets at September 30	$	377,323	$	226,309	$	377,323	$	226,309
Consolidated:
Revenue	$	3,614,148	$	3,190,780	$	10,251,295	$	6,610,580
Cost of revenue	3,326,360		2,955,889		9,450,546		6,142,796
Gross profit	$	287,788	$	234,891	$	800,749	$	467,784
Total assets at September 30	$	7,492,886	$	7,373,208	$	7,492,886	$	7,373,208

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Debt Debt Maturities (Details) (Amended Credit Agreement [Member], Revolving Facility [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Amended Credit Agreement [Member] | Revolving Facility [Member]
Long-term Debt, Fiscal Year Maturity [Abstract]
2013	$ 12,500
2014	43,750
2015	68,750
2016	93,750
2017	118,750
2018	656,250
Long-term Debt	$ 993,750

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Common Shares and Stock-Based Compensation

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Common Shares and Stock-Based Compensation

Common Shares and Stock-Based Compensation

(a) Issuance of common shares

On May 16, 2012, the Company completed a public offering of 12.0 million of its common shares at a price to the public of $45.30 per share. The net proceeds to the Company from the offering were approximately $519.1 million, after deducting the underwriting discounts and commissions and offering expenses. The Company used part of the net proceeds from the offering to pay a portion of the cash component of the Merger consideration and other related fees and expenses in connection with the Merger and the balance for general corporate purposes.

On July 2, 2012, the Company issued 66.8 million common shares and 0.5 million warrants in connection with the Catalyst Merger. See Note 5— Business Combinations for further information related to the Merger.

(b) Equity incentive plans

In July 2012, the maximum common shares of the Company allowed to be issued under the Catamaran Corporation Long-Term Incentive Plan (“LTIP”) was increased by 5 million, after the Company's shareholders approved an amendment to the LTIP at a Special Meeting of Shareholders of the Company on July 2, 2012.

In connection with the closing of the Merger with Catalyst on July 2, 2012, the Company assumed two stock incentive plans (together the "Assumed Plans") each as amended and adjusted for the purpose of granting awards to individuals who became employees of the Company subsequent to the close of the Merger or to newly hired employees of the Company who were not employed with the Company as of the close of the Merger. The maximum common shares of the Company allowed to be issued under the Assumed Plans is 1,480,936.

(c) Stock-based compensation

During the three-month periods ended September 30, 2013 and 2012, the Company recorded stock-based compensation expense of $6.6 million and $6.3 million, respectively. During the nine months ended September 30, 2013 and 2012 the Company recorded stock-based compensation expense of $19.7 million and $13.2 million, respectively. There were 6,867,399 and 1,053,891 stock-based awards available for grant under the LTIP and the Assumed Plans, respectively, as of September 30, 2013.

(i) Stock options

The Black-Scholes option-pricing model was used to estimate the fair value of the stock options issued in each period at the grant date. Below is a summary of options granted and the assumptions utilized to derive fair value of the stock options under the Black-Scholes option-pricing model:

	Nine Months Ended September 30,
	2013		2012
Total stock options granted	367,195		404,652
Volatility	41.8% - 45.4%		47.2% - 49.2%
Risk-free interest rate	0.81% - 1.74%		0.65% - 0.83%
Expected life (in years)	4.5		4.5
Dividend yield	—		—
Weighted-average grant date fair value	$	21.44	$	29.40

The table below summarizes the stock options outstanding as of September 30, 2013 under both plans.

	Options Outstanding	Weighted Average Exercise Price		Unrecognized compensation cost		Weighted Average Period
				(in thousands)
LTIP Plan
Canadian Options	3,064	$	3.35
U.S.Options	1,373,474	$	30.84	$	10,140	2.72
Assumed Plans
U.S.Options	49,665	$	56.21	$	876	$	3.45

(ii) Restricted stock units

During the three and nine months ended September 30, 2013, the Company granted time-based RSUs and performance-based RSUs to its employees and non-employee directors under both the LTIP and the Assumed Plans. Time-based RSUs vest on a straight-line basis over a range of two to four years. The Company also granted time-based RSUs that cliff vest after a three to four year period. Performance-based RSUs cliff vest based upon reaching agreed upon three-year performance conditions. The number of outstanding performance-based RSUs as of September 30, 2013 stated below assumes the associated performance targets will be met at the maximum level.

