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

6 Months Ended

Jun. 30, 2020

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) for the three and six months ended June 30:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2020		2019		2020
Numerator:
Net income (loss) from continuing operations	$	7,215	$	47,108	$	(976)	$	46,038
Income from discontinued operations, net of tax		6,398		36,397		15,020		55,717
Net income	$	13,613	$	83,505	$	14,044	$	101,755
Denominator:
Weighted average number of common shares outstanding—basic		24,101		25,054		24,024		24,891
Common stock equivalents—stock options		153		31		132		46
Common stock equivalents—RSAs		7		28		7		25
Common stock equivalents—RSUs		18		46		19		48
Common stock equivalents—PSUs		130		118		127		59
Common stock equivalents—employee stock purchase plan		7		1		6		5
Weighted average number of common shares outstanding—diluted		24,416		25,278		24,315		25,074
Net income (loss) per common share—basic:
Continuing operations	$	0.30	$	1.88	$	(0.04)	$	1.85
Discontinued operations		0.26		1.45		0.62		2.24
Consolidated operations	$	0.56	$	3.33	$	0.58	$	4.09
Net income (loss) per common share—diluted:
Continuing operations	$	0.30	$	1.86	$	(0.04)	$	1.84
Discontinued operations		0.26		1.44		0.62		2.22
Consolidated operations	$	0.56	$	3.30	$	0.58	$	4.06

The weighted average number of common shares outstanding for the three and six months ended June 30, 2019 and 2020 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 and six months ended June 30, 2019 and 2020 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 1.1 million and 1.1 million options for the three and six months ended June 30, 2019, respectively, and 1.3 million and 1.4 million options for the three and six months ended June 30, 2020, 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.