Schedule I, Condensed Financial Information of Parent Company

12 Months Ended

Dec. 31, 2012

Condensed Financial Statements, Captions [Line Items]

Schedule I, Condensed Financial Information of Registrant (Parent Company Only)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

COVENTRY HEALTH CARE, INC.

CONDENSED BALANCE SHEETS

(in thousands)

	December 31, 2012			December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	321,166		$	634,592
Short-term investments	84,241			61,435
Other receivables, net	14,394			4,570
Other current assets	41,973			79,923
Total current assets	461,774			780,520
Long-term investments	509,421			504,022
Property and equipment, net	3,574			4,339
Investment in subsidiaries	5,507,880			5,123,007
Other long-term assets	62,894			93,444
Total assets	$	6,545,543		$	6,505,332
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued liabilities	$	119,617		$	315,175
Total current liabilities	119,617			315,175
Long-term debt	1,585,190			1,584,700
Notes payable to subsidiary	65,000			65,000
Other long-term liabilities	52,821			29,466
Total liabilities	1,822,628			1,994,341
Stockholders’ equity:
Common stock, $.01 par value; 570,000 authorized 197,080 issued and 134,573 outstanding in 2012 193,469 issued and 141,172 outstanding in 2011	1,971			1,935
Treasury stock, at cost; 62,507 in 2012; 52,297 in 2011	(1,920,749		)	(1,583,313		)
Additional paid-in capital	1,970,877			1,848,995
Accumulated other comprehensive income, net	69,220			60,469
Retained earnings	4,601,596			4,182,905
Total stockholders’ equity	4,722,915			4,510,991
Total liabilities and stockholders’ equity	$	6,545,543		$	6,505,332

See accompanying notes to the condensed financial statements.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

COVENTRY HEALTH CARE, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands)

	For the years ended December 31,
	2012			2011			2010
Revenues:
Management fees charged to operating subsidiaries	$	302,718		$	261,798		$	208,453
Expenses:
Selling, general and administrative	198,665			200,005			170,524
Depreciation and amortization	575			1,297			939
Interest expense	101,576			101,174			82,590
Total expenses	300,816			302,476			254,053
Investment and other income, net	6,256			2,353			629
Income (loss) before income taxes and equity in net earnings of subsidiaries	8,158			(38,325		)	(44,971		)
(Provision) benefit for income taxes	(3,093		)	14,069			16,239
Income (loss) before equity in net earnings of  subsidiaries	5,065			(24,256		)	(28,732		)
Equity in net earnings of subsidiaries	481,998			567,361			467,348
Net earnings	$	487,063		$	543,105		$	438,616
Other comprehensive income (loss), net of tax:
Change in net unrealized gains (losses) on investments	8,751			19,388			(325		)
Comprehensive income	$	495,814		$	562,493		$	438,291

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

COVENTRY HEALTH CARE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

	For the years ended December 31,
	2012			2011			2010
Net cash from operating activities	$	84,340		$	(170,263	)	$	(21,032	)
Cash flows from investing activities:
Capital expenditures, net	444			(2,414		)	518
Proceeds from the sales and maturities of investments	432,627			624,559			196,052
Purchases of investments and other	(435,100		)	(1,155,558		)	—
Capital contributions to subsidiaries	(134,000		)	(140,192		)	(142,271		)
Dividends from subsidiaries	265,175			745,403			530,589
Payments for acquisitions, net	(1,375		)	(7,616		)	(102,356		)
Net cash from investing activities	127,771			64,182			482,532
Cash flows from financing activities:
Proceeds from issuance of stock	87,671			44,624			15,484
Payments for repurchase of stock	(339,985		)	(336,219		)	(4,888		)
Repayment of debt	(233,903		)	(380,029		)	—
Repayment of note to subsidiaries	—			—			(4,235		)
Proceeds from issuance of debt	—			589,867			—
Excess tax benefit from stock compensation	12,210			7,619			2,925
Payments for cash dividends	(51,530		)	—			—
Net cash from financing activities	(525,537		)	(74,138		)	9,286
Net change in cash and cash equivalents	(313,426		)	(180,219		)	470,786
Cash and cash equivalents at beginning of period	634,592			814,811			344,025
Cash and cash equivalents at end of period	$	321,166		$	634,592		$	814,811

See accompanying notes to the condensed financial statements.

Parent Company [Member]

Condensed Financial Statements, Captions [Line Items]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

Coventry Health Care, Inc. parent company financial information has been derived from its consolidated financial statements and should be read in conjunction with the consolidated financial statements included in this Form 10-K.  The accounting policies for the parent company are the same as those described in Note A, Organization and Summary of Significant Accounting Policies, to the consolidated financial statements.  The accounts of all subsidiaries are excluded from the parent company financial information. 

For information regarding the Company’s debt, commitments and contingencies and income taxes, refer to the respective notes to the consolidated financial statements.

SUBSIDIARY TRANSACTIONS

SUBSIDIARY TRANSACTIONS

Through intercompany service agreements approved, if required, by state regulatory authorities, the parent company charges a management fee for reimbursement of certain centralized services provided to its subsidiaries. 

The captions “Capital contributions to subsidiaries” and “Dividends from subsidiaries” on the condensed statements of cash flows include amounts from our regulated and non-regulated subsidiaries. During 2012, 2011 and 2010 we received $214.7 million, $489.4 million and $319.4 million, respectively, in dividends from our regulated subsidiaries and infused $134.0 million, $122.0 million and $11.5 million, respectively, in capital contributions into our regulated subsidiaries.