Magellan Health Services (MGLN)

Other Items

        A gain on the disposition of assets of $5.1 million was recognized in 2006 mainly as a result of the Company's sale of its equity interest in Royal.

Other Items

        A gain on the disposition of assets of $5.1 million was recognized in 2006 mainly as a result of the Company's sale of its equity interest in Royal.

Other Items

        A gain on the disposition of assets of $5.1 million was recognized in 2006 mainly as a result of the Company's sale of its equity interest in Royal.

Other Items

        A gain on the disposition of assets of $5.1 million was recognized in 2006 mainly as a result of the Company's sale of its
equity interest in Royal.

Other Items

        A gain on the disposition of Aetna Assets of $56.4 million was recorded in 2005. A gain on the disposition of assets of $5.1 million was recognized in 2006 mainly as a result of the Company's sale of its equity interest in Royal.

        The Company recorded special benefits of $0.6 million in 2005 relating to the reversal of lease run-out costs accrued in 2004, for which a buyout was negotiated in 2005.

Other Items

        A gain on the disposition of Aetna Assets of $56.4 million was recorded in 2005. A gain on the disposition of assets of $5.1 million was recognized
in 2006 mainly as a result of the Company's sale of its equity interest in Royal.

        The
Company recorded special benefits of $0.6 million in 2005 relating to the reversal of lease run-out costs accrued in 2004, for which a buyout was negotiated in
2005.

Other Items

        A gain on the disposition of assets of $5.1 million was recognized in the Prior Year Period as a result of the Company's sale of its equity interest in Royal.

Other Items

A gain on the disposition of assets of $5.1 million was recognized in the Prior Year Period mainly as a result of the Company’s sale of its equity interest in Royal.

Other Items

A gain on the disposition of assets of $4.7 million was recognized in the Prior Year Quarter in relation to the Company’s sale of its equity interest in Royal.

Other Items

A gain on the disposition of Aetna Assets of $56.4 million was recorded in Fiscal 2005.

The Company recorded special charges of $5.0 million in Fiscal 2004 that primarily consisted of employee severance and termination benefits and lease termination costs related to restructuring plans that resulted in the elimination of certain positions and the closure of certain offices. The Company recorded special benefits of $0.6 million in Fiscal 2005 relating to the reversal of lease run-out costs accrued in Fiscal 2004, for which a buyout was negotiated in Fiscal 2005.

Other

Most of ICORE’s distribution contracts with its customers use “average wholesale price” (“AWP”) as a benchmark for establishing pricing.  As part of a proposed settlement in the case of New England Carpenters Health Benefit Fund, et. al. v. First Data Bank, et. al., Civil Action No. 1:05-CV-11148-PBS (D. Mass.), a case brought against First Data Bank, one of several companies that report data on prescription drug prices, First Data Bank has agreed to reduce the AWP of over 8,000 specific pharmaceutical products by four percent.  The proposed settlement has not received preliminary or final approval of the court, and we cannot predict whether or when the court will approve the settlement or the timing of any changes to the AWP.

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In the absence of any action on the part of ICORE to renegotiate with its customers the pricing of those pharmacy distribution contracts that use AWP, the proposed reduction in First Data Bank’s AWP could materially reduce the margin earned by Icore on such Pharmaceutical distribution contracts.    While this change to AWP may adversely affect the margin earned by ICORE on those distribution contracts that use AWP, it is not expected to have a material adverse affect on the Company’s results of operations.

Other Items

The Company recorded approximately $8.2 million and $12.1 million of stock compensation expense in the Prior Year Period and Current Year Period, respectively, related to common stock and stock options granted to management. The increase is due primarily to the adoption of SFAS 123R effective January 1, 2006. See discussion of stock compensation expense in “Outlook—Results of Operations” below.

A gain on the disposition of assets of $5.1 million was recognized in the Current Year Period mainly as a result of the Company’s sale of its equity interest in Royal.

Other Items

The Company recorded approximately $3.8 million and $5.5 million of stock compensation expense in the Prior Year Quarter and Current Year Quarter, respectively, related to common stock and stock options granted to management. See discussion of stock compensation expense in “Outlook—Results of Operations” below.

A gain on the disposition of assets of $4.7 million was recognized in the Current Year Quarter in relation to the Company’s sale of its equity interest in Royal.

Other Items

A net reorganization benefit from continuing operations of approximately $438.2 million was recorded during Fiscal 2003. This amount is mainly composed of a net fresh start reorganization gain, partially offset by the write-off of deferred financing costs and professional fees and expenses incurred associated with the financial restructuring process and chapter 11 proceedings.

