WellCare Reports First Quarter 2009 Results

TAMPA, Fla.--(Business Wire)--
WellCare Health Plans, Inc. (NYSE: WCG) today reported first quarter 2009
adjusted net income of $12.3 million as compared with $21.7 million for the
first quarter 2008. Adjusted diluted earnings per share ("EPS") were $0.29
versus $0.52 in the same period last year.

First quarter adjusted results were negatively impacted by a decrease in
investment and other income, an increase in medical benefits expense associated
with Medicare Advantage private fee-for-service plans, and an increase in the
Medicaid segment medical benefits ratio ("MBR") due to premium rate increases
below the Company`s historical experience. These factors were offset in part by
the favorable development of 2008 medical benefits payable.

As determined under generally accepted accounting principles ("GAAP"), the
Company reported a net loss of $36.9 million, or $0.89 per diluted share, for
the first quarter 2009, compared with net income of $1.3 million, or $0.03 per
diluted share, for the first quarter 2008.

"We have achieved good progress, despite the challenging environment, as our
team has remained focused on serving our members, providers and government
clients," said Heath Schiesser, WellCare`s president and chief executive
officer. "In addition, we look forward to repaying our credit facility in full
in two days, and we will continue to invest in our infrastructure and compliance
programs."

Historical operating results described in this news release are adjusted to
exclude certain selling, general, and administrative ("SG&A") expenses for
investigation-related matters that management believes are not indicative of
longer-term business operations. Management believes adjusted amounts provide
additional, useful information for investors. Where applicable, adjusted results
are reconciled to the most directly comparable results determined under GAAP. In
addition, please also refer to the schedules in this news release that provide
supplemental information reconciling historical results determined under GAAP to
historical adjusted results.

Highlights of First Quarter Operations

Membership of 2.46 million as of March 31, 2009, essentially was unchanged from
2.45 million members as of March 31, 2008. Medicaid segment membership increased
10% year-over-year to 1.36 million, driven by growth in all programs and the
addition of the Hawaii program for the aged, blind, and disabled ("ABD") on
February 1, 2009, offset in part by the withdrawals from the Connecticut program
in April 2008 and the Ohio ABD program in August 2008. Medicare Advantage
membership was 270,000 on March 31, 2009, an increase of 32% from March 31,
2008. Medicare stand-alone Prescription Drug Plan ("PDP") membership decreased
18% year-over-year.

Premium revenue for the first quarter 2009 increased 10.5% year-over-year to
$1.79 billion. The growth is attributable principally to increases in Medicaid
and Medicare Advantage premiums, offset in part by a decrease in PDP premiums.

Investment and other income was $3.3 million, a decrease of 79% year-over-year,
primarily due to reduced market interest rates, and, to a lesser extent, lower
average investment and cash balances. The decrease reduced diluted EPS by
approximately $0.19 year-over-year.

Medical benefits expense was $1.55 billion, compared with $1.40 billion for the
same period last year. First quarter medical benefits expense was affected by
the year-to-year increase in costs associated with Medicare Advantage private
fee-for-service plans. This increase reduced adjusted diluted EPS by
approximately $0.33 year-over-year. On May 4, 2009, WellCare announced its
intention to withdraw in 2010 from private fee-for-service plans. Medical
benefits expense also was affected by the favorable development of 2008 medical
benefits payable in both the Company`s Medicaid and Medicare segments, which
amounted to $0.46 per diluted share.

The medical benefits ratio was 86.7% in the first quarter 2009, compared with
86.2% in 2008. The 50 basis point increase in the MBR was driven principally by
the Medicaid segment MBR, which increased primarily due to premium rate
increases below the Company`s historical experience

Adjusted SG&A expense was $215.2 million, or 12.0% of total revenues, compared
with $194.8 million, or 11.9% of total revenues, for the same period last year.
The increase principally resulted from growth in the Company`s operations and
investments in infrastructure and compliance programs.

Cash Flow and Financial Condition Highlights

For the first quarter ended March 31, 2009, net cash provided by operations was
$54.5 million after adjusting for the timing of receipt of payments from the
Company`s government clients. Please refer to the supplemental information for a
reconciliation of adjusted net cash provided by operations to net cash used in
operations of $105.8 million as determined under GAAP.

WellCare has a senior secured credit facility that has a term loan with an
outstanding balance of $152.4 million as of March 31, 2009. The Company expects
to pay the outstanding balance in full on its due date of May 13, 2009.

