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

6 Months Ended

Jun. 30, 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 June 30,				Six Months Ended June 30,
	2015		2016		2015		2016
Numerator:
Net income attributable to Magellan Health, Inc.	$	4,643	$	3,958	$	11,931	$	17,195
Denominator:
Weighted average number of common shares outstanding—basic		25,684		23,516		25,502		23,570
Common stock equivalents—stock options		362		355		406		306
Common stock equivalents—RSAs		654		619		584		583
Common stock equivalents—RSUs		26		23		36		27
Common stock equivalents—PSUs		49		31		58		29
Common stock equivalents—employee stock purchase plan		1		2		2		2
Weighted average number of common shares outstanding—diluted		26,776		24,546		26,588		24,517
Net income attributable to Magellan Health, Inc. per common share—basic	$	0.18	$	0.17	$	0.47	$	0.73
Net income attributable to Magellan Health, Inc. per common share—diluted	$	0.17	$	0.16	$	0.45	$	0.70

        The weighted average number of common shares outstanding for the six months ended June 30, 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 six months ended June 30, 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 0.8 million and 0.9 million options for the three and six months ended June 30, 2015, respectively, and 1.2 million and 1.1 million options for the three and six months ended June 30, 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.