##### 









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-Q


|   |  |                                                                                             
|-- |  | --------------------------------------------------------------------------------------------
|þ  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|  
|   |  | For the quarterly period ended September 30, 2005                                           
|  
|OR
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|  
|   |  | For the transition period
    from           to                                             

Commission File Number 001-31574


AMERIGROUP Corporation


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 54-1739323                              
|(State or Other Jurisdiction of
    Incorporation or Organization) |  | (I.R.S. Employer
    Identification No.)
|                                                                  
|4425 Corporation Lane,
    Virginia Beach, VA                      |  | 23462                                   
|(Address of principal executive offices)                           |  | (Zip Code)                              

Registrants telephone number, including area code:


(757) 490-6900


þ o


þ o


o þ












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AMERIGROUP Corporation
And Subsidiaries


Table of
Contents


|                                  |  |                                                                                                                         |  |  |    | 
|--------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------- |  |  | -- | 
|Part I.
    Financial Information
|Item 1.                           |  | Financial Statements                                                                                                    |  |  |    | 
|                                  |  | Condensed Consolidated Balance Sheets as of
    September 30, 2005 and December 31, 2004                                |  |  | 3  | 
|                                  |  | Condensed Consolidated Income Statements
    for the three and nine month periods ended September 30,
    2005 and 2004 |  |  | 4  | 
|                                  |  | Condensed Consolidated Statements of Cash
    Flows for the nine month periods ended September 30, 2005
    and 2004    |  |  | 5  | 
|                                  |  | Notes to Condensed Consolidated Financial
    Statements                                                                |  |  | 6  | 
|Item 2.                           |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                               |  |  | 15 | 
|Item 3.                           |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                          |  |  | 23 | 
|Item 4.                           |  | Controls and Procedures                                                                                                 |  |  | 24 | 
|                                 
|PartII. Other
    Information    
|Item 1.                           |  | Legal Proceedings                                                                                                       |  |  | 24 | 
|Item 2.                           |  | Unregistered Sales of Equity Securities and
    Use of Proceeds                                                         |  |  | 25 | 
|Item 3.                           |  | Defaults Upon Senior Securities                                                                                         |  |  | 25 | 
|Item 4.                           |  | Submission of Matters to a Vote of Security
    Holders                                                                 |  |  | 25 | 
|Item 5.                           |  | Other Information                                                                                                       |  |  | 26 | 
|Item 6.                           |  | Exhibits                                                                                                                |  |  | 27 | 
|EX-10.7.8                        
|EX-10.25.9                       
|EX-10.49.1                       
|EX-10.49.2                       
|EX-10.50                         
|EX-10.51                         
|EX-31.1                          
|EX-31.2                          
|EX-32                            



2



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##### 






Part I. Financial
Information







|        |                     
|------- | --------------------
|Item 1. | Financial Statements