Special charges of $9.5 million and $5.0 million were recorded in Fiscal 2003 and Fiscal 2004, respectively. The special charges primarily consist of employee severance and termination benefits, lease termination costs and consulting fees related to restructuring plans that have resulted in the elimination of certain positions and the closure of certain offices. Fiscal 2003 special charges include income related to the collection of a previously reserved note receivable. See Note 11—“Special Charges (Benefits)” to the consolidated financial statements set forth elsewhere herein for further discussion.

Goodwill impairment charges of $28.8 million were recorded in Fiscal 2003. The charges represent impairments to the Employer Solutions and Public Sector Solutions reporting units, based on the comparison between the carrying value and the fair market value of the segments, as estimated by an independent appraisal firm. The Fiscal 2003 write-down was attributable to the Company’s financial performance and its business outlook as of September 1, 2003 (the Predecessor Company’s annual measurement date), and resulted in the complete write-down of goodwill related to the Employer Solutions and Public Sector Solutions reporting units.

Stock compensation expense of $23.2 million was recorded in Fiscal 2004 mainly related to stock purchased by the Chief Executive Officer, stock granted to the Company’s senior executives, in-the-money stock options granted to management (including senior executives) and stock granted to non-management

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members of the Board of Directors who are not affiliated with Onex. See discussion of stock compensation expense in “Outlook—Results of Operations” below.

Other Items

The Company recorded approximately $15.9 million and $12.0 million of stock compensation expense in the Prior Year Period and Current Year Period, respectively, related to common stock and stock options granted to management. See discussion of stock compensation expense in “Outlook—Results of Operations” below.

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The Company recorded special charges of $4.3 million in the Prior Year Period. The special charges primarily consist of employee severance and termination benefits and lease termination costs related to restructuring plans that resulted in the elimination of certain positions and the closure of certain offices. The Company recorded special charges of $(0.6) million in the Current Year Period relating to the reversal of lease run-out costs accrued in the Prior Year Period, for which a buyout was negotiated in the Current Year Period.

Other Items

The Company recorded approximately $13.3 million and $8.2 million of stock compensation expense in the Prior Year Period and Current Year Period, respectively, related to common stock and stock options granted to management. See discussion of stock compensation expense in “Outlook—Results of Operations” below.

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The Company recorded special charges of $2.5 million in the Prior Year Period. The special charges primarily consist of employee severance and termination benefits and lease termination costs related to restructuring plans that resulted in the elimination of certain positions and the closure of certain offices.

Other Items

The Company recorded approximately $10.8 million and $3.8 million of stock compensation expense in the Prior Year Quarter and Current Year Quarter, respectively, related to common stock and stock options granted to management. See discussion of stock compensation expense in “Outlook—Results of Operations” below.

The Company recorded special charges of $1.9 million in the Prior Year Quarter. The special charges primarily consist of employee severance and termination benefits and lease termination costs related to restructuring plans that have resulted in the elimination of certain positions and the closure of certain offices. See Note H—“Special Charges” to the unaudited condensed consolidated financial statements set forth elsewhere herein for further discussion.

The Company recorded special charges of $9.5 million and $15.2 million in Calendar 2003 and Calendar 2002, respectively. The special charges primarily relate to restructuring plans that have resulted in the elimination of certain positions and the closure of certain offices, partially offset by income recorded to special charges related to the collection of a previously reserved note receivable. The charges related to restructuring plans primarily consist of employee severance and termination benefits, lease termination costs and consulting fees. See Note 12—“Special Charges” to the consolidated financial statements set forth elsewhere herein for further discussion.

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The Company recorded goodwill impairment charges of $28.8 million and $415.9 million in Calendar 2003 and Calendar 2002, respectively. The Calendar 2003 charge represents impairments to the Employer Solutions and Public Sector Solutions reporting units, based on the comparison between the carrying value and the fair market value of the segments, as estimated by an independent appraisal firm. The Calendar 2003 write-down was attributable to the Company’s financial performance and its business outlook as of September 1, 2003, and resulted in the complete write-down of goodwill related to the Employer Solutions and Public Sector Solutions reporting units. In Calendar 2002, the Company recorded an impairment charge to write-down the balance of goodwill related to the Health Plan Solutions, Employer Solutions and Public Sector Solutions reporting units to estimated fair value, based on independently appraised values. The Calendar 2002 write-down occurred due to changes in the Company’s financial performance and its business outlook from the beginning of the year through September 1, 2002, which decreased the estimated fair value of the Company’s reporting units.