8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to section 13 OR 15 (d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):

December 31, 2020

MAGELLAN HEALTH, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-6639	58-1076937
(State or Other Jurisdiction	(Commission File	(IRS Employer
of Incorporation)	Number)	Identification No.)

4801 E. Washington Street
Phoenix, Arizona	85034
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (800) 642-1716

(Former Name or Former Address, if Changed Since Last Report): n/a

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	MGLN	The NASDAQ Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Explanatory Note

On January 4, 2021, Magellan Health, Inc. (the “Company”) filed a Form 8-K (the “Initial 8-K”) disclosing the completion on December 31, 2020 of the sale of its Magellan Complete Care business (the “MCC Business”) to Molina Healthcare, Inc. (“Molina”), pursuant to a Stock and Asset Purchase Agreement, dated as of April 30, 2020, by and between the Company and Molina.

This Amendment No. 1 to the Initial 8-K is being filed solely to provide the pro forma financial information required by Item 9.01(b) of Form 8-K, which was omitted from the Initial 8-K. Accordingly, Item 9.01 of the Initial 8-K is amended and restated below, all other information in the Initial 8-K remains unchanged, and this Amendment No. 1 should be read in conjunction with the Initial 8-K.

Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits

(b) Pro forma financial information: The unaudited pro forma condensed consolidated balance sheet of the Company as of September 30, 2020, and the unaudited pro forma condensed consolidated statements of income of the Company for the nine months ended September 30, 2020 and for the years ended December 31, 2019, 2018 and 2017, and the notes thereto, which give pro forma effect to the disposition of the MCC Business, are included as Exhibit 99.1 to this Amendment No. 1 and are incorporated herein by reference.

(d) Exhibits: The exhibits to this Form 8-K are listed in the Exhibit Index below and are incorporated herein by reference.

2

Exhibit Index

Exhibit Number	Description of Exhibit
2.1	Stock and Asset Purchase Agreement, dated as of April 30, 2020, by and between Magellan Health, Inc. and Molina Healthcare, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 10-Q filed on May 11, 2020)
99.1	Unaudited pro forma condensed consolidated financial information of the Registrant
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MAGELLAN HEALTH, INC.

Date: January 6, 2021	By:	/s/ David P. Bourdon
		Name:   David P. Bourdon
		Title:     Chief Financial Officer

4

EX-99.1

Exhibit 99.1

Unaudited Pro Forma Condensed Consolidated Financial Information

On December 31, 2020, Magellan Health, Inc. (the “Company”) completed the sale of its Magellan Complete Care business (the “MCC Business”) to Molina Healthcare, Inc. (“Molina”), pursuant to a Stock and Asset Purchase Agreement, dated as of April 30, 2020, by and between the Company and Molina, for cash in the amount of $850 million plus closing adjustments of $158 million (subject to post-closing adjustments, if any), and the assumption by Molina of liabilities of the MCC Business.

The sale of the MCC Business is considered a significant disposition for purposes of Item 2.01 of Form 8-K. As a result, the Company prepared the accompanying unaudited pro forma condensed consolidated financial information in accordance with Article 11 of Regulation S-X.

The Company reported its operations of the MCC Business as discontinued operations in its consolidated financial statements included in Form 10-Q for the quarter and year-to-date periods ended June 30, 2020 and September 30, 2020. The accompanying unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2020 and for the years ended December 31, 2019, 2018 and 2017 give effect to the divestiture as if it had occurred on January 1, 2017. The accompanying unaudited pro forma condensed consolidated balance sheet gives effect to this divestiture as if it had occurred on September 30, 2020, the date of the Company’s most recently filed balance sheet.

The unaudited condensed consolidated pro forma financial information should be read in conjunction with (i) the audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Form 10-K for the year ended December 31, 2019 filed with the SEC on February 28, 2020, and (ii) the unaudited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Form 10-Q for the three and nine months ended September 30, 2020 filed with the SEC on October 29, 2020.

The unaudited pro forma condensed consolidated financial information is presented based on assumptions, adjustments, and currently available information described in the accompanying notes and is intended for informational purposes only. The unaudited pro forma condensed consolidated financial information is not necessarily indicative of what the Company’s results of operations or financial condition would have been had the divestiture been completed on the dates assumed. In addition, it is not necessarily indicative of the Company’s future results of operations or financial condition.

