To Our Shareholders: From our strong roots as a behavioral health company to our work in pharmacy and providing a suite of specialty solutions, Magellan Health Services is moving swiftly to become a market leader in the management of fast-growing, complex and high-cost areas of health- care, with a focus on special population management.  # uring 1, , agellan produced solid financial  results, executed on our two primary growth strategies, added seasoned healthcare executives to our team, and  implemented changes to our operations and products  to ensure that Magellan is nimble, competitive and  poised to respond swiftly to the changing healthcare  marketplace. The forward momentum we built during  2013 has positioned us well for future success. are actively enrolling Medicaid and Medicare lives  and gearing up for the start of the state’s dual eligible  program next year. In Iowa, our Behavioral Led Health  Home program, which serves adults with SMI and children with Serious Emotional Disturbance, continues to roll out in various counties across the state. In October, we acquired Partners Rx, which enhanced  our full-service pharmacy resources by adding scale  and capabilities in the commercial pharmacy benefit  management market, and enhanced our existing, seasoned team with new talent. The management of  drug spend has evolved, leaving many of our competitors unable to manage dollars spent through  the medical benefit ! y combining our / ! , with our  Medicaid pharmacy, specialty pharmacy, and our  unique medical pharmacy capabilities, we are able  to manage any drug, under any benefit, at any site  of service. The time is right for Magellan’s pharmacy  business to further expand its reach and become a  full-service market leader in the industry. ( n the past year, we significantly advanced our two key  growth strategies – our integrated health management  business, Magellan Complete Care, and our pharmacy  business, Magellan Rx Management. MCC is now live in three states, and we are setting  the stage to expand into other markets. In Florida, we  have been operating as a general Medicaid HMO since  June 2013, and we are preparing to go live in mid-2014 with the nationŗ s first , edicaid specialty plan for  individuals with Serious Mental Illness. In New York,  our strategic investment in AlphaCare has provided  us with long-term care management capabilities. We  Magellan’s employees are its greatest resource – providing innovative ideas, thoughtful solutions and  outstanding customer service. We’ve expanded the  sales, account management and clinical areas of our  company, and we have three seasoned healthcare executives leading our businesses. Sam Srivastava, The Right Leadership Executing on our growth strategies 2  Magellan Health Services