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 June 30, 2014

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)

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 July 31, 2014, there were 207,415,969 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 June 30, 2014 and December 31, 2013	3
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2014 and 2013	4
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2014 and 2013	5
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013	6
Consolidated Statements of Shareholders’ Equity for the Six Months Ended June 30, 2014 and 2013	7
Notes to Unaudited Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures About Market Risk	35
Item 4. Controls and Procedures	35
PART II — OTHER INFORMATION	37
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3. Defaults Upon Senior Securities	37
Item 4. Mine Safety Disclosures	37
Item 5. Other Information	37
Item 6. Exhibits	37
SIGNATURE	39
Exhibit 10.2
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)

	June 30, 2014			December 31, 2013
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	709,548		$	387,241
Restricted cash	32,223			32,220
Accounts receivable, net of allowance for doubtful accounts of $4,642 (2013 — $5,860)	1,173,606			959,586
Rebates receivable	908,216			305,955
Other current assets	219,519			152,673
Total current assets	3,043,112			1,837,675
Property and equipment, net of accumulated depreciation of $131,729 (2013 — $103,858)	198,392			197,007
Goodwill	4,724,639			4,720,275
Other intangible assets, net of accumulated amortization of $471,246 (2013 — $363,546)	1,071,456			1,181,419
Other long-term assets	80,287			59,387
Total assets	$	9,117,886		$	7,995,763
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	1,000,760		$	817,805
Accrued expenses and other current liabilities	275,576			254,100
Rebates payable	942,857			356,265
Current portion - long-term debt	68,750			50,000
Total current liabilities	2,287,943			1,478,170
Deferred income taxes	276,664			301,341
Long-term debt	1,379,432			1,215,363
Other long-term liabilities	97,178			89,391
Total liabilities	4,041,217			3,084,265
Commitments and contingencies (Note 10)
Shareholders’ equity
Common shares: no par value, unlimited shares authorized; 207,411,365 shares issued and outstanding at June 30, 2014 (December 31, 2013 — 206,305,070 shares)	4,261,667			4,215,291
Additional paid-in capital	58,881			77,790
Retained earnings	752,038			617,161
Accumulated other comprehensive loss	(1,834		)	(1,752		)
Total shareholders' equity	5,070,752			4,908,490
Non-controlling interest	5,917			3,008
Total equity	5,076,669			4,911,498
Total liabilities and equity	$	9,117,886		$	7,995,763

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 June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(unaudited)				(unaudited)
Revenue	$	5,385,808	$	3,417,430	$	10,300,287	$	6,637,147
Cost of revenue	5,055,995		3,152,841		9,655,813		6,124,185
Gross profit	329,813		264,589		644,474		512,962
Expenses:
Selling, general and administrative	126,635		99,888		257,153		200,386
Depreciation of property and equipment	13,093		7,938		25,461		14,908
Amortization of intangible assets	54,977		50,092		109,963		100,148
	194,705		157,918		392,577		315,442
Operating income	135,108		106,671		251,897		197,520
Interest and other expense, net	15,626		10,907		26,962		21,946
Income before income taxes	119,482		95,764		224,935		175,574
Income tax expense	33,241		24,607		61,349		47,635
Net income	86,241		71,157		$	163,586	$	127,939
Less: Net income attributable to non-controlling interest	14,809		7,736		28,709		13,113
Net income attributable to the Company	$	71,432	$	63,421	$	134,877	$	114,826
Earnings per share attributable to the Company:
Basic	$	0.35	$	0.31	$	0.65	$	0.56
Diluted	$	0.34	$	0.31	$	0.65	$	0.56
Weighted average number of shares used in computing earnings per share:
Basic	206,938,789		205,975,724		206,733,127		205,782,438
Diluted	207,310,851		206,624,432		207,207,122		206,535,143

See accompanying notes to the unaudited consolidated financial statements.

4

CATAMARAN CORPORATION

Consolidated Statements of Comprehensive Income

(in thousands)

	Three Months Ended June 30,					Six Months Ended June 30,
	2014			2013		2014		2013
	(unaudited)					(unaudited)
Net income	$	86,241		$	71,157	$	163,586	$	127,939
Other comprehensive income, net of tax
Unrealized income on cash flow hedge, net of income tax expense of $368 for the three and six months ended June 30, 2013	(61		)	786		82		1,047
Comprehensive income	86,180			71,943		163,668		$	128,986
Less: Comprehensive income attributable to non-controlling interest	14,809			7,736		28,709		$	13,113
Comprehensive income attributable to the Company	$	71,371		$	64,207	$	134,959	$	115,873

See accompanying notes to the unaudited consolidated financial statements.

5

CATAMARAN CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

	Six Months Ended June 30,
	2014			2013
	(unaudited)
Cash flows from operating activities:
Net income	$	163,586		$	127,939
Items not involving cash:
Stock-based compensation	15,398			13,131
Depreciation of property and equipment	27,378			17,145
Amortization of intangible assets	109,963			100,148
Deferred lease inducements and rent	190			15,349
Deferred income taxes	(26,044		)	(25,787		)
Tax benefit on option exercises	(3,993		)	(9,479		)
Deferred financing cost amortization	4,658			4,866
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	(214,015		)	(21,271		)
Rebates receivable	(602,515		)	18,413
Restricted cash	(3		)	231
Other current assets	(56,448		)	13,367
Accounts payable	182,933			(22,632		)
Accrued expenses and other current liabilities	17,032			(12,305		)
Rebates payable	586,592			13,787
Other long-term assets and liabilities	(11,826		)	3,351
Net cash provided by operating activities	192,886			236,253
Cash flows from investing activities:
Acquisition, net of cash acquired	(2,026		)	(7,076		)
Purchases of property and equipment	(32,873		)	(72,135		)
Proceeds from restricted cash	—			20,004
Net cash used by investing activities	(34,899		)	(59,207		)
Cash flows from financing activities:
Proceeds from issuance of debt	492,500			100,000
Repayment of long-term debt	(312,500		)	(250,000		)
Payment of financing costs	(1,963		)	(2,347		)
Proceeds from exercise of options	4,944			1,928
Proceeds from exercise of warrants	3,453			—
Tax benefit on option exercises	3,993			9,479
Payments of contingent consideration	—			(23,203		)
Distributions to non-controlling interest	(25,800		)	(10,115		)
Other	(321		)	—
Net cash provided (used) by financing activities	164,306			(174,258		)
Effect of foreign exchange on cash balances	14			24
Increase in cash and cash equivalents	322,307			2,812
Cash and cash equivalents, beginning of period	387,241			370,776
Cash and cash equivalents, end of period	$	709,548		$	373,588

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, 2013	206,305,070	$	4,215,291	$	77,790		$	617,161	$	(1,752	)	$	3,008		$	4,911,498
Activity during the period (unaudited):
Net income	—	—		—			134,877		—			28,709			163,586
Exercise of stock options	262,204	7,026		(2,082		)	—		—			—			4,944
Exercise of warrants	425,160	20,624		(17,171		)	—		—			—			3,453
Vesting of restricted stock units	418,931	18,726		(18,726		)	—		—			—			—
Tax benefit on options exercised	—	—		3,993			—		—			—			3,993
Stock-based compensation	—	—		15,398			—		—			—			15,398
Distributions to non-controlling interest	—	—		—			—		—			(25,800		)	(25,800		)
Other comprehensive income, net of tax	—	—		—			—		(82		)	—			(82		)
Other	—	—		(321		)	—		—			—			(321		)
Balance at June 30, 2014 (unaudited)	207,411,365	$	4,261,667	$	58,881		$	752,038	$	(1,834	)	$	5,917		$	5,076,669
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	—	—		—			114,826		—			13,113			127,939
Exercise of stock options	280,366	2,753		(825		)	—		—			—			1,928
Vesting of restricted stock units	451,404	24,697		(24,697		)	—		—			—			—
Tax benefit on options exercised	—	—		9,479			—		—			—			9,479
Stock-based compensation	—	—		13,131			—		—			—			13,131
Distributions to non-controlling interest	—	—		—			—		—			(10,115		)	(10,115		)
Other comprehensive income, net of tax	—	—		—			—		1,047			—			1,047
Balance at June 30, 2013 (unaudited)	206,130,872	$	4,208,228	$	70,618		$	469,817	$	(1,144	)	$	5,751		$	4,753,270

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, 2013. 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 six months ended June 30, 2014 are not necessarily indicative of the results to be expected for the full year ending December 31, 2014. 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, 2013.

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 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. The Company adopted this standard on January 1, 2014; however, the implementation of the standard 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 six months ended June 30, 2014.

b) Recent accounting standards issued

In June 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-12, Accounting for Share-Based Payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target shall not be reflected in estimating the fair value of the award at the grant date. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 for all entities, however earlier adoption is 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.

8

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

On April 10, 2014, the FASB issued (ASU) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The standard is required to be adopted by the Company in annual periods beginning on or after December 15, 2014, and interim periods within those annual periods. However, all entities may early adopt the guidance for new disposals (or new classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. 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 six months ended June 30, 2014 that the Company assessed to have a significant impact on its financial results or in the presentation and disclosure of its financial statements.

4. Business Combinations

Restat Acquisition

On October 1, 2013, the Company completed the acquisition of all of the outstanding equity interests of Restat, LLC ("Restat"), a privately-held PBM 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 $350.0 million in borrowings under a five-year senior secured revolving credit facility (the “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 and specialty pharmacy services. The results of Restat have been included in the Company's results since October 1, 2013.

The 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 recorded 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. Fair values for acquired amortizable intangible assets were determined as follows: customer relationships were valued using an excess earnings model based on expected future revenues derived from the customers acquired, non-compete agreements were valued using discounted cash flow models based on expected future results of Restat and trademarks/tradenames were valued using a royalty savings model based on future projected revenues of Restat. 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 acquisition are included within the Company's PBM segment. The residual amount of the purchase price after allocation to identifiable net assets represents goodwill. Goodwill is non-amortizing for financial statement purposes. Goodwill of $227.8 million related to the Restat acquisition is tax deductible. The goodwill recognized by the Company represents many of the synergies and business growth opportunities that the Company anticipates may be realized from the acquisition of Restat. The synergies include improved pricing from the Company's suppliers due to the increased volume of prescription drug purchases, pull through opportunities of the Company's mail and specialty service offerings, and a more efficient leveraging of resources to achieve operating profits.

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)		Measurement Period Adjustments (b)			Current Measurement Period Adjustments (c)		Current Amounts Recognized at Acquisition Date
Accounts receivable	$	13,842	$	—		$	—	$	13,842
Rebates receivable	6,635		(254		)	—		6,381
Other current assets	383		—			—		383
Total current assets	20,860		(254		)	—		20,606
Property and equipment	1,263		—			—		1,263
Intangible assets	182,720		—			—		182,720
Goodwill	223,474		2,280			2,084		227,838
Total assets acquired	428,317		2,026			2,084		432,427
Accounts payable	22,370		—			—		22,370
Rebates payable	16,106		—			—		16,106
Accrued liabilities	7,231		—			—		7,231
Other long-term liabilities	—		—			2,084		2,084
Total liabilities assumed	45,707		—			2,084		47,791
Net assets acquired	$	382,610	$	2,026		$	—	$	384,636

(a) As previously reported in the Company's Form 10-K for the period ended December 31, 2013.

(b) These measurement period adjustments were recorded during Q1 2014 to reflect an additional $2.0 million paid to former Restat owners for working capital reconciliation as well as changes in the estimated fair values of the associated assets acquired and liabilities assumed.

(c) These represent measurement period adjustments during the three months ended June 30, 2014 and were recorded to reflect changes in the estimated fair values of the associated Restat assets acquired and liabilities assumed based on factors existing as of the acquisition date.

During the three and six months ended June 30, 2014, the Company recognized $8.7 million and $17.4 million, respectively, of amortization expense from intangible assets acquired in the Restat acquisition. Amortization associated with the Restat acquisition for the remainder of 2014 is expected to be $16.4 million.

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

	Fair Value		Useful Life
Customer relationships - PBM	$	143,200	10 years
Customer relationships - cash card	35,500		3 years
Trademarks/Trade names	1,000		1 year
Non-compete agreements	3,020		5 years
Total	$	182,720

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 its acquisition of Restat as if the acquisition had occurred on the first day of the fiscal year prior to the fiscal year when the acquisition was completed. The unaudited pro forma financial information includes certain adjustments related to the acquisition, such as increased amortization from the fair value of intangible assets acquired recorded as part of the purchase accounting, the elimination of transactions between the Company and the acquired entities, and related income tax effects.

10

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

	Three Months Ended June 30, 2013		Six Months Ended June 30, 2013
Revenue	$	3,620,936	$	7,035,001
Gross profit	$	285,070	$	550,643
Net income attributable to the Company	$	66,368	$	123,007
Earnings per share attributable to the Company:
Basic	$	0.32	$	0.60
Diluted	$	0.32	$	0.60
Weighted average shares outstanding:
Basic	205,975,724		205,782,438
Diluted	206,624,432		206,535,143

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.

5. 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 six months ended June 30, 2014 and 2013.

The changes in the carrying amounts of goodwill by reportable segment for the six months ended June 30, 2014 are as follows (in thousands):

	PBM		HCIT		Total
Balance at December 31, 2013	$	4,700,610	$	19,665	$	4,720,275
Measurement period adjustments (a)	2,338		—		2,338
Working capital adjustment (b)	2,026		—		2,026
Acquisitions	—		—		—
Balance at June 30, 2014	$	4,704,974	$	19,665	$	4,724,639

(a) Represents 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 2013 consolidated financial statements as they were not deemed material.

(b) Represents adjustments to purchase price for the Restat acquisition, including settlement of working capital adjustment.

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

	June 30, 2014						December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	$	1,527,722	$	462,974	$	1,064,748	$	1,528,475	$	355,737	$	1,172,738
Non-compete agreements	11,920		6,236		5,684		13,430		6,463		6,967
Other intangible assets	3,060		2,036		1,024		3,060		1,346		1,714
Total	$	1,542,702	$	471,246	$	1,071,456	$	1,544,965	$	363,546	$	1,181,419

Total amortization associated with intangible assets at June 30, 2014 is estimated to be $103.3 million for the remainder of 2014, $194.0 million in 2015, $166.7 million in 2016, $147.5 million in 2017, $137.2 million in 2018, $126.8 million in 2019 and $195.9 million in total for years after 2019.

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CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Debt

The following table sets forth the components of the Company's long-term debt, net of debt discounts as of June 30, 2014 and December 31, 2013 (in thousands).

	June 30, 2014			December 31, 2013
Senior secured term loan facility with an interest rate of 2.06% and 1.81% at June 30, 2014 and December 31, 2013, respectively.	$	955,369		$	965,363
Senior secured revolving credit facility due June 1, 2018 with an interest rate of 2.06% and 1.81% at June 30, 2014 and December 31, 2013, respectively.	—			300,000
4.75% Senior Notes due 2021	492,813			—
Less current maturities	(68,750		)	(50,000		)
Long-term debt	$	1,379,432		$	1,215,363

4.75% Senior Notes

In March 2014, the Company issued $500.0 million aggregate principal amount of 4.75% Senior Notes due 2021 (the “Senior Notes”). The Senior Notes mature on March 15, 2021 and bear interest at 4.75% per year. The Company will pay interest on the Senior Notes on March 15 and September 15 of each year, or the first business day thereafter if such date is not a business day, commencing on September 15, 2014. The Company received approximately $492.5 million in net proceeds from the Senior Note offering, after deducting $7.5 million in underwriting discounts. Additionally the Company incurred approximately $2.0 million in offering expenses. The Company used part of the net proceeds from this offering to repay $300.0 million of the Company's outstanding borrowings under the secured revolving credit facility (the "Revolving Facility"). The Company plans to use the remainder of the net proceeds from this offering for general corporate purposes.

As discussed, in connection with the Senior Notes, the Company incurred approximately $7.5 million in underwriting debt discount and approximately $2.0 million in debt issuance costs. The $7.5 million debt discount incurred in connection with the Senior Notes is presented on the consolidated balance sheet as a reduction to long-term debt. The debt discount amounts are being amortized to interest expense over the life of the Senior Notes. The Company uses the straight-line method to amortize the debt discount amounts as it does not result in a materially different amount of interest expense than the effective interest rate method. The $2.0 million in offering expenses incurred in connection with the issuance of the Senior Notes are presented on the consolidated balance sheet as other assets. The offering expenses are being amortized to interest expense over the life of the Senior Notes using the straight-line method. The amortization related to financing costs and debt discounts totaled $0.3 million and $0.4 million for the three and six months ended June 30, 2014, respectively.

Guarantees

The Senior Notes are jointly and severally and fully and unconditionally guaranteed by each of the Company’s existing and future wholly-owned subsidiaries that guarantees obligations under (i) the credit agreement or (ii) certain other future indebtedness with an aggregate principal amount in excess of $175.0 million.

A subsidiary guarantor will be released from its obligations under its respective guarantee of the Senior Notes upon the release or discharge of such subsidiary guarantor from its guarantee of obligations under the credit agreement or certain other future indebtedness in an aggregate principal amount in excess of $175.0 million, or upon the earlier occurrence of certain other customary circumstances as set forth in the indenture. The Senior Notes and the guarantees by the subsidiary guarantors are the general senior unsecured obligations of the Company and the subsidiary guarantors. They rank equally in right of payment with the existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors.

Prepayments and Repayments

Prior to the scheduled maturity of the Senior Notes, the Company may at any time redeem all or a part of the Senior Notes, upon not less than 30 nor more than 60 days’ prior written notice at a redemption price equal to the greater of: (i) 100% of the principal amount of the Senior Notes to be redeemed, and (ii) the sum of the present values of the remaining scheduled payments of principal of and interest on the Senior Notes to be redeemed (exclusive of interest accrued to the applicable redemption date) discounted to such redemption date on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the then current treasury rate plus 50 basis points, plus, in each case, accrued and unpaid interest thereon to, but not including, the applicable redemption date.

If the Company experiences a change of control triggering event (as defined in the supplemental indenture), holders of the Senior Notes may require the Company to purchase the Senior Notes at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, to the date of purchase.

The Company is not required to make mandatory redemption payments or sinking fund payments with respect to the Senior Notes.

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CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Certain Covenants and Events of Default

The indenture governing the Senior Notes includes certain restrictive covenants, including covenants that limit the Company's ability and the ability of our subsidiaries to, among other things, incur secured debt; enter into sale and leaseback transactions; and amalgamate, consolidate, merge or transfer substantially all of the Company's assets to another entity. The covenants are subject to a number of important exceptions and qualifications set forth in the indenture.

The indenture governing the Senior Notes provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the indenture and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the trustee or holders of at least 25% in aggregate principal amount of and accrued but unpaid interest on the then outstanding Senior Notes may declare the principal amount of all the Senior Notes to be due and payable immediately. As of June 30, 2014, the Company was in compliance with the covenants under the Senior Notes.

Senior Secured Credit Facility

Concurrent with the consummation of the Catalyst Health Solutions Inc. merger ("Catalyst Merger"), on July 2, 2012, the Company entered into a credit agreement (as amended and supplemented from time to time, the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMCB”), as administrative agent, and a syndicate of lenders in an aggregate principal amount of $1.8 billion. The Credit Agreement provides for (i) a five-year senior secured term loan facility in the amount of $1.0 billion (the “Term Loan Facility”) and (ii) a five-year Revolving Facility in the amount of $800.0 million.

The Company made a principal repayment of $6.3 million in April 2014 on the Term Loan facility leaving the Company with $975.0 million outstanding as of June 30, 2014. In March 2014 the Company used the proceeds from the offering of the Senior Notes (refer above for a detailed discussion) to repay $300.0 million of the outstanding borrowings under the Revolving Facility. As of June 30, 2014 the Company had approximately $800.0 million of available borrowing capacity under the Revolving Facility. The amortization related to financing costs and debt discounts associated with the Credit Agreement totaled $2.1 million and $2.4 million for the three months ended June 30, 2014 and June 30, 2013, respectively. The amortization related to financing costs and debt discounts associated with the Credit Agreement totaled $4.3 million and $4.9 million for the six months ended June 30, 2014 and June 30, 2013, respectively.

Interest and Fees

The interest rates applicable to the Term Loan Facility and the Revolving Facility are based on a fluctuating rate of interest measured by reference to either, at the Company’s option, (a) an adjusted London Interbank Offered Rate (adjusted for maximum reserves) (“LIBOR”), plus an applicable margin or (b) an alternative base rate (which is the greatest of (i) the prime rate, (ii) the Federal Funds rate plus 0.5% and (iii) one-month LIBOR plus 1.0%), plus an applicable margin. The applicable margin, in each case, is adjusted from time to time based on the Company’s consolidated leverage ratio as of the last day of each fiscal quarter. The applicable margin for all borrowings is 0.875% per annum with respect to base rate borrowings and 1.875% 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 Credit Agreement. This resulted in an applicable interest rate of 2.06% at June 30, 2014 for both the Term Loan Facility and the Revolving Facility. See Note 11 — Financial Instruments for information on the Company's interest rate swap agreements. In addition to paying interest on outstanding principal under the Credit Agreement, the Company is required to pay a commitment fee to the lenders in respect of the unutilized commitments under the Credit Agreement at a fluctuating rate based on the Company’s leverage ratio.

Certain Covenants and Events of Default

The Credit Agreement contains a number of covenants that require the Company to maintain certain financial ratios, meet customary reporting requirements and restrict, with certain exceptions, transactions the Company or its subsidiaries may enter into, in each case as described further in the Company's 2013 Annual Report on Form 10-K. As of June 30, 2014, the Company was in compliance with the covenants of the Credit Agreement.

Maturity

Principal amounts outstanding under the Revolving Facility 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
2014	$	37,500
2015	68,750
2016	93,750
2017	118,750
2018	656,250
Total	$	975,000

13

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Guarantees and Collateral

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 June 30, 2014 approximates its fair value.

7. Stock-Based Compensation

During the three months ended June 30, 2014 and 2013, the Company recorded stock-based compensation expense of $8.6 million and $6.5 million, respectively. During the six months ended June 30, 2014 and 2013, the Company recorded stock-based compensation expense of $15.4 million and $13.1 million, respectively. There were 4,746,616 and 688,881 stock-based awards available for grant under the Long-Term Incentive Plan ("LTIP") and the plans assumed in connection with the merger with Catalyst Health Solutions, Inc. ("Assumed Plans"), respectively, as of June 30, 2014.

(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:

	Six Months Ended June 30,
	2014		2013
Total stock options granted	427,463		365,080
Volatility	38.4-39.2%		45.4		%
Risk-free interest rate	1.54-1.73%		0.81		%
Expected life (in years)	4.5		4.5
Dividend yield	—		—
Weighted-average grant date fair value	$	15.48	$	21.44

The table below summarizes the stock options outstanding as of June 30, 2014 under both plans.

	Options Outstanding	Weighted Average Exercise Price		Unrecognized Compensation Cost		Weighted Average Period
				(in thousands)
LTIP	1,363,784	$	35.92	$	10,644	2.75
Assumed Plans	148,090	$	47.05	$	2,019	3.47

(ii) Restricted stock units

During the three and six months ended June 30, 2014, 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 either vest on a straight-line basis over a range of two to four years, or 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 June 30, 2014 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 six months ended June 30, 2014:

	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	300,899	392,388	$	44.83	153,049	84,614	$	44.44
Outstanding	757,020	830,880	$	44.55	305,008	80,046	$	46.83

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CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The table below summarizes the unrecognized compensation cost related to the outstanding RSUs at June 30, 2014.

	Unrecognized Compensation Cost		Weighted Average Period
	(in thousands)
LTIP	$	47,342	2.38
Assumed Plans	$	14,823	2.97

(iii) Warrants

On July 2, 2012, the Company issued 66.8 million common shares and 0.5 million warrants in connection with the Catalyst Merger. See the Company's Annual Report on Form 10-K for the year ended December 31, 2012 for further information related to the Catalyst Merger.

During the three and six months ended June 30, 2014, 425,160 warrants were exercised with a weighted average exercise price of $8.12. As of June 30, 2014, there were no warrants outstanding.

8. 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 June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
PBM:
Revenue	$	5,350,962	$	3,382,195	$	10,229,337	$	6,563,748
Cost of revenue	5,039,279		3,135,211		9,622,564		6,089,312
Gross profit	311,683		246,984		606,773		474,436
Total assets at June 30	8,744,311		7,242,286		8,744,311		7,242,286
HCIT:
Revenue	34,846		35,235		70,950		73,399
Cost of revenue	16,716		17,630		33,249		34,873
Gross profit	18,130		$	17,605	37,701		38,526
Total assets at June 30	373,575		105,526		373,575		105,526
Consolidated:
Revenue	5,385,808		3,417,430		10,300,287		6,637,147
Cost of revenue	5,055,995		3,152,841		9,655,813		6,124,185
Gross profit	329,813		264,589		644,474		512,962
Total assets at June 30	$	9,117,886	$	7,347,812	$	9,117,886	$	7,347,812

9. Income Taxes

The Company’s effective tax rate for the three months ended June 30, 2014 and 2013 was 27.8% and 25.7%, respectively. The Company’s effective tax rate for the six months ended June 30, 2014 and 2013 was 27.3% and 27.1%, 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.

10. Commitments and Contingencies

In July 2014, the Company received a subpoena from the United States Attorney's Office for the District of Rhode Island, requesting documents and information concerning bona fide service fees and rebates received from certain pharmaceutical manufacturers in connection with certain drugs utilized under Part D of the Medicare program. The Company has been cooperating with the government and collecting documents in response to the subpoena.

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

15

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

11. Financial Instruments

The Company is subject to interest rate risk related to the variable rate debt under the Credit Agreement. When interest rates increase, interest expense would also 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 used in the Credit Agreement, the Company entered into a 3-year interest rate swap agreement with a total notional amount of $500 million. The swap agreement fixed the variable LIBOR rate on the Company's Term Loan Facility to 0.52%, resulting in a current effective rate as of June 30, 2014 of 2.39% after taking into account the 1.88% 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. This interest rate contract derivative instrument was designated as a cash flow hedge upon inception in August, 2012 and it expires in August 2015.

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 June 30, 2014 was $1.8 million. Interest expense for the three and six months ended June 30, 2014 includes $0.4 million and $0.8 million of expense reclassified from other comprehensive income into current earnings. Interest expense for the three and six months ended June 30, 2013 includes $0.3 million and $0.7 million of expense reclassified from other comprehensive income into current earnings. As of June 30, 2014, 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.