MAGELLAN HEALTH, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2020
(Unaudited)
(In thousands)

	Company		Pro Forma			Company
	As Reported		Adjustments			Pro Forma
ASSETS
Current Assets:
Cash and cash equivalents	$	152,050	$	1,013,029	(a)	$	1,165,079
Accounts receivable, net		769,159		-			769,159
Short-term investments		92,686		-			92,686
Pharmaceutical inventory		37,637		-			37,637
Other current assets		95,666		-			95,666
Current portion of assets held for sale		1,144,032		(1,144,032)	(b)		-
Total Current Assets		2,291,230		(131,003)			2,160,227
Property and equipment, net		131,869		-			131,869
Long-term investments		5,623		-			5,623
Deferred income taxes		25,823		(25,823)	(c)		-
Other long-term assets		67,692		-			67,692
Goodwill		806,421		-			806,421
Other intangible assets, net		52,362		-			52,362
Total Assets	$	3,381,020	$	(156,826)		$	3,224,194
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	122,020	$	-		$	122,020
Accrued liabilities		235,152		66,290	(d)		301,442
Medical claims payable		119,922		-			119,922
Other medical liabilities		123,205		-			123,205
Current debt, finance lease and deferred financing obligations		4,308		-			4,308
Current portion of liabilities held for sale		496,272		(496,272)	(b)		-
Total Current Liabilities		1,100,879		(429,982)			670,897
Long-term debt, finance lease and deferred financing obligations		637,093		-			637,093
Deferred income taxes		-		12,777	(c)		12,777
Tax contingencies		11,724		-			11,724
Deferred credits and other long-term liabilities		52,172		5,647	(c)		57,819
Total Liabilities		1,801,868		(411,558)			1,390,310
Stockholders’ Equity:
Ordinary common stock		553		-			553
Additional paid-in capital		1,455,009		-			1,455,009
Retained earnings		1,588,196		254,732	(b)		1,842,928
Accumulated other comprehensive income		121		-			121
Ordinary common stock in treasury, at cost		(1,464,727)		-			(1,464,727)
Total Stockholders’ Equity		1,579,152		254,732			1,833,884
Total Liabilities and Stockholders’ Equity	$	3,381,020	$	(156,826)		$	3,224,194

See notes to pro forma condensed consolidated financial statements.

MAGELLAN HEALTH, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 2017
(Unaudited)
(In thousands, except per share amounts)

	Company		Pro Forma		Company
	As Reported		Adjustments (e)		Pro Forma
Net revenue:
Managed care and other	$	3,479,182	$	(1,104,425)	$	2,374,757
PBM		2,359,401		115,724		2,475,125
Total net revenue		5,838,583		(988,701)		4,849,882
Costs and expenses:
Cost of care		2,413,770		(859,213)		1,554,557
Cost of goods sold		2,211,910		115,238		2,327,148
Direct service costs and other operating expenses		941,883		(166,595)		775,288
Depreciation and amortization		115,706		(6,820)		108,886
Interest expense		25,977		-		25,977
Interest and other income		(5,887)		2,945		(2,942)
Total costs and expenses		5,703,359		(914,445)		4,788,914
Income (loss) from continuing operations before income taxes		135,224		(74,256)		60,968
Provision (benefit) for income taxes		25,083		(5,453)		19,630
Net income		110,141		(68,803)		41,338
Less: net loss from non-controlling interest		(66)		66		-
Net Income	$	110,207	$	(68,737)	$	41,338
Weighted average number of common shares outstanding — basic		23,333
Weighted average number of common shares outstanding — diluted		24,440
Net income (loss) per common share — basic	$	4.72	$	(2.95)	$	1.77
Net income (loss) per common share — diluted	$	4.51	$	(2.81)	$	1.70

MAGELLAN HEALTH, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 2018
(Unaudited)
(In thousands, except per share amounts)

	Company		Pro Forma		Company
	As Reported		Adjustments (e)		Pro Forma
Net revenue:
Managed care and other	$	4,878,442	$	(2,527,866)	$	2,350,576
PBM		2,435,709		171,237		2,606,946
Total net revenue		7,314,151		(2,356,629)		4,957,522
Costs and expenses:
Cost of care		3,762,412		(2,207,721)		1,554,691
Cost of goods sold		2,283,022		169,681		2,452,703
Direct service costs and other operating expenses		1,071,535		(297,620)		773,915
Depreciation and amortization		132,660		(20,376)		112,284
Interest expense		35,396		(216)		35,180
Interest and other income		(14,068)		9,184		(4,884)
Total costs and expenses		7,270,957		(2,347,068)		4,923,889
Income (loss) from continuing operations before income taxes		43,194		(9,561)		33,633
Provision (benefit) for income taxes		19,013		(7,556)		11,457
Net Income	$	24,181	$	(2,005)	$	22,176
Weighted average number of common shares outstanding — basic		24,349
Weighted average number of common shares outstanding — diluted		25,035
Net income (loss) per common share — basic	$	0.99	$	(0.08)	$	0.91
Net income (loss) per common share — diluted	$	0.97	$	(0.08)	$	0.89

