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Amerigroup Reports Q4 Net Income of $40.2 Million or $0.79 per Diluted Share

February 19, 2010

VIRGINIA BEACH, Va., Feb. 19, 2010 /PRNewswire-FirstCall/ — Amerigroup Corporation (NYSE: AGP) today announced that net income for the fourth quarter of 2009 was $40.2 million, or $0.79 per diluted share, versus $35.9 million, or $0.67 per diluted share, for the fourth quarter of 2008. For the year ended December 31, 2009, the Company’s net income was $149.3 million, or $2.85 per diluted share.

Highlights include:

  • Membership was approximately 1.8 million as of December 31, 2009, representing a 13.2% increase over the fourth quarter of 2008 and a 0.6% increase compared to the third quarter of 2009.
  • Fourth quarter total revenue was $1.4 billion; an 18.5% increase over the fourth quarter of 2008 and a 4.5% increase compared to the third quarter of 2009.
  • Health benefits expense was 84.6% of premium revenues for the fourth quarter of 2009.
  • Selling, general and administrative expenses were 7.7% of total revenues.
  • Cash flow provided by operations was $147.0 million for the full year ended December 31, 2009 and $40.4 million in the fourth quarter of 2009.
  • Unregulated cash and investments were $232.0 million as of December 31, 2009.
  • Medical claims payable as of December 31, 2009 totaled $529.0 million compared to $550.1 million, as of September 30, 2009.
  • Days in claims payable was 42, compared to 45 days in the previous quarter.
  • The Company repurchased approximately 295,000 shares of its common stock during the fourth quarter for $6.9 million. For the full year, the Company repurchased approximately 2.7 million shares of its common stock for $69.8 million.

“We are very pleased with our strong finish to the year. Though 2009 included many challenges, we were able to respond effectively,” said James G. Carlson, Amerigroup’s Chairman and Chief Executive Officer. “While total membership exceeded expectations during the year, primarily due to swelling Medicaid eligibility in most states, premium rates were suppressed due to unprecedented state budget deficits. Additionally, medical cost trends were elevated in comparison to historical standards, mostly due to higher outpatient costs and the emergence of a significant, off-season influenza strain (H1N1).”

“Our outpatient costs are beginning to show signs of moderation and the impact of the H1N1 virus declined during the fourth quarter,” he continued. “Considering the range of outcomes that were possible in the fourth quarter of 2009, we are encouraged with the way our performance improved.”

Premium Revenues

Premium revenues for the fourth quarter of 2009 increased 19.3% to $1.4 billion compared to $1.1 billion in the fourth quarter of 2008. Sequentially, premium revenues increased $58.7 million, or 4.5%, compared with the third quarter of 2009. The sequential increase primarily reflects the impact of rate increases in Tennessee and Georgia as well as membership gains in the Temporary Aid for Needy Family (TANF) product in most markets.

In December, the Company received final confirmation of its rate increase in Tennessee, which was retroactive to July 1, 2009 and will be effective through June 30, 2011. The Company recognized approximately $12.6 million of revenue in the fourth quarter due to the retroactive nature of the Tennessee rate increase. In a similar fashion, the Company recorded approximately $2.5 million of revenue in the fourth quarter of 2009 for the Georgia rate increase due to its retroactive impact back to July 1, 2009.

For the year ended December 31, 2009, premium revenues increased 18.2% to $5.2 billion from $4.4 billion for the year ended December 31, 2008.

Investment Income and Other Revenues

Fourth quarter investment income and other revenues were $4.9 million versus $12.7 million in the fourth quarter of 2008 and compared to $5.3 million in the third quarter of 2009. Investment income decreased on a sequential basis due to a slight decrease in yield.

For the full year, investment income and other revenues were $29.1 million versus $71.4 million in 2008. The decrease was the result of lower rates of return on fixed income securities due to market interest rates and the Company’s conclusion of the Administrative Services Only (ASO) contract in West Tennessee in October of 2008. Investment income and other revenues for the year-ended 2008 included approximately $19.3 million of ASO revenue related to the West Tennessee contract.