Days in claims payable were 51 days as of March 31, 2009, compared with 54 days
as of December 31, 2008. Adjusted days in claims payable were 49 days as of
March 31, 2008. Please refer to the supplemental information for a
reconciliation of March 31, 2008 days, in claims payable to adjusted days in
claims payable.

Webcast

A discussion of WellCare`s first quarter 2009 results as well as the Company`s
outlook will be webcast live on Monday, May 11, 2009, beginning at 8:30 a.m.
Eastern Time. A replay will be available beginning approximately one hour
following the conclusion of the live broadcast. The webcast is available via the
Company`s web site at www.wellcare.com and at www.earnings.com.

About WellCare Health Plans, Inc.

WellCare Health Plans, Inc. provides managed care services exclusively for
government-sponsored healthcare programs, focusing on Medicaid and Medicare.
Headquartered in Tampa, Florida, WellCare offers a variety of health plans for
families, children, and the aged, blind, and disabled, as well as prescription
drug plans. The Company served nearly 2.5 million members nationwide as of March
31, 2009. For more information about WellCare, please visit the Company`s
website at www.wellcare.com.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains "forward-looking" statements that are made pursuant
to the Safe Harbor provisions of the Private Securities Litigation Reform Act of
1995. Statements that are predictive in nature, that depend upon or refer to
future events or conditions, or that include words such as "expects,"
"anticipates," "intends," "plans," "believes," "estimates," and similar
expressions are forward-looking statements. Forward-looking statements involve
known and unknown risks and uncertainties that may cause WellCare`s actual
future results to differ materially from those projected or contemplated in the
forward-looking statements. These risks and uncertainties include, but are not
limited to, risks regarding WellCare`s intentions with respect to the repayment
of its senior secured credit facility and its level of debt.

Additional information concerning these and other important risks and
uncertainties can be found under the captions "Cautionary Statement Regarding
Forward-Looking Statements" and "Risk Factors" in the Company`s 2008 Annual
Report on Form 10-K, as amended, and other filings made with the U.S. Securities
and Exchange Commission, which contain discussions of WellCare`s business and
the various factors that may affect it. WellCare undertakes no duty to update
these forward-looking statements to reflect any future events, developments, or
otherwise.

WELLCARE HEALTH PLANS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)

Three Months Ended
March 31,
2009 2008
Revenues:
Premium $ 1,791,927 $ 1,621,374
Investment and other income 3,334 15,547
Total revenues 1,795,261 1,636,921

Expenses:
Medical benefits 1,552,998 1,397,572
Selling, general, and administrative 271,521 227,736
Depreciation and amortization 5,739 5,151
Interest 2,286 3,304
Total expenses 1,832,544 1,633,763

(Loss) income before income taxes (37,283 ) 3,158
Income tax (benefit) expense (350 ) 1,838
Net (loss) income $ (36,933 ) $ 1,320

Net (loss) income per share:
Basic $ (0.89 ) $ 0.03
Diluted $ (0.89 ) $ 0.03

Weighted average common shares outstanding:
Basic 41,680,319 41,126,580
Diluted 41,680,319 41,944,055

WELLCARE HEALTH PLANS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

March 31, Dec. 31,
2009 2008
(unaudited)
ASSETS
Current
Assets:
Cash and cash $ 1,134,580 $ 1,181,922
equivalents
Investments 73,778 70,112
Premium and 285,401 215,525
other
receivables,
net
Other 51,514 825
receivables
from
government
partners, net
Funds 43,754 86,542
receivable
for the
benefit of
members
Prepaid 124,583 129,490
expenses and
other current
assets, net
Deferred 23,921 20,154
income taxes
Total current 1,737,531 1,704,570
assets
Property, 66,373 66,588
equipment and
capitalized
software, net
Goodwill 111,131 111,131
Other 14,110 14,493
intangible
assets, net
Long term 48,404 54,972
investments
Restricted 176,869 199,339
investment
assets
Deferred tax 19,814 23,263
asset
Other assets 27,317 29,105
Total Assets $ 2,201,549 $ 2,203,461

