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

9 Months Ended

Sep. 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 nine months ended September 30:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Numerator:
Net income (loss) from continuing operations	$	4,121	$	(17,296)	$	3,145	$	28,742
Income from discontinued operations, net of tax		17,153		28,943		32,173		84,660
Net income	$	21,274	$	11,647	$	35,318	$	113,402
Denominator:
Weighted average number of common shares outstanding—basic		24,426		25,448		24,159		25,078
Common stock equivalents—stock options		124		—		129		67
Common stock equivalents—RSAs		4		—		6		22
Common stock equivalents—RSUs		36		—		25		76
Common stock equivalents—PSUs		114		—		123		70
Common stock equivalents—employee stock purchase plan		4		—		5		4
Weighted average number of common shares outstanding—diluted		24,708		25,448		24,447		25,317
Net income (loss) per common share—basic:
Continuing operations	$	0.17	$	(0.68)	$	0.13	$	1.15
Discontinued operations		0.70		1.14		1.33		3.37
Consolidated operations	$	0.87	$	0.46	$	1.46	$	4.52
Net income (loss) per common share—diluted:
Continuing operations	$	0.17	$	(0.68)	$	0.13	$	1.14
Discontinued operations		0.69		1.14		1.31		3.34
Consolidated operations	$	0.86	$	0.46	$	1.44	$	4.48

The weighted average number of common shares outstanding for the three and nine months ended September 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 nine months ended September 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 nine months ended September 30, 2019, respectively, and 0.6 million and 1.0 million options for the three and nine months ended September 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.