12. 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 six months ended June 30, 2014, 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 June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	20,000	$	20,000
Derivative	$	—	$	1,792	$	—	$	1,792

	December 31, 2013
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	19,954	$	19,954
Derivative	$	—	$	1,719	$	—	$	1,719

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

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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. As of June 30, 2014, the fair value of the contingent purchase price consideration was $20.0 million and was recorded as accrued expenses and other current liabilities in the consolidated balance sheet.

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

Derivatives

Derivative liabilities relate to the interest rate swap agreement (refer to Note 11 — Financial Instruments for further information), which had a fair value of $1.8 million as of June 30, 2014. As the fair value measurement for the derivative instrument is based on quoted prices from a financial institution, this measurement is classified as Level 2 measurement as defined by fair value measurements guidance.

13. 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 six months ended June 30, 2014 and 2013:

	Three Months Ended June 30,		Six Months Ended June 30,
	2014	2013	2014	2013
Weighted average number of shares used in computing basic EPS	206,938,789	205,975,724	206,733,127	205,782,438
Add dilutive common stock equivalents:
Outstanding stock options and restricted stock units (a)	372,062	648,708	473,995	752,705
Weighted average number of shares used in computing diluted EPS	207,310,851	206,624,432	207,207,122	206,535,143

(a) Excludes 2,240,802 and 792,881 common stock equivalents for the three months ended June 30, 2014 and 2013 because their effect was anti-dilutive. Excludes 1,802,512 and 443,065 common stock equivalents for the six months ended June 30, 2014 and 2013 because their effect was anti-dilutive.

14. Concentration Risk

For the three months ended June 30, 2014 and 2013, one client accounted for 34% and 19% of total revenues, respectively. For the six months ended June 30, 2014 and 2013, one client accounted for 33% and 19% of total revenues, respectively.

At June 30, 2014, one client accounted for 16% of the outstanding accounts receivable balance. At December 31, 2013, one client accounted for 15% of the outstanding accounts receivable balance.

17

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Condensed consolidating financial information

The Senior Notes issued by the Company are fully and unconditionally (subject to certain customary release provisions, including sale, exchange, transfer or liquidation of the guarantor subsidiary) guaranteed by certain of our 100% owned subsidiaries. The following condensed consolidating financial information has been prepared in accordance with the requirements for presentation of such information (statements of comprehensive income were omitted as all other comprehensive income is attributed to the Company and was not material in any period presented). The condensed consolidating financial information presented below is not indicative of what the financial position, results of operations or cash flows would have been had each of the entities operated as an independent company during the period for various reasons, including, but not limited to, intercompany transactions and integration of systems.

The condensed consolidating financial information is presented separately for:

i. Catamaran Corporation (the parent company), the issuer of the Senior Notes;

ii. Guarantor subsidiaries, on a combined basis, as specified in the indenture governing Catamaran's obligations under the Senior Notes;

iii. Non-guarantor subsidiaries, on a combined basis;

iv. Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among Catamaran Corporation, the guarantor subsidiaries and the non-guarantor subsidiaries, (b) eliminate the investments in our subsidiaries and (c) record consolidating entries; and

v. Catamaran Corporation and subsidiaries on a consolidated basis.

18

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CATAMARAN CORPORATION

Condensed Consolidated Balance Sheets

June 30, 2014

(in thousands)

	Catamaran Corporation		Guarantors		Non-Guarantors		Consolidations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	260,944		421,581		27,023		—			709,548
Restricted cash	—		27,387		4,836		—			32,223
Accounts receivable, net	218		808,956		472,889		(108,457		)	1,173,606
Rebates receivable	10,422		1,504,529		72,053		(678,788		)	908,216
Other current assets	268		152,292		66,959		—			219,519
Intercompany receivable	169,821		232,816		—		(402,637		)	—
Total current assets	441,673		3,147,561		643,760		(1,189,882		)	3,043,112
Property and equipment, net	70		156,598		41,724		—			198,392
Goodwill	—		4,641,174		83,465		—			4,724,639
Other intangible assets, net	—		1,053,528		17,928		—			1,071,456
Investment in subsidiaries	6,073,578		129,117		37,071		(6,239,766		)	—
Other long-term assets	15,836		47,080		22,184		(4,813		)	80,287
Total assets	$	6,531,157	$	9,175,058	$	846,132	$	(7,434,461	)	$	9,117,886
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	29	$	1,098,017	$	44,886	$	(142,172	)	$	1,000,760
Accrued expenses and other current liabilities	10,402		236,591		28,583		—			275,576
Rebates payable	—		1,560,151		61,494		(678,788		)	942,857
Current portion - long-term debt	68,750		—		—		—			68,750
Intercompany payable	—		—		332,249		(332,249		)	—
Total current liabilities	79,181		2,894,759		467,212		(1,153,209		)	2,287,943
Deferred income taxes	—		271,362		5,302		—			276,664
Long-term debt	1,379,432		—		—		—			1,379,432
Other long-term liabilities	1,792		70,679		24,707		—			97,178
Total liabilities	1,460,405		3,236,800		497,221		(1,153,209		)	4,041,217
Commitments and contingencies (Note 10)
Shareholders’ equity
Total shareholders' equity	5,070,752		5,938,258		347,666		(6,285,924		)	5,070,752
Non-controlling interest	—		—		1,245		4,672			5,917
Total equity	5,070,752		5,938,258		348,911		(6,281,252		)	5,076,669
Total liabilities and equity	$	6,531,157	$	9,175,058	$	846,132	$	(7,434,461	)	$	9,117,886

19

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CATAMARAN CORPORATION

Condensed Consolidated Balance Sheets

December 31, 2013

(in thousands)

	Catamaran Corporation		Guarantors		Non-Guarantors		Consolidations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	15,090	$	350,889	$	21,262	$	—		$	387,241
Restricted cash	—		27,384		4,836		—			32,220
Accounts receivable, net	194		954,006		61,319		(55,933		)	959,586
Rebates receivable	35,777		473,924		92,227		(295,973		)	305,955
Other current assets	107		114,808		16,785		20,973			152,673
Intercompany receivable	130,743		—		125,888		(256,631		)	—
Total current assets	181,911		1,921,011		322,317		(587,564		)	1,837,675
Property and equipment, net	69		188,676		8,262		—			197,007
Goodwill	—		4,636,810		83,465		—			4,720,275
Other intangible assets, net	—		1,160,205		21,214		—			1,181,419
Investment in subsidiaries	5,980,865		105,947		—		(6,086,812		)	—
Other long-term assets	15,674		30,144		59,932		(46,363		)	59,387
Total assets	$	6,178,519	$	8,042,793	$	495,190	$	(6,720,739	)	$	7,995,763
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	—	$	840,055	$	37,251	$	(59,501	)	$	817,805
Accrued expenses and other current liabilities	2,947		200,071		28,403		22,679			254,100
Rebates payable	—		612,173		40,065		(295,973		)	356,265
Current portion - long-term debt	50,000		—		—		—			50,000
Intercompany payable	—		232,124		—		(232,124		)	—
Total current liabilities	52,947		1,884,423		105,719		(564,919		)	1,478,170
Deferred income taxes	—		296,040		5,301		—			301,341
Long-term debt	1,215,363		—		—		—			1,215,363
Other long-term liabilities	1,719		86,600		23,651		(22,579		)	89,391
Total liabilities	1,270,029		2,267,063		134,671		(587,498		)	3,084,265
Commitments and contingencies (Note 10)
Shareholders’ equity
Total shareholders' equity	4,908,490		5,775,730		359,274		(6,135,004		)	4,908,490
Non-controlling interest	—		—		1,245		1,763			3,008
Total equity	4,908,490		5,775,730		360,519		(6,133,241		)	4,911,498
Total liabilities and equity	$	6,178,519	$	8,042,793	$	495,190	$	(6,720,739	)	$	7,995,763

20

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Three Months ended June 30, 2014

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	8,650		$	5,185,019		$	743,397	$	(551,258	)	$	5,385,808
Cost of revenue	7,407			4,924,447			675,399		(551,258		)	5,055,995
Gross profit	1,243			260,572			67,998		—			329,813
Expenses:
Selling, general and administrative	815			97,536			28,284		—			126,635
Depreciation of property and equipment	8			11,737			1,348		—			13,093
Amortization of intangible assets	—			53,339			1,638		—			54,977
	823			162,612			31,270		—			194,705
Operating income	420			97,960			36,728		—			135,108
Interest and other expense, net	14,110			864			652		—			15,626
Equity (income) in subsidiaries	(85,122		)	(11,526		)	—		96,648			—
Income before income taxes	71,432			108,622			36,076		(96,648		)	119,482
Income tax expense	—			23,500			9,741		—			33,241
Net income	71,432			85,122			26,335		(96,648		)	86,241
Less net income attributable to non-controlling interest	—			—			—		14,809			14,809
Net income attributable to the Company	$	71,432		$	85,122		$	26,335	$	(111,457	)	$	71,432

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Three Months ended June 30, 2013

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	8,725		$	3,066,659		$	500,755	$	(158,709	)	$	3,417,430
Cost of revenue	7,555			2,854,996			448,999		(158,709		)	3,152,841
Gross profit	1,170			211,663			51,756		—			264,589
Expenses:
Selling, general and administrative	195			80,770			18,923		—			99,888
Depreciation of property and equipment	5			7,233			700		—			7,938
Amortization of intangible assets	—			48,422			1,670		—			50,092
	200			136,425			21,293		—			157,918
Operating income	970			75,238			30,463		—			106,671
Interest and other expense, net	9,512			981			414		—			10,907
Equity (income) in subsidiaries	(71,963		)	(12,697		)	—		84,660			—
Income before income taxes	63,421			86,954			30,049		(84,660		)	95,764
Income tax expense	—			14,991			9,616		—			24,607
Net income	63,421			71,963			20,433		(84,660		)	71,157
Less net income attributable to non-controlling interest	—			—			—		7,736			7,736
Net income attributable to the Company	$	63,421		$	71,963		$	20,433	$	(92,396	)	$	63,421

21

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Six Months ended June 30, 2014

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	19,690		$	9,889,672		$	1,440,813	$	(1,049,888	)	$	10,300,287
Cost of revenue	17,001			9,390,995			1,297,705		(1,049,888		)	9,655,813
Gross profit	2,689			498,677			143,108		—			644,474
Expenses:
Selling, general and administrative	1,134			198,865			57,154		—			257,153
Depreciation of property and equipment	17			22,975			2,469		—			25,461
Amortization of intangible assets	—			106,677			3,286		—			109,963
	1,151			328,517			62,909		—			392,577
Operating income	1,538			170,160			80,199		—			251,897
Interest and other expense, net	24,076			1,643			1,243		—			26,962
Equity (income) in subsidiaries	(157,415		)	(28,929		)	—		186,344			—
Income before income taxes	134,877			197,446			78,956		(186,344		)	224,935
Income tax expense	—			40,031			21,318		—			61,349
Net income	134,877			157,415			57,638		(186,344		)	163,586
Less net income attributable to non-controlling interest	—			—			—		28,709			28,709
Net income attributable to the Company	$	134,877		$	157,415		$	57,638	$	(215,053	)	$	134,877

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Six Months ended June 30, 2013

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	16,638		$	5,971,687		$	967,589	$	(318,767	)	$	6,637,147
Cost of revenue	14,693			5,562,268			865,991		(318,767		)	6,124,185
Gross profit	1,945			409,419			101,598		—			512,962
Expenses:
Selling, general and administrative	509			162,734			37,143		—			200,386
Depreciation of property and equipment	14			13,501			1,393		—			14,908
Amortization of intangible assets	—			96,844			3,304		—			100,148
	523			273,079			41,840		—			315,442
Operating income	1,422			136,340			59,758		—			197,520
Interest and other expense, net	19,462			1,518			966		—			21,946
Equity (income) in subsidiaries	(132,866		)	(26,866		)	—		159,732			—
Income before income taxes	114,826			161,688			58,792		(159,732		)	175,574
Income tax expense	—			28,822			18,813		—			47,635
Net income	114,826			132,866			39,979		(159,732		)	127,939
Less net income attributable to non-controlling interest	—			—			—		13,113			13,113
Net income attributable to the Company	$	114,826		$	132,866		$	39,979	$	(172,845	)	$	114,826

22

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CATAMARAN CORPORATION

Condensed Consolidated Statements of Cash Flows

Six Months ended June 30, 2014

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors			Consolidations			Consolidated
Cash flows from operating activities:
Net cash provided (used) by operating activities	$	152,832		$	591,827		$	(314,610	)	$	(237,163	)	$	192,886
Cash flows from investing activities:
Acquisitions, net of cash acquired	—			(2,026		)	—			—			(2,026		)
Purchases of property and equipment	(18		)	(18,671		)	(14,184		)	—			(32,873		)
Net cash used by investing activities	(18		)	(20,697		)	(14,184		)	—			(34,899		)
Cash flows from financing activities:
Proceeds from issuance of debt	492,500			—			—			—			492,500
Repayment of long-term debt	(312,500		)	—			—			—			(312,500		)
Payment of financing costs	(1,963		)	—			—			—			(1,963		)
Proceeds from exercise of options	7,026			(2,057		)	(25		)	—			4,944
Proceeds from exercise of warrants	3,453			—			—			—			3,453
Tax benefit on option exercises	—			3,955			38			—			3,993
Net transactions with parent and affiliates	(114,078		)	(483,936		)	335,051			262,963			—
Distributions to non-controlling interest	—			—			—			(25,800		)	(25,800		)
Proceeds from restricted stock	18,588			(18,079		)	(509		)	—			—
Other	—			(321		)	—			—			(321		)
Net cash provided (used) by financing activities	93,026			(500,438		)	334,555			237,163			164,306
Effect of foreign exchange on cash balances	14			—			—			—			14
Change in cash and cash equivalents	245,854			70,692			5,761			—			322,307
Cash and cash equivalents, beginning of period	15,090			350,889			21,262			—			387,241
Cash and cash equivalents, end of period	$	260,944		$	421,581		$	27,023		$	—		$	709,548

23

CATAMARAN CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CATAMARAN CORPORATION

Condensed Consolidated Statements of Cash Flows

Six Months ended June 30, 2013

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors			Consolidations			Consolidated
Cash flows from operating activities:
Net cash provided (used) by operating activities	$	60,033		$	292,494		$	40,384		$	(156,658	)	$	236,253
Cash flows from investing activities:
Acquisitions, net of cash acquired	—			—			(7,076		)	—			(7,076		)
Purchases of property and equipment	—			(71,919		)	(216		)	—			(72,135		)
Proceeds from restricted cash	—			20,004			—			—			20,004
Net cash used by investing activities	—			(51,915		)	(7,292		)	—			(59,207		)
Cash flows from financing activities:
Proceeds from issuance of debt	100,000			—			—			—			100,000
Repayment of long-term debt	(250,000		)	—			—			—			(250,000		)
Payment of financing costs	(2,347		)	—			—			—			(2,347		)
Proceeds from exercise of options	2,744			(806		)	(10		)	—			1,928
Tax benefit on option exercises	—			9,472			7			—			9,479
Payments of contingent consideration	—			(18,338		)	(4,865		)	—			(23,203		)
Net transactions with parent and affiliates	51,480			(187,511		)	(30,742		)	166,773			—
Distributions to non-controlling interest	—			—			—			(10,115		)	(10,115		)
Proceeds from restricted stock	24,462			(23,886		)	(576		)	—			—
Net cash (used) provided by financing activities	(73,661		)	(221,069		)	(36,186		)	156,658			(174,258		)
Effect of foreign exchange on cash balances	24			—			—			—			24
Change in cash and cash equivalents	(13,604		)	19,510			(3,094		)	—			2,812
Cash and cash equivalents, beginning of period	33,603			303,833			33,340			—			370,776
Cash and cash equivalents, end of period	$	19,999		$	323,343		$	30,246		$	—		$	373,588

24

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 2013 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, 2014.

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, our ability to achieve increased market acceptance for our product offerings and penetrate new markets; our ability to compete successfully; our dependence on, and ability to retain, key customers; customer demands for enhanced services levels or loss or unfavorable modification with our customers; the risks and challenges associated with our PBM partnering agreement with Cigna Corporation due to the size of the client and the complexity and long-term nature of the agreement; consolidation in the healthcare industry; our ability to identify and complete acquisitions, manage our growth, integrate acquisitions and achieve expected synergies from acquisitions; changes in industry pricing benchmarks and continuing market and economic challenges; our ability to maintain our relationships with pharmacy providers, pharmaceutical manufacturers, third-party rebate administrators and suppliers; compliance with existing laws, regulations and industry initiatives and future change in laws or regulations in the healthcare industry; our ability to maintain our relationships with suppliers; the outcome of any legal or tax proceeding that has been or may be instituted against us; the existence of undetected errors or similar problems in our software products; potential liability for the use of incorrect or incomplete data; interruption of our operations due to outside sources and breach of our security by third parties; our dependence on the expertise of our senior management and other personnel; maintaining our intellectual property rights and litigation involving intellectual property rights; our ability to obtain, use or successfully integrate third-party licensed technology; our ability to accurately forecast our financial results; our level of indebtedness and the covenants and restrictions in the agreements governing our outstanding indebtedness; our access to sufficient capital to fund our future requirements; potential write-offs of goodwill or other intangible assets; and the material weakness identified in our internal control over financial reporting. This foregoing list of factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. Other factors that should be considered are discussed from time to time in Catamaran's filings with the U.S. Securities and Exchange Commission, including the risks and uncertainties discussed under the captions “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K and subsequent filings with the U.S. Securities and Exchange Commission, which are available at www.sec.gov.

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.

All figures are in U.S. dollars unless otherwise stated.

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

25

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 June 30, 2014 and 2013, pharmacies, excluding the Company's internally owned mail and specialty pharmacy locations, collected approximately $1.1 billion and $0.7 billion, respectively, in co-payments from the participants. During the six months ended June 30, 2014 and 2013, pharmacies, excluding the Company's internally owned mail and specialty pharmacy locations, collected approximately $2.1 billion and $1.3 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 cost of goods sold, 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 products for managing prescription drug programs and for drug prescribing and dispensing. The Company’s solutions are available 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 servicesand 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, increase its penetration of mail and specialty fulfillment by Company owned pharmacies, 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.

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

26

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 of PBM services 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 among customers who contract with the Company to provide a full-suite of PBM services, large customersthat 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 customers the flexibility to operate the Company’s systems themselves (with or without taking advantage of the Company’s significant customization, consulting and systems implementation services) on a fee-per-transaction or subscription basis through application service provider processing from the Company’s data center. In other cases, the Company fully manages a customer’s pharmacy benefit program from claims adjudication through clinical programs and consulting.

Leading technology and platform:  The Company’s technology is robust, scalable, and web-enabled. The platform is able to cross-check multiple processes, such as reviewing claim eligibility, adverse drug reaction and properly calculating member, pharmacy and payor payments on a real-time basis. 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 customized comprehensive PBM services by offering customers a selection of services to choose from to meet their unique needs. 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 traditional and specialty 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 by the pharmaceutical manufacturer or third party rebate administrator to the customer. The Company believes that its pricing model together with the flexibility to select from a broad range of customizable services help the customers realize measurable results and cost savings.

Selected Trends and Highlights for the Three and Six Months Ended June 30, 2014 and 2013

Business trends

Our results for the three and six months ended June 30, 2014 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 ramp-up of the Cigna contract implementation, continued integration of Restat, increased mail and specialty volumes and new client implementations during 2014 have driven the overall growth in our 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 three and six months ended June 30, 2014 increased from the same periods in 2013. These increases were 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 2014. These positive trends have helped 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.

Financial results

• Total revenue for the three months ended June 30, 2014 increased $2.0 billion or 57.6% to $5.4 billion as compared to $3.4 billion for the same period in 2013. Total revenue for the six months ended June 30, 2014 increased $3.7 billion or 55.2% to $10.3 billion as compared to $6.6 billion for the same period in 2013.

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• Adjusted prescription claim volume increased 48.8% to 101.2 million for the second quarter of 2014, as compared to 68.0 million for the second quarter of 2013. Adjusted prescription claim volume increased 49.7% to 201.2 million for the six months ended June 30, 2014, as compared to 134.4 million for the same period in 2013. 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.

• Gross profit for the three months ended June 30, 2014 increased $65.2 million or 24.7% to $329.8 million as compared to $264.6 million for the same period in 2013. Gross profit for the six months ended June 30, 2014 increased $131.5 million or 25.6% to $644.5 million as compared to $513.0 million for the same period in 2013.

• Operating income increased $28.4 million, or 26.7%, for the three months ended June 30, 2014, to $135.1 million as compared to $106.7 million for the same period in 2013. Operating income increased $54.4 million, or 27.5%, for the six months ended June 30, 2014, to $251.9 million as compared to $197.5 million for the same period in 2013.

• Net income attributable to the Company increased $8.0 million or 12.6% to $71.4 million for the three months ended June 30, 2014, as compared to $63.4 million for the same period in 2013. The Company reported net income attributable to the Company of $134.9 million for the six months ended June 30, 2014, an increase of $20.1 million or 17.5% as compared to $114.8 million for the same period in 2013.

• Earnings per share (fully-diluted) attributable to the Company increased $0.03 or 9.7% to $0.34 in the three months ended June 30, 2014 as compared to $0.31 per share (fully-diluted) for the same period in 2013. Earnings per share (fully-diluted) attributable to the Company increased $0.09 or 16.1% to $0.65 in the six months ended June 30, 2014 as compared to $0.56 per share (fully-diluted) for the same period in 2013.

• Cash flow from operations decreased $43.4 million or 18.4% to $192.9 million in the six months ended June 30, 2014 as compared to $236.3 million for the same period in 2013.

Business combinations

On October 1, 2013, the Company completed the acquisition of Restat, LLC, a privately held PBM 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 $350.0 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.

Recent developments

In March 2014, the Company issued $500.0 million aggregate principal amount of 4.75% Senior Notes due 2021. The Company used the net proceeds from this offering to repay $300.0 million of the Company's outstanding borrowings under the Revolving Facility leaving the Company with approximately $800.0 million of available borrowing capacity under the Revolving Facility as of June 30, 2014. The Company will use the remainder of the net proceeds from this offering for general corporate purposes.

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Results of Operations

Three and six months ended June 30, 2014 as compared to the three and six months ended June 30, 2013

	Three Months Ended June 30,				Six Months Ended June 30,
In thousands, except per share data	2014		2013		2014		2013
Revenue	$	5,385,808	$	3,417,430	$	10,300,287	$	6,637,147
Cost of revenue	5,055,995		3,152,841		9,655,813		6,124,185
Gross profit	329,813		264,589		644,474		512,962
SG&A	126,635		99,888		257,153		200,386
Depreciation of property and equipment	13,093		7,938		25,461		14,908
Amortization of intangible assets	54,977		50,092		109,963		100,148
Operating income	135,108		106,671		251,897		197,520
Interest and other expense, net	15,626		10,907		26,962		21,946
Income before income taxes	119,482		95,764		224,935		175,574
Income tax expense	33,241		24,607		61,349		47,635
Net income	86,241		71,157		163,586		127,939
Less: Net loss attributable to non-controlling interest	14,809		7,736		28,709		13,113
Net income attributable to the Company	$	71,432	$	63,421	$	134,877	$	114,826
Diluted earnings per share	$	0.34	$	0.31	$	0.65	$	0.56

Revenue

Revenue increased $2.0 billion, or 57.6%, to $5.4 billion for the three months ended June 30, 2014 as compared to $3.4 billion for the three months ended June 30, 2013. Revenue increased $3.7 billion, or 55.2%, to $10.3 billion for the six months ended June 30, 2014 as compared to $6.6 billion for the six months ended June 30, 2013. Revenues increased during both periods primarily as a result of an increase in the adjusted prescription claim volume of 48.8% and 49.7% to 101.2 million and 201.2 million for the three months and six months, respectively, ended June 30, 2014. The increases in claim volume in both periods are mainly due to organic growth added through new customer implementations including the continued implementation of the Cigna contract as well as additional claim volume related to the Restat acquisition. Additionally, revenue per prescription claim has increased in both periods as a result of increased specialty claim volume, which has a higher revenue per prescription claim rate as compared to the Company's general book of business.

Cost of Revenue

Cost of revenue increased $1.9 billion, or 60.4%, to $5.1 billion for the three months ended June 30, 2014 compared to $3.2 billion for the three months ended June 30, 2013. Cost of revenue increased $3.5 billion, or 57.7%, to $9.7 billion for the six months ended June 30, 2014 compared to $6.1 billion for the six months ended June 30, 2013.The increases for both periods are in line with the increases in revenues and are primarily due to increased PBM transaction volumes in 2014 as noted above in the revenue discussion. During the three and six months ended June 30, 2014, the cost of prescriptions dispensed from the Company's PBM segment accounted for 98.4% and 98.2% 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.

Gross Profit

Gross profit increased $65.2 million, or 24.7%, to $329.8 million for the three months ended June 30, 2014 as compared to $264.6 million for the same period in 2013. Gross profit increased $131.5 million, or 25.6%, to $644.5 million for the six months ended June 30, 2014 as compared to $513.0 million for the same period in 2013. The increases during both periods are mostly due to the successful implementation of new customer contracts in 2014, including the continued implementation of the Cigna contract. Gross profit decreased from 7.7% of revenue to 6.1% of revenueduring the three months ended June 30, 2014 as compared to the same period in 2013. Gross profit decreased from 7.7% of revenue to 6.3% of revenueduring the six months ended June 30, 2014 as compared to the same period in 2013. The decreases for both periods are mainly due to Cigna transactions carrying a significantly lower gross profit percentage as compared to the historical PBM business and comprising a larger proportion of revenue.

SG&A Costs

SG&A costs for the three months ended June 30, 2014 were $126.6 million as compared to $99.9 million for the three months ended June 30, 2013, an increase of $26.7 million, or 26.8%. SG&A costs for the six months ended June 30, 2014 were $257.2 million as compared to $200.4 million for the six months ended June 30, 2013, an increase of $56.8 million, or 28.3%. These increases are mainly due to the addition of operating costs related to the Company's acquisition of Restat that were not present during the three and six months ended June 30, 2013, as well as additional resources added to support the implementation of the Cigna contract and overall growth of the PBM segment. SG&A costs consist

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primarily of employee costs in addition to professional services costs, facilities and costs not related to revenue. In addition, SG&A costs include stock-based compensation cost of $7.9 million and $6.1 million for the three months ended June 30, 2014 and June 30, 2013, respectively. SG&A costs include stock-based compensation cost of $14.3 million and $12.4 million for the six months ended June 30, 2014 and June 30, 2013, respectively.