The table below summarizes the number of time-based and performance-based RSUs that were granted and outstanding under both plans for the nine months ended September 30, 2013:

	LTIP Plan				Assumed Plans
	Number of Restricted Stock Units				Number of Restricted Stock Units
	Time-Based	Performance - Based	Weighted Average Grant Date Fair Value Per Unit		Time-Based	Performance - Based	Weighted Average Grant Date Fair Value Per Unit
Granted	251,970	253,980	$	56.25	130,320	25,570	$	55.78
Outstanding	702,978	674,496			205,830	17,510

The table below summarizes the unrecognized compensation cost related to the outstanding RSUs at September 30, 2013.

	Unrecognized Compensation Cost		Weighted Average Period
	(in thousands)
LTIP	$	35,200	2.37
Assumed Plans	$	9,832	3.16

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Stock Split

9 Months Ended

Sep. 30, 2013

Equity [Abstract]

Stock Split

Stock Split

On September 6, 2012, the Company announced that its board of directors had declared a nominal dividend on the issued and outstanding common shares of the Company to effect a two-for-one stock split. Shareholders of record at the close of business on September 20, 2012 were issued one additional common share for each share owned as of that date. The additional common shares were distributed on October 1, 2012. All share and per share data presented in this report have been retroactively adjusted to reflect this stock split.

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net income	$ 211,067	$ 73,059
Items not involving cash:
Stock-based compensation	19,724	13,161
Depreciation of property and equipment	28,204	12,945
Amortization of intangible assets	147,368	70,710
Deferred lease inducements and rent	24,042	1,409
Deferred income taxes	(36,225)	(18,693)
Tax benefit on stock-based compensation plans	(10,469)	(17,214)
Amortization of deferred financing fees	6,999	2,689
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	(119,630)	(86,160)
Rebates receivable	11,131	6,681
Restricted cash	199	9,338
Other current assets	8,036	29,494
Accounts payable	47,608	59,477
Accrued expenses and other current liabilities	(17,983)	(24,459)
Pharmacy benefit management rebates payable	14,022	10,336
Other	1,760	4,741
Net cash provided by operating activities	335,853	147,514
Cash flows from investing activities:
Proceeds from restricted cash	20,004	0
Acquisition, net of cash acquired	(7,076)	(1,564,385)
Purchases of property and equipment	(93,272)	(12,901)
Net cash used by investing activities	(80,344)	(1,577,286)
Cash flows from financing activities:
Proceeds from public offering, net of issuance costs	0	518,813
Proceeds from issuance of debt	100,000	1,470,448
Repayment of debt	(256,250)	(511,993)
Tax benefit on stock-based compensation plans	10,469	17,214
Proceeds from exercise of options and warrants	3,463	5,738
Payments of contingent consideration	(23,203)	0
Debt issuance costs	(2,347)	(18,806)
Distribution to non-controlling interest	(22,115)	0
Net cash (used) provided by financing activities	(189,983)	1,481,414
Effect of foreign exchange on cash balances	(75)	8
Increase in cash and cash equivalents	65,451	51,650
Cash and cash equivalents, beginning of period	370,776	341,382
Cash and cash equivalents, end of period	$ 436,227	$ 393,032

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Lease Exit Costs (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
Operating Leased Assets [Line Items]
Leases payments, net of sub-lease receipts		$ 7.2
Selling, General and Administrative Expenses
Operating Leased Assets [Line Items]
Lease loss expense	5.6	6.0
Accrued Expenses and Other Current Liabilities
Operating Leased Assets [Line Items]
Lease loss accrual	$ 5.6	$ 5.6

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Common Shares and Stock-Based Compensation (Details) 5 (Restricted Stock Units (RSUs), USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
LTIP Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs on nonvested awards	$ 35,200
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years)	2 years 4 months 13 days
Assumed Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs on nonvested awards	$ 9,832
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years)	3 years 1 month 28 days

