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Exhibit 99

MAGELLAN HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(1)

(In thousands, except per share amounts)

		For the Quarter Ended September 30,						For the Year Ended September 30,
		2000			2001			2000			2001
Net revenue		$	432,369		$	432,562		$	1,640,933		$	1,755,512
Costs and expenses:
	Salaries, cost of care and other operating expenses		378,506			391,495			1,442,082			1,557,042
	Equity in earnings of unconsolidated subsidiaries		(945	)		(3,330	)		(9,792	)		(36,566	)
			377,561			388,165			1,432,290			1,520,476
	EBITDA		54,808			44,397			208,643			235,036
	Depreciation and amortization		17,371			18,035			68,261			68,294
	Interest, net		25,085			22,742			97,286			93,662
	Special charges, net		25,398			—			25,398			3,340
			67,854			40,777			190,945			165,296
Income (loss) from continuing operations before provision for (benefit from) income taxes and minority interest			(13,046	)		3,620			17,698			69,740
Provision for (benefit from) income taxes			(11,133	)		3,024			8,994			36,388
Income (loss) from continuing operations before minority interest			(1,913	)		596			8,704			33,352
Minority interest			9			7			114			78
Income (loss) from continuing operations			(1,922	)		589			8,590			33,274
Income (loss) from discontinued operations (net of taxes)			(8,312	)		(1,010	)		(56,736	)		4,624
Loss on disposal of discontinued operations			(17,662	)		37			(17,662	)		(9,359	)
			(25,974	)		(973	)		(74,398	)		(4,735	)
Income (loss) before extraordinary item			(27,896	)		(384	)		(65,808	)		28,539
Extraordinary item — net (loss) on early extinguishment of debt			—			—			—			(3,984	)
Net income (loss)			(27,896	)		(384	)		(65,808	)		24,555
Preferred dividend requirement and amortization of redeemable preferred stock issuance costs			1,303			1,302			3,802			5,049
Income (loss) available to common stockholders			(29,199	)		(1,686	)		(69,610	)		19,506
Unrealized foreign currency translation gain (loss)			(59	)		—			(170	)		(113	)
Provision for (benefit from) income taxes related to unrealized foreign currency translation gain (loss)			24			—			68			45
Other comprehensive income (loss)			(35	)		—			(102	)		(68	)
Comprehensive income (loss)		$	(29,234	)	$	(1,686	)	$	(69,712	)	$	19,438
			—			—			—			—
Average number of common shares outstanding — basic			32,368			34,535			32,144			33,448
Average number of common shares outstanding — diluted			32,368			34,535			32,386			41,235
Income (loss) per common share available for common stockholders — basic:
	Income (loss) from continuing operations	$	(0.10	)	$	(0.02	)	$	0.15		$	0.84
	Income (loss) from discontinued operations	$	(0.80	)	$	(0.03	)	$	(2.32	)	$	(0.14	)
	Extraordinary (loss) on early extinguishment of debt	$	—		$	—		$	—		$	(0.12	)
Income (loss) available to common stockholders		$	(0.90	)	$	(0.05	)	$	(2.17	)	$	0.58
Income per common share available for common stockholders — diluted:
	Income (loss) from continuing operations	$	(0.10	)	$	(0.02	)	$	0.15		$	0.81
	Income (loss) from discontinued operations	$	(0.80	)	$	(0.03	)	$	(2.30	)	$	(0.11	)
	Extraordinary (loss) on early extinguishment of debt	$	—		$	—		$	—		$	(0.10	)
Income (loss) available to common stockholders		$	(0.90	)	$	(0.05	)	$	(2.15	)	$	0.60

(1)

For a more detailed discussion of Magellan's fiscal 2001 results, please consult the Company's Annual Report on Form 10-K which will be filed with the SEC by December 29, 2001.

MAGELLAN HEALTH SERVICES, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands, except per share amounts)

	For the Quarter Ended September 30,						For the Year Ended September 30,
	2000			2001			2000			2001
INCOME FROM CONTINUING OPERATIONS — AS ADJUSTED(1)
Income (loss) from continuing operations before taxes	$	(13,046	)	$	3,620		$	17,698		$	69,740
TRICARE pricing settlements less incurred claims adjustments		—			—			—			(28,018	)
Special charges		25,398			—			25,398			3,340
Adjusted tax provision(2)		(7,691	)		(3,024	)		(28,238	)		(26,517	)
Minority interest		(9	)		(7	)		(114	)		(78	)
Adjusted income (loss) from continuing operations		4,652			589			14,744			18,467
Preferred dividend and amortization of preferred stock issuance costs		(1,303	)		(1,302	)		(3,802	)		(5,049	)
Adjusted (loss) income from continuing operations available to common stockholders	$	3,349		$	(713	)	$	10,942		$	13,418
Average number of common shares outstanding — diluted(3)		32,368			34,535			32,386			34,382
Adjusted income (loss) from continuing operations available to common shareholders	$	0.10		$	(0.02	)	$	0.34		$	0.39
CASH FLOW HIGHLIGHTS
Operating cash flows before interest and taxes paid	$	66,651		$	42,886		$	212,319		$	183,964
Interest and taxes paid		(41,401	)		(34,336	)		(105,444	)		(98,278	)
Operating cash flows		25,250			8,550			106,875			85,686
Capital expenditures		(12,079	)		(16,747	)		(36,924	)		(34,709	)
Acquisitions, net of cash acquired and return of escrowed funds		—			(3,731	)		(68,597	)		(87,731	)
Proceeds from issuance of redeemable preferred stock, net of issuance costs		—			—			54,765			—
Proceeds from sale of assets, net		—			7,123			3,300			110,551
Proceeds from issuance of debt, net of issuance costs		4,077			2,857			59,642			356,648
Payments on long-term debt		(23,334	)		(849	)		(110,260	)		(458,221	)
Cash used in other investing and financing activities		(293	)		1,913			1,266			8,485
Net increase (decrease) in cash and cash equivalents	$	(6,379	)	$	(884	)	$	10,067		$	(19,291	)

BALANCE SHEET HIGHLIGHTS (in millions)	September 30, 2000		September 30, 2001
Unrestricted cash and cash equivalents	$	47.5	$	28.2
Restricted cash and investments	$	117.7	$	122.4
Total long-term debt, including current maturities	$	1,098.0	$	1,006.4
Revolver availability, net	$	90.4	$	115.7

NOTES:

(1)

Adjustments consist of: (i) special charges, which are primarily related to severance, lease terminations and impairments of long-lived assets in the 2000 periods and losses on the sale of the Company's Canadian subsidiary in the 2001 period; and (ii) exclusion of the Tricare pricing settlements net of certain incurred claims adjustments in the 2001 period.

(2)

The tax provision has been adjusted to reflect application of a 40% tax rate to the sum of pre-tax income plus permanent tax differences which is consistent with Magellan's practice on ongoing operating income.

(3)

Conversion of the redeemable preferred stock was not presumed due to the antidilutive effect.

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Exhibit 99