Health Benefits

Health benefits expense, as a percent of premium revenues, was 84.6% for the fourth quarter of 2009 versus 83.2% in the fourth quarter of 2008, and compared to 87.5% in the third quarter of 2009. For the full-year 2009, the health benefits ratio was 85.4% compared to 82.9% for the full-year 2008.

The sequential improvement in the health benefits ratio was primarily due to favorable reserve development and premium rate increases.

The favorable reserve development, net of associated experience rebate accruals in Texas, impacted the health benefits ratio by approximately 190 bps. Based on further paid claims activity during the quarter, the Company was able to revise its medical cost estimates for earlier quarters in 2009. The downward revisions were most significant in the second quarter and the early part of the third quarter. Estimates for trend still remain high compared to historical standards, but results demonstrate some moderation relative to previous estimates.

Additionally, the Company recorded increased revenue during the fourth quarter for the annual rate increases in Tennessee and Georgia, as noted in the Premium Revenues section above, which also favorably impacted the health benefits ratio.

“During a period of elevated medical costs, we are pleased that our previously established reserve estimates have proven to be solid,” said James W. Truess, Amerigroup’s Chief Financial Officer. “Looking back over the year, trends were high relative to historical standards in the first couple of quarters, largely driven by outpatient costs. We identified these changes in a timely manner and initiated a set of actions to combat the increases. More recently, after the H1N1 peak in October, we are seeing some initial indications of trend moderation in the fourth quarter.”

The impact from H1N1 in the fourth quarter 2009 was elevated in comparison with the third quarter of 2009, but the overall impact was less than previously expected. The Company began to see signs of abatement during the fourth quarter as the impact from the H1N1 flu peaked in October and moderated significantly by December. The Company currently estimates that H1N1 raised the health benefits ratio by approximately 90 bps in the quarter.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were 7.7% of total revenues for the fourth quarter of 2009, versus 9.0% in the fourth quarter of 2008, and compared to 6.3% for the third quarter of 2009. The selling, general and administrative expense ratio increased sequentially, due to the reversal of variable compensation accruals in the third quarter of 2009 which lowered the ratio in that quarter.

For the full-year 2009, the selling, general and administrative expense ratio was 7.6% compared with 9.8% for the full-year 2008.

Premium Taxes

Fourth quarter premium taxes were $33.2 million versus $25.7 million for the fourth quarter of 2008, and compared to $38.3 million in the third quarter of 2009. The sequential decrease in premium taxes was primarily due to the elimination of premium tax in Georgia, effective October 1, 2009.

For the full-year 2009, premium taxes were $134.3 million versus $93.8 million for the full-year 2008.

Net Income

Net income for the fourth quarter of 2009 was $40.2 million, or $0.79 per diluted share, versus $35.9 million, or $0.67 per diluted share, for the fourth quarter of 2008.

For the year ended December 31, 2009, the Company’s net income was $149.3 million, or $2.85 per diluted share. Excluding the positive impact of a tax adjustment of $22.4 million, or $0.43 per diluted share, recorded in the second quarter of 2009, net income would have been $126.8 million, or $2.42 per diluted share. For the full-year 2008, the Company’s net loss was $56.6 million, or $1.07 per diluted share, including the impact of a one-time litigation charge of $234.2 million, or $199.6 million net of the related tax benefit. Excluding the impact of this charge, full-year 2008 net income would have been $143.0 million, or $2.66 per diluted share. A reconciliation of these non-GAAP financial measures to GAAP is included on page 12 of this release.

Balance Sheet and Cash Flow Highlights

Cash and investments at December 31, 2009 totaled $1.5 billion of which $232.0 million was unregulated compared to $277.2 million in the third quarter of 2009. The sequential decline is due to increased funding of the Company’s health plan subsidiaries of approximately $40 million for rising statutory net worth requirements. During the quarter, the Company also repurchased approximately 295,000 shares of its common stock for $6.9 million under the Company’s ongoing stock repurchase program. For the full year, the Company repurchased approximately 2.7 million shares of its common stock for $69.8 million.

