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

3 Months Ended

Mar. 31, 2016

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

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

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

        The following table reconciles income attributable to common shareholders (numerator) and shares (denominator) used in the computations of net income per share attributable to common shareholders (in thousands, except per share data):

	Three Months Ended March 31,
	2015		2016
Numerator:
Net income attributable to Magellan Health, Inc.	$	7,288	$	13,237
Denominator:
Weighted average number of common shares outstanding—basic		25,319		23,631
Common stock equivalents—stock options		450		257
Common stock equivalents—RSAs		514		547
Common stock equivalents—RSUs		46		30
Common stock equivalents—PSUs		68		28
Common stock equivalents—employee stock purchase plan		2		2
Weighted average number of common shares outstanding—diluted		26,399		24,495
Net income attributable to Magellan Health, Inc. per common share—basic	$	0.29	$	0.56
Net income attributable to Magellan Health, Inc. per common share—diluted	$	0.28	$	0.54

        The weighted average number of common shares outstanding for the three months ended March 31, 2015 and 2016 were calculated using outstanding shares of the Company's common stock. Common stock equivalents included in the calculation of diluted weighted average common shares outstanding for the three months ended March 31, 2015 and 2016 represent stock options to purchase shares of the Company's common stock, RSAs, RSUs, PSUs and stock purchased under the Employee Stock Purchase Plan.

        The Company had additional potential dilutive securities outstanding representing 1.0 million and 1.5 million options for the three months ended March 31, 2015 and 2016, respectively, that were not included in the computation of dilutive securities because they were anti-dilutive for the period. Had these shares not been anti-dilutive, all of these shares would not have been included in the net income attributable to common shareholder per common share calculation as the Company uses the treasury stock method of calculating diluted shares.