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Stock Split (Details)	0 Months Ended	1 Months Ended
	Sep. 06, 2012	Oct. 31, 2012
Equity [Abstract]
Number of common shares received after stock split	2	2

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

From time to time in connection with its operations, the Company is named as a defendant in actions for damages and costs allegedly sustained by third party plaintiffs. The Company has considered these proceedings and disputes in determining the necessity of any accruals for losses that are probable and reasonably estimable. In addition, various aspects of the Company’s business may subject it to litigation and liability for damages arising from errors in processing the pricing of prescription drug claims, failure to meet performance measures within certain contracts relating to its services performed, its ability to obtain certain levels of discounts or rebates on prescription purchases from retail pharmacies and drug manufacturers or other actions or omissions. The Company’s recorded accruals are based on estimates developed with consideration given to the potential merits of claims or quantification of any performance obligations. The Company takes into account its history of claims, the limitations of any insurance coverage, advice from outside counsel, and management’s strategy with regard to the settlement or defense of such claims and obligations. While the ultimate outcome of those claims, lawsuits or performance obligations cannot be predicted with certainty, the Company believes, based on its understanding of the facts of these claims and performance obligations, that adequate provisions have been recorded in the accounts where required.

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Debt

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Debt

Debt

The following table sets forth the components of our long-term debt (in thousands) as of September 30, 2013 and December 31, 2012.

	September 30, 2013			December 31, 2012
Senior secured term loan facility with an interest rate of 1.81% and 2.25% at September 30, 2013 and December 31, 2012, respectively	$	970,360		$	1,073,403
Senior secured revolving credit facility due June 1, 2018 with an interest rate of 1.81% and 2.25% at September 30, 2013 and December 31, 2012, respectively	50,000			100,000
Less current maturities	(43,750		)	(41,250		)
Long-term debt	$	976,610		$	1,132,153

On June 3, 2013, the Company entered into an Amendment (the “Amendment”) to the Credit Agreement dated July 2, 2012 (the "Credit Agreement"), with JPMorgan Chase Bank, N.A. ("JPMCB"), as administrative agent, and a syndicate of lenders. The Credit Agreement initially provided for a senior secured credit facility in an aggregate amount of $1.8 billion consisting of (i) a five-year senior secured term loan facility in the amount of $1.1 billion (the “Term Loan Facility”) and (ii) a five-year senior secured revolving credit facility in the amount of $700 million (the “Revolving Facility”).

Pursuant to the Amendment, the following key terms of the Credit Agreement were modified:

• an extension of the maturity date for the Term Loan Facility and the Revolving Facility from July 2, 2017 to June 1, 2018;

• an increase in the commitments under the Revolving Facility from $700 million to $800 million;

• a decrease in the commitments under the Term Loan Facility from $1.1 billion to $1.0 billion;

• additional flexibility for the Company and its subsidiaries to (i) make certain permitted acquisitions, (ii) create liens, (iii) make investments, loans, advances or guarantees, and (iv) pay dividends and distributions or repurchase its own capital stock; and

• modifications to the interest rates and financial covenants applicable to the Company and its subsidiaries as described further below.

After giving effect to the Amendment, the interest rates applicable to the Term Loan Facility and the Revolving Facility will continue to be based on a fluctuating rate of interest measured by reference to either, at the Company's option, (i) a base rate, plus an applicable margin, or (ii) an adjusted London interbank offered rate (adjusted for maximum reserves) (“LIBOR”), plus an applicable margin. The applicable margin, in each case, will continue to be adjusted from time to time based on the Company's consolidated leverage ratio for the previous fiscal quarter. The Amendment provides for a reduction in the applicable margins that would be in effect at any time when the Company's consolidated leverage ratio is greater than 1.50 to 1 and less than 2.50 to 1. After giving effect to the Amendment, the initial applicable margin for all borrowings is 0.625% per annum with respect to base rate borrowings and 1.625% per annum with respect to LIBOR borrowings. The Company intends to continue to elect the LIBOR rate as it has previously done during the term of the loan. This resulted in the applicable interest rate decreasing to 1.81% at September 30, 2013 from 2.25% prior to the Amendment. See Note 12 — Financial Instruments for information on the Company's interest rate swap agreements.

