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.

SOURCE Amerigroup Corporation