The debt to total capital ratio decreased to 19.3% as of December 31, 2009, from 19.8%, as of September 30, 2009.

Medical claims payable as of December 31, 2009 totaled $529.0 million compared to $550.1 million as of September 30, 2009. Days in claims payable represented 42 days of health benefits expense compared to 45 days in the previous quarter. The sequential decline in days was primarily due to a normal weekly claims disbursement cycle occurring on the last day of the fourth quarter. This resulted in complete distribution of the final claims payment cycle in the fourth quarter compared to partial distribution in the third quarter.

In light of increasing claims processing speed that has been achieved during 2009, the Company is revising its expected range for days in claims payable to 40 to 50 days.

Included on page 11 is a table presenting the components of the change in medical claims payable for the twelve month periods ended December 31, 2009 and December 31, 2008.

Cash Flow Highlights

Cash flow from operations totaled $147.0 million for the twelve months ended December 31, 2009 and $40.4 million for the fourth quarter versus $72.6 million in the third quarter of 2009. The sequential decline in cash flow from operations for the quarter was primarily due to an experience rebate payment to the State of Texas.

Outlook

In October of 2009, the Company withdrew its earnings per share guidance for 2009 due to the wide range of medical cost outcomes that were possible in the fourth quarter as well as uncertainty regarding premium rate actions. The Company has elected not to resume the practice of issuing guidance at this time pending further clarity on medical cost trends and additional insight on state premium rate actions.

Fourth Quarter Earnings Call

Amerigroup senior management will discuss the Company’s fourth quarter results on a conference call Friday, February 19, 2010 at 8:30 a.m. Eastern Time (ET). The conference can be accessed by dialing 866-260-3161 (domestic) or 706-679-7245 (international) approximately ten minutes prior to the start time of the call. A recording of the call may be accessed by dialing 800-642-1687 (domestic) or 706-645-9291 (international) and providing passcode 49316157. The replay will be available shortly after the conclusion of the call until Friday, February 26, 2010, at 11:59 p.m. Eastern Time. The conference call will also be available through the investors’ page of the Company’s web site, www.amerigroupcorp.com, or through www.earnings.com. A 30-day replay of this webcast will be available on these web sites beginning approximately two hours following the conclusion of the live broadcast earnings conference call.

About Amerigroup Corporation

Amerigroup Corporation and its subsidiaries help those in publicly funded healthcare programs by ensuring that these individuals enter an organized system of care and a true medical home. Serving approximately 1.8 million members in 11 states nationwide, Amerigroup accepts all eligible people regardless of age, sex, race or disability. The Company’s product offerings do not utilize any individual underwriting nor deny coverage due to pre-existing medical conditions. Amerigroup is dedicated to offering real solutions that improve healthcare access and quality for its members, while proactively working to reduce the overall cost of care to taxpayers. For more information and real story examples of these solutions, please visit www.amerigroupcorp.com.

Forward-Looking Statements

This release is intended to be disclosure through methods reasonably designed to provide broad, non-exclusionary distribution to the public in compliance with the Securities and Exchange Commission’s Fair Disclosure Regulation. This release contains certain ”forward-looking” statements, including statements related to membership growth, medical costs and outpatient cost trends, the severity of the flu season, the impact of the H1N1 virus and days in claims payable. These statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from those projected or contemplated in the forward-looking statements. These risks and uncertainties include, but are not limited to: our inability to manage medical costs; our inability to operate new products and markets at expected levels, including, but not limited to, profitability, membership and targeted service standards; national, state and local economic conditions, including their effect on the rate-setting process and timing of payments; the effect of government regulations and changes in regulations governing the healthcare industry; changes in Medicaid and Medicare payment levels and methodologies; increased use of services, increased cost of individual services, epidemics, pandemics, the introduction of new or costly treatments and technology, new mandated benefits, insured population characteristics and seasonal changes in the level of healthcare use; our ability to maintain and increase membership levels; our ability to enter into new markets or remain in existing markets; changes in market interest rates or any disruptions in the credit markets; our ability to maintain compliance with all minimum capital requirements; liabilities and other claims asserted against us; demographic changes; the competitive environment in which we operate; the availability and terms of capital to fund acquisitions and capital improvements; our ability to attract and retain qualified personnel; the unfavorable resolution of new or pending litigation; and catastrophes, including acts of terrorism or severe weather.