AMERIGROUP Corporation
And Subsidiaries





Condensed Consolidated
Balance Sheets


|                                                      |                                                                                                                                                                                      |                            |           |         |              |   |         |         |         | 
|----------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | --------- | ------- | ------------ | - | ------- | ------- | ------- | 
|                                                      |                                                                                                                                                                                      | September 30,              |           |         | December 31, |  
|                                                      |                                                                                                                                                                                      | 2005                       |           |         | 2004         |  
|                                                      |                                                                                                                                                                                      |                            |           |         |              |  
|                                                      |                                                                                                                                                                                      | (Dollars in thousands)     |          
|ASSETS                                               
|Current assets:                                       |                                                                                                                                                                                      |                            |           |         |              |   |         |        
|                                                      | Cash and cash equivalents                                                                                                                                                            |                            | $         | 243,647 |              |   | $       | 227,130 |        
|                                                      | Short-term investments                                                                                                                                                               |                            |           | 97,188  |              |   |         | 176,364 |        
|                                                      | Premium receivables                                                                                                                                                                  |                            |           | 73,770  |              |   |         | 44,081  |        
|                                                      | Deferred income taxes                                                                                                                                                                |                            |           | 13,228  |              |   |         | 11,019  |        
|                                                      | Prepaid expenses and other current assets                                                                                                                                            |                            |           | 25,059  |              |   |         | 18,737  |        
|                                                      |                                                                                                                                                                                      |                            |           |         |              |  
|                                                      |                                                                                                                                                                                      | Total current assets       |           |         | 452,892      |   |         |         | 477,331 | 
|Long-term investments                                 |                                                                                                                                                                                      |                            | 200,070   |         |              |   | 208,565 |        
|Investments on deposit for licensure                  |                                                                                                                                                                                      |                            | 56,278    |         |              |   | 38,365  |        
|Property and equipment, net                           |                                                                                                                                                                                      |                            | 35,812    |         |              |   | 34,030  |        
|Software, net                                         |                                                                                                                                                                                      |                            | 23,071    |         |              |   | 16,268  |        
|Other long-term assets                                |                                                                                                                                                                                      |                            | 7,304     |         |              |   | 4,909   |        
|Goodwill and other intangible assets, net             |                                                                                                                                                                                      |                            | 252,645   |         |              |   | 140,382 |        
|                                                      |                                                                                                                                                                                      |                            |           |         |              |  
|                                                      |                                                                                                                                                                                      | $                          | 1,028,072 |         |              | $ | 919,850 |        
|                                                      |                                                                                                                                                                                      |                            |           |         |              |  
|                                                     
|LIABILITIES AND STOCKHOLDERS EQUITY                 
|Current liabilities:                                  |                                                                                                                                                                                      |                            |           |         |              |   |         |        
|                                                      | Claims payable                                                                                                                                                                       |                            | $         | 286,882 |              |   | $       | 241,253 |        
|                                                      | Accounts payable                                                                                                                                                                     |                            |           | 3,590   |              |   |         | 4,826   |        
|                                                      | Unearned revenue                                                                                                                                                                     |                            |           | 55,866  |              |   |         | 34,228  |        
|                                                      | Accrued payroll and related liabilities                                                                                                                                              |                            |           | 15,848  |              |   |         | 19,833  |        
|                                                      | Accrued expenses and other current liabilities                                                                                                                                       |                            |           | 19,024  |              |   |         | 33,841  |        
|                                                      | Current portion of capital lease obligations                                                                                                                                         |                            |           | 1,970   |              |   |         | 3,168   |        
|                                                      |                                                                                                                                                                                      |                            |           |         |              |  
|                                                      |                                                                                                                                                                                      | Total current liabilities  |           |         | 383,180      |   |         |         | 337,149 | 
|Capital lease obligations, less current portion       |                                                                                                                                                                                      |                            | 1,522     |         |              |   | 2,878   |        
|Deferred income taxes and other long-term liabilities |                                                                                                                                                                                      |                            | 16,077    |         |              |   | 11,111  |        
|                                                      |                                                                                                                                                                                      |                            |           |         |              |  
|                                                      |                                                                                                                                                                                      | Total liabilities          |           |         | 400,779      |   |         |         | 351,138 | 
|                                                      |                                                                                                                                                                                      |                            |           |         |              |  
|Stockholders equity:                                 |                                                                                                                                                                                      |                            |           |         |              |   |         |        
|                                                      | Common stock, $0.01 par value. Authorized
    100,000,000 shares; issued and outstanding 51,448,330 and
    50,529,724 at September 30, 2005 and December 31,
    2004, respectively |                            |           | 515     |              |   |         | 505     |        
|                                                      | Additional paid-in capital                                                                                                                                                           |                            |           | 370,434 |              |   |         | 352,417 |        
|                                                      | Retained earnings                                                                                                                                                                    |                            |           | 256,344 |              |   |         | 215,790 |        
|                                                      |                                                                                                                                                                                      |                            |           |         |              |  
|                                                      |                                                                                                                                                                                      | Total stockholders equity |           |         | 627,293      |   |         |         | 568,712 | 
|                                                      |                                                                                                                                                                                      |                            |           |         |              |  
|                                                      |                                                                                                                                                                                      | $                          | 1,028,072 |         |              | $ | 919,850 |        
|                                                      |                                                                                                                                                                                      |                            |           |         |              |  