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 $13.1 million and $7.9 million for the three months ended June 30, 2014 and 2013, respectively. Depreciation expense was $25.5 million and $14.9 million for the six months ended June 30, 2014 and 2013, 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 six months ended June 30, 2014 mainly as a result of new asset purchases made by the Company in 2014 and 2013 to support the growth of the PBM business, including the continued implementation of the Cigna contract and other new clients, as well as the expansion of the Company's mail and specialty businesses.

Amortization

Total amortization expense for the three months ended June 30, 2014 and 2013 was $55.0 million and $50.1 million, respectively, an increase of $4.9 million. Total amortization expense for the six months ended June 30, 2014 and 2013 was $110.0 million and $100.1 million, respectively, an increase of $9.8 million. The increases in amortization expense were driven mainly by the amortization of intangible assets acquired in the acquisition of Restat. The increases were offset by a decline in amortization expense of other intangibles which are primarily amortized on an accelerated basis in line with their estimated remaining benefits, which are greater at the beginning of their useful lives and diminish over time. Amortization expense on all the Company’s intangible assets held as of June 30, 2014 is expected to be approximately $103.3 million for the remainder of 2014. Refer to Note 5 — 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 increased $4.7 million to $15.6 million for the three months ended June 30, 2014 from $10.9 million for the same period in 2013. Interest and other expense, net increased $5.0 million to $27.0 million for the six months ended June 30, 2014 from $21.9 million for the same period in 2013. The increases are mainly due to higher average principal amount of long-term debt outstanding resulting from the issuance in March 2014 of $500.0 million aggregate principal 4.75% senior notes. Refer to Note 6 — Debt in the notes to the unaudited consolidated financial statements for more information related to the Company's Credit Agreement and Senior Notes.

Income Taxes

The Company recognized income tax expense of $33.2 million for the three months ended June 30, 2014, representing an effective tax rate of 27.8%, as compared to $24.6 million, representing an effective tax rate of 25.7%, for the same period in 2013. The Company recognized income tax expense of $61.3 million for the six months ended June 30, 2014, representing an effective tax rate of 27.3%, as compared to $47.6 million, representing an effective tax rate of 27.1%, for the same period in 2013. The increases in tax expense during both periods ended June 30, 2014 were mainly due to higher taxable income as a result of new customer implementations as well as the acquisition of Restat.

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 June 30, 2014 as compared to the three months ended June 30, 2013 (in thousands)

	PBM						HCIT						Consolidated
	2014			2013			2014			2013			2014			2013
Revenue	$	5,350,962		$	3,382,195		$	34,846		$	35,235		$	5,385,808		$	3,417,430
Cost of revenue	5,039,279			3,135,211			16,716			17,630			5,055,995			3,152,841
Gross profit	$	311,683		$	246,984		$	18,130		$	17,605		$	329,813		$	264,589
Gross profit %	5.8		%	7.3		%	52.0		%	50.0		%	6.1		%	7.7		%

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Six months ended June 30, 2014 as compared to the six months ended June 30, 2013 (in thousands)

	PBM						HCIT						Consolidated
	2014			2013			2014			2013			2014			2013
Revenue	$	10,229,337		$	6,563,748		$	70,950		$	73,399		$	10,300,287		$	6,637,147
Cost of revenue	9,622,564			6,089,312			33,249			34,873			9,655,813			6,124,185
Gross profit	$	606,773		$	474,436		$	37,701		$	38,526		$	644,474		$	512,962
Gross profit %	5.9		%	7.2		%	53.1		%	52.5		%	6.3		%	7.7		%

PBM

Revenue was $5.4 billion for the three months ended June 30, 2014, an increase of $2.0 billion, or 58.2%, as compared to the same period in 2013. Revenue was $10.2 billion for the six months ended June 30, 2014, an increase of $3.7 billion, or 55.8%, as compared to the same period in 2013. The increase in both periods is mainly due to organic growth which led to increased adjusted claim volume of 33.2 million, or 48.8% in the three months ended June 30, 2014, as compared to 68.0 million for the same period in 2013. Adjusted claim volume increased 66.8 million, or 49.7% in the six months ended June 30, 2014, as compared to 134.4 million for the same period in 2013. Additionally, revenue per prescription claim has increased in both periods as a result of increased specialty claim volume, which have a higher revenue per prescription rate as compared to the Company's general book of business.

Cost of revenue was $5.0 billion for the three months ended June 30, 2014 as compared to $3.1 billion for the same period in 2013. Cost of revenue was $9.6 billion for the six months ended June 30, 2014 as compared to $6.1 billion for the same period in 2013. 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 $64.7 million or 26.2% to $311.7 million for the three months ended June 30, 2014 as compared to $247.0 million for the same period in 2013. Gross profit increased $132.3 million or 27.9% to $606.8 million for the six months ended June 30, 2014 as compared to $474.4 million for the same period in 2013. The increases during both periods are mostly due to the successful implementation of new customer contracts in 2014 which includes the continued implementation of the Cigna contract. Gross profit percentage was 5.8% and 7.3% for the three months ended June 30, 2014 and 2013, respectively. Gross profit percentage was 5.9% and 7.2% for the six months ended June 30, 2014 and 2013, respectively. Gross profit percentage decreased for the three and six months ended June 30, 2014 as compared to the same periods in 2013 due to Cigna transactions carrying a significantly lower gross profit percentage as compared to the historical PBM business, coupled with the significant volume associated with the Cigna business representing a larger proportion of total PBM revenue.

HCIT

HCIT revenue decreased $0.4 million, or 1.1%, to $34.8 million for the three months ended June 30, 2014, as compared to $35.2 million for the same period in 2013. HCIT revenue decreased $2.4 million, or 3.3%, to $71.0 million for the six months ended June 30, 2014, as compared to $73.4 million for the same period in 2013. The decreases during the three and six months ended June 30, 2014 compared to the same periods in 2013 are mainly due to decreases in the professional services revenue.

Cost of revenue decreased $0.9 million or 5.2% to $16.7 million for the three months ended June 30, 2014 compared to $17.6 million for the same period in 2013. Cost of revenue decreased $1.6 million or 4.7% to $33.2 million for the six months ended June 30, 2014 compared to $34.9 million for the same period in 2013. The cost of revenue decreased during the three and six months ended June 30, 2014 and June 30, 2013 as a result of a lower volume of HCIT transactions in 2014 as compared to 2013.

Gross profit increased by $0.5 million, or 3.0%, to $18.1 million for the three months ended June 30, 2014 as compared to $17.6 million for the same period in 2013. Gross profit increased by $0.8 million, or 2.1%, to $37.7 million for the six months ended June 30, 2014 as compared to $38.5 million for the same period in 2013. The gross profit percentage was 52.0% for the three months ended June 30, 2014 as compared to 50.0% for the three months ended June 30, 2013. The gross profit percentage was 53.1% for the six months ended June 30, 2014 as compared to 52.5% for the six months ended June 30, 2013. The increases in gross profit were mainly attributable to decreases in cost of revenue discussed above.

Non-GAAP Measures

The Company reports its financial results in accordance with GAAP, but the Company's 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.

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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 six months ended June 30, 2014 and 2013.

EBITDA Reconciliation	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2014			2013			2014			2013
	(unaudited)						(unaudited)
Net income attributable to the Company (GAAP)	$	71,432		$	63,421		$	134,877		$	114,826
Add:
Depreciation of property and equipment	14,019			9,042			27,378			17,145
Amortization of intangible assets	54,977			50,092			109,963			100,148
Interest and other expense, net	15,626			10,907			26,962			21,946
Income tax expense	33,241			24,607			61,349			47,635
Adjustments related to non-controlling interest	(791		)	(6		)	(1,176		)	(98		)
EBITDA	$	188,504		$	158,063		$	359,353		$	301,602

EBITDA for the three months ended June 30, 2014 was $188.5 million, compared to $158.1 million for the same period of 2013. EBITDA for the six months ended June 30, 2014 was $359.4 million, compared to $301.6 million for the same period of 2013. The increases during both periods are mainly due to increased net income attributable to the Company as a result of increased revenue driven by new customer contract implementations during 2014. This was partially offset by increased costs incurred to support the Company's growth and prior acquisitions.

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 six months ended June 30, 2014 and 2013.

Adjusted EPS Reconciliation
(in thousands, except per share data)
	Three Months Ended June 30,												Six Months Ended June 30,
	2014						2013						2014						2013
	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)	$	71,432		$	0.34		$	63,421		$	0.31		$	134,877		$	0.65		$	114,826		$	0.56
Amortization of intangible assets	54,977			0.27			50,092			0.24			109,963			0.53			100,148			0.48
Tax effect of reconciling item	(15,284		)	(0.07		)	(12,874		)	(0.06		)	(30,020		)	(0.14		)	(27,140		)	(0.13		)
Non-GAAP net income attributable to the Company	$	111,125		$	0.54		$	100,639		$	0.49		$	214,820		$	1.04		$	187,834		$	0.91

Adjusted EPS for the three months ended June 30, 2014 was $0.54 as compared to $0.49 in the corresponding period of 2013. Adjusted EPS for the six months ended June 30, 2014 was $1.04 as compared to $0.91 in the corresponding period of 2013. The increases during the three and six months ended June 30, 2014 as compared to the same periods in 2013 are mainly due to increased gross profit as a result of organic growth as discussed before, and was partially offset by increased costs incurred to support the Company's business growth and prior 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 June 30, 2014, under its Credit Agreement, the Company had approximately $975.0 million of

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outstanding debt under the Term Loan Facility and approximately $800.0 million of available borrowing capacity under the Revolving Facility. In March 2014, the Company issued $500.0 million aggregate principal amount of 4.75% senior notes due in March 2021. The Company used part of the net proceeds from this offering to repay $300.0 million of the Company's outstanding borrowings under the Revolving Facility. The Company plans to use the remainder of the net proceeds from this offering for general corporate purposes. Due to the outstanding borrowings under the Credit Agreement and the recently issued Senior Notes the Company will continue to incur significant interest expense and expects this expense and the related principal payments to continue for the remainder of 2014 and throughout the remaining term of the debt agreements. Refer to Note 6 — Debt in the notes to the unaudited consolidated financial statements for more information regarding the Credit Agreement and the Senior Notes.

At June 30, 2014 and December 31, 2013, the Company had cash and cash equivalents totaling $709.5 million and $387.2 million, respectively. The Company believes that its cash on hand, together with cash generated from operating activities and cash available through the Revolving Facility, will be sufficient to support planned operations for the foreseeable future and service our outstanding debt obligations. At June 30, 2014, cash and cash equivalents consisted of cash on hand, deposits in banks, and bank term deposits with original maturities of 90 days or less.

As of June 30, 2014, 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 June 30, 2014 are as follows:

• Accounts receivable are comprised of trade accounts receivable primarily from the PBM segment's customers. Accounts receivable increased $214.0 million to $1.2 billion at June 30, 2014, from $959.6 million at December 31, 2013. The accounts receivable balance increased mainly due to an increase in revenue in Q2 2014 compared to Q4 2013 driven mainly by organic growth.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.

• Rebates receivable of $908.2 million at June 30, 2014 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 that are subject to final settlement. Rebates receivable increased $602.3 million from $306.0 million at December 31, 2013 due to an increased volume of rebate eligible claims processed in 2014 as well as the timing of receipts from pharmaceutical manufacturers and third party administrators.

• Other assets are mostly comprised of prepaid assets, inventory and deferred tax assets. Other assets increased $66.8 million or 43.8% to $219.5 million at June 30, 2014 from $152.7 million at December 31, 2013. The increase in other assets is mainly due to an increase in the inventory balance which was driven by an increase in the Company's mail and specialty pharmacy claim volume.

• 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 $183.0 million to $1.0 billion, from $817.8 million at December 31, 2013, 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.

• 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 that are subject to final settlement. Rebates payable increased $586.6 million to $942.9 million from $356.3 million at December 31, 2013, due to higher rebate volume.

• Accrued liabilities are mainly comprised of customer deposits, salaries and wages payables and other accrued liabilities related to operating expenses of the Company. Accrued liabilities increased by $21.5 million to $275.6 million at June 30, 2014 from $254.1 million at December 31, 2013. The increase was driven primarily by increased operating expenses of the Company.

Cash flows from operating activities

For the six months ended June 30, 2014, the Company generated $192.9 million of cash from operating activities, a decrease of $43.4 million as compared to the amount of cash provided from operations for the same period in 2013. Cash from operating activities decreased during the six months ended June 30, 2014 as compared to the same period in 2013 due to a net cash outflow of $48.1 million due to the increased volume and timing of receipts and payments associated with the Company's rebate program as well as a net cash outflow of $69.8 million related to other assets, driven by an increase in inventory as a result of an expanding mail and specialty business. These cash outflows were offset by an increase in net income of $35.6 million, and a net cash inflow of $42.2 million due to the timing of receipts and payments on the Company's outstanding accounts receivable, accounts payable and accrued expenses balances.

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 and are typically paid to customers on a quarterly basis. 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.

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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 six months ended June 30, 2014, the Company used $34.9 million of cash from investing activities, a decrease of $24.3 million as compared to $59.2 million of cash used during the six months ended June 30, 2013. This was mainly due to a decrease in the purchases of property and equipment of $39.3 million during the six months ended June 30, 2013 as compared to the same period in 2013 offset by $20.0 million of proceeds of restricted cash in 2013 which decreased the cash used in investing activities during the six months ended June 30, 2013.

Cash flows from financing activities

For the six months ended June 30, 2014, the Company generated $164.3 million of cash for financing activities, an increase of $338.6 million as compared to a use of $174.3 million in cash from financing activities during the six months ended June 30, 2013. This increase is attributable to the Company's issuance of $500.0 million aggregate principal amount of the Senior Notes, which was partially offset by repaying $300.0 million of the Company's outstanding 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. Refer to Note 6— Debt in the notesto the unaudited consolidated financial statements for more information on the Credit Agreement.

In March 2014, the Company issued $500.0 million aggregate principal amount of 4.75% Senior Notes due 2021. The Company partially used the net proceeds from this offering to repay $300.0 million of the Company's outstanding borrowings under the Revolving Facility leaving the Company with approximately $800.0 million of available borrowing capacity under the Revolving Facility as of June 30, 2014. As a result of the additional issued debt, the interest expense and cash required to service its debt will increase in future periods.

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 may adversely affect the Company's liquidity position or require 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 10 — Commitments and Contingencies in the notes to the unaudited consolidated financial statements.

Contractual Obligations

For the six months ended June 30, 2014, there have been no significant changes to the Company’s contractual obligations as disclosed in its 2013 Annual Report on Form 10-K other than as disclosed below with respect to the required principal payments under the Credit Agreement and the Senior Notes.

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	Payments due by period (in millions)
	Total		Less than one year		1-3 years		4-5 years		More than 5 years
Principal Repayment under the Credit Agreement*	$	975.0	$	68.8	$	187.5	$	718.7	$	—
Repayment under Senior Notes**	$	666.3	$	23.8	$	47.5	$	47.5	$	547.5

*The commitment amounts are exclusive of interest payments. Currently, the Company's long-term debt obligations carry an annual interest rate of 2.39% on $500.0 million, which has been fixed through the Company's interest rate swap agreements, and 2.06% on the remaining $475.0 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 6 — Debt for further information on the terms of the Company's long-term debt obligations.

** Amounts reported include interest payments on the $500.0 million aggregate principal amount of the senior notes which carry an interest rate of 4.75%. Interest payments are due semi-annually on March 15 and September 15 of each year, beginning on September 15, 2014. See Note 6 — Debt for further information on the terms of the Company's long-term debt obligations.

Outstanding Securities

As of July 31, 2014, the Company had 207,415,969 common shares outstanding, 1,496,751 stock options outstanding, and 1,957,681 RSUs outstandingoutstanding. The options 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 July 31, 2014 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 2013 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 $475.0 million of the $975.0 million drawn under the Credit Agreement, as of June 30, 2014, as $500.0 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 11 — 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 June 30, 2014, assuming a hypothetical 1% fluctuation in the interest rate of the loan, the Company's pre-tax income would vary by approximately $4.8 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 LIBOR-based floating rate and are described in more detail in Note 6 — 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 2013 Annual Report on Form 10-K. In the three months ended June 30, 2014, there have been no material changes in the Company's foreign exchange rate risk as disclosed in its 2013 Annual Report on Form 10-K.

ITEM 4. Controls and Procedures

We maintain a system of controls and procedures under the supervision and with the participation of our management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), pursuant to Rule 13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to ensure the Company's consolidated financial statements are prepared in accordance with generally accepted accounting principles and present fairly the Company's financial results of operations. As reported in our 2013 Annual Report on Form 10-K as of December 31, 2013, our management concluded that our internal control over financial reporting was not effective as a result of a material weakness related to ineffective general information technology controls ("GITCs") intended to ensure that access to applications and data, and the ability to place program changes into production for such applications and data, was adequately restricted to appropriate internal personnel. Due to this material weakness in internal control over financial reporting, our management concluded in our 2013 Form 10-K that our disclosure controls and procedures were ineffective as of December 31, 2013.

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Management has taken steps to remediate the GITC material weakness, including enhancing its internal documentation and monitoring approach to ensure that all GITC procedures designed to restrict access to applications and data are operating in a manner in order to provide management with comfort that access is properly limited to the appropriate internal personnel and the ability to place program changes into production for such applications and data. Management began to implement these remedial steps during the first half of 2014 and expects that these steps will be substantially implemented and tested during the third quarter. of 2014 In accordance with the Company’s internal control compliance program, the material weakness designation cannot be closed until the remediation processes have been operational for a period of time and successfully tested. As a result, because of the GITC material weakness in internal control over financial reporting disclosed in our 2013 Form 10-K, our CEO and CFO have concluded that our disclosure controls and procedures were ineffective as of June 30, 2014.

As a result of the material weakness identified, the Company assessed the material weakness's impact to the Company's consolidated financial statements to ensure they were prepared in accordance with generally accepted accounting principles and present fairly the Company's financial results of operation as of and for the three and six months ended June 30, 2014. Based on management's additional procedures and assessment, management concluded that the consolidated financial statements included in this Form 10-Q present fairly, in all material aspects, the Company's financial position, results of operations and cash flows for the periods presented.

Except as described above in regards to the remediation process, there were no changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) that occurred during the three and six month periods ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

For information on legal proceedings, refer to Note 10 —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, 2013 includes a detailed discussion of certain material risk factors facing us. In the three and six months ended June 30, 2014, 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, 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

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ITEM 6.    Exhibits

Exhibit Number		Description of Document	Reference
10.1†		Catamaran Corporation Amended and Restated Incentive Plan, effective March 5, 2014	Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed May 15, 2014.
10.2†		Catamaran Corporation Third Amended and Restated Long-Term Incentive Plan, effective March 5, 2014	Filed herewith.
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 June 30, 2014 and December 31, 2013, (ii) the Consolidated Statements of Operations for the three and six months ended June 30, 2014 and 2013, (iii) the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2014 and 2013, (iv) the Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013, (v) the Consolidated Statements of Shareholders' Equity for the six months ended June 30, 2014 and 2013, and (vi) the notes to the Unaudited Consolidated Financial Statements.	Filed herewith.
†	Indicates management contract or compensatory plan

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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
August 1, 2014	By:	/s/ Michael Shapiro
		Michael Shapiro
		Senior Vice President and Chief Financial Officer (on behalf of the registrant and as principal financial and accounting officer)

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EXHIBIT INDEX

Exhibit Number		Description of Document	Reference
10.1†		Catamaran Corporation Amended and Restated Incentive Plan, effective March 5, 2014	Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed May 15, 2014.
10.2†		Catamaran Corporation Third Amended and Restated Long-Term Incentive Plan, effective March 5, 2014	Filed herewith.
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 June 30, 2014 and December 31, 2013, (ii) the Consolidated Statements of Operations for the three and six months ended June 30, 2014 and 2013, (iii) the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2014 and 2013, (iv) the Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013, (v) the Consolidated Statements of Shareholders' Equity for the six months ended June 30, 2014 and 2013, and (vi) the notes to the Unaudited Consolidated Financial Statements.	Filed herewith.
†	Indicates management contract or compensatory plan

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EX-10.2

Exhibit 10.2

CATAMARAN CORPORATION

THIRD AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN

(Amended on March 5, 2014)

Catamaran Corporation, a corporation existing under the laws of the Yukon Territory of Canada (the “Company”), hereby establishes and adopts the following Third Amended and Restated Long-Term Incentive Plan (the “Plan”), effective March 5, 2014 which amends and restates that certain Long-Term Incentive Plan initially adopted by the Board on March 11, 2009 and subsequently amended and restated on March 9, 2011 and July 2, 2012. In September 2010, the Board declared a stock dividend on the issued and outstanding Shares to effect a two-for-one stock split, which was distributed on September 17, 2010 to shareholders of record as of the close of business on September 14, 2010. In September 2012, the Board declared a stock dividend on the issued and outstanding Shares to effect a two-for-one stock split, which was distributed on October 1, 2012 to shareholders of record at the close of business on September 20, 2012. All references in the Plan to numbers of Shares have been adjusted herein to reflect such stock splits.

1. PURPOSE OF THE PLAN

1.1. Purpose.  The purpose of the Plan is to assist the Company and its Affiliates in attracting and retaining selected individuals to serve as directors, employees and/or consultants of the Company who are expected to contribute to the Company’s success and to achieve long-term objectives which will inure to the benefit of all shareholders of the Company through the additional incentives inherent in the Awards hereunder. The Plan is designed to provide the board of directors of the Company with sufficient flexibility to address current and future long-term incentive equity-based alternatives for the Company which includes Options or Restricted Stock Units. The specific terms of any Awards, including such items as vesting periods and treatment of the Award upon a change of control or termination of employment, will be set forth in the applicable Award Agreement.

2. DEFINITIONS

2.1. “Affiliate” shall mean (i) any person or entity that directly, or through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company (including any Subsidiary) or (ii) any entity in which the Company has a significant equity interest, as determined by the Committee.

2.2. “Applicable Period” shall mean, with respect to any Performance Period, a period commencing on or before the first day of the Performance Period and ending not later than the earlier of (a) 90 days after the commencement of the Performance Period and (b) the date on which twenty-five percent (25%) of the Performance Period has been completed. Any action required to be taken within an Applicable Period may be taken at a later date if permissible under Section 162(m) of the Code or regulations promulgated thereunder, as they may be amended from time to time.

2.3. “Award” shall mean any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Award, Dividend Equivalent, Other Stock-Based Award or any other right, interest or option relating to Shares or other property (including cash) granted pursuant to the provisions of the Plan.

2.4. “Award Agreement” shall mean any written agreement, contract or other instrument or document evidencing any Award granted by the Committee hereunder.

2.5. “Board” shall mean the board of directors of the Company.

2.6. “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto. All citations to Sections of the Code are to such Sections as they may from time to time be amended or renumbered.

2.7. “Committee” shall mean the Compensation Committee of the Board or such other committee appointed by the Board to administer the Plan, consisting of no fewer than two Directors, each of whom is (i) a “Non-Employee Director” within the meaning of Rule 16b-3 (or any

1

successor rule) of the Exchange Act, (ii) an “outside director” within the meaning of Section 162(m)(4)(C)(i) of the Code, and (iii) an “independent director” for purpose of the rules and regulations of The Nasdaq Stock Market (“Nasdaq”).

2.8. “Covered Employee” shall mean a “covered employee” within the meaning of Section 162(m)(3) of the Code.

2.9. “Director” shall mean a non-employee member of the Board.

2.10. “Dividend Equivalents” shall have the meaning set forth in Section 12.7.

2.11. “Employee” shall mean any employee (including an officer) of the Company or any Affiliate. Solely for purposes of the Plan, an Employee shall also mean any other natural person, including a consultant, who provides services to the Company or any Affiliate, so long as such person (i) renders bona fide services that are not in connection with the offer and sale of the Company’s securities in a capital-raising transaction or distribution; (ii) does not directly or indirectly promote or maintain a market for the Company’s securities; (iii) provides services pursuant to a written contract; and (iv) spends or will spend a significant amount of time and attention to the business and affairs of the Company or any Affiliate.

2.12. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and any successor thereto. All citations to Sections of the Exchange Act are to such Sections as they may from time to time be amended or renumbered.

2.13. “Fair Market Value” shall mean, with respect to any property other than Shares, the market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. The Fair Market Value of Shares as of any date shall be: (i) the per Share closing price of the Shares as reported on Nasdaq on that date (or if there was no reported closing price on such date, on the last preceding date on which the closing price was reported); (ii) if the Company is not then listed on Nasdaq, the per Share closing price of the Shares as reported on the TSX on that date (or if there was no reported closing price on such date, on the last preceding date on which the closing price was reported); or (iii) if the Company is not then listed on Nasdaq or the TSX, the Fair Market Value of Shares shall be determined by the Committee in its sole discretion in accordance with Section 409A of the Code.

2.14. “Family Entity” shall mean a trust in which one or more Family Members have more than fifty percent of the beneficial interest, a foundation in which the Participant and/or one or more Family Members control the management of assets and any other entity in which the Participant and/or one or more Family Members own more than fifty percent of the voting interests.

2.15. “Family Member” shall mean the Participant’s spouse, parent, child, stepchild, grandchild, sibling, mother or father-in-law, son or daughter-in-law, stepparent, grandparent, former spouse, niece, nephew or brother or sister-in-law, including adoptive relationships, or any person sharing the Participant’s household (other than a tenant or employee).

2.16. “Freestanding Stock Appreciation Right” shall have the meaning set forth in Section 6.1(a).

2.17. “Insider” shall have the meaning set forth in the TSX Company Manual.

2.18. “Limitations” shall have the meaning set forth in Section 10.4.

2.19. “Option” shall mean any right granted to a Participant under the Plan allowing such Participant to purchase Shares at such price or prices and during such period or periods as the Committee shall determine.

2.20. “Other Stock-Based Award” shall have the meaning set forth in Section 8.1.

2.21. “Participant” shall mean an Employee or Director to whom the Committee has granted an Award under the Plan.

2.22. “Payee” shall have the meaning set forth in Section 13.1.

2.23. “Performance Award” shall mean any Award of Performance Shares or Performance Units granted pursuant to Section 9.

2.24. “Performance Period” shall mean that period established by the Committee at the time any Performance Award is granted or at any time thereafter during which any performance goals specified by the Committee with respect to such Award are to be measured.

2

2.25. “Performance Share” shall mean any grant pursuant to Section 9 of a unit valued by reference to a designated number of Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter, but not later than the time permitted by Section 162(m) of the Code in the case of a Covered Employee, unless the Committee determines not to comply with Section 162(m) of the Code with respect to such Performance Share.

