Magellan Health Inc MGLN
Q4 2011 Earnings Call Transcript

Transcript Call Date 02/28/2012

Operator: Welcome and thank you for standing by for the Fourth Quarter 2011 Earnings Call. At this time, all participants are in a listen-only mode. Today's conference is being recorded. If you have any objections, you may disconnect at this time.

Now, I will turn the meeting over to Renie Shapiro. Ma'am you may begin.

Renie Shapiro - SVP, Corporate Finance: Good morning, and thank you for joining us today. This is Renie Shapiro, Senior Vice President of Corporate Finance for Magellan Health Services. With me today are Magellan's Chairman and CEO, Rene Lerer; our President, Karen Rohan and our Chief Financial Officer, Jon Rubin. They will discuss the financial and operational results of our fourth quarter ended December 31, 2011.

Certain of the statements that will be made during this conference call are forward-looking statements contemplated under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those discussed. These forward-looking statements are qualified in their entirety by the complete discussion of risks set forth under the caption 'Risk Factors' in Magellan's Annual Report on Form 10-K for the year ended December 31, 2011, which we will file with the SEC today and will subsequently be found on our website under For Investors.

In addition, please note that in this call we'll refer to segment profit. Segment profit is disclosed and defined in our Annual Report on Form 10-K and is equal to net revenues less the sum of cost of care, cost of goods sold, direct service costs and other operating expenses excluding stock compensation expense. Segment profit information referred to in this call may be considered a non-GAAP financial measure. Included in the tables issued with this morning's press release is the reconciliation from segment profit to the line item income before income taxes. We encourage you to review such reconciliation for an understanding of how segment profit compares to that GAAP measure.

I will now turn the call over to our, Chairman and CEO, Rene Lerer.

Rene Lerer, M.D. - Chairman and CEO: Thank you, Renie, and good morning. Thank you for joining us. I am pleased to report that Magellan had a strong fourth quarter, which completed a successful 2011. Our many accomplishments in 2011 included achieving solid financial results, attracting new customers and implementing a focus growth strategy in Medicaid and pharmacy. Across the organization our employees continue to meet and exceed the expectations of our customers and members, and I am proud of their hard work and dedication.

There are several factors contributing to our success during the year. These included strong performance in our Radiology Benefits Management and Medicaid Administration business segments and key wins in our public sector behavioral health business. The Specialty Pharmaceutical unit regained its momentum to deliver its best year ever. While we experienced challenges related to cost of care in our Commercial Behavioral Health unit, we have identified several drivers of the cost pressure and have put in place clinical, network and administrative action plans to address those issues.

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