3



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##### 



AMERIGROUP Corporation
And Subsidiaries





Condensed Consolidated
Income Statements


|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |           |            |  |        |           |            | 
|---------------------------- | ----------------------------------- | --------------------------------------------------------------------------------------------- | ---- | ------- | ----------------- | - | ------ | ------- | ---------- |  | ------ | --------- | ---------- |  | ------ | --------- | ---------- | 
|                             |                                     | Three Months Ended                                                                            |      |         | Nine Months Ended |  
|                             |                                     | September 30,                                                                                 |      |         | September 30,     |  
|                             |                                     |                                                                                               |      |         |                   |  
|                             |                                     | 2005                                                                                          |      |         | 2004              |   |        | 2005    |            |  | 2004   |          
|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |          
|                             |                                     | (Dollars in thousands, except per share data)                                                 |     
|Revenues:                    |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |           |            |  |        |          
|                             | Premium                             |                                                                                               | $    | 582,784 |                   |   | $      | 468,156 |            |  | $      | 1,697,403 |            |  | $      | 1,326,409 |           
|                             | Investment income and other         |                                                                                               |      | 4,609   |                   |   |        | 2,822   |            |  |        | 12,224    |            |  |        | 6,999     |           
|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |          
|                             |                                     | Total revenues                                                                                |      |         | 587,393           |   |        |         | 470,978    |  |        |           | 1,709,627  |  |        |           | 1,333,408  | 
|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |          
|Expenses:                    |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |           |            |  |        |          
|                             | Health benefits                     |                                                                                               |      | 520,243 |                   |   |        | 374,085 |            |  |        | 1,437,718 |            |  |        | 1,070,747 |           
|                             | Selling, general and administrative |                                                                                               |      | 63,596  |                   |   |        | 52,124  |            |  |        | 183,382   |            |  |        | 141,339   |           
|                             | Depreciation and amortization       |                                                                                               |      | 6,508   |                   |   |        | 4,935   |            |  |        | 20,260    |            |  |        | 15,825    |           
|                             | Interest                            |                                                                                               |      | 156     |                   |   |        | 165     |            |  |        | 476       |            |  |        | 540       |           
|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |          
|                             |                                     | Total expenses                                                                                |      |         | 590,503           |   |        |         | 431,309    |  |        |           | 1,641,836  |  |        |           | 1,228,451  | 
|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |          
|                             |                                     | (Loss) income before income taxes                                                             |      |         | (3,110            | ) |        |         | 39,669     |  |        |           | 67,791     |  |        |           | 104,957    | 
|Income tax (benefit) expense |                                     |                                                                                               | (850 | )       |                   |   | 15,336 |         |            |  | 27,060 |           |            |  | 41,340 |          
|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |          
|                             |                                     | Net (loss) income                                                                             |      | $       | (2,260            | ) |        | $       | 24,333     |  |        | $         | 40,731     |  |        | $         | 63,617     | 
|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |          
|Net (loss) income per share: |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |           |            |  |        |          
|                             |                                     | Basic net (loss) income per share                                                             |      | $       | (0.04             | ) |        | $       | 0.49       |  |        | $         | 0.80       |  |        | $         | 1.28       | 
|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |          
|                             |                                     | Weighted average number of common shares outstanding                                          |      |         | 51,420,856        |   |        |         | 49,905,062 |  |        |           | 51,123,511 |  |        |           | 49,533,942 | 
|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |          
|                             |                                     | Diluted net (loss) income per share                                                           |      | $       | (0.04             | ) |        | $       | 0.47       |  |        | $         | 0.77       |  |        | $         | 1.23       | 
|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |          
|                             |                                     | Weighted average number of common shares and dilutive potential
    common shares outstanding |      |         | 51,420,856        |   |        |         | 51,955,940 |  |        |           | 53,008,886 |  |        |           | 51,599,277 | 
|                             |                                     |                                                                                               |      |         |                   |   |        |         |            |  |        |          



4



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AMERIGROUP Corporation
And Subsidiaries