2.26. “Performance Unit” shall mean any grant pursuant to Section 9 of a unit valued by reference to a designated amount of property (including cash) other than Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter, but not later than the time permitted by Section 162(m) of the Code in the case of a Covered Employee, unless the Committee determines not to comply with Section 162(m) of the Code with respect to such Performance Unit.

2.27. “Permitted Assignee” shall have the meaning set forth in Section 12.5.

2.28. “Prior Plan” shall mean the SXC Health Solutions Corp. Amended and Restated Stock Option Plan.

2.29. “Restricted Stock” shall mean any Share issued with the restriction that the holder may not sell, transfer, pledge or assign such Share and with such other restrictions as the Committee, in its sole discretion, may impose (including any restriction on the right to vote such Share and the right to receive any dividends), which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate.

2.30. “Restricted Stock Unit” means an Award that is valued by reference to a Share, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including without limitation, cash or Shares, or any combination thereof, and that has such restrictions as the Committee, in its sole discretion, may impose, including without limitation, any restriction on the right to retain such Awards, to sell, transfer, pledge or assign such Awards, and/or to receive any cash Dividend Equivalents with respect to such Awards, which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate,

2.31. “Restriction Period” shall have the meaning set forth in Section 7.1.

2.32. “Restricted Stock Award” shall have the meaning set forth in Section 7.1.

2.33. “Restricted Stock Unit Award” shall have the meaning set forth in Section 7.1.

2.34. “Share” shall mean a share of common stock of the Company, no par value per share.

2.35. “Stock Appreciation Right” shall mean the right granted to a Participant pursuant to Section 6.

2.36. “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the granting of the Award, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

2.37. “Substitute Awards” shall mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

2.38. “Tandem Stock Appreciation Right” shall have the meaning set forth in Section 6.1(b).

2.39. “TSX” means the Toronto Stock Exchange.

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3. SHARES SUBJECT TO THE PLAN

3.1. Number of Shares.  (a) Subject to adjustment as provided in this Section 3.1 and in Section 12.4, a total of 6,440,000 Shares shall be authorized for issuance pursuant to Awards granted under the Plan. Since March 11, 2009, no grants have been made under the Prior Plan, but Shares authorized for issuance pursuant to awards granted under the Prior Plan that have not been used for awards granted under the Prior Plan may be, and in some cases have been, issued pursuant to Awards granted under this Plan in addition to the number of Shares specified immediately above. Any Shares that are subject to Awards of Options or Stock Appreciation Rights shall be counted against this limit as one (1) Share for every one (1) Share granted. Any Shares that are subject to Awards other than Options or Stock Appreciation Rights shall be counted against this limit as one-and-seventy-nine one-hundredths (1.79) Shares for every one (1) Share granted.

(b) If any Shares subject to an Award or to an award under the Prior Plan are forfeited, expire or otherwise terminate without issuance of such Shares, or any Award or award under the Prior Plan is settled for cash or otherwise does not result in the issuance of all or a portion of the Shares subject to such Award, the Shares shall, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, again be available for Awards under the Plan, as provided in Section 3.1(c) below.

(c) Any Shares that again become available for grant pursuant to this Section 3 shall be added back as one (1) Share if such Shares were subject to Options or Stock Appreciation Rights granted under the Plan or options or stock appreciation rights granted under the Prior Plan, and as one-and-seventy-nine one-hundredths (1.79) Shares if such Shares were subject to Awards other than Options or Stock Appreciation Rights granted under the Plan.

3.2. Character of Shares.  Any Shares issued hereunder may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares purchased in the open market or otherwise.

4. ELIGIBILITY AND ADMINISTRATION

4.1. Eligibility.  Any Employee or Director shall be eligible to be selected as a Participant.

4.2. Administration.  (a) The Plan shall be administered by the Committee. The Directors may remove from, add members to, or fill vacancies on, the Committee. A majority of the Committee shall constitute a quorum. The acts of the Committee shall be either (i) acts of a majority of the members of the Committee present at any meeting at which a quorum is present or (ii) acts approved in writing by all of the members of the Committee without a meeting.

(b) The Committee shall have full power and authority, subject to the provisions of the Plan and subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board, to: (i) select the Employees and Directors to whom Awards may from time to time be granted hereunder; (ii) determine the type or types of Awards, not inconsistent with the provisions of the Plan, to be granted to each Participant hereunder; (iii) determine the number of Shares to be covered by each Award granted hereunder; (iv) determine the terms and conditions, not inconsistent with the provisions of the Plan, of any Award granted hereunder; (v) determine whether, to what extent and under what circumstances Awards may be settled in cash, Shares or other property, subject to Section 8.1; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other property and other amounts payable with respect to an Award made under the Plan shall be deferred in accordance with Section 409A of the Code either automatically or at the election of the Participant; (vii) determine whether, to what extent and under what circumstances any Award shall be cancelled or suspended; (viii) interpret and administer the Plan and any instrument or agreement entered into under or in connection with the Plan, including any Award Agreement; (ix) correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent that the Committee shall deem desirable to carry it into effect; (x) establish such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (xi) determine whether any Award will have Dividend Equivalents; and (xii) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.

(c) Decisions of the Committee shall be final, conclusive and binding on all persons or entities, including the Company, any Participant, any shareholder and any Employee or any Affiliate. No member of the Committee, and no entity, committee, member of the Board or officer to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission, interpretation, construction or determination made in connection with this Plan in good faith, and the members of the Committee and such entities, committees, members of the Board or officers shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys’ fees) arising there from to the full extent permitted by law.

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(d) The Committee may delegate to a committee of one or more directors of the Company or, to the extent permitted by law, to one or more officers or a committee of officers the right to grant Awards to Employees who are not Directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) of the Company and to cancel or suspend Awards to Employees who are not Directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) of the Company; provided, however, that to the extent the Committee intends that an Award granted to any person who is a “covered employee” within the meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to be a covered employee at any time during the applicable Performance Period or during any period in which a Performance Award may be paid following a Performance Period be exempt from Section 162(m) of the Code, only the Committee shall be permitted to (a) designate such person to participate in the Plan for such Performance Period, (b) establish performance goals and Performance Awards for such person, and (c) certify the achievement of such performance goals.

5. OPTIONS

5.1. Grant of Options.  Options may be granted hereunder to Participants either alone or in addition to other Awards granted under the Plan. Any Option shall be subject to the terms and conditions of this Section 5 and to such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall deem desirable.

5.2. Award Agreements.  All Options granted pursuant to this Section 5 shall be evidenced by a written Award Agreement in such form and containing such terms and conditions as the Committee shall determine which are not inconsistent with the provisions of the Plan. Granting of an Option pursuant to the Plan shall impose no obligation on the recipient to exercise such Option. Any individual who is granted an Option pursuant to this Section 5 may hold more than one Option granted pursuant to the Plan at the same time.

5.3. Option Price.  The exercise price per Share subject to an Option under any Option granted pursuant to this Section 5shall be determined by the Committee and set forth in the applicable Award Agreement, and shall not be less than the Fair Market Value on the applicable Grant Date. In no event may any Option granted under this Plan be amended, other than pursuant to Section 12.4, to decrease the exercise price thereof, be cancelled in exchange for cash or other Awards or in conjunction with the grant of any new Option with a lower exercise price or otherwise be subject to any action that would be treated under the Applicable Exchange listing standards or for accounting purposes, as a “repricing” of such Option, unless such amendment, cancellation, or action is approved by the Company’s stockholders.

5.4. Option Period.  The term of each Option shall be fixed by the Committee in its sole discretion; provided that no Option shall be exercisable after the expiration of seven years from the date the Option is granted.

5.5. Exercise of Options.  Vested Options granted under the Plan shall be exercised by the Participant or by a Permitted Assignee thereof (or by the Participant’s executors, administrators, guardian or legal representative, as may be provided in an Award Agreement) as to all or part of the Shares covered thereby, by the giving of written, telephonic, or electronic notice of exercise to the Company or its designated agent pursuant to rules and procedures established by the Committee for this purpose, specifying the number of Shares to be purchased, accompanied by payment of the full purchase price for the Shares being purchased. Unless otherwise provided in an Award Agreement, full payment of such purchase price shall be made at the time of exercise and shall be made (a) in cash or cash equivalents (including certified check or bank check or wire transfer of immediately available funds), (b) by tendering previously acquired Shares (either actually or by attestation, valued at their then Fair Market Value), (c) with the consent of the Committee, by withholding Shares otherwise issuable in connection with the exercise of the Option, (d) as provided by the Committee, cashless exercises as permitted under the Federal Reserve Board’s Regulation T, subject to applicable securities law restrictions, or (e) any combination of any of the foregoing. The notice of exercise, accompanied by such payment, shall be delivered to the Company at its principal business office or such other office as the Committee may from time to time direct, and shall be in such form, containing such further provisions consistent with the provisions of the Plan, as the Committee may from time to time prescribe. In no event may any Option granted hereunder be exercised for a fraction of a Share.

5.6. Form of Settlement.  In its sole discretion, the Committee may provide, at the time of grant, that the Shares to be issued upon an Option’s exercise shall be in the form of Restricted Stock or other similar securities, or may reserve the right so to provide after the time of grant.

6. STOCK APPRECIATION RIGHTS

6.1. Grant and Exercise.  The Committee may provide Stock Appreciation Rights alone or in tandem with other Awards (including Options), in each case upon such terms and conditions, not inconsistent with the Plan, as the Committee may establish. The provisions of Stock Appreciation Rights need not be the same with respect to each recipient.

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(a) Stock Appreciation Rights granted without regard to any Option or other Award (a “Freestanding Stock Appreciation Right”) shall generally have the same terms and conditions as Options, including (i) an exercise price not less than Fair Market Value on the date of grant (except in the case of Substitute Awards or in connection with an adjustment provided in Section 12.4) and (ii) a term not greater than seven years. Upon the exercise of a Freestanding Stock Appreciation Right, the holder shall have the right to receive the excess of (i) the Fair Market Value of one Share on the date of exercise or such other amount as the Committee shall so determine at any time during a specified period before the date of exercise over (ii) the exercise price of the right on the date of grant.

(b) Stock Appreciation Rights may be granted in conjunction with all or part of any Option granted under the Plan (a “Tandem Stock Appreciation Right”). Any Tandem Stock Appreciation Right may be granted at the same time as the related Option is granted or at any time thereafter before exercise or expiration of such Option. Upon the exercise of a Tandem Stock Appreciation Right, the holder shall have the right to receive (i) the excess of the Fair Market Value of one Share on the date of exercise or such other amount as the Committee shall so determine at any time during a specified period before the date of exercise over (ii) the related Option exercise price. Any Tandem Stock Appreciation Right may be exercised only when the related Option would be exercisable and the Fair Market Value of the Shares subject to the related Option exceeds the option price at which Shares can be acquired pursuant to the Option. Tandem Stock Appreciation Rights shall terminate and no longer be exercisable upon and to the extent of the termination or exercise of the related Option; provided that, unless the Committee otherwise determines at or after the time of grant, a Tandem Stock Appreciation Right granted with respect to less than the full number of Shares covered by a related Option shall not terminate until the number of Shares then exercisable under such Option equals the number of Shares to which the Tandem Stock Appreciation Right applies. Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable to the extent the Tandem Stock Appreciation Right has been exercised.

(c) The Committee may impose such terms and conditions on Stock Appreciation Rights granted in conjunction with any Award (other than an Option) as the Committee shall determine in its sole discretion.

(d) The Committee shall determine in its sole discretion whether payment upon the exercise of a Stock Appreciation Right shall be made in cash, in whole Shares or other property, or any combination thereof. If payment will be made in Shares, the number of Shares shall be determined based on the Fair Market Value of a Share on the date of exercise. If the Committee elects to make full payment in Shares, no fractional Shares shall be issued and cash payments shall be made in lieu of fractional Shares. Payment with respect to a Stock Appreciation Right shall be made within 30 days after the date on which the Stock Appreciation Right is exercised.

(e) In no event may any Stock Appreciation Right granted under this Plan be amended, other than pursuant to Section 12.4, to decrease the exercise price thereof, be cancelled in exchange for cash or other Awards or in conjunction with the grant of any new Stock Appreciation Right with a lower exercise price or otherwise be subject to any action that would be treated under the Applicable Exchange listing standards or for accounting purposes, as a “repricing” of such Stock Appreciation Right, unless such amendment, cancellation, or action is approved by the Company’s stockholders.

7. RESTRICTED STOCK AWARDS AND RESTRICTED STOCK UNIT AWARDS

7.1. Grants.  Awards of Restricted Stock and of Restricted Stock Units may be granted hereunder to Participants either alone or in addition to other Awards granted under the Plan (a “Restricted Stock Award” or “Restricted Stock Unit Award”, respectively). A Restricted Stock Award or Restricted Stock Unit Award shall be subject to restrictions imposed by the Committee covering a period of time specified by the Committee (the “Restriction Period”). The provisions of Restricted Stock Awards and Restricted Stock Unit Awards need not be the same with respect to each recipient.

7.2. Award Agreements.  The terms of any Restricted Stock Award or Restricted Stock Unit Award granted under the Plan shall be set forth in a written Award Agreement which shall contain provisions determined by the Committee and not inconsistent with the Plan.

7.3. Rights of Holders of Restricted Stock and Restricted Stock Units.  Beginning on the date of grant of the Restricted Stock Award and subject to execution of the Award Agreement, the Participant shall become a shareholder of the Company with respect to all Shares subject to the Award Agreement and shall have all of the rights of a shareholder, including the right to vote such Shares and the right to receive distributions made with respect to such Shares. A Participant receiving a Restricted Stock Unit Award shall not possess voting rights with respect to such Award. Any Shares or any other property (other than cash) distributed as a dividend, Dividend Equivalent or otherwise with respect to any Restricted Stock Award or Restricted Stock Unit Award as to which the restrictions have not yet lapsed shall be subject to the same restrictions as such Restricted Stock Award or Restricted Stock Unit Award.

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8. OTHER STOCK-BASED AWARDS

8.1. Stock and Administration.  Other Awards of Shares and other Awards that are valued in whole or in part by reference to, or are otherwise based on, Shares or other property (“Other Stock-Based Awards”) may be granted hereunder to Participants, either alone or in addition to other Awards granted under the Plan, and such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan. Other Stock-Based Awards may be paid in cash, Shares, other property, or any combination thereof, in the sole discretion of the Committee at the time of payment. Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Participants to whom and the time or times at which such Other Stock-Based Awards shall be made, the number of Shares to be granted pursuant to such Awards, and all other conditions of the Awards. The provisions of Other Stock-Based Awards need not be the same with respect to each recipient.

8.2. Award Agreements.  Shares (including securities convertible into Shares) subject to Awards granted under this Section 8 shall be evidenced by a written Award Agreement in such form and containing such terms and conditions as the Committee shall determine which are not inconsistent with the provisions of the Plan.

9. PERFORMANCE AWARDS

9.1. Terms of Performance Awards.  The performance criteria to be achieved during any Performance Period and the length of the Performance Period shall be determined by the Committee upon the grant of each Performance Award. Except as provided in Section 11 or as may be provided in an Award Agreement, Performance Awards will be distributed only after the end of the relevant Performance Period. Performance Awards may be paid in cash, Shares, other property, or any combination thereof, in the sole discretion of the Committee at the time of payment. The performance goals to be achieved for each Performance Period shall be conclusively determined by the Committee and may be based upon the criteria set forth in Section 10.1. The amount of the Award to be distributed shall be conclusively determined by the Committee. Performance Awards may be paid in a lump sum or in installments following the close of the Performance Period or, in accordance with procedures established by the Committee and Section 409A of the Code, on a deferred basis.

10. CODE SECTION 162(m) PROVISIONS

10.1. Covered Employees and Performance Criteria.  Notwithstanding any other provision of the Plan, if the Committee determines at the time a Restricted Stock Award, a Restricted Stock Unit Award, a Performance Award or an Other Stock-Based Award is granted to a Participant who is, or is likely to be, as of the end of the tax year in which the Company would claim a tax deduction in connection with such Award, a Covered Employee, then the Committee may provide that this Section 10.1 is applicable to the Award and that the lapsing of restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall accordingly be subject to the achievement of one or more objective performance goals established by the Committee, which shall be based on the attainment of specified levels of one or any combination of the following: revenue growth; earnings before taxes; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; operating income; pre- or after-tax income; cash flow; cash flow per share; net earnings; earnings per share; return on equity; return on invested capital; return on assets; economic value added (or an equivalent metric); share price performance; total shareholder return; improvement in or attainment of expense levels; improvement in or attainment of working capital levels; strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion goals, cost targets, customer satisfaction, reductions in errors and omissions, reductions in lost business, management of employment practices and employee benefits, supervision of litigation and information technology, quality and quality audit scores, productivity, efficiency, and goals relating to acquisitions or divestitures; market share; gross profits; and/or comparisons with various stock market indices of the Company or any Affiliate, division or business unit of the Company for or within which the Participant is primarily employed. Such performance goals also may be based solely by reference to the Company’s performance or the performance of an Affiliate, division or business unit of the Company, or based upon the relative performance of other companies or upon comparisons of any of the indicators of performance relative to other companies. The Committee may also exclude the impact of an event or occurrence which the Committee determines should appropriately be excluded, including (a) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges, (b) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management, or (c) a change in accounting standards required by generally accepted accounting principles. Such performance goals shall be set by the Committee within the Applicable Period of each Performance Period for each Participant or for any group of Participants (or both), and shall otherwise comply with the requirements of, Section 162(m) of the Code, or any successor provision thereto, and the regulations thereunder. Performance goals shall be subject to such other special rules and conditions as the Committee may establish at any time within the Applicable Period.

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10.2. Adjustments.  Notwithstanding any provision of the Plan (other than Sections 11 and 12.4), with respect to any Restricted Stock Award, Restricted Stock Unit Award, Performance Award or Other Stock-Based Award that is subject to this Section 10, the Committee may adjust downwards, but not upwards, the amount payable pursuant to such Award, and the Committee may not waive the achievement of the applicable performance goals, except in the case of the death or disability of the Participant or a Change in Control of the Company.

10.3. Restrictions.  The Committee shall have the power to impose such other restrictions on Awards subject to this Section 10 as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, or any successor provision thereto.

10.4. Limitations on Grants to Participants.  Subject to adjustment as provided in Section 12.4, (i) no Employee may be granted (A) Options, Freestanding Stock Appreciation Rights, or Option/Tandem Stock Appreciation Rights during any 12-month period with respect to more than 300,000 Shares or (B) Restricted Stock Awards, Restricted Stock Unit Awards, Performance Awards and/or Other Stock-Based Awards that are denominated in Shares in any 12-month period with respect to more than 300,000 Shares, and (ii) Directors may not, in the aggregate, be granted Awards at any time during the term of this Plan with respect to more than one percent (1%) of the outstanding Shares (collectively, the “Limitations”). In addition to the foregoing, (i) the maximum dollar value payable to any Employee in any 12-month period with respect to Performance Awards that are valued with reference to property other than Shares is $2,000,000, and (ii) the maximum dollar value payable to any Director (A) in any 12-month period with respect to Awards is $200,000 (it being understood that the value of any Awards denominated in Shares shall be determined using the “grant date fair value” method in accordance with FAS 123R) and (B) during the term of this Plan with respect to Awards is $2,000,000 (it being understood that the value of any Awards denominated in Shares shall be determined using the “grant date fair value” method in accordance with FAS 123R). If an Award is cancelled, the cancelled Award shall continue to be counted toward the applicable Limitations. The per-Participant limit described in this Section 10.4 shall be construed and applied consistently with Section 162(m) of the Code, or any successor provision thereto, and the regulations thereunder.

11. CHANGE IN CONTROL PROVISIONS

11.1. Impact of Change in Control on Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Unit Awards, Performance Awards and Other Stock-Based Awards.  The terms of any Award may provide in the Award Agreement evidencing the Award that, upon a “Change in Control” of the Company (as that term may be defined therein), (a) Options and Stock Appreciation Rights outstanding as of the date of the Change in Control shall become exercisable in full or part, (b) restrictions and deferral limitations on Restricted Stock Awards and Restricted Stock Unit Awards lapse and the Restricted Stock Awards and Restricted Stock Unit Awards become free of all restrictions and limitations and become vested, (c) the Performance Period applicable to any outstanding Performance Awards shall lapse and the performance criteria applicable to any outstanding Performance Award shall be deemed to be satisfied at the target or other level, and (d) the restrictions and deferral limitations and other conditions applicable to any Other Stock-Based Awards or any other Awards shall lapse, and such Other Stock-Based Awards or such other Awards shall become free of all restrictions, limitations or conditions and become fully vested in full or part and transferable to the full extent of the original grant, subject in each case to any terms and conditions contained in the Award Agreement evidencing such Award, including but not limited to a condition that such treatment will apply only if the Participant remains employed on the effective date of the Change in Control or has incurred an involuntary termination of employment without cause on account of the Change in Control, as determined by the Committee in its sole discretion, within a period of up to 3 months prior to the effective date of the Change in Control. Notwithstanding any other provision of the Plan, the Committee, in its discretion, may determine that, upon the occurrence of a Change in Control of the Company, each Option and Stock Appreciation Right outstanding shall terminate within a specified number of days after notice to the Participant, and such Participant shall receive, with respect to each Share subject to such Option or Stock Appreciation Right, an amount equal to the excess of the Fair Market Value of such Share immediately prior to the occurrence of such Change in Control over the exercise price per share of such Option and/or Stock Appreciation Right; such amount to be payable in cash, in one or more kinds of stock or property (including the stock or property, if any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion, shall determine.  

12. GENERALLY APPLICABLE PROVISIONS

12.1. Amendment and Modification of the Plan.  The Board may, from time to time, alter, amend, suspend or terminate the Plan as it shall deem advisable, subject to any requirement for shareholder approval imposed by applicable law, including the rules and regulations of Nasdaq, the TSX or any rule or regulation of any stock exchange or quotation system on which Shares are listed or quoted; provided that the Board may not amend the Plan in any manner that would result in noncompliance with Rule 16b-3 promulgated under the Exchange Act; and further provided that the Board may not, without the approval of the Company’s shareholders, amend the Plan to (a) increase the number of Shares that may be the subject of Awards under the Plan (except for adjustments pursuant to Section 12.4), (b) expand the types of awards available under the Plan, (c) materially expand the class of persons eligible to participate in the Plan (which, for the avoidance of doubt, shall include the re-introduction

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of Directors as persons eligible to participate in the Plan should they cease to be eligible Participants in the future), (d) amend any provision of Section 5.3, (e) increase the maximum permissible term of any Option specified by Section 5.4, (f) increase the term or reduce the exercise price of any Award granted to any Participant beyond its original expiry or exercise price or (g) amend any provision of Sections 10, 12.1 or 12.5. In addition, no amendments to, or termination of, the Plan shall in any way materially impair the rights of a Participant under any Award previously granted without such Participant’s consent.

12.2. Specific Amendments to Plan Permitted.  Without limiting the generality of the foregoing, the Board may make the following amendments to the Plan, without obtaining shareholder approval: (a) amendments to the terms and conditions of the Plan necessary to ensure that the Plan complies with the applicable regulatory requirements, including without limitation: (i) the rules of the TSX, Nasdaq or any national securities exchange or system on which the stock is then listed or reported, or by any regulatory body having jurisdiction with respect thereto, (ii) the requirements of Rule 16b-3, as amended (or any successor or similar rule), under the Exchange Act and (iii) applicable tax laws and regulations; (b) amendments to the provisions of the Plan respecting administration of the Plan and eligibility for participation under the Plan; (c) subject to Section 12.1(e) and (f), amendments to the provisions of the Plan respecting the terms and conditions on which Awards may be granted pursuant to the Plan, including the provisions relating to the exercise price, the term and the vesting schedule; and (d) amendments to the Plan that are of a “housekeeping” nature.

12.3. Specific Amendments to Awards Permitted.  Without limiting the generality of the foregoing and subject to shareholder approval for specified amendments as provided in Section 12.1(e) and (f) above or elsewhere in the Plan, the Board may amend the price, the term, the vesting schedule and the termination provisions of Awards granted pursuant to the Plan.

12.4. Adjustments.  In the event of any merger, reorganization, consolidation, recapitalization, dividend (other than a regular cash dividend) or distribution (whether in cash, shares or other property), stock split, reverse stock split, spin-off or similar transaction or other change in corporate structure affecting the Shares or the value thereof, such adjustments and other substitutions shall be made to the Plan and to Awards as the Committee, in its sole discretion and in accordance with Section 409A of the Code, deems equitable or appropriate, including such adjustments in the aggregate number, class and kind of securities that may be delivered under the Plan and, in the aggregate or to any one Participant, in the number, class, kind and option or exercise price of securities subject to outstanding Awards granted under the Plan (including, if the Committee deems appropriate, the substitution of similar options to purchase the shares of, or other awards denominated in the shares of, another company) as the Committee may determine to be appropriate in its sole discretion; provided, however, that the number of Shares subject to any Award shall always be a whole number.

12.5. Transferability of Awards.  Awards may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by the Participant, except by will or the laws of descent and distribution; provided, however, that unless otherwise specified in the Award Agreement, as long as the Participant continues employment with or service to the Company, the Participant may transfer, subject to applicable law, Awards to a Family Member or Family Entity without consideration (each transferee thereof, a “Permitted Assignee”); provided, however, in the case of a transfer of Awards to a limited liability company or a partnership which is a Family Entity, such transfer may be for consideration consisting solely of an equity interest in the limited liability company or partnership to which the transfer is made. Any transfer of Awards shall be in a form acceptable to the Committee, shall be signed by the Participant and shall be effective only upon written acknowledgement by the Committee of its receipt and acceptance of such notice. If an Award is transferred to a Family Member or to a Family Entity, such Award may not thereafter be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by such Family Member or Family Entity except by will or the laws of descent and distribution. Except as provided in this Section 12.5, and except as otherwise authorized by the Committee in an Award Agreement, no Award and no Shares subject to Awards described in Section 8 that have not been issued or as to which any applicable restriction, performance or deferral period has not lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent and distribution, and such Award may be exercised during the life of the Participant only by the Participant or the Participant’s guardian or legal representative.

12.6. Termination of Employment.  The Committee shall determine and set forth in each Award Agreement whether any Awards granted in such Award Agreement will continue to be exercisable, and the terms of such exercise, on and after the date that a Participant ceases to be employed by or to provide services to the Company or any Affiliate (including as a Director), whether by reason of death, disability, voluntary or involuntary termination of employment or services, or otherwise. The date of termination of a Participant’s employment or services will be determined by the Committee, which determination will be final.