Investors should also refer to our annual report on Form 10-K for the year ended December 31, 2008 filed with the Securities and Exchange Commission (“SEC”) and subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with or furnished to the SEC, for a discussion of certain known risk factors that could cause our actual results to differ materially from our current estimates. Given these risks and uncertainties, we can give no assurances that any forward-looking statements will, in fact, transpire and, therefore, caution investors not to place undue reliance on them. We specifically disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.


                      AMERIGROUP CORPORATION AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (dollars in thousands, except per share data)
                                    (unaudited)                               

                                   Three months ended   Twelve months ended
                                      December 31,          December 31,
                                      ------------          ------------
                                     2009   2008[1]        2009    2008[1]
                                     ----   -------        ----    -------    

    Revenues:
        Premium                $1,357,683 $1,137,632 $5,158,989    $4,366,359
        Investment income and
         other                      4,902     12,687     29,081        71,383
                                    -----     ------     ------        ------
            Total revenues      1,362,585  1,150,319  5,188,070     4,437,742
                                ---------  ---------  ---------     ---------
    Expenses:
        Health benefits         1,148,366    946,095  4,407,273     3,618,261
        Selling, general and
         administrative           105,191    103,772    394,089       435,876
        Premium tax                33,200     25,706    134,277        93,757
        Litigation settlement           -          -          -       234,205
        Depreciation and
         amortization               8,299     10,926     34,746        37,385
        Interest                    3,867      4,407     16,266        20,514
                                    -----      -----     ------        ------
            Total expenses      1,298,923  1,090,906  4,986,651     4,439,998
                                ---------  ---------  ---------     ---------
            Income (loss)
             before
             income taxes          63,662     59,413    201,419        (2,256)
    Income tax expense             23,440     23,550     52,140        54,350
                                   ------     ------     ------        ------
            Net income (loss)     $40,222    $35,863   $149,279      $(56,606)
                                  =======    =======   ========      ======== 

        Diluted net income
         (loss)
         per share                  $0.79      $0.67      $2.85        $(1.07)
                                    =====      =====      =====        ====== 

        Weighted average
         number of
         common shares and
         dilutive potential
         common shares
         outstanding           51,069,265 53,345,226 52,309,268  52,816,674[2]
                               ========== ========== ==========  ============ 

    [1] 2008 results reflect the previously disclosed reclassification of
        premium taxes and experience rebate. Additionally, results include the
        impact from the adoption of a new accounting pronouncement related to
        convertible debt instruments which increased interest expense in each
        of the periods presented.
    [2] Weighted shares in the twelve months ended December 31, 2008 exclude
        potentially dilutive common stock equivalents due to the net loss in
        that period in accordance with U.S. generally accepted accounting
        principles. 

    The following table sets forth selected operating ratios.  All ratios,
    with the exception of the health benefits ratio, are shown as a
    percentage of total revenues.
                                           Three months    Twelve months
                                              ended           ended
                                           December 31,    December 31,
                                           ------------    ------------
                                            2009   2008   2009     2008
                                            ----   ----   ----     ----
    Premium revenue                         99.6%  98.9%  99.4%  98.4%
    Investment income and other              0.4    1.1    0.6    1.6
                                             ---    ---    ---    ---
    Total revenues                         100.0% 100.0% 100.0% 100.0%
                                           =====  =====  =====  =====
    Health benefits [1]                     84.6%  83.2%  85.4%  82.9%
    Selling, general and administrative
     expenses                                7.7%   9.0%   7.6%   9.8%
    Income (loss) before income taxes        4.7%   5.2%   3.9%  (0.1)%
    Net income (loss)                        3.0%   3.1%   2.9%  (1.3)%  

    [1] The health benefits ratio is shown as a percentage of premium
        revenue because there is a direct relationship between the
        premium received and the health benefits provided.               