Condensed Consolidated
Statements Of Cash Flows


|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |         |         |            |        |         |          |  
|---------------------------------------------------- | ------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | ------------------------------------------------- | --------------------------------------------------- | ------ | ------- | ------- | ---------- | ------ | ------- | -------- | -
|                                                     |                                                                                       | Nine Months Ended                                                                         |                                                  
|                                                     |                                                                                       | September 30,                                                                             |                                                  
|                                                     |                                                                                       |                                                                                           |                                                  
|                                                     |                                                                                       | 2005                                                                                      |                                                   |                                                     | 2004   |        
|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |        
|                                                     |                                                                                       | (Dollars in thousands)                                                                    |                                                  
|Cash flows from operating activities:                |                                                                                       |                                                                                           |                                                   |                                                     |        |         |         |           
|                                                     | Net income                                                                            |                                                                                           | $                                                 | 40,731                                              |        |         | $       | 63,617     |       
|                                                     | Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                                                           |                                                   |                                                     |        |         |         |            |       
|                                                     |                                                                                       | Depreciation and amortization                                                             |                                                   |                                                     | 20,260 |         |         |            | 15,825 |        
|                                                     |                                                                                       | Loss on disposal or abandonment of property, equipment and
    software                   |                                                   |                                                     |       |         |         |            | 951    |        
|                                                     |                                                                                       | Deferred tax benefit                                                                      |                                                   |                                                     | (2,445 | )       |         |            | (827   | )      
|                                                     |                                                                                       | Amortization of deferred compensation                                                     |                                                   |                                                     |       |         |         |            | 57     |        
|                                                     |                                                                                       | Tax benefit related to exercise of stock options                                          |                                                   |                                                     | 8,447  |         |         |            | 4,881  |        
|                                                     |                                                                                       | Changes in assets and liabilities increasing
    (decreasing) cash flows from operations: |                                                   |                                                     |        |         |         |            |        |        
|                                                     |                                                                                       |                                                                                           | Premium receivables                               |                                                     |        | (23,862 | )       |            |        | (5,661  | )       
|                                                     |                                                                                       |                                                                                           | Prepaid expenses and other current assets         |                                                     |        | (3,186  | )       |            |        | 2,507   |         
|                                                     |                                                                                       |                                                                                           | Other assets                                      |                                                     |        | (1,121  | )       |            |        | (814    | )       
|                                                     |                                                                                       |                                                                                           | Claims payable                                    |                                                     |        | 18,205  |         |            |        | (3,308  | )       
|                                                     |                                                                                       |                                                                                           | Accounts payable, accrued expenses and other, net |                                                     |        | (22,538 | )       |            |        | 14,050  |         
|                                                     |                                                                                       |                                                                                           | Unearned revenue                                  |                                                     |        | 21,545  |         |            |        | (23,750 | )       
|                                                     |                                                                                       |                                                                                           | Other long-term liabilities                       |                                                     |        | (730    | )       |            |        | 1,406   |         
|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |        
|                                                     |                                                                                       |                                                                                           |                                                   | Net cash provided by operating activities           |        |         | 55,306  |            |        |         | 68,934   |  
|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |        
|Cash flows from investing activities:                |                                                                                       |                                                                                           |                                                   |                                                     |        |         |         |           
|                                                     | Proceeds from sales of available-for-sale securities                                  |                                                                                           |                                                   | 951,850                                             |        |         |         | 3,560,374  |       
|                                                     | Purchase of available-for-sale securities                                             |                                                                                           |                                                   | (870,847                                            | )      |         |         | (3,544,980 | )     
|                                                     | Proceeds from redemption of held-to-maturity securities                               |                                                                                           |                                                   | 133,790                                             |        |         |         | 89,639     |       
|                                                     | Purchase of held-to-maturity securities                                               |                                                                                           |                                                   | (127,300                                            | )      |         |         | (192,807   | )     
|                                                     | Purchase of property, equipment and software                                          |                                                                                           |                                                   | (18,058                                             | )      |         |         | (17,176    | )     
|                                                     | Proceeds from redemption of investments on deposit for licensure                      |                                                                                           |                                                   | 20,493                                              |        |         |         | 35,525     |       
|                                                     | Purchase of investments on deposit for licensure                                      |                                                                                           |                                                   | (30,379                                             | )      |         |         | (37,842    | )     
|                                                     | Acquisition, net of cash acquired                                                     |                                                                                           |                                                   | (103,645                                            | )      |         |         |           |       
|                                                     | Purchase price adjustment received                                                    |                                                                                           |                                                   |                                                    |        |         |         | 48         |       
|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |        
|                                                     |                                                                                       |                                                                                           |                                                   | Net cash used in investing activities               |        |         | (44,096 | )          |        |         | (107,219 | )
|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |        
|Cash flows from financing activities:                |                                                                                       |                                                                                           |                                                   |                                                     |        |         |         |           
|                                                     | Net decrease in bank overdrafts                                                       |                                                                                           |                                                   |                                                    |        |         |         | (5,315     | )     
|                                                     | Payment of capital lease obligations                                                  |                                                                                           |                                                   | (2,648                                              | )      |         |         | (3,583     | )     
|                                                     | Payment of debt issuance costs                                                        |                                                                                           |                                                   | (1,626                                              | )      |         |         |           |       
|                                                     | Proceeds from exercise of common stock options and employee
    stock purchases       |                                                                                           |                                                   | 9,581                                               |        |         |         | 8,051      |       
|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |        
|                                                     |                                                                                       |                                                                                           |                                                   | Net cash provided by (used in) financing activities |        |         | 5,307   |            |        |         | (847     | )
|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |        
|Net increase (decrease) in cash and cash equivalents |                                                                                       |                                                                                           | 16,517                                            |                                                     |        |         | (39,132 | )         
|Cash and cash equivalents at beginning of period     |                                                                                       |                                                                                           | 227,130                                           |                                                     |        |         | 84,030  |           
|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |        
|Cash and cash equivalents at end of period           |                                                                                       | $                                                                                         | 243,647                                           |                                                     |        | $       | 44,898  |           
|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |        
|Supplemental disclosures of cash flow information:   |                                                                                       |                                                                                           |                                                   |                                                     |        |         |         |           
|                                                     | Cash paid for interest                                                                |                                                                                           | $                                                 | 477                                                 |        |         | $       | 539        |       
|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |        
|                                                     | Cash paid for income taxes                                                            |                                                                                           | $                                                 | 27,094                                              |        |         | $       | 31,568     |       
|                                                     |                                                                                       |                                                                                           |                                                   |                                                     |        |        