12.7. Deferral; Dividend Equivalents.  The Committee shall be authorized to establish procedures pursuant to which the payment of any Award may be deferred. Subject to the provisions of the Plan and any Award Agreement, the recipient of an Award (including any deferred Award) may, if so determined by the Committee, be entitled to receive, currently or on a deferred basis, cash, stock or other property dividends,

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or cash payments in amounts equivalent to cash, stock or other property dividends on Shares (“Dividend Equivalents”) with respect to the number of Shares covered by the Award, as determined by the Committee, in its sole discretion and in compliance with Section 409A of the Code, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional Shares or otherwise reinvested.

12.8. Insiders.  Notwithstanding anything to the contrary contained herein, (a) the number of Shares which may be reserved for issuance under the Plan and under any other employee stock option plans or other equity-based compensation arrangements of the Company to Insiders of the Company, and of any Affiliate or Subsidiary of the Company, shall not exceed 10% of the outstanding issue (as hereinafter defined); (b) the number of Shares which may be issued within a one-year period pursuant to the Plan and under any other employee stock option plans or other equity-based compensation arrangements of the Company to Insiders of the Company, and of any Affiliate or Subsidiary of the Company, shall not exceed 10% of the outstanding issue; and (c) the number of Shares which may be issued within a one-year period pursuant to the Plan and under any other employee stock option plans or other equity-based compensation arrangements of the Company to any one Insider of the Company, or any Affiliate or Subsidiary of the Company, shall not exceed 5% of the outstanding issue. For purposes of this Section 12.8, “outstanding issue” shall mean the total number of Shares outstanding on a non-diluted basis, subject to applicable adjustments as provided for in the by-laws of the Company and the rules and regulations of Nasdaq or the TSX. For purposes of clauses (b) and (c) of this Section 12.8, “outstanding issue” shall be determined on the basis of the total number of Shares that are outstanding immediately prior to the Share issuance in question, excluding Shares issued pursuant to equity-based compensation arrangements of the Company over the preceding one-year period.

13. MISCELLANEOUS

13.1. Tax Withholding.  The Company shall have the right to make all payments or distributions pursuant to the Plan to a Participant (or a Permitted Assignee thereof) (any such person, a “Payee”) net of any applicable Federal, State, Provincial and local taxes required to be paid or withheld as a result of (a) the grant of any Award, (b) the exercise of an Option or Stock Appreciation Right, (c) the delivery of Shares or cash, (d) the lapse of any restrictions in connection with any Award or (e) any other event occurring pursuant to the Plan. The Company or any Affiliate shall have the right to withhold from wages or other amounts otherwise payable to such Payee such withholding taxes as may be required by law, or to otherwise require the Payee to pay such withholding taxes. If the Payee shall fail to make such tax payments as are required, the Company or its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Payee or to take such other action as may be necessary to satisfy such withholding obligations. The Committee shall be authorized to establish procedures for election by Participants to satisfy such obligation for the payment of such taxes by tendering previously acquired Shares (either actually or by attestation, valued at their then Fair Market Value) or by directing the Company to retain or withhold Shares (up to the employee’s minimum required tax withholding rate) otherwise deliverable in connection with the Award.

13.2. Right of Discharge Reserved; Claims to Awards.  Nothing in the Plan nor the grant of an Award hereunder shall confer upon any Employee or Director the right to continue in the employment or service of the Company or any Affiliate or affect any right that the Company or any Affiliate may have to terminate the employment or service of (or to demote or to exclude from future Awards under the Plan) any such Employee or Director at any time for any reason. Except as specifically provided by the Committee, the Company shall not be liable for the loss of existing or potential profit from an Award granted in the event of termination of an employment or other relationship. No Employee or Participant shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Employees or Participants under the Plan.

13.3. Prospective Recipient.  The prospective recipient of any Award under the Plan shall not, with respect to such Award, be deemed to have become a Participant, or to have any rights with respect to such Award, until and unless such recipient shall have executed an agreement or other instrument evidencing the Award and delivered a copy thereof to the Company, and otherwise complied with the then applicable terms and conditions.

13.4. Stop Transfer Orders.  All certificates for Shares delivered under the Plan pursuant to any Award shall be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares are then listed, and any applicable federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any Shares under the Plan or make any other distributions or the benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933, and the applicable requirements of any securities exchange or similar entity.

13.5. Nature of Payments.  All Awards made pursuant to the Plan are in consideration of services performed or to be performed for the Company or any Affiliate, division or business unit of the Company. Any income or gain realized pursuant to Awards under the Plan shall

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constitute a special incentive payment to the Participant and shall not be taken into account, to the extent permissible under applicable law, as compensation for purposes of any of the employee benefit plans of the Company or any Affiliate except as may be determined by the Committee or by the Board or board of directors of the applicable Affiliate.

13.6. Other Plans.  Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.

13.7. Severability.  If any provision of the Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction, such provision shall (a) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (b) not affect any other provision of the Plan or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required under the Plan shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under the Plan, and if the making of any payment in full or the provision of any other benefit required under the Plan in full would be unlawful or otherwise invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be unlawful, invalid or unenforceable shall be made or provided under the Plan.

13.8. Construction.  All references in the Plan to “Section or Sections” are intended to refer to the Section or Sections, as the case may be, of the Plan. As used in the Plan, the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.”

13.9. Unfunded Status of the Plan.  The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver the Shares or payments in lieu of or with respect to Awards hereunder; provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan.

13.10. Governing Law.  The Plan and all determinations made and actions taken thereunder, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to conflicts of laws principles.

13.11. Effective Date of Plan; Termination of Plan.  This Plan, as amended and restated, shall be submitted to the shareholders of the Company for approval and, if approved, shall become effective as of the Effective Date. The Plan shall be null and void and of no effect if not approved by the shareholders of the Company and in such event each Award shall, notwithstanding any of the preceding provisions of the Plan, be null and void and of no effect. Awards may be granted under the Plan at any time and from time to time on or prior to the tenth anniversary of the effective date of the Plan, on which date the Plan will expire except as to Awards then outstanding under the Plan. Such outstanding Awards shall remain in effect until they have been exercised or terminated, or have expired.

13.12. Foreign Employees.  Awards may be granted to Participants who are foreign nationals or employed outside the United States, or both, on such terms and conditions different from those applicable to Awards to Employees employed in the United States as may, in the judgment of the Committee, be necessary or desirable in order to recognize differences in local law or tax policy. The Committee also may impose conditions on the exercise or vesting of Awards in order to minimize the Company’s obligation with respect to tax equalization for Employees on assignments outside their home country. The Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan.

13.13. Captions.  The captions in the Plan are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein.

11

13.14. Section 409A.  The Plan shall be interpreted, construed and operated to reflect the intent of the Company that all aspects of the Plan shall, to the extent subject to Code Section 409A, comply with Section 409A and any regulations and other guidance thereunder. This Plan may be amended at any time, without the consent of the Participant, to avoid the application of Code Section 409A in a particular circumstance or to satisfy any of the requirements under Code Section 409A. Nothing in the Plan shall provide a basis for any person to take action against the Company or any Subsidiary or Affiliate based on matters covered by Code Section 409A, including the tax treatment of any award made under the Plan.

13.15. Currency.  All references to price herein are to be in United States currency and all required payments hereunder are to be calculated and paid in United States currency. For the avoidance of doubt, Awards granted to Participants in jurisdictions other than the United States are to be granted in United States currency and all payments required thereunder are to be paid in United States currency.

12

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 in order 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 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:	August 1, 2014
By:	/s/ Mark Thierer
	Mark Thierer
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael Shapiro, 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 in order 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 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:	August 1, 2014
By:	/s/ Michael Shapiro
	Michael Shapiro
	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 June 30, 2014 (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 

August 1, 2014

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, Michael Shapiro, the chief financial officer of Catamaran Corporation, certify that (i) the Quarterly Report on Form 10-Q of Catamaran Corporation for the quarter ended June 30, 2014 (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/ Michael Shapiro  

Michael Shapiro 

Chief Financial Officer 

August 1, 2014

XML

Debt Maturities (Details) (Term Loan Facility [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Term Loan Facility [Member]
Long-term Debt, Fiscal Year Maturity [Abstract]
2014	$ 37,500
2015	68,750
2016	93,750
2017	118,750
2018	656,250
Long-term debt	$ 975,000

XML

Condensed Consolidating Financial Statements Income Statement (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Condensed Income Statements, Captions [Line Items]
Revenue	$ 5,385,808	$ 3,417,430	$ 10,300,287	$ 6,637,147
Cost of revenue	5,055,995	3,152,841	9,655,813	6,124,185
Gross profit	329,813	264,589	644,474	512,962
Expenses:
Selling, general and administrative	126,635	99,888	257,153	200,386
Depreciation of property and equipment	13,093	7,938	25,461	14,908
Amortization of intangible assets	54,977	50,092	109,963	100,148
Total operating expenses	194,705	157,918	392,577	315,442
Operating income	135,108	106,671	251,897	197,520
Interest and other expense, net	15,626	10,907	26,962	21,946
Equity (income) in subsidiaries	0	0	0	0
Income before income taxes	119,482	95,764	224,935	175,574
Income tax expense	33,241	24,607	61,349	47,635
Net income	86,241	71,157	163,586	127,939
Less: Net income attributable to non-controlling interest	14,809	7,736	28,709	13,113
Net income attributable to the Company	71,432	63,421	134,877	114,826
Reportable Legal Entities [Member] | Catamaran Corporation [Member]
Condensed Income Statements, Captions [Line Items]
Revenue	8,650	8,725	19,690	16,638
Cost of revenue	7,407	7,555	17,001	14,693
Gross profit	1,243	1,170	2,689	1,945
Expenses:
Selling, general and administrative	815	195	1,134	509
Depreciation of property and equipment	8	5	17	14
Amortization of intangible assets	0	0	0	0
Total operating expenses	823	200	1,151	523
Operating income	420	970	1,538	1,422
Interest and other expense, net	14,110	9,512	24,076	19,462
Equity (income) in subsidiaries	(85,122)	(71,963)	(157,415)	(132,866)
Income before income taxes	71,432	63,421	134,877	114,826
Income tax expense	0	0	0	0
Net income	71,432	63,421	134,877	114,826
Less: Net income attributable to non-controlling interest	0	0	0	0
Net income attributable to the Company	71,432	63,421	134,877	114,826
Reportable Legal Entities [Member] | Guarantors [Member]
Condensed Income Statements, Captions [Line Items]
Revenue	5,185,019	3,066,659	9,889,672	5,971,687
Cost of revenue	4,924,447	2,854,996	9,390,995	5,562,268
Gross profit	260,572	211,663	498,677	409,419
Expenses:
Selling, general and administrative	97,536	80,770	198,865	162,734
Depreciation of property and equipment	11,737	7,233	22,975	13,501
Amortization of intangible assets	53,339	48,422	106,677	96,844
Total operating expenses	162,612	136,425	328,517	273,079
Operating income	97,960	75,238	170,160	136,340
Interest and other expense, net	864	981	1,643	1,518
Equity (income) in subsidiaries	(11,526)	(12,697)	(28,929)	(26,866)
Income before income taxes	108,622	86,954	197,446	161,688
Income tax expense	23,500	14,991	40,031	28,822
Net income	85,122	71,963	157,415	132,866
Less: Net income attributable to non-controlling interest	0	0	0	0
Net income attributable to the Company	85,122	71,963	157,415	132,866
Reportable Legal Entities [Member] | Non-Guarantors [Member]
Condensed Income Statements, Captions [Line Items]
Revenue	743,397	500,755	1,440,813	967,589
Cost of revenue	675,399	448,999	1,297,705	865,991
Gross profit	67,998	51,756	143,108	101,598
Expenses:
Selling, general and administrative	28,284	18,923	57,154	37,143
Depreciation of property and equipment	1,348	700	2,469	1,393
Amortization of intangible assets	1,638	1,670	3,286	3,304
Total operating expenses	31,270	21,293	62,909	41,840
Operating income	36,728	30,463	80,199	59,758
Interest and other expense, net	652	414	1,243	966
Equity (income) in subsidiaries	0	0	0	0
Income before income taxes	36,076	30,049	78,956	58,792
Income tax expense	9,741	9,616	21,318	18,813
Net income	26,335	20,433	57,638	39,979
Less: Net income attributable to non-controlling interest	0	0	0	0
Net income attributable to the Company	26,335	20,433	57,638	39,979
Consolidations [Member]
Condensed Income Statements, Captions [Line Items]
Revenue	(551,258)	(158,709)	(1,049,888)	(318,767)
Cost of revenue	(551,258)	(158,709)	(1,049,888)	(318,767)
Gross profit	0	0	0	0
Expenses:
Selling, general and administrative	0	0	0	0
Depreciation of property and equipment	0	0	0	0
Amortization of intangible assets	0	0	0	0
Total operating expenses	0	0	0	0
Operating income	0	0	0	0
Interest and other expense, net	0	0	0	0
Equity (income) in subsidiaries	96,648	84,660	186,344	159,732
Income before income taxes	(96,648)	(84,660)	(186,344)	(159,732)
Income tax expense	0	0	0	0
Net income	(96,648)	(84,660)	(186,344)	(159,732)
Less: Net income attributable to non-controlling interest	14,809	7,736	28,709	13,113
Net income attributable to the Company	$ (111,457)	$ (92,396)	$ (215,053)	$ (172,845)

XML

Financial Instruments (Details) (USD $)		6 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 Interest Rate Swap [Member]	Jun. 30, 2014 Interest Rate Swap [Member] Fair Value, Measurements, Recurring [Member]	Jun. 30, 2013 Interest Rate Swap [Member] Fair Value, Measurements, Recurring [Member]	Jun. 30, 2014 Interest Rate Swap [Member] Fair Value, Measurements, Recurring [Member]	Jun. 30, 2013 Interest Rate Swap [Member] Fair Value, Measurements, Recurring [Member]	Dec. 31, 2013 Fair Value, Inputs, Level 2 [Member] Fair Value, Measurements, Recurring [Member]	Jun. 30, 2014 Fair Value, Inputs, Level 2 [Member] Interest Rate Swap [Member] Fair Value, Measurements, Recurring [Member]
Derivative [Line Items]
Length of interest rate swap		3 years
Notional amount of interest rate cash flow hedge derivatives		$ 500,000,000
Libor rate		0.52%
Effective interest rate		2.39%
Basis spread on variable rate		1.88%
Fair value of interest rate swap							1,719,000	1,792,000
Cash flow hedge loss reclassified to interest expense			400,000	300,000	800,000	700,000
Deferred expenses related to derivative instruments	$ 1,700,000

XML

Condensed Consolidating Financial Statements Cash Flows (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net cash provided (used) by operating activities	$ 192,886	$ 236,253
Cash flows from investing activities:
Acquisitions, net of cash acquired	(2,026)	(7,076)
Purchases of property and equipment	(32,873)	(72,135)
Proceeds from restricted cash	0	20,004
Net cash used by investing activities	(34,899)	(59,207)
Cash flows from financing activities:
Proceeds from issuance of debt	492,500	100,000
Repayment of long-term debt	(312,500)	(250,000)
Payment of financing costs	(1,963)	(2,347)
Proceeds from exercise of options	4,944	1,928
Proceeds from exercise of warrants	3,453	0
Tax benefit on option exercises	3,993	9,479
Payments of contingent consideration	0	(23,203)
Net transactions with parent and affiliates	0	0
Distributions to non-controlling interest	(25,800)	(10,115)
Proceeds from restricted stock	0	0
Other	(321)	0
Net cash (used) provided by financing activities	164,306	(174,258)
Effect of foreign exchange on cash balances	14	24
Change in cash and cash equivalents	322,307	2,812
Cash and cash equivalents, beginning of period	387,241	370,776
Cash and cash equivalents, end of period	709,548	373,588
Reportable Legal Entities [Member] | Catamaran Corporation [Member]
Cash flows from operating activities:
Net cash provided (used) by operating activities	152,832	60,033
Cash flows from investing activities:
Acquisitions, net of cash acquired	0	0
Purchases of property and equipment	(18)	0
Proceeds from restricted cash		0
Net cash used by investing activities	(18)	0
Cash flows from financing activities:
Proceeds from issuance of debt	492,500	100,000
Repayment of long-term debt	(312,500)	(250,000)
Payment of financing costs	(1,963)	(2,347)
Proceeds from exercise of options	7,026	2,744
Proceeds from exercise of warrants	3,453
Tax benefit on option exercises	0	0
Payments of contingent consideration		0
Net transactions with parent and affiliates	(114,078)	51,480
Distributions to non-controlling interest	0	0
Proceeds from restricted stock	18,588	24,462
Other	0
Net cash (used) provided by financing activities	93,026	(73,661)
Effect of foreign exchange on cash balances	14	24
Change in cash and cash equivalents	245,854	(13,604)
Cash and cash equivalents, beginning of period	15,090	33,603
Cash and cash equivalents, end of period	260,944	19,999
Reportable Legal Entities [Member] | Guarantors [Member]
Cash flows from operating activities:
Net cash provided (used) by operating activities	591,827	292,494
Cash flows from investing activities:
Acquisitions, net of cash acquired	(2,026)	0
Purchases of property and equipment	(18,671)	(71,919)
Proceeds from restricted cash		20,004
Net cash used by investing activities	(20,697)	(51,915)
Cash flows from financing activities:
Proceeds from issuance of debt	0	0
Repayment of long-term debt	0	0
Payment of financing costs	0	0
Proceeds from exercise of options	(2,057)	(806)
Proceeds from exercise of warrants	0
Tax benefit on option exercises	3,955	9,472
Payments of contingent consideration		(18,338)
Net transactions with parent and affiliates	(483,936)	(187,511)
Distributions to non-controlling interest	0	0
Proceeds from restricted stock	(18,079)	(23,886)
Other	(321)
Net cash (used) provided by financing activities	(500,438)	(221,069)
Effect of foreign exchange on cash balances	0	0
Change in cash and cash equivalents	70,692	19,510
Cash and cash equivalents, beginning of period	350,889	303,833
Cash and cash equivalents, end of period	421,581	323,343
Reportable Legal Entities [Member] | Non-Guarantors [Member]
Cash flows from operating activities:
Net cash provided (used) by operating activities	(314,610)	40,384
Cash flows from investing activities:
Acquisitions, net of cash acquired	0	(7,076)
Purchases of property and equipment	(14,184)	(216)
Proceeds from restricted cash		0
Net cash used by investing activities	(14,184)	(7,292)
Cash flows from financing activities:
Proceeds from issuance of debt	0	0
Repayment of long-term debt	0	0
Payment of financing costs	0	0
Proceeds from exercise of options	(25)	(10)
Proceeds from exercise of warrants	0
Tax benefit on option exercises	38	7
Payments of contingent consideration		(4,865)
Net transactions with parent and affiliates	335,051	(30,742)
Distributions to non-controlling interest	0	0
Proceeds from restricted stock	(509)	(576)
Other	0
Net cash (used) provided by financing activities	334,555	(36,186)
Effect of foreign exchange on cash balances	0	0
Change in cash and cash equivalents	5,761	(3,094)
Cash and cash equivalents, beginning of period	21,262	33,340
Cash and cash equivalents, end of period	27,023	30,246
Consolidations [Member]
Cash flows from operating activities:
Net cash provided (used) by operating activities	(237,163)	(156,658)
Cash flows from investing activities:
Acquisitions, net of cash acquired	0	0
Purchases of property and equipment	0	0
Proceeds from restricted cash		0
Net cash used by investing activities	0	0
Cash flows from financing activities:
Proceeds from issuance of debt	0	0
Repayment of long-term debt	0	0
Payment of financing costs	0	0
Proceeds from exercise of options	0	0
Proceeds from exercise of warrants	0
Tax benefit on option exercises	0	0
Payments of contingent consideration		0
Net transactions with parent and affiliates	262,963	166,773
Distributions to non-controlling interest	(25,800)	(10,115)
Proceeds from restricted stock	0	0
Other	0
Net cash (used) provided by financing activities	237,163	156,658
Effect of foreign exchange on cash balances	0	0
Change in cash and cash equivalents	0	0
Cash and cash equivalents, beginning of period	0	0
Cash and cash equivalents, end of period	$ 0	$ 0

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 segment	Jun. 30, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Number of operating segments			2
Revenue	$ 5,385,808	$ 3,417,430	$ 10,300,287	$ 6,637,147
Cost of revenue	5,055,995	3,152,841	9,655,813	6,124,185
Gross profit	329,813	264,589	644,474	512,962
Total assets	9,117,886	7,347,812	9,117,886	7,347,812	7,995,763
P B M [Member]
Segment Reporting Information [Line Items]
Revenue	5,350,962	3,382,195	10,229,337	6,563,748
Cost of revenue	5,039,279	3,135,211	9,622,564	6,089,312
Gross profit	311,683	246,984	606,773	474,436
Total assets	8,744,311	7,242,286	8,744,311	7,242,286
H C I T [Member]
Segment Reporting Information [Line Items]
Revenue	34,846	35,235	70,950	73,399
Cost of revenue	16,716	17,630	33,249	34,873
Gross profit	18,130	17,605	37,701	38,526
Total assets	$ 373,575	$ 105,526	$ 373,575	$ 105,526

XML

Business Combinations Restat (Details) (USD $)	3 Months Ended		6 Months Ended			0 Months Ended		3 Months Ended	6 Months Ended	0 Months Ended						0 Months Ended						0 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jul. 02, 2012 Revolving Credit Facility [Member]	Oct. 02, 2013 Restat [Member]	Jun. 30, 2014 Restat [Member]	Jun. 30, 2014 Restat [Member]	Oct. 02, 2013 Restat [Member] Customer Relationship - PBM [Member]	Oct. 02, 2013 Restat [Member] Customer Relationship, Cash Cards [Member]	Oct. 02, 2013 Restat [Member] Trademarks and Trade Names [Member]	Oct. 02, 2013 Restat [Member] Non-compete agreements [Member]	Oct. 02, 2013 Restat [Member] Initial Amounts Recognized at Acquisition Date [Member]		Oct. 02, 2013 Restat [Member] Measurement Period Adjustments [Member]	Jun. 30, 2014 Restat [Member] Measurement Period Adjustments [Member]		Mar. 31, 2014 Restat [Member] Measurement Period Adjustments [Member]		Oct. 02, 2013 Restat [Member] Current Amounts Recognized at Acquisition Date [Member]	Oct. 02, 2013 Restat [Member] Revolving Credit Facility [Member]
Business Acquisition [Line Items]
Purchase price							$ 409,500,000
Debt amount																						350,000,000
Term of long-term debt						5 years																5 years
Goodwill expected to be tax deductible							227,800,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract]
Accounts receivable														13,842,000	[1]		0	[2]	0	[3]	13,842,000
Rebates receivable														6,635,000	[1]		0	[2]	(254,000)	[3]	6,381,000
Other current assets														383,000	[1]		0	[2]	0	[3]	383,000
Total current assets														20,860,000	[1]		0	[2]	(254,000)	[3]	20,606,000
Property and equipment														1,263,000	[1]		0	[2]	0	[3]	1,263,000
Intangible assets							182,720,000			143,200,000	35,500,000	1,000,000	3,020,000	182,720,000	[1]		0	[2]	0	[3]	182,720,000
Goodwill	4,724,639,000		4,724,639,000		4,720,275,000									223,474,000	[1]		2,084,000	[2]	2,280,000	[3]	227,838,000
Total assets acquired														428,317,000	[1]		2,084,000	[2]	2,026,000	[3]	432,427,000
Accounts payable														22,370,000	[1]		0	[2]	0	[3]	22,370,000
Rebates payable														16,106,000	[1]		0	[2]	0	[3]	16,106,000
Accrued liabilities														7,231,000	[1]		0	[2]	0	[3]	7,231,000
Other long-term liabilities														0	[1]		2,084,000	[2]	0	[3]	2,084,000
Total liabilities assumed														45,707,000	[1]		2,084,000	[2]	0	[3]	47,791,000
Net assets acquired														382,610,000	[1]		0	[2]	2,026,000	[3]	384,636,000
Measurement period adjustment paid to former Restat owners																2,000,000
Amortization of intangible assets	54,977,000	50,092,000	109,963,000	100,148,000				8,700,000	17,400,000
Future amortization expense, remainder of 2014	$ 103,300,000		$ 103,300,000					$ 16,400,000	$ 16,400,000
Acquired intangible assets, useful life										10 years	3 years	1 year	5 years

[1] As previously reported in the Company's Form 10-K for the period ended December 31, 2013.

[2] These represent measurement period adjustments during the three months ended June 30, 2014 and were recorded to reflect changes in the estimated fair values of the associated Restat assets acquired and liabilities assumed based on factors existing as of the acquisition date.

[3] These measurement period adjustments were recorded during Q1 2014 to reflect an additional $2.0 million paid to former Restat owners for working capital reconciliation as well as changes in the estimated fair values of the associated assets acquired and liabilities assumed.

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

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 Measurement Period Adjustments (c)		Current Amounts Recognized at Acquisition Date
Accounts receivable	$	13,842	$	—		$	—	$	13,842
Rebates receivable	6,635		(254		)	—		6,381
Other current assets	383		—			—		383
Total current assets	20,860		(254		)	—		20,606
Property and equipment	1,263		—			—		1,263
Intangible assets	182,720		—			—		182,720
Goodwill	223,474		2,280			2,084		227,838
Total assets acquired	428,317		2,026			2,084		432,427
Accounts payable	22,370		—			—		22,370
Rebates payable	16,106		—			—		16,106
Accrued liabilities	7,231		—			—		7,231
Other long-term liabilities	—		—			2,084		2,084
Total liabilities assumed	45,707		—			2,084		47,791
Net assets acquired	$	382,610	$	2,026		$	—	$	384,636

(a) As previously reported in the Company's Form 10-K for the period ended December 31, 2013.

(b) These measurement period adjustments were recorded during Q1 2014 to reflect an additional $2.0 million paid to former Restat owners for working capital reconciliation as well as changes in the estimated fair values of the associated assets acquired and liabilities assumed.