In connection with the Amendment, the Company made a $100 million prepayment on the Term Loan Facility to reduce its outstanding balance to $1.0 billion from $1.1 billion. The Company utilized funds from its Revolving Facility to make the prepayment, leaving the Company with $700 million of remaining available borrowing capacity under the Revolving Facility at the time of the Amendment execution. In June 2013, the Company repaid $50 million of the amount borrowed under the Revolving Facility, leaving the Company with $750 million of borrowing capacity under the Revolving Facility as of September 30, 2013. On October 1, 2013, the Company utilized $350 million under the Revolving Facility to partially fund the acquisition of Restat. The Company made a principal repayment of $6.3 million in July 2013 on the Term Loan facility leaving the Company with $993.8 million outstanding as of September 30, 2013. In connection with executing the Amendment, the Company paid $2.3 million in direct lender fees to the syndication of banks providing credit to the Company. The fees consisted of a $1.3 million debt discount related to the Term Loan Facility and $1.0 million of debt issuance costs related to the Revolving Facility. The $1.3 million debt discount incurred in connection with the Amendment is presented on the consolidated balance sheet as a reduction to long-term debt, along with the $24.1 million of unamortized debt discount incurred in connection with the execution of the Credit Agreement. The debt discount amounts are being amortized to interest expense over the amended life of the Term Loan Facility. The Company uses the straight-line method to amortize the debt discount as it does not result in a materially different amount of interest expense than the effective interest rate method. The additional $1.0 million debt issue cost incurred in connection with the execution of the Amendment related to the Revolving Facility, along with $16.6 million of unamortized debt issuance costs incurred in connection with the execution of the Credit Agreement, are presented on the consolidated balance sheet as other assets. The debt issuance costs are being amortized to interest expense over the amended life of the Revolving Facility using the straight-line method. The amortization related to financing costs and debt discounts totaled $2.1 million and $7.0 million for the three and nine month periods ended September 30, 2013, respectively.

Upon executing the Amendment, the Company assessed whether the modifications to the Credit Agreement were substantial and should be accounted for using extinguishment accounting. The Company made its assessment both on a total basis and on an individual basis for each member of the syndication. The Company performed separate assessments for the Term Loan Facility and the Revolving Facility. As a result of the assessments, the Company recorded an additional interest expense charge of $0.4 million from unamortized debt discount and debt issuance costs during the nine months ended September 30, 2013.

As previously disclosed, the Credit Agreement prior to giving effect to the Amendment required the Company to maintain a consolidated leverage ratio at all times less than or equal to 3.75 to 1 initially, with step-downs to (i) 3.50 to 1 beginning with the fiscal quarter ending December 31, 2012, (ii) 3.25 to 1 beginning with the fiscal quarter ending December 31, 2013 and (iii) 3.00 to 1 beginning with the fiscal quarter ending December 31, 2014. The Credit Agreement, as amended by the Amendment, requires the Company to maintain a consolidated leverage ratio at all times less than or equal to 4.00 to 1 and a consolidated senior secured leverage ratio at all times less than or equal to 3.25 to 1. As previously disclosed, the Company's consolidated leverage ratio is defined as the ratio of (1) consolidated total debt to (2) consolidated EBITDA (with add-backs permitted to consolidated EBITDA for (a) fees and expenses related to the Merger, the closing of the Credit Agreement, a specified historic acquisition and future permitted acquisitions, (b) synergies projected by the Company in good faith to be realized as a result of the Merger in an aggregate amount not to exceed a specified threshold and (c) fees and expenses and integration costs related to historical acquisitions by Catalyst in an aggregate amount not to exceed a specified threshold). The Company's new consolidated senior secured leverage ratio is defined as the ratio of (1) (a) consolidated total debt minus (b) any portion of consolidated total debt that is subordinated or not secured by a lien upon the assets of the Company or its subsidiaries to (2) consolidated EBITDA (subject to the permitted add-backs noted above). The Credit Agreement, as amended by the Amendment, continues to require the Company to maintain an interest coverage ratio greater than or equal to 4.00 to 1. As previously disclosed, the interest coverage ratio is defined as the ratio of (1) consolidated EBIT (subject to the permitted add-backs noted above) to (2) consolidated interest expense, tested at the end of each fiscal quarter for the rolling four fiscal quarter period then most recently ended. As of September 30, 2013, the Company was in compliance with the covenants of the Credit Agreement, as amended by the Amendment.