|                                           |                     |   |         |         | 
|------------------------------------------ | ------------------- | - | ------- | ------- | 
|Assets acquired, including cash of $27,755 |                     | $ | 168,378 |        
|Liabilities assumed                        |                     |   | 36,978  |        
|                                           |                     |   |        
|                                           | Net assets acquired |   | $       | 131,400 | 
|                                           |                     |   |        



5



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##### 



AMERIGROUP Corporation
And Subsidiaries





Notes To Condensed
Consolidated Financial Statements


(Dollars in thousands, except per share data)












6



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##### 



AMERIGROUP Corporation
And Subsidiaries


Notes To Condensed
Consolidated Financial
Statements  (Continued)




|                                     |                                                                                               |                    |   |            |                   |  |   |            |  |  |      |            |  |  |   |            | 
|------------------------------------ | --------------------------------------------------------------------------------------------- | ------------------ | - | ---------- | ----------------- |  | - | ---------- |  |  | ---- | ---------- |  |  | - | ---------- | 
|                                     |                                                                                               | Three Months Ended |   |            | Nine Months Ended | 
|                                     |                                                                                               | September 30,      |   |            | September 30,     | 
|                                     |                                                                                               |                    |   |            |                   | 
|                                     |                                                                                               | 2005               |   |            | 2004              |  |   | 2005       |  |  | 2004 |           
|                                     |                                                                                               |                    |   |            |                   |  |   |            |  |  |      |           
|Basic net (loss) income per share:   |                                                                                               |                    |   |            |                   |  |   |            |  |  |      |            |  |  |   |           
|                                     | Net (loss) income                                                                             |                    | $ | (2,260     | )                 |  | $ | 24,333     |  |  | $    | 40,731     |  |  | $ | 63,617     | 
|                                     |                                                                                               |                    |   |            |                   |  |   |            |  |  |      |           
|                                     | Weighted average number of common shares outstanding                                          |                    |   | 51,420,856 |                   |  |   | 49,905,062 |  |  |      | 51,123,511 |  |  |   | 49,533,942 | 
|                                     |                                                                                               |                    |   |            |                   |  |   |            |  |  |      |           
|                                     | Basic net (loss) income per share                                                             |                    | $ | (0.04      | )                 |  | $ | 0.49       |  |  | $    | 0.80       |  |  | $ | 1.28       | 
|                                     |                                                                                               |                    |   |            |                   |  |   |            |  |  |      |           
|Diluted net (loss) income per share: |                                                                                               |                    |   |            |                   |  |   |            |  |  |      |            |  |  |   |           
|                                     | Net (loss) income                                                                             |                    | $ | (2,260     | )                 |  | $ | 24,333     |  |  | $    | 40,731     |  |  | $ | 63,617     | 
|                                     |                                                                                               |                    |   |            |                   |  |   |            |  |  |      |           
|                                     | Weighted average number of common shares outstanding                                          |                    |   | 51,420,856 |                   |  |   | 49,905,062 |  |  |      | 51,123,511 |  |  |   | 49,533,942 | 
|                                     | Dilutive effect of stock options (as determined by applying the
    treasury stock method)    |                    |   |           |                   |  |   | 2,050,878  |  |  |      | 1,885,375  |  |  |   | 2,065,335  | 
|                                     |                                                                                               |                    |   |            |                   |  |   |            |  |  |      |           
|                                     | Weighted average number of common shares and dilutive potential
    common shares outstanding |                    |   | 51,420,856 |                   |  |   | 51,955,940 |  |  |      | 53,008,886 |  |  |   | 51,599,277 | 
|                                     |                                                                                               |                    |   |            |                   |  |   |            |  |  |      |           
|                                     | Diluted net (loss) income per share                                                           |                    | $ | (0.04      | )                 |  | $ | 0.47       |  |  | $    | 0.77       |  |  | $ | 1.23       | 
|                                     |                                                                                               |                    |   |            |                   |  |   |            |  |  |      |           