(c) These represent measurement period adjustments during the three months ended June 30, 2014 and were recorded to reflect changes in the estimated fair values of the associated Restat 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
Customer relationships - PBM	$	143,200	10 years
Customer relationships - cash card	35,500		3 years
Trademarks/Trade names	1,000		1 year
Non-compete agreements	3,020		5 years
Total	$	182,720

Unaudited pro forma results of operations

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

	Three Months Ended June 30, 2013		Six Months Ended June 30, 2013
Revenue	$	3,620,936	$	7,035,001
Gross profit	$	285,070	$	550,643
Net income attributable to the Company	$	66,368	$	123,007
Earnings per share attributable to the Company:
Basic	$	0.32	$	0.60
Diluted	$	0.32	$	0.60
Weighted average shares outstanding:
Basic	205,975,724		205,782,438
Diluted	206,624,432		206,535,143

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Earnings Per Share (Details) 1	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Earnings Per Share [Abstract]
Weighted average number of shares used in computing basic EPS	206,938,789		205,975,724		206,733,127		205,782,438
Add dilutive common stock equivalents:
Outstanding stock options and restricted stock units	372,062	[1]	648,708	[1]	473,995	[1]	752,705	[1]
Weighted average number of shares used in computing diluted EPS	207,310,851		206,624,432		207,207,122		206,535,143

[1] Excludes 2,240,802 and 792,881 common stock equivalents for the three months ended June 30, 2014 and 2013 because their effect was anti-dilutive. Excludes 1,802,512 and 443,065 common stock equivalents for the six months ended June 30, 2014 and 2013 because their effect was anti-dilutive.

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Stock-Based Compensation (Details) 3 (Stock Options [Member], USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
LTIP Plan [Member]
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 9 months 0 days
Options Outstanding (in shares)	1,363,784
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 35.92
Unrecognized compensation cost	$ 10,644
Assumed Plans [Member]
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 19 days
Options Outstanding (in shares)	148,090
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 47.05
Unrecognized compensation cost	$ 2,019

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Goodwill and Other Intangible Assets (Details) 3 (USD $) In Millions, unless otherwise specified	Jun. 30, 2014
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract]
Future amortization expense, remainder of 2014	$ 103.3
Future amortization expense, 2015	194.0
Future amortization expense, 2016	166.7
Future amortization expense, 2017	147.5
Future amortization expense, 2018	137.2
Future amortization expense, 2019	126.8
Future amortization expense after 2019	$ 195.9

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Concentration Risk (Details) (Customer Concentration Risk [Member])	3 Months Ended		6 Months Ended			12 Months Ended
	Jun. 30, 2014 Sales [Member] Customer One [Member] customer	Jun. 30, 2013 Sales [Member] Customer One [Member] customer	Jun. 30, 2014 Sales [Member] Customer One [Member] customer	Jun. 30, 2013 Sales [Member] Customer One [Member] customer	Jun. 30, 2014 Accounts Receivable [Member] Customer One [Member] customer	Dec. 31, 2013 Accounts Receivable [Member] Customer Two [Member] customer
Concentration Risk [Line Items]
Concentration risk, number of customers	1	1	1	1	1	1
Concentration risk, percentage, period	34.00%	19.00%	33.00%	19.00%
Concentration risk, percentage					16.00%	15.00%

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Income Taxes (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Tax Disclosure [Abstract]
Effective income tax rate	27.80%	25.70%	27.30%	27.10%

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Description of Business

6 Months Ended

Jun. 30, 2014

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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Stock-Based Compensation (Details) 4 (USD $)	6 Months Ended
	Jun. 30, 2014
Restricted Stock Units Performance Based [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
LTIP Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair value of restricted units outstanding (per unit)	$ 44.55
LTIP Plan [Member] | Restricted Stock Units Time Based [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted units granted	300,899
Number of restricted units outstanding	757,020
LTIP Plan [Member] | Restricted Stock Units Performance Based [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted units granted	392,388
Number of restricted units outstanding	830,880
LTIP Plan [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date value of restricted units granted (per unit)	$ 44.83
Assumed Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair value of restricted units outstanding (per unit)	$ 46.83
Assumed Plans [Member] | Restricted Stock Units Time Based [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted units granted	153,049
Number of restricted units outstanding	305,008
Assumed Plans [Member] | Restricted Stock Units Performance Based [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted units granted	84,614
Number of restricted units outstanding	80,046
Assumed Plans [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date value of restricted units granted (per unit)	$ 44.44
Straight Line Vesting Basis [Member] | Restricted Stock Units Time Based [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years
Straight Line Vesting Basis [Member] | Restricted Stock Units Time Based [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Cliff Vesting [Member] | Restricted Stock Units Time Based [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Cliff Vesting [Member] | Restricted Stock Units Time Based [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2014

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 June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
PBM:
Revenue	$	5,350,962	$	3,382,195	$	10,229,337	$	6,563,748
Cost of revenue	5,039,279		3,135,211		9,622,564		6,089,312
Gross profit	311,683		246,984		606,773		474,436
Total assets at June 30	8,744,311		7,242,286		8,744,311		7,242,286
HCIT:
Revenue	34,846		35,235		70,950		73,399
Cost of revenue	16,716		17,630		33,249		34,873
Gross profit	18,130		$	17,605	37,701		38,526
Total assets at June 30	373,575		105,526		373,575		105,526
Consolidated:
Revenue	5,385,808		3,417,430		10,300,287		6,637,147
Cost of revenue	5,055,995		3,152,841		9,655,813		6,124,185
Gross profit	329,813		264,589		644,474		512,962
Total assets at June 30	$	9,117,886	$	7,347,812	$	9,117,886	$	7,347,812

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2014

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:

	Six Months Ended June 30,
	2014		2013
Total stock options granted	427,463		365,080
Volatility	38.4-39.2%		45.4		%
Risk-free interest rate	1.54-1.73%		0.81		%
Expected life (in years)	4.5		4.5
Dividend yield	—		—
Weighted-average grant date fair value	$	15.48	$	21.44

Schedule of stock option activity

The table below summarizes the stock options outstanding as of June 30, 2014 under both plans.

	Options Outstanding	Weighted Average Exercise Price		Unrecognized Compensation Cost		Weighted Average Period
				(in thousands)
LTIP	1,363,784	$	35.92	$	10,644	2.75
Assumed Plans	148,090	$	47.05	$	2,019	3.47

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 six months ended June 30, 2014:

	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	300,899	392,388	$	44.83	153,049	84,614	$	44.44
Outstanding	757,020	830,880	$	44.55	305,008	80,046	$	46.83

Schedule of unrecognized compensation expenses

The table below summarizes the unrecognized compensation cost related to the outstanding RSUs at June 30, 2014.

	Unrecognized Compensation Cost		Weighted Average Period
	(in thousands)
LTIP	$	47,342	2.38
Assumed Plans	$	14,823	2.97

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Stock-Based Compensation (Details) 5 (Restricted Stock Units (RSUs) [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
LTIP Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs on nonvested awards	$ 47,342
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years)	2 years 4 months 17 days
Assumed Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs on nonvested awards	$ 14,823
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years)	2 years 11 months 19 days

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Schedule of fair value measurements

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 June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	20,000	$	20,000
Derivative	$	—	$	1,792	$	—	$	1,792

	December 31, 2013
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	19,954	$	19,954
Derivative	$	—	$	1,719	$	—	$	1,719

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2014

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 six months ended June 30, 2014 and 2013:

	Three Months Ended June 30,		Six Months Ended June 30,
	2014	2013	2014	2013
Weighted average number of shares used in computing basic EPS	206,938,789	205,975,724	206,733,127	205,782,438
Add dilutive common stock equivalents:
Outstanding stock options and restricted stock units (a)	372,062	648,708	473,995	752,705
Weighted average number of shares used in computing diluted EPS	207,310,851	206,624,432	207,207,122	206,535,143

(a) Excludes 2,240,802 and 792,881 common stock equivalents for the three months ended June 30, 2014 and 2013 because their effect was anti-dilutive. Excludes 1,802,512 and 443,065 common stock equivalents for the six months ended June 30, 2014 and 2013 because their effect was anti-dilutive.

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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
Beginning balance, amount at Dec. 31, 2012	$ 4,609,861	$ 4,180,778	$ 73,530	$ 354,991	$ (2,191)	$ 2,753
Beginning balance, shares at Dec. 31, 2012		205,399,102
Activities during the period (unaudited) [Roll Forward]
Net income	127,939			114,826		13,113
Exercise of stock options, shares		280,366
Exercise of stock options, amount	1,928	2,753	(825)
Vesting of restricted stock units, shares		451,404
Vesting of restricted stock units, amount	0	24,697	(24,697)
Tax benefit on options exercised	9,479		9,479
Stock-based compensation	13,131		13,131
Distributions to non-controlling interest	(10,115)					(10,115)
Other comprehensive income, net of tax	1,047				1,047
Ending balance, amount at Jun. 30, 2013	4,753,270	4,208,228	70,618	469,817	(1,144)	5,751
Ending balance, shares at Jun. 30, 2013		206,130,872
Beginning balance, amount at Dec. 31, 2013	4,911,498	4,215,291	77,790	617,161	(1,752)	3,008
Beginning balance, shares at Dec. 31, 2013	206,305,070	206,305,070
Activities during the period (unaudited) [Roll Forward]
Net income	163,586			134,877		28,709
Exercise of stock options, shares		262,204
Exercise of stock options, amount	4,944	7,026	(2,082)
Exercise of warrants, shares		425,160
Exercise of warrants, amount	3,453	20,624	(17,171)
Vesting of restricted stock units, shares		418,931
Vesting of restricted stock units, amount	0	18,726	(18,726)
Tax benefit on options exercised	3,993		3,993
Stock-based compensation	15,398		15,398
Distributions to non-controlling interest	(25,800)					(25,800)
Other comprehensive income, net of tax	(82)				(82)
Other	(321)		(321)
Ending balance, amount at Jun. 30, 2014	$ 5,076,669	$ 4,261,667	$ 58,881	$ 752,038	$ (1,834)	$ 5,917
Ending balance, shares at Jun. 30, 2014	207,411,365	207,411,365

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Condensed Consolidating Financial Statements (Tables)

6 Months Ended

Jun. 30, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Summary of condensed balance sheets

CATAMARAN CORPORATION

Condensed Consolidated Balance Sheets

June 30, 2014

(in thousands)

	Catamaran Corporation		Guarantors		Non-Guarantors		Consolidations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	260,944		421,581		27,023		—			709,548
Restricted cash	—		27,387		4,836		—			32,223
Accounts receivable, net	218		808,956		472,889		(108,457		)	1,173,606
Rebates receivable	10,422		1,504,529		72,053		(678,788		)	908,216
Other current assets	268		152,292		66,959		—			219,519
Intercompany receivable	169,821		232,816		—		(402,637		)	—
Total current assets	441,673		3,147,561		643,760		(1,189,882		)	3,043,112
Property and equipment, net	70		156,598		41,724		—			198,392
Goodwill	—		4,641,174		83,465		—			4,724,639
Other intangible assets, net	—		1,053,528		17,928		—			1,071,456
Investment in subsidiaries	6,073,578		129,117		37,071		(6,239,766		)	—
Other long-term assets	15,836		47,080		22,184		(4,813		)	80,287
Total assets	$	6,531,157	$	9,175,058	$	846,132	$	(7,434,461	)	$	9,117,886
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	29	$	1,098,017	$	44,886	$	(142,172	)	$	1,000,760
Accrued expenses and other current liabilities	10,402		236,591		28,583		—			275,576
Rebates payable	—		1,560,151		61,494		(678,788		)	942,857
Current portion - long-term debt	68,750		—		—		—			68,750
Intercompany payable	—		—		332,249		(332,249		)	—
Total current liabilities	79,181		2,894,759		467,212		(1,153,209		)	2,287,943
Deferred income taxes	—		271,362		5,302		—			276,664
Long-term debt	1,379,432		—		—		—			1,379,432
Other long-term liabilities	1,792		70,679		24,707		—			97,178
Total liabilities	1,460,405		3,236,800		497,221		(1,153,209		)	4,041,217
Commitments and contingencies (Note 10)
Shareholders’ equity
Total shareholders' equity	5,070,752		5,938,258		347,666		(6,285,924		)	5,070,752
Non-controlling interest	—		—		1,245		4,672			5,917
Total equity	5,070,752		5,938,258		348,911		(6,281,252		)	5,076,669
Total liabilities and equity	$	6,531,157	$	9,175,058	$	846,132	$	(7,434,461	)	$	9,117,886

CATAMARAN CORPORATION

Condensed Consolidated Balance Sheets

December 31, 2013

(in thousands)

	Catamaran Corporation		Guarantors		Non-Guarantors		Consolidations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	15,090	$	350,889	$	21,262	$	—		$	387,241
Restricted cash	—		27,384		4,836		—			32,220
Accounts receivable, net	194		954,006		61,319		(55,933		)	959,586
Rebates receivable	35,777		473,924		92,227		(295,973		)	305,955
Other current assets	107		114,808		16,785		20,973			152,673
Intercompany receivable	130,743		—		125,888		(256,631		)	—
Total current assets	181,911		1,921,011		322,317		(587,564		)	1,837,675
Property and equipment, net	69		188,676		8,262		—			197,007
Goodwill	—		4,636,810		83,465		—			4,720,275
Other intangible assets, net	—		1,160,205		21,214		—			1,181,419
Investment in subsidiaries	5,980,865		105,947		—		(6,086,812		)	—
Other long-term assets	15,674		30,144		59,932		(46,363		)	59,387
Total assets	$	6,178,519	$	8,042,793	$	495,190	$	(6,720,739	)	$	7,995,763
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	—	$	840,055	$	37,251	$	(59,501	)	$	817,805
Accrued expenses and other current liabilities	2,947		200,071		28,403		22,679			254,100
Rebates payable	—		612,173		40,065		(295,973		)	356,265
Current portion - long-term debt	50,000		—		—		—			50,000
Intercompany payable	—		232,124		—		(232,124		)	—
Total current liabilities	52,947		1,884,423		105,719		(564,919		)	1,478,170
Deferred income taxes	—		296,040		5,301		—			301,341
Long-term debt	1,215,363		—		—		—			1,215,363
Other long-term liabilities	1,719		86,600		23,651		(22,579		)	89,391
Total liabilities	1,270,029		2,267,063		134,671		(587,498		)	3,084,265
Commitments and contingencies (Note 10)
Shareholders’ equity
Total shareholders' equity	4,908,490		5,775,730		359,274		(6,135,004		)	4,908,490
Non-controlling interest	—		—		1,245		1,763			3,008
Total equity	4,908,490		5,775,730		360,519		(6,133,241		)	4,911,498
Total liabilities and equity	$	6,178,519	$	8,042,793	$	495,190	$	(6,720,739	)	$	7,995,763

Summary of condensed income statements

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Three Months ended June 30, 2014

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	8,650		$	5,185,019		$	743,397	$	(551,258	)	$	5,385,808
Cost of revenue	7,407			4,924,447			675,399		(551,258		)	5,055,995
Gross profit	1,243			260,572			67,998		—			329,813
Expenses:
Selling, general and administrative	815			97,536			28,284		—			126,635
Depreciation of property and equipment	8			11,737			1,348		—			13,093
Amortization of intangible assets	—			53,339			1,638		—			54,977
	823			162,612			31,270		—			194,705
Operating income	420			97,960			36,728		—			135,108
Interest and other expense, net	14,110			864			652		—			15,626
Equity (income) in subsidiaries	(85,122		)	(11,526		)	—		96,648			—
Income before income taxes	71,432			108,622			36,076		(96,648		)	119,482
Income tax expense	—			23,500			9,741		—			33,241
Net income	71,432			85,122			26,335		(96,648		)	86,241
Less net income attributable to non-controlling interest	—			—			—		14,809			14,809
Net income attributable to the Company	$	71,432		$	85,122		$	26,335	$	(111,457	)	$	71,432

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Three Months ended June 30, 2013

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	8,725		$	3,066,659		$	500,755	$	(158,709	)	$	3,417,430
Cost of revenue	7,555			2,854,996			448,999		(158,709		)	3,152,841
Gross profit	1,170			211,663			51,756		—			264,589
Expenses:
Selling, general and administrative	195			80,770			18,923		—			99,888
Depreciation of property and equipment	5			7,233			700		—			7,938
Amortization of intangible assets	—			48,422			1,670		—			50,092
	200			136,425			21,293		—			157,918
Operating income	970			75,238			30,463		—			106,671
Interest and other expense, net	9,512			981			414		—			10,907
Equity (income) in subsidiaries	(71,963		)	(12,697		)	—		84,660			—
Income before income taxes	63,421			86,954			30,049		(84,660		)	95,764
Income tax expense	—			14,991			9,616		—			24,607
Net income	63,421			71,963			20,433		(84,660		)	71,157
Less net income attributable to non-controlling interest	—			—			—		7,736			7,736
Net income attributable to the Company	$	63,421		$	71,963		$	20,433	$	(92,396	)	$	63,421

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Six Months ended June 30, 2014

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	19,690		$	9,889,672		$	1,440,813	$	(1,049,888	)	$	10,300,287
Cost of revenue	17,001			9,390,995			1,297,705		(1,049,888		)	9,655,813
Gross profit	2,689			498,677			143,108		—			644,474
Expenses:
Selling, general and administrative	1,134			198,865			57,154		—			257,153
Depreciation of property and equipment	17			22,975			2,469		—			25,461
Amortization of intangible assets	—			106,677			3,286		—			109,963
	1,151			328,517			62,909		—			392,577
Operating income	1,538			170,160			80,199		—			251,897
Interest and other expense, net	24,076			1,643			1,243		—			26,962
Equity (income) in subsidiaries	(157,415		)	(28,929		)	—		186,344			—
Income before income taxes	134,877			197,446			78,956		(186,344		)	224,935
Income tax expense	—			40,031			21,318		—			61,349
Net income	134,877			157,415			57,638		(186,344		)	163,586
Less net income attributable to non-controlling interest	—			—			—		28,709			28,709
Net income attributable to the Company	$	134,877		$	157,415		$	57,638	$	(215,053	)	$	134,877

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Six Months ended June 30, 2013

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	16,638		$	5,971,687		$	967,589	$	(318,767	)	$	6,637,147
Cost of revenue	14,693			5,562,268			865,991		(318,767		)	6,124,185
Gross profit	1,945			409,419			101,598		—			512,962
Expenses:
Selling, general and administrative	509			162,734			37,143		—			200,386
Depreciation of property and equipment	14			13,501			1,393		—			14,908
Amortization of intangible assets	—			96,844			3,304		—			100,148
	523			273,079			41,840		—			315,442
Operating income	1,422			136,340			59,758		—			197,520
Interest and other expense, net	19,462			1,518			966		—			21,946
Equity (income) in subsidiaries	(132,866		)	(26,866		)	—		159,732			—
Income before income taxes	114,826			161,688			58,792		(159,732		)	175,574
Income tax expense	—			28,822			18,813		—			47,635
Net income	114,826			132,866			39,979		(159,732		)	127,939
Less net income attributable to non-controlling interest	—			—			—		13,113			13,113
Net income attributable to the Company	$	114,826		$	132,866		$	39,979	$	(172,845	)	$	114,826

Summary of condensed cash flow statements

CATAMARAN CORPORATION

Condensed Consolidated Statements of Cash Flows

Six Months ended June 30, 2014

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors			Consolidations			Consolidated
Cash flows from operating activities:
Net cash provided (used) by operating activities	$	152,832		$	591,827		$	(314,610	)	$	(237,163	)	$	192,886
Cash flows from investing activities:
Acquisitions, net of cash acquired	—			(2,026		)	—			—			(2,026		)
Purchases of property and equipment	(18		)	(18,671		)	(14,184		)	—			(32,873		)
Net cash used by investing activities	(18		)	(20,697		)	(14,184		)	—			(34,899		)
Cash flows from financing activities:
Proceeds from issuance of debt	492,500			—			—			—			492,500
Repayment of long-term debt	(312,500		)	—			—			—			(312,500		)
Payment of financing costs	(1,963		)	—			—			—			(1,963		)
Proceeds from exercise of options	7,026			(2,057		)	(25		)	—			4,944
Proceeds from exercise of warrants	3,453			—			—			—			3,453
Tax benefit on option exercises	—			3,955			38			—			3,993
Net transactions with parent and affiliates	(114,078		)	(483,936		)	335,051			262,963			—
Distributions to non-controlling interest	—			—			—			(25,800		)	(25,800		)
Proceeds from restricted stock	18,588			(18,079		)	(509		)	—			—
Other	—			(321		)	—			—			(321		)
Net cash provided (used) by financing activities	93,026			(500,438		)	334,555			237,163			164,306
Effect of foreign exchange on cash balances	14			—			—			—			14
Change in cash and cash equivalents	245,854			70,692			5,761			—			322,307
Cash and cash equivalents, beginning of period	15,090			350,889			21,262			—			387,241
Cash and cash equivalents, end of period	$	260,944		$	421,581		$	27,023		$	—		$	709,548

CATAMARAN CORPORATION

Condensed Consolidated Statements of Cash Flows

Six Months ended June 30, 2013

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors			Consolidations			Consolidated
Cash flows from operating activities:
Net cash provided (used) by operating activities	$	60,033		$	292,494		$	40,384		$	(156,658	)	$	236,253
Cash flows from investing activities:
Acquisitions, net of cash acquired	—			—			(7,076		)	—			(7,076		)
Purchases of property and equipment	—			(71,919		)	(216		)	—			(72,135		)
Proceeds from restricted cash	—			20,004			—			—			20,004
Net cash used by investing activities	—			(51,915		)	(7,292		)	—			(59,207		)
Cash flows from financing activities:
Proceeds from issuance of debt	100,000			—			—			—			100,000
Repayment of long-term debt	(250,000		)	—			—			—			(250,000		)
Payment of financing costs	(2,347		)	—			—			—			(2,347		)
Proceeds from exercise of options	2,744			(806		)	(10		)	—			1,928
Tax benefit on option exercises	—			9,472			7			—			9,479
Payments of contingent consideration	—			(18,338		)	(4,865		)	—			(23,203		)
Net transactions with parent and affiliates	51,480			(187,511		)	(30,742		)	166,773			—
Distributions to non-controlling interest	—			—			—			(10,115		)	(10,115		)
Proceeds from restricted stock	24,462			(23,886		)	(576		)	—			—
Net cash (used) provided by financing activities	(73,661		)	(221,069		)	(36,186		)	156,658			(174,258		)
Effect of foreign exchange on cash balances	24			—			—			—			24
Change in cash and cash equivalents	(13,604		)	19,510			(3,094		)	—			2,812
Cash and cash equivalents, beginning of period	33,603			303,833			33,340			—			370,776
Cash and cash equivalents, end of period	$	19,999		$	323,343		$	30,246		$	—		$	373,588

XML

Stock-Based Compensation (Details) 1 (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Stockholders' Equity [Line Items]
Stock-based compensation	$ 8,600	$ 6,500	$ 15,398	$ 13,131
LTIP [Member]
Stockholders' Equity [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	4,746,616		4,746,616
Assumed Plans [Member]
Stockholders' Equity [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	688,881		688,881

XML

Condensed Consolidating Financial Statements Balance Sheet (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 709,548	$ 387,241	$ 373,588	$ 370,776
Restricted cash	32,223	32,220
Accounts receivable, net	1,173,606	959,586
Rebates receivable	908,216	305,955
Other current assets	219,519	152,673
Intercompany receivable	0	0
Total current assets	3,043,112	1,837,675
Property and equipment, net	198,392	197,007
Goodwill	4,724,639	4,720,275
Other intangible assets, net	1,071,456	1,181,419
Investment in subsidiaries	0	0
Other long-term assets	80,287	59,387
Total assets	9,117,886	7,995,763	7,347,812
Current liabilities
Accounts payable	1,000,760	817,805
Accrued expenses and other current liabilities	275,576	254,100
Rebates payable	942,857	356,265
Current portion - long-term debt	68,750	50,000
Intercompany payable	0	0
Total current liabilities	2,287,943	1,478,170
Deferred income taxes	276,664	301,341
Long-term debt	1,379,432	1,215,363
Other long-term liabilities	97,178	89,391
Total liabilities	4,041,217	3,084,265
Commitments and contingencies (Note 10)
Shareholders’ equity
Total shareholders' equity	5,070,752	4,908,490
Non-controlling interest	5,917	3,008
Total equity	5,076,669	4,911,498	4,753,270	4,609,861
Total liabilities and equity	9,117,886	7,995,763
Reportable Legal Entities [Member] | Catamaran Corporation [Member]
Current assets
Cash and cash equivalents	260,944	15,090	19,999	33,603
Restricted cash	0	0
Accounts receivable, net	218	194
Rebates receivable	10,422	35,777
Other current assets	268	107
Intercompany receivable	169,821	130,743
Total current assets	441,673	181,911
Property and equipment, net	70	69
Goodwill	0	0
Other intangible assets, net	0	0
Investment in subsidiaries	6,073,578	5,980,865
Other long-term assets	15,836	15,674
Total assets	6,531,157	6,178,519
Current liabilities
Accounts payable	29	0
Accrued expenses and other current liabilities	10,402	2,947
Rebates payable	0	0
Current portion - long-term debt	68,750	50,000
Intercompany payable	0	0
Total current liabilities	79,181	52,947
Deferred income taxes	0	0
Long-term debt	1,379,432	1,215,363
Other long-term liabilities	1,792	1,719
Total liabilities	1,460,405	1,270,029
Commitments and contingencies (Note 10)
Shareholders’ equity
Total shareholders' equity	5,070,752	4,908,490
Non-controlling interest	0	0
Total equity	5,070,752	4,908,490
Total liabilities and equity	6,531,157	6,178,519
Reportable Legal Entities [Member] | Guarantors [Member]
Current assets
Cash and cash equivalents	421,581	350,889	323,343	303,833
Restricted cash	27,387	27,384
Accounts receivable, net	808,956	954,006
Rebates receivable	1,504,529	473,924
Other current assets	152,292	114,808
Intercompany receivable	232,816	0
Total current assets	3,147,561	1,921,011
Property and equipment, net	156,598	188,676
Goodwill	4,641,174	4,636,810
Other intangible assets, net	1,053,528	1,160,205
Investment in subsidiaries	129,117	105,947
Other long-term assets	47,080	30,144
Total assets	9,175,058	8,042,793
Current liabilities
Accounts payable	1,098,017	840,055
Accrued expenses and other current liabilities	236,591	200,071
Rebates payable	1,560,151	612,173
Current portion - long-term debt	0	0
Intercompany payable	0	232,124
Total current liabilities	2,894,759	1,884,423
Deferred income taxes	271,362	296,040
Long-term debt	0	0
Other long-term liabilities	70,679	86,600
Total liabilities	3,236,800	2,267,063
Commitments and contingencies (Note 10)
Shareholders’ equity
Total shareholders' equity	5,938,258	5,775,730
Non-controlling interest	0	0
Total equity	5,938,258	5,775,730
Total liabilities and equity	9,175,058	8,042,793
Reportable Legal Entities [Member] | Non-Guarantors [Member]
Current assets
Cash and cash equivalents	27,023	21,262	30,246	33,340
Restricted cash	4,836	4,836
Accounts receivable, net	472,889	61,319
Rebates receivable	72,053	92,227
Other current assets	66,959	16,785
Intercompany receivable	0	125,888
Total current assets	643,760	322,317
Property and equipment, net	41,724	8,262
Goodwill	83,465	83,465
Other intangible assets, net	17,928	21,214
Investment in subsidiaries	37,071	0
Other long-term assets	22,184	59,932
Total assets	846,132	495,190
Current liabilities
Accounts payable	44,886	37,251
Accrued expenses and other current liabilities	28,583	28,403
Rebates payable	61,494	40,065
Current portion - long-term debt	0	0
Intercompany payable	332,249	0
Total current liabilities	467,212	105,719
Deferred income taxes	5,302	5,301
Long-term debt	0	0
Other long-term liabilities	24,707	23,651
Total liabilities	497,221	134,671
Commitments and contingencies (Note 10)
Shareholders’ equity
Total shareholders' equity	347,666	359,274
Non-controlling interest	1,245	1,245
Total equity	348,911	360,519
Total liabilities and equity	846,132	495,190
Consolidations [Member]
Current assets
Cash and cash equivalents	0	0	0	0
Restricted cash	0	0
Accounts receivable, net	(108,457)	(55,933)
Rebates receivable	(678,788)	(295,973)
Other current assets	0	20,973
Intercompany receivable	(402,637)	(256,631)
Total current assets	(1,189,882)	(587,564)
Property and equipment, net	0	0
Goodwill	0	0
Other intangible assets, net	0	0
Investment in subsidiaries	(6,239,766)	(6,086,812)
Other long-term assets	(4,813)	(46,363)
Total assets	(7,434,461)	(6,720,739)
Current liabilities
Accounts payable	(142,172)	(59,501)
Accrued expenses and other current liabilities	0	22,679
Rebates payable	(678,788)	(295,973)
Current portion - long-term debt	0	0
Intercompany payable	(332,249)	(232,124)
Total current liabilities	(1,153,209)	(564,919)
Deferred income taxes	0	0
Long-term debt	0	0
Other long-term liabilities	0	(22,579)
Total liabilities	(1,153,209)	(587,498)
Commitments and contingencies (Note 10)
Shareholders’ equity
Total shareholders' equity	(6,285,924)	(6,135,004)
Non-controlling interest	4,672	1,763
Total equity	(6,281,252)	(6,133,241)
Total liabilities and equity	$ (7,434,461)	$ (6,720,739)

