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Non-GAAP Measures
 6 Months Ended
Jun. 30, 2014
Non-GAAP Measures  
Non-GAAP Measures

NOTE D—Non-GAAP Measures

        The Company reports its financial results in accordance with GAAP, however the Company's management also assesses business performance and makes business decisions regarding the Company's operations using certain non-GAAP measures. In addition to Segment Profit, as defined in Note C—"Business Segment Information", the Company also uses adjusted net income attributable to Magellan Health, Inc. ("Adjusted Net Income") and adjusted net income per common share attributable to Magellan Health, Inc. on a diluted basis ("Adjusted EPS"). Adjusted Net Income and Adjusted EPS reflect certain adjustments made for acquisitions completed after January 1, 2013 to exclude non-cash stock compensation expense resulting from restricted stock purchases by sellers as well as amortization of identified acquisition intangibles. The Company believes these non-GAAP measures provide a more useful comparison of the Company's underlying business performance from period to period and is more representative of the earnings capacity of the Company. Non-GAAP financial measures we disclose, such as Segment Profit, Adjusted Net Income, and Adjusted EPS, should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP.

        The following table reconciles Adjusted Net Income to net income attributable to Magellan Health, Inc. (in thousands):

 
   Three Months
Ended June 30,		   Six Months Ended
June 30,		  
 
   2013   2014   2013   2014  

Adjusted Net Income

   $ 31,480   $ 11,030   $ 59,538   $ 38,336  

Adjusted for acquisitions starting in 2013

                          

Amortization of acquired intangibles

     —     (3,426 )   —     (5,059 )

Stock compensation relating to acquisitions

     —     (6,373 )   —     (7,311 )

Tax impact

     —     3,755     —     4,740  
                   
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Net income attributable to Magellan Health, Inc. 

   $ 31,480   $ 4,986   $ 59,538   $ 30,706  
                   
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        The following table reconciles Adjusted EPS to net income per common share attributable to Magellan Health, Inc.—diluted:

 
   Three Months
Ended
June 30,		   Six Months Ended
June 30,		  
 
   2013   2014   2013   2014  

Adjusted EPS

   $ 1.15   $ 0.39   $ 2.17   $ 1.37  

Adjusted for acquisitions starting in 2013

                          

Amortization of acquired intangibles

     —     (0.12 )   —     (0.18 )

Stock compensation relating to acquisitions

     —     (0.23 )   —     (0.26 )

Tax impact

     —     0.14     —     0.17  
                   
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Net income per common share attributable to Magellan Health, Inc.—Diluted

   $ 1.15   $ 0.18   $ 2.17   $ 1.10  
                   
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