7



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##### 



AMERIGROUP Corporation
And Subsidiaries


Notes To Condensed
Consolidated Financial
Statements  (Continued)


Accounting for Stock-Based
Compensation Accounting for Stock Issued to Employees Accounting for Stock-Based
Compensation  Transition and Disclosure


|                                     |                                                                                                                                                     |                    |   |         |                   |  |   |        |  |  |      |        |  |  |   |        | 
|------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------ | - | ------- | ----------------- |  | - | ------ |  |  | ---- | ------ |  |  | - | ------ | 
|                                     |                                                                                                                                                     | Three Months Ended |   |         | Nine Months Ended | 
|                                     |                                                                                                                                                     | September 30,      |   |         | September 30,     | 
|                                     |                                                                                                                                                     |                    |   |         |                   | 
|                                     |                                                                                                                                                     | 2005               |   |         | 2004              |  |   | 2005   |  |  | 2004 |       
|                                     |                                                                                                                                                     |                    |   |         |                   |  |   |        |  |  |      |       
|Net (loss) income:                   |                                                                                                                                                     |                    |   |         |                   |  |   |        |  |  |      |        |  |  |   |       
|                                     | Reported net (loss) income                                                                                                                          |                    | $ | (2,260  | )                 |  | $ | 24,333 |  |  | $    | 40,731 |  |  | $ | 63,617 | 
|                                     | Deduct: Total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    related tax effects |                    |   | 10,370  |                   |  |   | 2,197  |  |  |      | 16,517 |  |  |   | 6,642  | 
|                                     |                                                                                                                                                     |                    |   |         |                   |  |   |        |  |  |      |       
|                                     | Proforma net (loss) income                                                                                                                          |                    | $ | (12,630 | )                 |  | $ | 22,136 |  |  | $    | 24,214 |  |  | $ | 56,975 | 
|                                     |                                                                                                                                                     |                    |   |         |                   |  |   |        |  |  |      |       
|Basic net (loss) income per share:   |                                                                                                                                                     |                    |   |         |                   |  |   |        |  |  |      |        |  |  |   |       
|                                     | Reported basic net (loss) income per share                                                                                                          |                    | $ | (0.04   | )                 |  | $ | 0.49   |  |  | $    | 0.80   |  |  | $ | 1.28   | 
|                                     | Proforma basic net (loss) income per share                                                                                                          |                    |   | (0.25   | )                 |  |   | 0.45   |  |  |      | 0.47   |  |  |   | 1.15   | 
|Diluted net (loss) income per share: |                                                                                                                                                     |                    |   |         |                   |  |   |        |  |  |      |        |  |  |   |       
|                                     | Reported diluted net (loss) income per share                                                                                                        |                    | $ | (0.04   | )                 |  | $ | 0.47   |  |  | $    | 0.77   |  |  | $ | 1.23   | 
|                                     | Proforma diluted net (loss) income per share                                                                                                        |                    |   | (0.25   | )                 |  |   | 0.43   |  |  |      | 0.46   |  |  |   | 1.12   | 







8



---



##### 



AMERIGROUP Corporation
And Subsidiaries


Notes To Condensed
Consolidated Financial
Statements  (Continued)












|                                     |                           |   |         |         | 
|------------------------------------ | ------------------------- | - | ------- | ------- | 
|Cash and cash equivalents            |                           | $ | 27,755  |        
|Investments on deposit for licensure |                           |   | 8,027   |        
|Goodwill and other intangible assets |                           |   | 118,673 |        
|Property and equipment               |                           |   | 3,941   |        
|Other assets                         |                           |   | 9,982   |        
|                                     |                           |   |        
|                                     | Total assets acquired     |   |         | 168,378 | 
|                                     |                           |   |        
|Claims payable                       |                           |   | 27,424  |        
|Other liabilities                    |                           |   | 9,554   |        
|                                     |                           |   |        
|                                     | Total liabilities assumed |   |         | 36,978  | 
|                                     |                           |   |        
|                                     | Net assets acquired       |   | $       | 131,400 | 
|                                     |                           |   |        

