Coventry Health Care announces consolidated results for the third quarter of 2009

Coventry Health Care, Inc. (NYSE:CVH) today reported consolidated operating results for the quarter ended September 30, 2009. Operating revenues totaled $3.4 billion for the quarter with GAAP net earnings of $70.6 million, or $0.48 earnings per diluted share (EPS). Excluding the impact of the First Health Services Corporation (FHSC) divestiture in the third quarter, which resulted in a net charge of $26.7 million, or $0.18 per diluted share, adjusted net earnings were $97.3 million, or $0.66 per diluted share.

Excluding the impact of the FHSC divestiture, the Company is increasing its full year 2009 adjusted EPS guidance to a range of $2.01 to $2.03, an increase of $0.12 from the midpoint of the prior EPS range of $1.85 to $1.95. GAAP EPS for the full year is now expected to be in a range of $1.45 to $1.47 as the Company has recorded a largely non-cash full year charge of $0.56 per diluted share as a result of the FHSC divestiture, as outlined on page two.

“I continue to be pleased with the Company’s financial and operational results for 2009 including today’s increase to full year EPS guidance,” said Allen F. Wise, chairman and chief executive officer of Coventry. “In the face of a challenging environment, we feel confident that focusing on our seven core businesses and driving a low cost structure will best position Coventry for the future.”

Third Quarter Consolidated Highlights

• Revenues from continuing operations increased 17.7% from the prior year quarter
• Continued growth in Medicare products
  • Medicare Coordinated Care Product (CCP) membership growth of 38% from the prior year quarter
  • Medicare Part D membership growth of 81,000 from the prior quarter
• Health plan commercial group risk medical loss ratio of 82.1%
• GAAP cash flows from operations were $314.3 million
• Excellent liquidity position
  • Approximately $570 million of deployable free cash at the parent at quarter-end
  • Debt repayment of $98 million during the quarter
• Share buyback of 1.5 million shares at the end of the quarter
• Investment portfolio in a net unrealized gain position at quarter-end