MAGELLAN HEALTH, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 2019
(Unaudited)
(In thousands, except per share amounts)

	Company		Pro Forma		Company
	As Reported		Adjustments (e)		Pro Forma
Net revenue:
Managed care and other	$	5,103,393	$	(2,756,458)	$	2,346,935
PBM		2,056,030		162,648		2,218,678
Total net revenue		7,159,423		(2,593,810)		4,565,613
Costs and expenses:
Cost of care		3,940,531		(2,397,007)		1,543,524
Cost of goods sold		1,898,871		160,414		2,059,285
Direct service costs and other operating expenses		1,090,731		(289,064)		801,667
Depreciation and amortization		131,509		(21,142)		110,367
Interest expense		36,153		(285)		35,868
Interest and other income		(19,189)		12,332		(6,857)
Total costs and expenses		7,078,606		(2,534,752)		4,543,854
Income (loss) from continuing operations before income taxes		80,817		(59,058)		21,759
Provision (benefit) for income taxes		24,915		(15,753)		9,162
Net Income	$	55,902	$	(43,305)	$	12,597
Weighted average number of common shares outstanding — basic		24,243
Weighted average number of common shares outstanding — diluted		24,563
Net income (loss) per common share — basic	$	2.30	$	(1.79)	$	0.51
Net income (loss) per common share — diluted	$	2.27	$	(1.76)	$	0.51

MAGELLAN HEALTH, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2020
(Unaudited)
(In thousands, except per share amounts)

	Company		Pro Forma		Company
	As Reported		Adjustments (f)		Pro Forma
Net revenue:
Managed care and other	$	1,670,567	$	-	$	1,670,567
PBM		1,722,004		-		1,722,004
Total net revenue		3,392,571		-		3,392,571
Costs and expenses:
Cost of care		1,035,377		-		1,035,377
Cost of goods sold		1,621,577		-		1,621,577
Direct service costs and other operating expenses		620,767		-		620,767
Depreciation and amortization		71,976		-		71,976
Interest expense		24,239		-		24,239
Interest and other income		(2,119)		-		(2,119)
Special charges		24,908		-		24,908
Total costs and expenses		3,396,725		-		3,396,725
Income (loss) from continuing operations before income taxes		(4,154)		-		(4,154)
Provision (benefit) for income taxes		(32,896)		-		(32,896)
Net income from continuing operations		28,742		-		28,742
Income from discontinued operations, net of tax		84,660		(84,660)		-
Net Income	$	113,402	$	(84,660)	$	28,742
Weighted average number of common shares outstanding — basic		25,078
Weighted average number of common shares outstanding — diluted		25,317
Net income (loss) per common share — basic
Continuing operations	$	1.15	$	-	$	1.15
Discontinued operations		3.37		(3.37)		-
Consolidated operations	$	4.52	$	(3.37)	$	1.15
Net income (loss) per common share — diluted
Continuing operations	$	1.14	$	-	$	1.14
Discontinued operations		3.34		(3.34)		-
Consolidated operations	$	4.48	$	(3.34)	$	1.14

MAGELLAN HEALTH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
NINE MONTHS ENDED SEPTEMBER 30, 2020

(a) - Adjustment reflects the net cash proceeds from the sale of the Magellan Complete Care ("MCC") reporting unit as if the closing date were September 30, 2020.

(b) - Adjustment reflects the assets and liabilities of the MCC reporting unit, which were previously classified as held for sale and impact to the related equity.

(c) - Adjustment reflects the tax impact to deferred taxes upon the close of the transaction.

(d) - Adjustment reflects liabilities for income taxes payable and other liabilities generated by the transaction.

(e) - Adjustments reflect the historical operating results of the MCC reporting unit and the impact of intercompany revenue, cost of goods sold and direct service costs previously eliminated on a consolidated basis.

(f) - Adjustment reflects the operating results of the MCC reporting unit reported as discontinued operations.

XML

Document and Entity Information	Dec. 31, 2020
Document and Entity Information [Abstract]
Entity Central Index Key	0000019411
Document Type	8-K/A
Document Period End Date	Dec. 31, 2020
Entity File Number	1-6639
Entity Registrant Name	MAGELLAN HEALTH INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identificatoin Number	58-1076937
Entity Address, Address Line One	4801 E. Washington Street
Entity Address, City or Town	Phoenix
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85034
City Area Code	800
Local Phone Number	642-1716
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	MGLN
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Amendment Flag	false