9



---



##### 



AMERIGROUP Corporation
And Subsidiaries


Notes To Condensed
Consolidated Financial
Statements  (Continued)




|                                       |  |   |        |              |  |  |             | 
|-------------------------------------- |  | - | ------ | ------------ |  |  | ----------- | 
|                                       |  |   |        | Amortization | 
|                                       |  |   |        | Period       | 
|                                       |  |   |        |              | 
|Membership rights and provider network |  | $ | 12,900 |              |  |  | 10 years    | 
|Non-compete agreement and trademarks   |  |   | 1,080  |              |  |  | 1 - 3 years | 
|                                       |  |   |        |              |  | 
|                                       |  | $ | 13,980 |              |  |  |             | 
|                                       |  |   |        |              |  | 



|                                             |  |   |           | 
|-------------------------------------------- |  | - | --------- | 
|Premium revenue                              |  | $ | 2,008,319 | 
|Investment income and other                  |  |   | 9,030     | 
|                                             |  |   |          
|Total revenues                               |  |   | 2,017,349 | 
|                                             |  |   |          
|Health benefits expenses                     |  |   | 1,608,656 | 
|Selling, general and administrative expenses |  |   | 229,812   | 
|Depreciation and amortization expenses       |  |   | 28,734    | 
|Interest expense                             |  |   | 731       | 
|                                             |  |   |          
|Income before income taxes                   |  |   | 149,416   | 
|Provision for income taxes                   |  |   | 59,093    | 
|                                             |  |   |          
|Net income                                   |  | $ | 90,323    | 
|                                             |  |   |          





10



---



##### 



AMERIGROUP Corporation
And Subsidiaries


Notes To Condensed
Consolidated Financial
Statements  (Continued)












11



---



##### 



AMERIGROUP Corporation
And Subsidiaries


Notes To Condensed
Consolidated Financial
Statements  (Continued)














Shared-Based Payment, Statement of Cash Flows.


12



---



##### 



AMERIGROUP Corporation
And Subsidiaries


Notes To Condensed
Consolidated Financial
Statements  (Continued)










| |                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. A modified prospective method in which
    compensation cost is recognized beginning with the effective
    date (a) based on the requirements of
    SFAS No. 123(R) for all share-based payments granted
    after the effective date and (b) based on the requirements
    of SFAS No. 123 for all awards granted to employees
    prior to the effective date of SFAS No. 123(R) that
    remain unvested on the effective date.
|
| | 2. A modified retrospective method which
    includes the requirements of the modified prospective method
    described above, but also permits entities to restate based on
    the amounts previously recognized under SFAS No. 123
    for purposes of proforma disclosures.                                                                                                                                                        







|                                                      |                                   |                    |        |        |                   |   |        |        |  |   |        |        |  |   |        |        | 
|----------------------------------------------------- | --------------------------------- | ------------------ | ------ | ------ | ----------------- | - | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                                      |                                   | Three Months Ended |        |        | Nine Months Ended |  
|                                                      |                                   | September 30,      |        |        | September 30,     |  
|                                                      |                                   |                    |        |        |                   |  
|                                                      |                                   | 2005               |        |        | 2004              |   |        | 2005   |  |   | 2004   |       
|                                                      |                                   |                    |        |        |                   |   |        |        |  |   |        |       
|Net (loss) income                                     |                                   | $                  | (2,260 | )      |                   | $ | 24,333 |        |  | $ | 40,731 |        |  | $ | 63,617 |       
|Changes in unrealized loss on investments, net of tax |                                   |                    | (178   | )      |                   |   |       |        |  |   | (178   | )      |  |   |       |       
|                                                      |                                   |                    |        |        |                   |   |        |        |  |   |        |       
|                                                      | Total comprehensive (loss) income |                    | $      | (2,438 | )                 |   | $      | 24,333 |  |   | $      | 40,553 |  |   | $      | 63,617 | 
|                                                      |                                   |                    |        |        |                   |   |        |        |  |   |        |       



13



---



##### 



AMERIGROUP Corporation
And Subsidiaries


Notes To Condensed
Consolidated Financial
Statements  (Continued)