Principal amounts outstanding under the Revolving Facility of the Amendment are due and payable in full on June 1, 2018. Principal repayments on the Term Loan Facility will be due as follows (in thousands):

Year	Amount due
2013	$	12,500
2014	43,750
2015	68,750
2016	93,750
2017	118,750
2018	656,250
Total	$	993,750

The Credit Agreement also contains a number of covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to: incur additional indebtedness; create liens; make investments, loans, advances or guarantees; sell or transfer assets; pay dividends and distributions or repurchase its own capital stock; prepay certain indebtedness; engage in mergers, acquisitions or consolidations (subject to exceptions for certain permitted acquisitions); change its lines of business or enter into new lines of business; engage in certain transactions with affiliates; enter into agreements restricting the ability to grant liens in favor of the collateral agent for the benefit of the secured parties; engage in sale and leaseback transactions; or enter into swap, forward, future or derivative transaction or option or similar agreements. In addition, the Credit Agreement includes various (i) customary affirmative covenants and other reporting requirements and (ii) customary events of default, including, without limitation, payment defaults, violation of covenants, material inaccuracy of representations or warranties, cross-defaults to other material agreements evidencing indebtedness, bankruptcy events, certain ERISA events, material judgments, invalidity of guarantees or security documents and change of control. Drawings under the Revolving Facility are subject to certain conditions precedent, including material accuracy of representations and warranties and absence of default.

The Company’s obligations under the Credit Agreement are guaranteed by all existing and future, direct and indirect, material subsidiaries of the Company (collectively, the “Subsidiary Guarantors”).  In addition, the Company and each Subsidiary Guarantor have pledged substantially all of their assets, subject to certain exceptions, to secure the Company’s obligations under the Credit Agreement. 

The carrying value of the Company's debt at September 30, 2013 approximates its fair value.

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Lease Exit Costs

9 Months Ended

Sep. 30, 2013

Leases [Abstract]

Lease Exit Costs

Lease Exit Costs

In August 2013, the Company executed a plan to exit a portion of space it had leased in Maryland and entered into a sub-lease agreement with a third-party tenant that was coterminous with the Company's remaining lease term. As a result of this exit, the Company recorded a charge and corresponding lease loss accrual equal to the present value of the amount by which the net future lease obligations exceed the remaining rent-related deferred balances. The net future lease obligations were calculated by taking the remaining contractual rent obligation less the amount the Company will receive from the sub-lease agreement and recorded at its present value based on the Company's credit adjusted risk-free interest rate. During the three and nine month periods ended September 30, 2013, the Company recorded approximately $5.6 million of lease loss expense as a result of this exit in SG&A expense in the consolidated statements of operations.

As of September 30, 2013, the Company had a lease loss accrual of approximately $5.6 million, which is included in accrued expenses and other current liabilities in the consolidated balance sheets. Remaining lease payments, and remaining sub-lease receipts, associated with the Maryland lease loss accrual are expected to be paid and received over the remaining lease term. Based on the Company's current assumptions as of September 30, 2013, expected lease payments, net of sub-lease receipts, are expected to result in a total net cash outlay of approximately $7.2 million for the remaining lease term. The partial exit from the space in Maryland did not involve any employee termination costs or trigger any material asset impairment charges.

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Financial Instruments

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

Financial Instruments

The Company used variable rate debt to partially finance its Merger with Catalyst. The Company is subject to interest rate risk related to the variable rate debt. When interest rates increase, interest expense would increase. Conversely, when interest rates decrease, interest expense would also decrease.