    The following table sets forth the approximate number of members the
    Company served in each state as of December 31, 2009 and 2008.  Because
    the Company receives two premiums for members that are in both the
    Medicare Advantage and Medicaid products, these members have been counted
    twice in the states where the Company offers both plans. 

                                        December 31,
                                        ------------
                                       2009      2008
                                       ----      ----
        Texas[1]                    505,000   455,000
        Georgia                     249,000   206,000
        Florida                     236,000   237,000
        Tennessee                   195,000   187,000
        Maryland                    194,000   169,000
        New Jersey                  118,000   105,000
        New York                    114,000   110,000
        Nevada                       62,000         -
        Ohio                         60,000    58,000
        Virginia                     35,000    25,000
        New Mexico                   20,000    11,000
        South Carolina[2]                 -    16,000
                                     ------    ------
              Total               1,788,000 1,579,000
                                  ========= =========

    [1] Membership includes approximately 13,000 ASO members in 2009.

    [2] Amerigroup exited the State of South Carolina on March 1, 2009.

    The following table sets forth the approximate number of members in
    each of the Company's products as of December 31, 2009 and 2008.  Because
    the Company receives two premiums for members that are in both the
    Medicare Advantage and Medicaid products, these members have been
    counted in each product.

                                        December 31,
                                        ------------
    Product                            2009      2008
    -------                            ----      ----
     TANF (Medicaid)[1]           1,255,000 1,095,000
     CHIP[1]                        259,000   253,000
     ABD (Medicaid)[2]              196,000   182,000
     FamilyCare (Medicaid)           63,000    40,000
     Medicare Advantage              15,000     9,000
                                     ------     -----
         Total                    1,788,000 1,579,000
                                  ========= =========

    [1] 2008 reflects a reclassification from CHIP to TANF to
        coincide with State classifications.
    [2] Membership includes approximately 13,000 ASO members in 2009.

                     AMERIGROUP CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                  (dollars in thousands, except per share data)
                                   (unaudited)
                                                             December 31,
                                                         2009           2008
                                                         ----           ---- 

                                      Assets
    Current assets:
        Cash and cash equivalents                    $505,915       $763,272
        Short-term investments                        137,523         97,466
        Premium receivables                           104,867         86,595
        Deferred income taxes                          26,361         25,347
        Prepaid expenses, provider and other
         receivables and other                         47,316         42,281
                                                       ------         ------
          Total current assets                        821,982      1,014,961 

    Property, equipment and software, net             101,002        103,747
    Goodwill and other intangible assets, net         249,730        250,205
    Long-term investments, including investments
     on deposit for licensure                         813,976        571,663
    Other long-term assets                             12,944         15,091
                                                       ------         ------
          Total assets                             $1,999,634     $1,955,667
                                                   ==========     ========== 

                       Liabilities and Stockholders' Equity
    Current liabilities:
        Claims payable                               $529,036       $536,107
        Unearned revenue                               98,298         82,588
        Accounts payable                                4,685          6,810
        Accrued expenses and other                    127,278        170,811
        Current portion of long-term debt                   -            506
                                                          ---            ---
          Total current liabilities                   759,297        796,822 

    Long-term debt                                    235,104        268,956
    Other long-term liabilities                        20,789         17,230
                                                       ------         ------
          Total liabilities                         1,015,190      1,083,008
                                                    ---------      --------- 