LIABILITIES
AND
STOCKHOLDERS`
EQUITY
Current
Liabilities:
Medical $ 879,801 $ 766,179
benefits
payable
Unearned 18,643 81,197
premiums
Accounts 14,359 5,138
payable
Other accrued 286,891 338,340
expenses
Other 31,012 8,100
payables to
government
partners
Taxes payable 13,047 12,187
Debt 152,381 152,741
Other current 674 674
liabilities
Total current 1,396,808 1,364,556
liabilities
Other 30,440 33,076
liabilities
Total 1,427,248 1,397,632
liabilities
Commitments - -
and
contingencies
Stockholders`
Equity:
Preferred - -
stock, $0.01
par value
(20,000,000
authorized,
no shares
issued or
outstanding)
Common stock, 422 423
$0.01 par
value
(100,000,000
authorized,
42,221,355
and
42,261,345
shares issued
and
outstanding
at March 31,
2009 and
December 31,
2008,
respectively)
Paid-in 398,707 390,526
capital
Retained 381,708 418,641
earnings
Accumulated (6,536 ) (3,761 )
other
comprehensive
expense
Total 774,301 805,829
stockholders`
equity
Total $ 2,201,549 $ 2,203,461
Liabilities
and
Stockholders`
Equity

WELLCARE HEALTH PLANS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Three Months Ended
March 31,
2009 2008
Cash from (used in) operating activities:
Net (loss) income $ (36,933 ) $ 1,320
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Depreciation and amortization expense 5,739 5,151
Equity-based compensation expense 9,612 7,607
Deferred taxes, net (318 ) 3,563
Changes in operating accounts:
Premium and other receivables, net (69,876 ) 81,748
Other receivables from government partners, net (50,689 ) (6,018 )
Prepaid expenses and other, net 4,907 (32,652 )
Medical benefits payable 113,622 123,638
Unearned premiums (62,554 ) (17,769 )
Accounts payable 9,221 14,475
Other accrued expenses (51,449 ) (20,851 )
Other payables to government partners 22,912 (74,140 )
Taxes 2,288 20,048
Other (2,236 ) (39,341 )
Net cash (used in) provided by operations (105,754 ) 66,779
Cash from (used in) investing activities:
Purchases of investments (18,756 ) (105,999 )
Proceeds from sales and maturities of investments 19,051 175,803
Purchases of restricted investments (17,088 ) (9,317 )
Proceeds from maturities of restricted assets 39,390 738
Additions to property and equipment, net (5,141 ) (3,876 )
Net cash provided by investing activities 17,456 57,349
Cash from (used in) financing activities:
Purchase of treasury stock and other (1,432 ) (1,530 )
Repayments on debt (400 ) (800 )
Funds received for the benefits of members, net of disbursements 42,788 104,039
Net cash provided by financing activities 40,956 101,709
Cash and cash equivalents:
(Decrease) increase during the period (47,342 ) 225,837
Balance at beginning of year 1,181,922 1,008,409
Balance at end of period $ 1,134,580 $ 1,234,246

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for taxes $ 903 $ 15,772
Cash paid for interest $ 1,790 $ 2,971

WELLCARE HEALTH PLANS, INC.
MEMBERSHIP STATISTICS

As of March 31,
2009 2008
Membership by Program
Medicaid Membership
TANF 1,080,000 947,000
S-CHIP 164,000 187,000
SSI 92,000 71,000
FHP 19,000 28,000
Total Medicaid Membership 1,355,000 1,233,000

Medicare Membership
Medicare Advantage 270,000 204,000
Prescription drug plan (stand-alone) 831,000 1,009,000
Total Medicare Membership 1,101,000 1,213,000
Total Membership 2,456,000 2,446,000
Medicaid Membership by State
Florida 490,000 455,000
Georgia 496,000 456,000
Other states 369,000 322,000
Total Medicaid Membership 1,355,000 1,233,000

WELLCARE HEALTH PLANS, INC.
UNAUDITED SEGMENT AND LINE OF BUSINESS INFORMATION
(Dollars in thousands)

Three Months Ended
March 31,
2009 2008
Premium revenue:
Medicaid:
Florida $ 248,692 $ 241,903
Georgia 324,924 307,116
Other states 235,562 184,616
Total Medicaid 809,178 733,635

Medicare:
Medicare Advantage plans 733,099 545,822
Prescription Drug plans 249,650 341,917
Total Medicare 982,749 887,739
Total premium revenue $ 1,791,927 $ 1,621,374

Medical benefits ratio:
Medicaid segment 85.2 % 83.3 %
Medicare segment 87.8 % 88.6 %

WELLCARE HEALTH PLANS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION

Reconciliation of GAAP Statements of Operations to Adjusted Statements of Operations
(Dollars in thousands except per share amounts)

The Company reports operating results on a non-GAAP basis to exclude certain expenses that management believes are not indicative of future business trends and operations. Management believes adjusted amounts provide
additional, useful information for investors. Following are statements of operations and related measures for the three months ended March 31, 2009 and 2008, as determined under GAAP, reconciled to the adjusted
statements of operations and related measures for each of the same periods.