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 709,548	$ 387,241
Restricted cash	32,223	32,220
Accounts receivable, net of allowance for doubtful accounts of $4,642 (2013 — $5,860)	1,173,606	959,586
Rebates receivable	908,216	305,955
Other current assets	219,519	152,673
Total current assets	3,043,112	1,837,675
Property and equipment, net of accumulated depreciation of $131,729 (2013 — $103,858)	198,392	197,007
Goodwill	4,724,639	4,720,275
Other intangible assets, net of accumulated amortization of $471,246 (2013 — $363,546)	1,071,456	1,181,419
Other long-term assets	80,287	59,387
Total assets	9,117,886	7,995,763
Current liabilities
Accounts payable	1,000,760	817,805
Accrued expenses and other current liabilities	275,576	254,100
Rebates payable	942,857	356,265
Current portion - long-term debt	68,750	50,000
Total current liabilities	2,287,943	1,478,170
Deferred income taxes	276,664	301,341
Long-term debt	1,379,432	1,215,363
Other long-term liabilities	97,178	89,391
Total liabilities	4,041,217	3,084,265
Commitments and contingencies (Note 10)
Shareholders’ equity
Common shares: no par value, unlimited shares authorized; 207,411,365 shares issued and outstanding at June 30, 2014 (December 31, 2013 — 206,305,070 shares)	4,261,667	4,215,291
Additional paid-in capital	58,881	77,790
Retained earnings	752,038	617,161
Accumulated other comprehensive loss	(1,834)	(1,752)
Total shareholders' equity	5,070,752	4,908,490
Non-controlling interest	5,917	3,008
Total equity	5,076,669	4,911,498
Total liabilities and equity	$ 9,117,886	$ 7,995,763

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Stock-Based Compensation (Details) 6 (Catalyst [Member])	0 Months Ended	3 Months Ended	6 Months Ended
	Jul. 02, 2012	Jun. 30, 2014	Jun. 30, 2014
Catalyst [Member]
Business Acquisition [Line Items]
Shares issued	66,800,000
Warrants issued	500,000
Warrants exercised		425,160	425,160
Weighted average exercise price (in dollars per share)		8.12	8.12
Warrants outstanding		0	0

XML

Consolidated Statement of Comprehensive Income Parenthetical (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
Income tax expense on unrealized income (loss) on cash flow hedges	$ 368	$ 368

XML

Goodwill and Other Intangible Assets (Details) 1 (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Goodwill [Roll Forward]
Goodwill, Beginning Balance	$ 4,720,275
Goodwill, Measurement period adjustment	2,338	[1]
Goodwill, Working capital adjustments	2,026	[2]
Goodwill, Acquisitions	0
Goodwill, Ending Balance	4,724,639
P B M [Member]
Goodwill [Roll Forward]
Goodwill, Beginning Balance	4,700,610
Goodwill, Measurement period adjustment	2,338	[1]
Goodwill, Working capital adjustments	2,026	[2]
Goodwill, Acquisitions	0
Goodwill, Ending Balance	4,704,974
H C I T [Member]
Goodwill [Roll Forward]
Goodwill, Beginning Balance	19,665
Goodwill, Measurement period adjustment	0	[1]
Goodwill, Working capital adjustments	0	[2]
Goodwill, Acquisitions	0
Goodwill, Ending Balance	$ 19,665

[1] Represents 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 2013 consolidated financial statements as they were not deemed material.

[2] Represents adjustments to purchase price for the Restat acquisition, including settlement of working capital adjustment

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Concentration Risk

6 Months Ended

Jun. 30, 2014

Risks and Uncertainties [Abstract]

Concentration Risk

Concentration Risk

For the three months ended June 30, 2014 and 2013, one client accounted for 34% and 19% of total revenues, respectively. For the six months ended June 30, 2014 and 2013, one client accounted for 33% and 19% of total revenues, respectively.

At June 30, 2014, one client accounted for 16% of the outstanding accounts receivable balance. At December 31, 2013, one client accounted for 15% of the outstanding accounts receivable balance.

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Goodwill and Other Intangible Assets (Details) 2 (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 1,542,702	$ 1,544,965
Accumulated Amortization	471,246	363,546
Net	1,071,456	1,181,419
Customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,527,722	1,528,475
Accumulated Amortization	462,974	355,737
Net	1,064,748	1,172,738
Non-compete agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	11,920	13,430
Accumulated Amortization	6,236	6,463
Net	5,684	6,967
Other intangible assets [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	3,060	3,060
Accumulated Amortization	2,036	1,346
Net	$ 1,024	$ 1,714

XML

Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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, 2013. 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 six months ended June 30, 2014 are not necessarily indicative of the results to be expected for the full year ending December 31, 2014. 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, 2013.

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 Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net income	$ 163,586	$ 127,939
Items not involving cash:
Stock-based compensation	15,398	13,131
Depreciation of property and equipment	27,378	17,145
Amortization of intangible assets	109,963	100,148
Deferred lease inducements and rent	190	15,349
Deferred income taxes	(26,044)	(25,787)
Tax benefit on option exercises	(3,993)	(9,479)
Deferred financing cost amortization	4,658	4,866
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	(214,015)	(21,271)
Rebates receivable	(602,515)	18,413
Restricted cash	(3)	231
Other current assets	(56,448)	13,367
Accounts payable	182,933	(22,632)
Accrued expenses and other current liabilities	17,032	(12,305)
Rebates payable	586,592	13,787
Other long-term assets and liabilities	(11,826)	3,351
Net cash provided by operating activities	192,886	236,253
Cash flows from investing activities:
Acquisition, net of cash acquired	(2,026)	(7,076)
Purchases of property and equipment	(32,873)	(72,135)
Proceeds from restricted cash	0	20,004
Net cash used by investing activities	(34,899)	(59,207)
Cash flows from financing activities:
Proceeds from issuance of debt	492,500	100,000
Repayment of long-term debt	(312,500)	(250,000)
Payment of financing costs	(1,963)	(2,347)
Proceeds from exercise of options	4,944	1,928
Proceeds from exercise of warrants	3,453	0
Tax benefit on option exercises	3,993	9,479
Payments of contingent consideration	0	(23,203)
Distributions to non-controlling interest	(25,800)	(10,115)
Other	(321)	0
Net cash (used) provided by financing activities	164,306	(174,258)
Effect of foreign exchange on cash balances	14	24
Change in cash and cash equivalents	322,307	2,812
Cash and cash equivalents, beginning of period	387,241	370,776
Cash and cash equivalents, end of period	$ 709,548	$ 373,588

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Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 4,642	$ 5,860
Property and equipment, accumulated depreciation	131,729	103,858
Other intangible assets, accumulated amortization	$ 471,246	$ 363,546
Common stock issued (in shares)	207,411,365	206,305,070
Common stock outstanding (in shares)	207,411,365	206,305,070

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Income Taxes

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s effective tax rate for the three months ended June 30, 2014 and 2013 was 27.8% and 25.7%, respectively. The Company’s effective tax rate for the six months ended June 30, 2014 and 2013 was 27.3% and 27.1%, 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.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 31, 2014
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
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		207,415,969

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

In July 2014, the Company received a subpoena from the United States Attorney's Office for the District of Rhode Island, requesting documents and information concerning bona fide service fees and rebates received from certain pharmaceutical manufacturers in connection with certain drugs utilized under Part D of the Medicare program. The Company has been cooperating with the government and collecting documents in response to the subpoena.

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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Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]
Revenue	$ 5,385,808	$ 3,417,430	$ 10,300,287	$ 6,637,147
Cost of revenue	5,055,995	3,152,841	9,655,813	6,124,185
Gross profit	329,813	264,589	644,474	512,962
Expenses:
Selling, general and administrative	126,635	99,888	257,153	200,386
Depreciation of property and equipment	13,093	7,938	25,461	14,908
Amortization of intangible assets	54,977	50,092	109,963	100,148
Total operating expenses	194,705	157,918	392,577	315,442
Operating income	135,108	106,671	251,897	197,520
Interest and other expense, net	15,626	10,907	26,962	21,946
Income before income taxes	119,482	95,764	224,935	175,574
Income tax expense	33,241	24,607	61,349	47,635
Net income	86,241	71,157	163,586	127,939
Less: Net income attributable to non-controlling interest	14,809	7,736	28,709	13,113
Net income attributable to the Company	$ 71,432	$ 63,421	$ 134,877	$ 114,826
Earnings per share attributable to the Company:
Basic (in dollars per share)	$ 0.35	$ 0.31	$ 0.65	$ 0.56
Diluted (in dollars per share)	$ 0.34	$ 0.31	$ 0.65	$ 0.56
Weighted average number of shares used in computing earnings per share:
Basic (in shares)	206,938,789	205,975,724	206,733,127	205,782,438
Diluted (in shares)	207,310,851	206,624,432	207,207,122	206,535,143

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Business Combinations

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Business Combinations

Business Combinations

Restat Acquisition

On October 1, 2013, the Company completed the acquisition of all of the outstanding equity interests of Restat, LLC ("Restat"), a privately-held PBM 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 $350.0 million in borrowings under a five-year senior secured revolving credit facility (the “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 and specialty pharmacy services. The results of Restat have been included in the Company's results since October 1, 2013.

The 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 recorded 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. Fair values for acquired amortizable intangible assets were determined as follows: customer relationships were valued using an excess earnings model based on expected future revenues derived from the customers acquired, non-compete agreements were valued using discounted cash flow models based on expected future results of Restat and trademarks/tradenames were valued using a royalty savings model based on future projected revenues of Restat. 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 acquisition are included within the Company's PBM segment. The residual amount of the purchase price after allocation to identifiable net assets represents goodwill. Goodwill is non-amortizing for financial statement purposes. Goodwill of $227.8 million related to the Restat acquisition is tax deductible. The goodwill recognized by the Company represents many of the synergies and business growth opportunities that the Company anticipates may be realized from the acquisition of Restat. The synergies include improved pricing from the Company's suppliers due to the increased volume of prescription drug purchases, pull through opportunities of the Company's mail and specialty service offerings, and a more efficient leveraging of resources to achieve operating profits.

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 Measurement Period Adjustments (c)		Current Amounts Recognized at Acquisition Date
Accounts receivable	$	13,842	$	—		$	—	$	13,842
Rebates receivable	6,635		(254		)	—		6,381
Other current assets	383		—			—		383
Total current assets	20,860		(254		)	—		20,606
Property and equipment	1,263		—			—		1,263
Intangible assets	182,720		—			—		182,720
Goodwill	223,474		2,280			2,084		227,838
Total assets acquired	428,317		2,026			2,084		432,427
Accounts payable	22,370		—			—		22,370
Rebates payable	16,106		—			—		16,106
Accrued liabilities	7,231		—			—		7,231
Other long-term liabilities	—		—			2,084		2,084
Total liabilities assumed	45,707		—			2,084		47,791
Net assets acquired	$	382,610	$	2,026		$	—	$	384,636

(a) As previously reported in the Company's Form 10-K for the period ended December 31, 2013.

(b) These measurement period adjustments were recorded during Q1 2014 to reflect an additional $2.0 million paid to former Restat owners for working capital reconciliation as well as changes in the estimated fair values of the associated assets acquired and liabilities assumed.

(c) These represent measurement period adjustments during the three months ended June 30, 2014 and were recorded to reflect changes in the estimated fair values of the associated Restat assets acquired and liabilities assumed based on factors existing as of the acquisition date.

During the three and six months ended June 30, 2014, the Company recognized $8.7 million and $17.4 million, respectively, of amortization expense from intangible assets acquired in the Restat acquisition. Amortization associated with the Restat acquisition for the remainder of 2014 is expected to be $16.4 million.

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

	Fair Value		Useful Life
Customer relationships - PBM	$	143,200	10 years
Customer relationships - cash card	35,500		3 years
Trademarks/Trade names	1,000		1 year
Non-compete agreements	3,020		5 years
Total	$	182,720

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 its acquisition of Restat as if the acquisition had occurred on the first day of the fiscal year prior to the fiscal year when the acquisition was completed. The unaudited pro forma financial information includes certain adjustments related to the acquisition, such as increased amortization from the fair value of intangible assets acquired recorded as part of the purchase accounting, the elimination of transactions between the Company and the acquired entities, and related income tax effects.

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

	Three Months Ended June 30, 2013		Six Months Ended June 30, 2013
Revenue	$	3,620,936	$	7,035,001
Gross profit	$	285,070	$	550,643
Net income attributable to the Company	$	66,368	$	123,007
Earnings per share attributable to the Company:
Basic	$	0.32	$	0.60
Diluted	$	0.32	$	0.60
Weighted average shares outstanding:
Basic	205,975,724		205,782,438
Diluted	206,624,432		206,535,143

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.

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2014

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

a) Recent accounting standards implemented

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. The Company adopted this standard on January 1, 2014; however, the implementation of the standard 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 six months ended June 30, 2014.

b) Recent accounting standards issued

In June 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-12, Accounting for Share-Based Payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target shall not be reflected in estimating the fair value of the award at the grant date. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 for all entities, however earlier adoption is 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.

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

On April 10, 2014, the FASB issued (ASU) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The standard is required to be adopted by the Company in annual periods beginning on or after December 15, 2014, and interim periods within those annual periods. However, all entities may early adopt the guidance for new disposals (or new classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. 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 six months ended June 30, 2014 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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Condensed Consolidating Financial Statements

6 Months Ended

Jun. 30, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed consolidating financial information

Condensed consolidating financial information

The Senior Notes issued by the Company are fully and unconditionally (subject to certain customary release provisions, including sale, exchange, transfer or liquidation of the guarantor subsidiary) guaranteed by certain of our 100% owned subsidiaries. The following condensed consolidating financial information has been prepared in accordance with the requirements for presentation of such information (statements of comprehensive income were omitted as all other comprehensive income is attributed to the Company and was not material in any period presented). The condensed consolidating financial information presented below is not indicative of what the financial position, results of operations or cash flows would have been had each of the entities operated as an independent company during the period for various reasons, including, but not limited to, intercompany transactions and integration of systems.

The condensed consolidating financial information is presented separately for:

i. Catamaran Corporation (the parent company), the issuer of the Senior Notes;

ii. Guarantor subsidiaries, on a combined basis, as specified in the indenture governing Catamaran's obligations under the Senior Notes;

iii. Non-guarantor subsidiaries, on a combined basis;

iv. Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among Catamaran Corporation, the guarantor subsidiaries and the non-guarantor subsidiaries, (b) eliminate the investments in our subsidiaries and (c) record consolidating entries; and

v. Catamaran Corporation and subsidiaries on a consolidated basis.

CATAMARAN CORPORATION

Condensed Consolidated Balance Sheets

June 30, 2014

(in thousands)

	Catamaran Corporation		Guarantors		Non-Guarantors		Consolidations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	260,944		421,581		27,023		—			709,548
Restricted cash	—		27,387		4,836		—			32,223
Accounts receivable, net	218		808,956		472,889		(108,457		)	1,173,606
Rebates receivable	10,422		1,504,529		72,053		(678,788		)	908,216
Other current assets	268		152,292		66,959		—			219,519
Intercompany receivable	169,821		232,816		—		(402,637		)	—
Total current assets	441,673		3,147,561		643,760		(1,189,882		)	3,043,112
Property and equipment, net	70		156,598		41,724		—			198,392
Goodwill	—		4,641,174		83,465		—			4,724,639
Other intangible assets, net	—		1,053,528		17,928		—			1,071,456
Investment in subsidiaries	6,073,578		129,117		37,071		(6,239,766		)	—
Other long-term assets	15,836		47,080		22,184		(4,813		)	80,287
Total assets	$	6,531,157	$	9,175,058	$	846,132	$	(7,434,461	)	$	9,117,886
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	29	$	1,098,017	$	44,886	$	(142,172	)	$	1,000,760
Accrued expenses and other current liabilities	10,402		236,591		28,583		—			275,576
Rebates payable	—		1,560,151		61,494		(678,788		)	942,857
Current portion - long-term debt	68,750		—		—		—			68,750
Intercompany payable	—		—		332,249		(332,249		)	—
Total current liabilities	79,181		2,894,759		467,212		(1,153,209		)	2,287,943
Deferred income taxes	—		271,362		5,302		—			276,664
Long-term debt	1,379,432		—		—		—			1,379,432
Other long-term liabilities	1,792		70,679		24,707		—			97,178
Total liabilities	1,460,405		3,236,800		497,221		(1,153,209		)	4,041,217
Commitments and contingencies (Note 10)
Shareholders’ equity
Total shareholders' equity	5,070,752		5,938,258		347,666		(6,285,924		)	5,070,752
Non-controlling interest	—		—		1,245		4,672			5,917
Total equity	5,070,752		5,938,258		348,911		(6,281,252		)	5,076,669
Total liabilities and equity	$	6,531,157	$	9,175,058	$	846,132	$	(7,434,461	)	$	9,117,886

CATAMARAN CORPORATION

Condensed Consolidated Balance Sheets

December 31, 2013

(in thousands)

	Catamaran Corporation		Guarantors		Non-Guarantors		Consolidations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	15,090	$	350,889	$	21,262	$	—		$	387,241
Restricted cash	—		27,384		4,836		—			32,220
Accounts receivable, net	194		954,006		61,319		(55,933		)	959,586
Rebates receivable	35,777		473,924		92,227		(295,973		)	305,955
Other current assets	107		114,808		16,785		20,973			152,673
Intercompany receivable	130,743		—		125,888		(256,631		)	—
Total current assets	181,911		1,921,011		322,317		(587,564		)	1,837,675
Property and equipment, net	69		188,676		8,262		—			197,007
Goodwill	—		4,636,810		83,465		—			4,720,275
Other intangible assets, net	—		1,160,205		21,214		—			1,181,419
Investment in subsidiaries	5,980,865		105,947		—		(6,086,812		)	—
Other long-term assets	15,674		30,144		59,932		(46,363		)	59,387
Total assets	$	6,178,519	$	8,042,793	$	495,190	$	(6,720,739	)	$	7,995,763
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	—	$	840,055	$	37,251	$	(59,501	)	$	817,805
Accrued expenses and other current liabilities	2,947		200,071		28,403		22,679			254,100
Rebates payable	—		612,173		40,065		(295,973		)	356,265
Current portion - long-term debt	50,000		—		—		—			50,000
Intercompany payable	—		232,124		—		(232,124		)	—
Total current liabilities	52,947		1,884,423		105,719		(564,919		)	1,478,170
Deferred income taxes	—		296,040		5,301		—			301,341
Long-term debt	1,215,363		—		—		—			1,215,363
Other long-term liabilities	1,719		86,600		23,651		(22,579		)	89,391
Total liabilities	1,270,029		2,267,063		134,671		(587,498		)	3,084,265
Commitments and contingencies (Note 10)
Shareholders’ equity
Total shareholders' equity	4,908,490		5,775,730		359,274		(6,135,004		)	4,908,490
Non-controlling interest	—		—		1,245		1,763			3,008
Total equity	4,908,490		5,775,730		360,519		(6,133,241		)	4,911,498
Total liabilities and equity	$	6,178,519	$	8,042,793	$	495,190	$	(6,720,739	)	$	7,995,763

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Three Months ended June 30, 2014

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	8,650		$	5,185,019		$	743,397	$	(551,258	)	$	5,385,808
Cost of revenue	7,407			4,924,447			675,399		(551,258		)	5,055,995
Gross profit	1,243			260,572			67,998		—			329,813
Expenses:
Selling, general and administrative	815			97,536			28,284		—			126,635
Depreciation of property and equipment	8			11,737			1,348		—			13,093
Amortization of intangible assets	—			53,339			1,638		—			54,977
	823			162,612			31,270		—			194,705
Operating income	420			97,960			36,728		—			135,108
Interest and other expense, net	14,110			864			652		—			15,626
Equity (income) in subsidiaries	(85,122		)	(11,526		)	—		96,648			—
Income before income taxes	71,432			108,622			36,076		(96,648		)	119,482
Income tax expense	—			23,500			9,741		—			33,241
Net income	71,432			85,122			26,335		(96,648		)	86,241
Less net income attributable to non-controlling interest	—			—			—		14,809			14,809
Net income attributable to the Company	$	71,432		$	85,122		$	26,335	$	(111,457	)	$	71,432

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Three Months ended June 30, 2013

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	8,725		$	3,066,659		$	500,755	$	(158,709	)	$	3,417,430
Cost of revenue	7,555			2,854,996			448,999		(158,709		)	3,152,841
Gross profit	1,170			211,663			51,756		—			264,589
Expenses:
Selling, general and administrative	195			80,770			18,923		—			99,888
Depreciation of property and equipment	5			7,233			700		—			7,938
Amortization of intangible assets	—			48,422			1,670		—			50,092
	200			136,425			21,293		—			157,918
Operating income	970			75,238			30,463		—			106,671
Interest and other expense, net	9,512			981			414		—			10,907
Equity (income) in subsidiaries	(71,963		)	(12,697		)	—		84,660			—
Income before income taxes	63,421			86,954			30,049		(84,660		)	95,764
Income tax expense	—			14,991			9,616		—			24,607
Net income	63,421			71,963			20,433		(84,660		)	71,157
Less net income attributable to non-controlling interest	—			—			—		7,736			7,736
Net income attributable to the Company	$	63,421		$	71,963		$	20,433	$	(92,396	)	$	63,421

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Six Months ended June 30, 2014

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	19,690		$	9,889,672		$	1,440,813	$	(1,049,888	)	$	10,300,287
Cost of revenue	17,001			9,390,995			1,297,705		(1,049,888		)	9,655,813
Gross profit	2,689			498,677			143,108		—			644,474
Expenses:
Selling, general and administrative	1,134			198,865			57,154		—			257,153
Depreciation of property and equipment	17			22,975			2,469		—			25,461
Amortization of intangible assets	—			106,677			3,286		—			109,963
	1,151			328,517			62,909		—			392,577
Operating income	1,538			170,160			80,199		—			251,897
Interest and other expense, net	24,076			1,643			1,243		—			26,962
Equity (income) in subsidiaries	(157,415		)	(28,929		)	—		186,344			—
Income before income taxes	134,877			197,446			78,956		(186,344		)	224,935
Income tax expense	—			40,031			21,318		—			61,349
Net income	134,877			157,415			57,638		(186,344		)	163,586
Less net income attributable to non-controlling interest	—			—			—		28,709			28,709
Net income attributable to the Company	$	134,877		$	157,415		$	57,638	$	(215,053	)	$	134,877

CATAMARAN CORPORATION

Condensed Consolidated Statements of Operations

Six Months ended June 30, 2013

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors		Consolidations			Consolidated
Revenue	$	16,638		$	5,971,687		$	967,589	$	(318,767	)	$	6,637,147
Cost of revenue	14,693			5,562,268			865,991		(318,767		)	6,124,185
Gross profit	1,945			409,419			101,598		—			512,962
Expenses:
Selling, general and administrative	509			162,734			37,143		—			200,386
Depreciation of property and equipment	14			13,501			1,393		—			14,908
Amortization of intangible assets	—			96,844			3,304		—			100,148
	523			273,079			41,840		—			315,442
Operating income	1,422			136,340			59,758		—			197,520
Interest and other expense, net	19,462			1,518			966		—			21,946
Equity (income) in subsidiaries	(132,866		)	(26,866		)	—		159,732			—
Income before income taxes	114,826			161,688			58,792		(159,732		)	175,574
Income tax expense	—			28,822			18,813		—			47,635
Net income	114,826			132,866			39,979		(159,732		)	127,939
Less net income attributable to non-controlling interest	—			—			—		13,113			13,113
Net income attributable to the Company	$	114,826		$	132,866		$	39,979	$	(172,845	)	$	114,826