    Stockholders' equity:
        Common stock, $.01 par value                      546            539
        Additional paid-in capital, net of
         treasury stock                               391,912        434,789
        Accumulated other comprehensive income
         (loss)                                         1,354         (4,022)
        Retained earnings                             590,632        441,353
                                                      -------        -------
          Total stockholders' equity                  984,444        872,659
                                                      -------        -------
          Total liabilities and stockholders'
           equity                                  $1,999,634     $1,955,667
                                                   ==========     ========== 

                     AMERIGROUP CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                                          Twelve months ended
                                                              December 31,
                                                               ------------
                                                             2009      2008
                                                             ----      ----
                                                       (dollars in thousands)
    Cash flows from operating activities:
        Net income (loss)                                 $149,279  $(56,606)
        Adjustments to reconcile net income (loss)
         to net cash provided by operating activities:
            Depreciation and amortization                   34,746    37,385
            Loss on disposal of property, equipment and
             software                                          585       644
            Deferred tax expense (benefit)                     818      (288)
            Compensation expense related to share-based
             payments                                       15,936    10,381
            Convertible debt non-cash interest expense       9,974     9,344
            Other                                             (167)    8,367
            Gain on sale of contract rights                 (5,810)        -
            Changes in assets and liabilities (decreasing)
             increasing cash flows from operations:
              Premium receivables                          (18,272)   (3,655)
              Prepaid expenses, provider and other
               receivables and other current assets         (2,310)   41,183
              Other assets                                  (1,146)      788
              Claims payable                                (7,071)   (5,066)
              Unearned revenue                              15,710    26,651
              Accounts payable, accrued expenses and
               other current liabilities                   (43,758)    5,557
              Other long-term liabilities                   (1,480)     (409)
                                                            ------      ----
                          Net cash provided by operating
                           activities                      147,034    74,276
                                                           -------    ------ 

    Cash flows from investing activities:
        Release of restricted investments held as
         collateral                                              -   351,318
        Purchase of investments, net                      (265,307)   (3,081)
        Purchase of investments on deposit for
         licensure, net                                     (7,410)   (5,493)
        Purchase of property, equipment and software       (29,738)  (37,034)
        Proceeds from sale of contract rights                5,810         -
        Purchase price adjustment received                       -     1,500
                                                             -----     -----
                          Net cash (used in) provided
                           by investing activities        (296,645)  307,210
                                                          --------   ------- 

    Cash flows from financing activities:
        Repayments of borrowings under credit facility     (44,318)  (84,028)
        Payment of capital lease obligations                     -      (368)
        Proceeds and tax benefits from exercise of stock
         options and change in bank overdrafts and
         other, net                                          6,323     9,215
        Treasury stock repurchases                         (69,751)  (30,647)
                                                           -------   -------
                          Net cash used in financing
                           activities                     (107,746) (105,828)
                                                          --------  --------
    Net (decrease) increase in cash and cash equivalents  (257,357)  275,658
    Cash and cash equivalents at beginning of year         763,272   487,614
                                                           -------   -------
    Cash and cash equivalents at end of year              $505,915  $763,272
                                                          ========  ======== 

                    AMERIGROUP CORPORATION AND SUBSIDIARIES
               Components of the Change in Medical Claims Payable
                             (dollars in thousands)                        

                                                Twelve months ended
                                      December 31, 2009  December 31, 2008
                                      -----------------  -----------------
    Medical claims payable,
     beginning of period                       $536,107           $541,173 

    Health benefits expense incurred during period:
        Related to current year               4,492,590          3,679,107
        Related to prior years                  (85,317)           (60,846)
                                                -------            -------
            Total incurred                    4,407,273          3,618,261
                                              ---------          --------- 

    Health benefits payments during period:
        Related to current year               4,007,789          3,197,732
        Related to prior years                  406,555            425,595
                                                -------            -------
            Total payments                    4,414,344          3,623,327
                                              ---------          --------- 

    Medical claims payable, end of
     period                                    $529,036           $536,107
                                               ========           ======== 

    Health benefits expense incurred during both periods were reduced for
    amounts related to prior years.  The amounts related to prior years
    include the impact of amounts previously included in the liability to
    establish it at a level sufficient under moderately adverse conditions
    that were not needed and the reduction in health benefits expense due
    to revisions to prior estimates.   