Three Months Ended March 31, 2009 Three Months Ended March 31, 2008
GAAP Adjustments Adjusted GAAP Adjustments Adjusted
Revenues:
Premium $ 1,791,927 $ - $ 1,791,927 $ 1,621,374 $ - $ 1,621,374
Investment and other income 3,334 - 3,334 15,547 - 15,547
Total revenues 1,795,261 - 1,795,261 1,636,921 - 1,636,921

Expenses:
Medical benefits 1,552,998 - 1,552,998 1,397,572 - 1,397,572
Selling, general, and (a)
administrative 271,521 (56,300 ) (b) 215,221 227,736 (32,906 ) (a) 194,830
Depreciation and amortization 5,739 - 5,739 5,151 - 5,151
Interest 2,286 - 2,286 3,304 - 3,304
Total expenses 1,832,544 (56,300 ) 1,776,244 1,633,763 (32,906 ) 1,600,857

Income (loss) before income taxes (37,283 ) 56,300 19,017 3,158 32,906 36,064
Income tax expense (benefit) (350 ) 7,097 6,747 1,838 12,504 14,342
Net income (loss) $ (36,933 ) $ 49,203 $ 12,270 $ 1,320 $ 20,402 $ 21,722

Weighted average shares outstanding:
Basic 41,680,319 - 41,680,319 41,126,580 - 41,126,580
Diluted 41,680,319 194,529 41,874,848 41,944,055 - 41,944,055

Net income per share:
Basic $ (0.89 ) $ 1.18 $ 0.29 $ 0.03 $ 0.50 $ 0.53
Diluted $ (0.89 ) $ 1.18 $ 0.29 $ 0.03 $ 0.49 $ 0.52

Medical benefits ratio 86.7 % 86.7 % 86.2 % 86.2 %
Administrative expense ratio 15.1 % (3.1 %) 12.0 % 13.9 % (2.0 %) 11.9 %
Days in claims payable 51 days 51 days 43 days 6 days (c) 49 days

(a) Investigation-related
legal, accounting, employee
retention, and other costs:
Administrative expenses
associated with the
government and Special
Committee investigations
amounted to approximately
$11.5 million and $32.9
million before income
taxes, respectively, in the
three month periods ended
March 31, 2009 and 2008.
(b) Liability for investigation
-related matters: Based on
the status of the
government investigations,
the Company recorded a
liability of $44.8 million
before and after income
taxes in the three month
period ended March 31,
2009.
(c) Days in claims payable:
Adjusted medical benefits
payable as of March 31,
2008, is $92.9 million
greater than medical
benefits payable determined
under GAAP. This adjustment
results from the Company`s
ability to review
substantially complete
claims information that
became available between
the date of the original
actuarially determined
estimate and the filing
date of the 2007 10-K. Had
WellCare filed its 2007 10
-K timely and not been able
to observe substantially
complete claims
information, medical
benefits payable as of
March 31, 2008, would have
increased by $92.9 million.
The adjustment to March 31,
2008, medical benefits
payable results in six
additional days in claims
payable as of that date.
Therefore, adjusted days in
claims payable is 49 days
as of March 31, 2008.

Premium taxes were $24.5 million and $20.3 million, respectively, for the three
month periods ended March 31, 2009 and 2008.

WELLCARE HEALTH PLANS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION

Reconciliation of GAAP Net Cash Provided By Operations
To Adjusted Net Cash Provided By Operations

The Company reports cash provided by operations on a non-GAAP basis to exclude the changes in unearned premiums,
premiums and other receivables, and other receivables to and payables from government partners. The Company believes
that excluding changes in unearned premiums, premiums and other receivables, and other receivables to and payables from
government partners is useful measure of cash flow from operations, as these changes are a function of the timing of
cash receipts from and payments to federal and state agencies at the end of a period.

Three Months Ended
March 31,
2009 2008
Net cash provided by operating activities, as reported under GAAP $ (105,754 ) $ 66,779
Adjusted for change in:
Unearned premiums 62,554 17,769
Premiums receivable 69,876 (81,748 )
Other receivables from government partners 50,689 6,018
Other payables to government partners (22,912 ) 74,140
Net cash provided by operating activities, as adjusted $ 54,453 $ 82,958

WellCare Health Plans, Inc.
Investor relations:
Gregg Haddad, 813-865-1284
gregg.haddad@wellcare.com
or
Media relations:
Amy Knapp, 813-290-6208
amy.knapp@wellcare.com

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