In order to manage fluctuations in cash flows resulting from interest rate risk attributable to changes in the benchmark interest rates, in September 2012 the Company entered into 3-year interest rate swap agreements with a total notional amount of $500 million to fix the variable LIBOR rate on the Company's Term Loan Facility to 0.52%, resulting in a current effective rate of 2.14% after taking into account the 1.625% margin per the Credit Agreement, as amended. Under the interest rate swap, the Company receives LIBOR-based variable interest rate payments and makes fixed interest rate payments, thereby creating the equivalent to fixed-rate debt with respect to the notional amount of such swap agreements. These interest rate contract derivative instruments were designated as cash flow hedges upon inception in September 2012.

The Company assesses interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company does not enter into derivative instruments for any purpose other than hedging identified exposures. That is, the Company does not speculate using derivative instruments and has not designated any instruments as fair value hedges or hedges of the foreign currency exposure of a net investment in foreign operations.

The fair value of the interest rate swap liability as of September 30, 2013 was $1.8 million. Interest expense for the three and nine months ended September 30, 2013 includes $0.4 million and $1.1 million, respectively, of expense reclassified from other comprehensive income into current earnings. As of September 30, 2013, approximately $1.7 million of deferred expenses related to the derivative instruments accumulated in other comprehensive income is expected to be reclassified as interest expense during the next twelve months. This expectation is based on the expected timing of the occurrence of the hedged forecasted transactions and assumes the current LIBOR rate will remain consistent. Fluctuations in the market LIBOR rate will have an impact on the amount of expense reclassified from accumulated other comprehensive income to interest expense, as well as the overall fair value of the derivative instrument.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 31, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	CTRX
Entity Registrant Name	Catamaran Corp.
Entity Central Index Key	0001363851
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		206,298,320

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Fair Value

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Fair value measurement guidance defines a three-level hierarchy to prioritize the inputs to valuation techniques used to measure fair value into three broad levels, with Level 1 considered the most reliable. During the three and nine month periods ended September 30, 2013, there were no movements of fair value measurements between Levels 1, 2 and 3. For assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets, the table below categorizes fair value measurements across the three levels as of September 30, 2013 and December 31, 2012 (in thousands):

	September 30, 2013
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	19,840	$	19,840
Derivative	$	—	$	1,751	$	—	$	1,751

	December 31, 2012
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	49,183	$	49,183
Derivative	$	—	$	2,639	$	—	$	2,639

When available and appropriate, the Company uses quoted market prices in active markets to determine fair value, and classifies such items within Level 1. Level 1 values only include instruments traded on a public exchange. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability or can be derived principally from or corroborated by observable market data. If the Company were to use one or more significant unobservable inputs for a model-derived valuation, the resulting valuation would be classified in Level 3.

Contingent purchase price consideration

The contingent purchase price consideration liability reflects the fair values of potential future payments related to certain legacy acquisitions. The potential future payments are contingent upon the acquired entities meeting certain revenue, gross margin and client retention milestones through March 31, 2014. As of September 30, 2013, the fair value of the contingent purchase price consideration was $19.8 million and was recorded as accrued expenses and other current liabilities in the consolidated balance sheet. The contingent purchase price consideration decreased for the three and nine months ended September 30, 2013 as compared to the fair value reported for the year ended December 31, 2012 due to payments of $25.5 million and an adjustment of $4.5 million which was recognized in SG&A in the consolidated statement of operations.

The change in the present value of the amount expected to be paid in the future for the contingent purchase price consideration was $0.1 million and $0.5 million for the three and nine months ended September 30, 2013, respectively, and was recorded as interest expense in the consolidated statement of operations. The Company utilized a probability weighted discounted cash flow method to arrive at the fair value of the contingent consideration based on the expected results or the achievement of client retention milestones.

As the fair value measurement for the contingent consideration is based on inputs not observed in the market, these measurements are classified as Level 3 measurements as defined by fair value measurements guidance.

Derivatives

Derivative liabilities relate to the interest rate swap agreements (refer to Note 12 — Financial Instruments for further information), which had a fair value of $1.8 million as of September 30, 2013. As the fair value measurement for the derivative instruments are based on quoted prices from a financial institution, these measurements are classified as Level 2 measurements as defined by fair value measurements guidance.