                Reconciliation of Non-GAAP Financial Measures            

    Management believes that the presentation of certain financial information
    in this press release, excluding the tax adjustment and litigation
    settlement charge that were recorded in twelve months ended December 31,
    2009 and December 31, 2008, respectively, which is non-GAAP financial
    information, is useful to investors and improves the comparability of the
    Company's ongoing operational results between periods.  The non-GAAP
    financial information should be considered in addition to, not as a
    substitute for, financial information prepared in accordance with GAAP.

                   AMERIGROUP CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                (dollars in thousands, except per share data)
                                 (unaudited)                             

       2009 Operating Results Excluding the Positive Impact of the Tax
                                Adjustment                             

                                       GAAP      Less:           Adjusted
                              Twelve months     Impact      Twelve months
                                      ended     of Tax              ended
                          December 31, 2009 Adjustment  December 31, 2009
                          ----------------- ----------  -----------------
    Revenues:
        Premium                  $5,158,989         $-         $5,158,989
        Investment income
         and other                   29,081          -             29,081
                                     ------       ----             ------
            Total revenues        5,188,070          -          5,188,070
    Expenses:
        Health benefits           4,407,273          -          4,407,273
        Selling, general and
         administrative             394,089          -            394,089
        Premium tax                 134,277          -            134,277
        Depreciation and
         amortization                34,746          -             34,746
        Interest                     16,266          -             16,266
                                     ------       ----             ------
            Total expenses        4,986,651          -          4,986,651
                                  ---------       ----          ---------
            Income before
             income taxes           201,419          -            201,419
    Income tax expense (benefit)     52,140    (22,449)            74,589
                                     ------    -------             ------
            Net income             $149,279    $22,449           $126,830
                                   ========    =======           ========

        Diluted net income
         per share                    $2.85     ($0.43)             $2.42
                                      =====     ======              =====

        Weighted average number
          of common shares and
          dilutive potential
          common shares
          outstanding            52,309,268                    52,309,268
                                 ==========                    ==========

    2008 Operating Results Excluding the Impact of the Litigation Settlement 

                                       GAAP          Less:           Adjusted
                              Twelve months         Impact      Twelve months
                                      ended  of Litigation              ended
                          December 31, 2008     Settlement  December 31, 2008
                          -----------------     ----------  -----------------
    Revenues:
        Premium                  $4,366,359             $-         $4,366,359
        Investment income and
         other                       71,383              -             71,383
                                     ------           ----             ------
            Total revenues        4,437,742              -          4,437,742
    Expenses:
        Health benefits           3,618,261              -          3,618,261
        Selling, general and
         administrative             435,876              -            435,876
        Premium tax                  93,757              -             93,757
        Litigation
         settlement                 234,205        234,205                  -
        Depreciation and
         amortization                37,385              -             37,385
        Interest                     20,514              -             20,514
                                     ------           ----             ------
            Total expenses        4,439,998        234,205          4,205,793
                                  ---------        -------          ---------
            (Loss) income before
             income taxes            (2,256)      (234,205)           231,949
    Income tax expense (benefit)     54,350        (34,567)            88,917
                                     ------        -------             ------
            Net (loss) income      ($56,606)     ($199,638)          $143,032
                                   ========      =========           ========

        Diluted net (loss)
         income per share            ($1.07)         $3.73              $2.66
                                     ======          =====              =====

        Weighted average number
         of common shares and
         dilutive potential
         common shares
         outstanding             52,816,674                        53,726,342
                                 ==========                        ==========

    CONTACTS:
    Investors:  Julie Loftus Trudell  Media: Tara Wall
    Senior Vice President, Investor    Senior Vice President,
     Relations                         Communications
    Amerigroup Corporation            Amerigroup Corporation
    (757) 321-3597                     (757) 518-3671

SOURCE Amerigroup Corporation


Source: newswire



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