CATAMARAN CORPORATION

Condensed Consolidated Statements of Cash Flows

Six Months ended June 30, 2014

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors			Consolidations			Consolidated
Cash flows from operating activities:
Net cash provided (used) by operating activities	$	152,832		$	591,827		$	(314,610	)	$	(237,163	)	$	192,886
Cash flows from investing activities:
Acquisitions, net of cash acquired	—			(2,026		)	—			—			(2,026		)
Purchases of property and equipment	(18		)	(18,671		)	(14,184		)	—			(32,873		)
Net cash used by investing activities	(18		)	(20,697		)	(14,184		)	—			(34,899		)
Cash flows from financing activities:
Proceeds from issuance of debt	492,500			—			—			—			492,500
Repayment of long-term debt	(312,500		)	—			—			—			(312,500		)
Payment of financing costs	(1,963		)	—			—			—			(1,963		)
Proceeds from exercise of options	7,026			(2,057		)	(25		)	—			4,944
Proceeds from exercise of warrants	3,453			—			—			—			3,453
Tax benefit on option exercises	—			3,955			38			—			3,993
Net transactions with parent and affiliates	(114,078		)	(483,936		)	335,051			262,963			—
Distributions to non-controlling interest	—			—			—			(25,800		)	(25,800		)
Proceeds from restricted stock	18,588			(18,079		)	(509		)	—			—
Other	—			(321		)	—			—			(321		)
Net cash provided (used) by financing activities	93,026			(500,438		)	334,555			237,163			164,306
Effect of foreign exchange on cash balances	14			—			—			—			14
Change in cash and cash equivalents	245,854			70,692			5,761			—			322,307
Cash and cash equivalents, beginning of period	15,090			350,889			21,262			—			387,241
Cash and cash equivalents, end of period	$	260,944		$	421,581		$	27,023		$	—		$	709,548

CATAMARAN CORPORATION

Condensed Consolidated Statements of Cash Flows

Six Months ended June 30, 2013

(in thousands)

	Catamaran Corporation			Guarantors			Non-Guarantors			Consolidations			Consolidated
Cash flows from operating activities:
Net cash provided (used) by operating activities	$	60,033		$	292,494		$	40,384		$	(156,658	)	$	236,253
Cash flows from investing activities:
Acquisitions, net of cash acquired	—			—			(7,076		)	—			(7,076		)
Purchases of property and equipment	—			(71,919		)	(216		)	—			(72,135		)
Proceeds from restricted cash	—			20,004			—			—			20,004
Net cash used by investing activities	—			(51,915		)	(7,292		)	—			(59,207		)
Cash flows from financing activities:
Proceeds from issuance of debt	100,000			—			—			—			100,000
Repayment of long-term debt	(250,000		)	—			—			—			(250,000		)
Payment of financing costs	(2,347		)	—			—			—			(2,347		)
Proceeds from exercise of options	2,744			(806		)	(10		)	—			1,928
Tax benefit on option exercises	—			9,472			7			—			9,479
Payments of contingent consideration	—			(18,338		)	(4,865		)	—			(23,203		)
Net transactions with parent and affiliates	51,480			(187,511		)	(30,742		)	166,773			—
Distributions to non-controlling interest	—			—			—			(10,115		)	(10,115		)
Proceeds from restricted stock	24,462			(23,886		)	(576		)	—			—
Net cash (used) provided by financing activities	(73,661		)	(221,069		)	(36,186		)	156,658			(174,258		)
Effect of foreign exchange on cash balances	24			—			—			—			24
Change in cash and cash equivalents	(13,604		)	19,510			(3,094		)	—			2,812
Cash and cash equivalents, beginning of period	33,603			303,833			33,340			—			370,776
Cash and cash equivalents, end of period	$	19,999		$	323,343		$	30,246		$	—		$	373,588

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Financial Instruments

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

Financial Instruments

The Company is subject to interest rate risk related to the variable rate debt under the Credit Agreement. When interest rates increase, interest expense would also 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 used in the Credit Agreement, the Company entered into a 3-year interest rate swap agreement with a total notional amount of $500 million. The swap agreement fixed the variable LIBOR rate on the Company's Term Loan Facility to 0.52%, resulting in a current effective rate as of June 30, 2014 of 2.39% after taking into account the 1.88% 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. This interest rate contract derivative instrument was designated as a cash flow hedge upon inception in August, 2012 and it expires in August 2015.

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 June 30, 2014 was $1.8 million. Interest expense for the three and six months ended June 30, 2014 includes $0.4 million and $0.8 million of expense reclassified from other comprehensive income into current earnings. Interest expense for the three and six months ended June 30, 2013 includes $0.3 million and $0.7 million of expense reclassified from other comprehensive income into current earnings. As of June 30, 2014, 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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Stock-Based Compensation

6 Months Ended

Jun. 30, 2014

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

Stock-Based Compensation

Stock-Based Compensation

During the three months ended June 30, 2014 and 2013, the Company recorded stock-based compensation expense of $8.6 million and $6.5 million, respectively. During the six months ended June 30, 2014 and 2013, the Company recorded stock-based compensation expense of $15.4 million and $13.1 million, respectively. There were 4,746,616 and 688,881 stock-based awards available for grant under the Long-Term Incentive Plan ("LTIP") and the plans assumed in connection with the merger with Catalyst Health Solutions, Inc. ("Assumed Plans"), respectively, as of June 30, 2014.

(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:

	Six Months Ended June 30,
	2014		2013
Total stock options granted	427,463		365,080
Volatility	38.4-39.2%		45.4		%
Risk-free interest rate	1.54-1.73%		0.81		%
Expected life (in years)	4.5		4.5
Dividend yield	—		—
Weighted-average grant date fair value	$	15.48	$	21.44

The table below summarizes the stock options outstanding as of June 30, 2014 under both plans.

	Options Outstanding	Weighted Average Exercise Price		Unrecognized Compensation Cost		Weighted Average Period
				(in thousands)
LTIP	1,363,784	$	35.92	$	10,644	2.75
Assumed Plans	148,090	$	47.05	$	2,019	3.47

(ii) Restricted stock units

During the three and six months ended June 30, 2014, 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 either vest on a straight-line basis over a range of two to four years, or 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 June 30, 2014 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 six months ended June 30, 2014:

	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	300,899	392,388	$	44.83	153,049	84,614	$	44.44
Outstanding	757,020	830,880	$	44.55	305,008	80,046	$	46.83

The table below summarizes the unrecognized compensation cost related to the outstanding RSUs at June 30, 2014.

	Unrecognized Compensation Cost		Weighted Average Period
	(in thousands)
LTIP	$	47,342	2.38
Assumed Plans	$	14,823	2.97

(iii) Warrants

On July 2, 2012, the Company issued 66.8 million common shares and 0.5 million warrants in connection with the Catalyst Merger. See the Company's Annual Report on Form 10-K for the year ended December 31, 2012 for further information related to the Catalyst Merger.

During the three and six months ended June 30, 2014, 425,160 warrants were exercised with a weighted average exercise price of $8.12. As of June 30, 2014, there were no warrants outstanding.

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2014

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 six months ended June 30, 2014 and 2013.

The changes in the carrying amounts of goodwill by reportable segment for the six months ended June 30, 2014 are as follows (in thousands):

	PBM		HCIT		Total
Balance at December 31, 2013	$	4,700,610	$	19,665	$	4,720,275
Measurement period adjustments (a)	2,338		—		2,338
Working capital adjustment (b)	2,026		—		2,026
Acquisitions	—		—		—
Balance at June 30, 2014	$	4,704,974	$	19,665	$	4,724,639

(a) Represents 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 2013 consolidated financial statements as they were not deemed material.

(b) Represents adjustments to purchase price for the Restat acquisition, including settlement of working capital adjustment.

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

	June 30, 2014						December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	$	1,527,722	$	462,974	$	1,064,748	$	1,528,475	$	355,737	$	1,172,738
Non-compete agreements	11,920		6,236		5,684		13,430		6,463		6,967
Other intangible assets	3,060		2,036		1,024		3,060		1,346		1,714
Total	$	1,542,702	$	471,246	$	1,071,456	$	1,544,965	$	363,546	$	1,181,419

Total amortization associated with intangible assets at June 30, 2014 is estimated to be $103.3 million for the remainder of 2014, $194.0 million in 2015, $166.7 million in 2016, $147.5 million in 2017, $137.2 million in 2018, $126.8 million in 2019 and $195.9 million in total for years after 2019.

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Debt

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Debt

Debt

The following table sets forth the components of the Company's long-term debt, net of debt discounts as of June 30, 2014 and December 31, 2013 (in thousands).

	June 30, 2014			December 31, 2013
Senior secured term loan facility with an interest rate of 2.06% and 1.81% at June 30, 2014 and December 31, 2013, respectively.	$	955,369		$	965,363
Senior secured revolving credit facility due June 1, 2018 with an interest rate of 2.06% and 1.81% at June 30, 2014 and December 31, 2013, respectively.	—			300,000
4.75% Senior Notes due 2021	492,813			—
Less current maturities	(68,750		)	(50,000		)
Long-term debt	$	1,379,432		$	1,215,363

4.75% Senior Notes

In March 2014, the Company issued $500.0 million aggregate principal amount of 4.75% Senior Notes due 2021 (the “Senior Notes”). The Senior Notes mature on March 15, 2021 and bear interest at 4.75% per year. The Company will pay interest on the Senior Notes on March 15 and September 15 of each year, or the first business day thereafter if such date is not a business day, commencing on September 15, 2014. The Company received approximately $492.5 million in net proceeds from the Senior Note offering, after deducting $7.5 million in underwriting discounts. Additionally the Company incurred approximately $2.0 million in offering expenses. The Company used part of the net proceeds from this offering to repay $300.0 million of the Company's outstanding borrowings under the secured revolving credit facility (the "Revolving Facility"). The Company plans to use the remainder of the net proceeds from this offering for general corporate purposes.

As discussed, in connection with the Senior Notes, the Company incurred approximately $7.5 million in underwriting debt discount and approximately $2.0 million in debt issuance costs. The $7.5 million debt discount incurred in connection with the Senior Notes is presented on the consolidated balance sheet as a reduction to long-term debt. The debt discount amounts are being amortized to interest expense over the life of the Senior Notes. The Company uses the straight-line method to amortize the debt discount amounts as it does not result in a materially different amount of interest expense than the effective interest rate method. The $2.0 million in offering expenses incurred in connection with the issuance of the Senior Notes are presented on the consolidated balance sheet as other assets. The offering expenses are being amortized to interest expense over the life of the Senior Notes using the straight-line method. The amortization related to financing costs and debt discounts totaled $0.3 million and $0.4 million for the three and six months ended June 30, 2014, respectively.

Guarantees

The Senior Notes are jointly and severally and fully and unconditionally guaranteed by each of the Company’s existing and future wholly-owned subsidiaries that guarantees obligations under (i) the credit agreement or (ii) certain other future indebtedness with an aggregate principal amount in excess of $175.0 million.

A subsidiary guarantor will be released from its obligations under its respective guarantee of the Senior Notes upon the release or discharge of such subsidiary guarantor from its guarantee of obligations under the credit agreement or certain other future indebtedness in an aggregate principal amount in excess of $175.0 million, or upon the earlier occurrence of certain other customary circumstances as set forth in the indenture. The Senior Notes and the guarantees by the subsidiary guarantors are the general senior unsecured obligations of the Company and the subsidiary guarantors. They rank equally in right of payment with the existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors.

Prepayments and Repayments

Prior to the scheduled maturity of the Senior Notes, the Company may at any time redeem all or a part of the Senior Notes, upon not less than 30 nor more than 60 days’ prior written notice at a redemption price equal to the greater of: (i) 100% of the principal amount of the Senior Notes to be redeemed, and (ii) the sum of the present values of the remaining scheduled payments of principal of and interest on the Senior Notes to be redeemed (exclusive of interest accrued to the applicable redemption date) discounted to such redemption date on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the then current treasury rate plus 50 basis points, plus, in each case, accrued and unpaid interest thereon to, but not including, the applicable redemption date.

If the Company experiences a change of control triggering event (as defined in the supplemental indenture), holders of the Senior Notes may require the Company to purchase the Senior Notes at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, to the date of purchase.

The Company is not required to make mandatory redemption payments or sinking fund payments with respect to the Senior Notes.

Certain Covenants and Events of Default

The indenture governing the Senior Notes includes certain restrictive covenants, including covenants that limit the Company's ability and the ability of our subsidiaries to, among other things, incur secured debt; enter into sale and leaseback transactions; and amalgamate, consolidate, merge or transfer substantially all of the Company's assets to another entity. The covenants are subject to a number of important exceptions and qualifications set forth in the indenture.

The indenture governing the Senior Notes provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the indenture and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the trustee or holders of at least 25% in aggregate principal amount of and accrued but unpaid interest on the then outstanding Senior Notes may declare the principal amount of all the Senior Notes to be due and payable immediately. As of June 30, 2014, the Company was in compliance with the covenants under the Senior Notes.

Senior Secured Credit Facility

Concurrent with the consummation of the Catalyst Health Solutions Inc. merger ("Catalyst Merger"), on July 2, 2012, the Company entered into a credit agreement (as amended and supplemented from time to time, the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMCB”), as administrative agent, and a syndicate of lenders in an aggregate principal amount of $1.8 billion. The Credit Agreement provides for (i) a five-year senior secured term loan facility in the amount of $1.0 billion (the “Term Loan Facility”) and (ii) a five-year Revolving Facility in the amount of $800.0 million.

The Company made a principal repayment of $6.3 million in April 2014 on the Term Loan facility leaving the Company with $975.0 million outstanding as of June 30, 2014. In March 2014 the Company used the proceeds from the offering of the Senior Notes (refer above for a detailed discussion) to repay $300.0 million of the outstanding borrowings under the Revolving Facility. As of June 30, 2014 the Company had approximately $800.0 million of available borrowing capacity under the Revolving Facility. The amortization related to financing costs and debt discounts associated with the Credit Agreement totaled $2.1 million and $2.4 million for the three months ended June 30, 2014 and June 30, 2013, respectively. The amortization related to financing costs and debt discounts associated with the Credit Agreement totaled $4.3 million and $4.9 million for the six months ended June 30, 2014 and June 30, 2013, respectively.

Interest and Fees

The interest rates applicable to the Term Loan Facility and the Revolving Facility are based on a fluctuating rate of interest measured by reference to either, at the Company’s option, (a) an adjusted London Interbank Offered Rate (adjusted for maximum reserves) (“LIBOR”), plus an applicable margin or (b) an alternative base rate (which is the greatest of (i) the prime rate, (ii) the Federal Funds rate plus 0.5% and (iii) one-month LIBOR plus 1.0%), plus an applicable margin. The applicable margin, in each case, is adjusted from time to time based on the Company’s consolidated leverage ratio as of the last day of each fiscal quarter. The applicable margin for all borrowings is 0.875% per annum with respect to base rate borrowings and 1.875% 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 Credit Agreement. This resulted in an applicable interest rate of 2.06% at June 30, 2014 for both the Term Loan Facility and the Revolving Facility. See Note 11 — Financial Instruments for information on the Company's interest rate swap agreements. In addition to paying interest on outstanding principal under the Credit Agreement, the Company is required to pay a commitment fee to the lenders in respect of the unutilized commitments under the Credit Agreement at a fluctuating rate based on the Company’s leverage ratio.

Certain Covenants and Events of Default

The Credit Agreement contains a number of covenants that require the Company to maintain certain financial ratios, meet customary reporting requirements and restrict, with certain exceptions, transactions the Company or its subsidiaries may enter into, in each case as described further in the Company's 2013 Annual Report on Form 10-K. As of June 30, 2014, the Company was in compliance with the covenants of the Credit Agreement.

Maturity

Principal amounts outstanding under the Revolving Facility 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
2014	$	37,500
2015	68,750
2016	93,750
2017	118,750
2018	656,250
Total	$	975,000

Guarantees and Collateral

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 June 30, 2014 approximates its fair value.

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Segment Information

6 Months Ended

Jun. 30, 2014

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 June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
PBM:
Revenue	$	5,350,962	$	3,382,195	$	10,229,337	$	6,563,748
Cost of revenue	5,039,279		3,135,211		9,622,564		6,089,312
Gross profit	311,683		246,984		606,773		474,436
Total assets at June 30	8,744,311		7,242,286		8,744,311		7,242,286
HCIT:
Revenue	34,846		35,235		70,950		73,399
Cost of revenue	16,716		17,630		33,249		34,873
Gross profit	18,130		$	17,605	37,701		38,526
Total assets at June 30	373,575		105,526		373,575		105,526
Consolidated:
Revenue	5,385,808		3,417,430		10,300,287		6,637,147
Cost of revenue	5,055,995		3,152,841		9,655,813		6,124,185
Gross profit	329,813		264,589		644,474		512,962
Total assets at June 30	$	9,117,886	$	7,347,812	$	9,117,886	$	7,347,812

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Business Combinations Pro Forma Information (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013 Restat [Member]
Business Acquisition, Pro Forma Information [Abstract]
Revenue	$ 3,620,936	$ 7,035,001
Gross profit	285,070	550,643
Net income attributable to the Company	$ 66,368	$ 123,007
Earnings per share attributable to the Company:
Basic (in dollars per share)	$ 0.32	$ 0.60
Diluted (in dollars per share)	$ 0.32	$ 0.60
Weighted average number of shares used in computing earnings per share:
Basic (in shares)	205,975,724	205,782,438
Diluted (in shares)	206,624,432	206,535,143

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Earnings Per Share (Details) 2 (Anti-dilutive Stock Options and RSU [Member])	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Anti-dilutive Stock Options and RSU [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	2,240,802	792,881	1,802,512	443,065

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Earnings Per Share

6 Months Ended

Jun. 30, 2014

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 six months ended June 30, 2014 and 2013:

	Three Months Ended June 30,		Six Months Ended June 30,
	2014	2013	2014	2013
Weighted average number of shares used in computing basic EPS	206,938,789	205,975,724	206,733,127	205,782,438
Add dilutive common stock equivalents:
Outstanding stock options and restricted stock units (a)	372,062	648,708	473,995	752,705
Weighted average number of shares used in computing diluted EPS	207,310,851	206,624,432	207,207,122	206,535,143

(a) Excludes 2,240,802 and 792,881 common stock equivalents for the three months ended June 30, 2014 and 2013 because their effect was anti-dilutive. Excludes 1,802,512 and 443,065 common stock equivalents for the six months ended June 30, 2014 and 2013 because their effect was anti-dilutive.

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2014

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 six months ended June 30, 2014 are as follows (in thousands):

	PBM		HCIT		Total
Balance at December 31, 2013	$	4,700,610	$	19,665	$	4,720,275
Measurement period adjustments (a)	2,338		—		2,338
Working capital adjustment (b)	2,026		—		2,026
Acquisitions	—		—		—
Balance at June 30, 2014	$	4,704,974	$	19,665	$	4,724,639

(a) Represents 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 2013 consolidated financial statements as they were not deemed material.

(b) Represents adjustments to purchase price for the Restat acquisition, including settlement of working capital adjustment

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):

	June 30, 2014						December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	$	1,527,722	$	462,974	$	1,064,748	$	1,528,475	$	355,737	$	1,172,738
Non-compete agreements	11,920		6,236		5,684		13,430		6,463		6,967
Other intangible assets	3,060		2,036		1,024		3,060		1,346		1,714
Total	$	1,542,702	$	471,246	$	1,071,456	$	1,544,965	$	363,546	$	1,181,419

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Fair Value (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Inputs, Level 2 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative		$ 1,719
Fair Value, Inputs, Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contingent purchase price consideration	20,000	19,954
Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contingent purchase price consideration	20,000	19,954
Derivative	1,792	1,719
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative	$ 1,792

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Stock-Based Compensation (Details) 2 (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Total stock options granted	427,463	365,080
Volatility		45.40%
Risk-free interest rate		0.81%
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)	$ 15.48	$ 21.44
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Volatility	38.40%
Minimum [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate	1.54%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Volatility	39.20%
Maximum [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate	1.73%

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Consolidated Statement of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 86,241	$ 71,157	$ 163,586	$ 127,939
Other comprehensive income, net of tax
Unrealized income on cash flow hedge, net of income tax expense of $368 for the three and six months ended June 30, 2013	(61)	786	82	1,047
Comprehensive income	86,180	71,943	163,668	128,986
Less: Comprehensive income attributable to non-controlling interest	14,809	7,736	28,709	13,113
Comprehensive income attributable to the Company	$ 71,371	$ 64,207	$ 134,959	$ 115,873

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Basis of Presentation

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [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, 2013. 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 six months ended June 30, 2014 are not necessarily indicative of the results to be expected for the full year ending December 31, 2014. 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, 2013.

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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Debt (Tables)

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Components of long-term debt

The following table sets forth the components of the Company's long-term debt, net of debt discounts as of June 30, 2014 and December 31, 2013 (in thousands).

	June 30, 2014			December 31, 2013
Senior secured term loan facility with an interest rate of 2.06% and 1.81% at June 30, 2014 and December 31, 2013, respectively.	$	955,369		$	965,363
Senior secured revolving credit facility due June 1, 2018 with an interest rate of 2.06% and 1.81% at June 30, 2014 and December 31, 2013, respectively.	—			300,000
4.75% Senior Notes due 2021	492,813			—
Less current maturities	(68,750		)	(50,000		)
Long-term debt	$	1,379,432		$	1,215,363

Schedule of maturities of principal amounts outstanding under Revolving Facility

Principal amounts outstanding under the Revolving Facility 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
2014	$	37,500
2015	68,750
2016	93,750
2017	118,750
2018	656,250
Total	$	975,000

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Debt (Details) (USD $)	3 Months Ended		6 Months Ended				0 Months Ended		0 Months Ended	6 Months Ended	12 Months Ended	1 Months Ended	6 Months Ended	12 Months Ended	1 Months Ended	3 Months Ended	6 Months Ended		6 Months Ended						1 Months Ended		1 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jul. 02, 2012	Jul. 02, 2012 Term Loan Facility [Member]	Jun. 30, 2014 Term Loan Facility [Member]	Jul. 02, 2012 Revolving Credit Facility [Member]	Jun. 30, 2014 Secured Debt [Member] Term Loan Facility [Member]	Dec. 31, 2013 Secured Debt [Member] Term Loan Facility [Member]	Mar. 31, 2014 Secured Debt [Member] Revolving Credit Facility [Member]	Jun. 30, 2014 Secured Debt [Member] Revolving Credit Facility [Member]	Dec. 31, 2013 Secured Debt [Member] Revolving Credit Facility [Member]	Mar. 31, 2014 4.75% Senior Notes [Member]	Jun. 30, 2014 4.75% Senior Notes [Member]	Jun. 30, 2014 4.75% Senior Notes [Member]	Dec. 31, 2013 4.75% Senior Notes [Member]	Jun. 30, 2014 Federal Funds Rate [Member] Secured Debt [Member] Term Loan Facility [Member]	Jun. 30, 2014 Federal Funds Rate [Member] Secured Debt [Member] Revolving Credit Facility [Member]	Jun. 30, 2014 LIBOR [Member] Secured Debt [Member] Term Loan Facility [Member]	Jun. 30, 2014 LIBOR [Member] Secured Debt [Member] Revolving Credit Facility [Member]	Jun. 30, 2014 Base Rate [Member] Secured Debt [Member] Term Loan Facility [Member]	Jun. 30, 2014 Base Rate [Member] Secured Debt [Member] Revolving Credit Facility [Member]	Apr. 30, 2014 Amended Credit Agreement [Member] Term Loan Facility [Member]	Jun. 30, 2014 Amended Credit Agreement [Member] Term Loan Facility [Member]	Mar. 31, 2014 Amended Credit Agreement [Member] Revolving Credit Facility [Member]	Jun. 30, 2014 Amended Credit Agreement [Member] Revolving Credit Facility [Member]	Jun. 30, 2014 Debt Instrument, Redemption, Period One [Member] 4.75% Senior Notes [Member]	Jun. 30, 2014 Debt Instrument, Redemption, Period One [Member] Minimum [Member] 4.75% Senior Notes [Member]	Jun. 30, 2014 Debt Instrument, Redemption, Period One [Member] Maximum [Member] 4.75% Senior Notes [Member]	Jun. 30, 2014 Financial guarantee [Member] 4.75% Senior Notes [Member]
Long-term Debt, by Category, Current and Noncurrent [Abstract]
Long-term debt								$ 975,000,000		$ 955,369,000	$ 965,363,000		$ 0	$ 300,000,000		$ 492,813,000	$ 492,813,000	$ 0								$ 975,000,000
Less current maturities	(68,750,000)		(68,750,000)		(50,000,000)
Long-term debt	1,379,432,000		1,379,432,000		1,215,363,000
Debt amount						1,800,000,000.0	1,000,000,000		800,000,000						500,000,000
Stated interest rate															4.75%
Proceeds from issuance of debt															492,500,000
Debt discount															7,500,000
Debt issuance cost paid															2,000,000
Repayments of Long-term Lines of Credit												300,000,000													6,300,000		300,000,000
Amortization of financing costs and debt discounts																300,000	400,000
Trigger amount for redemption of debt																																175,000,000
Redemption period																														30 days	60 days
Redemption price, percentage of principle amount redeemable																													100.00%
Change of control triggering event redemption price, percentage																													101.00%
Percentage of aggregate amount of debt required to make note due and payable immediately																													25.00%
Term of long-term debt							5 years		5 years
Line of credit, remaining borrowing capacity																												800,000,000
Amortization related to financing costs and debt discounts	$ 2,100,000	$ 2,400,000	$ 4,300,000	$ 4,900,000
Initial applicable margin for borrowings																			0.50%	0.50%	1.00%	1.00%							0.50%
Debt Instrument, Interest Rate Margin																					1.875%	1.875%	0.875%	0.875%
Interest rate during period										2.06%	1.81%		2.06%	1.81%

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Fair Value

6 Months Ended

Jun. 30, 2014

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 six months ended June 30, 2014, 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 June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	20,000	$	20,000
Derivative	$	—	$	1,792	$	—	$	1,792

	December 31, 2013
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent purchase price consideration	$	—	$	—	$	19,954	$	19,954
Derivative	$	—	$	1,719	$	—	$	1,719

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. As of June 30, 2014, the fair value of the contingent purchase price consideration was $20.0 million and was recorded as accrued expenses and other current liabilities in the consolidated balance sheet.

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

Derivatives

Derivative liabilities relate to the interest rate swap agreement (refer to Note 11 — Financial Instruments for further information), which had a fair value of $1.8 million as of June 30, 2014. As the fair value measurement for the derivative instrument is based on quoted prices from a financial institution, this measurement is classified as Level 2 measurement as defined by fair value measurements guidance.