14



---



##### 








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

Forward-looking Statements








| |   |                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | national, state and local economic conditions, including their
    effect on the rate increase process, timing of payments, and the
    availability and cost of labor, utilities and materials;                                                        
|
| |  | the effect of government regulations and changes in regulations
    governing the healthcare industry, including our compliance with
    such regulations and their effect on certain of our unit costs
    and our ability to manage our medical costs;
|
| |  | changes in Medicaid payment levels and methodologies and the
    application of such methodologies by the Federal and state
    governments;                                                                                                            
|
| |  | liabilities and other claims asserted against us;                                                                                                                                                                                                       
|
| |  | our ability to attract and retain qualified personnel;                                                                                                                                                                                                  
|
| |  | our ability to maintain compliance with all minimum capital
    requirements;                                                                                                                                                                           
|
| |  | the availability and terms of capital to fund acquisitions and
    capital improvements;                                                                                                                                                                
|
| |  | the competitive environment in which we operate;                                                                                                                                                                                                        
|
| |  | our ability to maintain and increase membership levels;                                                                                                                                                                                                 
|
| |  | demographic changes; and                                                                                                                                                                                                                                
|
| |  | terrorism.                                                                                                                                                                                                                                              



15



---



##### 



Overview










| |   |                                                        
| | - | -------------------------------------------------------
| |  | Actuarially sound rate setting;                        
|
| |  | Targeted provider re-contracting;                      
|
| |  | Expanded disease management and Early Case Finding; and
|
| |  | Continued claims processing improvements.              





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Organic growth  Our premium revenues for the third
    quarter of 2005 from this source, increased 12.5% over the same
    period in 2004 from membership increases in existing service
    areas and new markets and premium rate increases received after
    September 30, 2004 to date. Premium revenues were adversely
    affected by $6.3 million of anticipated premium recoupments
    related to recently identified enrollment errors by the States
    of Florida and Texas due to eligibility issues related to prior
    periods.                                                                                                    
|
| |  | Growth through acquisitions  Effective
    January 1, 2005, we completed our stock acquisition of
    CarePlus in New York City, New York, pursuant to the terms of
    the merger agreement. At the date of the acquisition, CarePlus
    served approximately 115,000 members covered by New York
    States Medicaid, Child Health Plus and Family Health Plus
    programs. CarePlus service areas include New York City
    (Brooklyn, Manhattan, Queens and Staten Island) and Putnam
    County, New York. CarePlus accounted for 49% of the premium
    revenue increase in the third quarter of 2005 over the third
    quarter of 2004.





16



---



##### 















17



---



##### 















18



---



##### 





|                                                                    |  |               |           |   |      |  |         | 
|------------------------------------------------------------------- |  | ------------- | --------- | - | ---- |  | ------- | 
|                                                                    |  | September 30, |          
|                                                                    |  |               |          
|                                                                    |  | 2005          |           |   | 2004 | 
|                                                                    |  |               |           |   |      | 
|Texas                                                               |  |               | 405,000   |   |      |  | 384,000 | 
|Florida                                                             |  |               | 215,000   |   |      |  | 242,000 | 
|Maryland                                                            |  |               | 136,000   |   |      |  | 128,000 | 
|New York                                                            |  |               | 130,000   |   |      |  |        | 
|New Jersey                                                          |  |               | 108,000   |   |      |  | 105,000 | 
|Illinois                                                            |  |               | 44,000    |   |      |  | 36,000  | 
|District of Columbia                                                |  |               | 41,000    |   |      |  | 39,000  | 
|Virginia                                                            |  |               | 19,000    |   |      |  |        | 
|Ohio                                                                |  |               | 1,000     |   |      |  |        | 
|                                                                    |  |               |           |   |      | 
|Total                                                               |  |               | 1,099,000 |   |      |  | 934,000 | 
|                                                                    |  |               |           |   |      | 
|Percentage growth from September 30, 2004 to
    September 30, 2005 |  |               | 17.7      | % |      |  |         | 



|                            |  |               |           |  |      |  |         | 
|--------------------------- |  | ------------- | --------- |  | ---- |  | ------- | 
|                            |  | September 30, |          
|                            |  |               |          
|Product                     |  | 2005          |           |  | 2004 | 
|                            |  |               |           |  |      | 
|AMERICAID (Medicaid  TANF) |  |               | 775,000   |  |      |  | 649,000 | 
|AMERIKIDS (SCHIP)           |  |               | 196,000   |  |      |  | 194,000 | 
|AMERIPLUS (Medicaid  SSI)  |  |               | 87,000    |  |      |  | 78,000  | 
|AMERIFAM (FamilyCare)       |  |               | 41,000    |  |      |  | 13,000  | 
|                            |  |               |           |  |      | 
|Total                       |  |               | 1,099,000 |  |      |  | 934,000 | 
|                            |  |               |           |  |      | 





19



---



##### 



Results of Operations




|                                             |  |               |       |   |               |  |       |      |  |  |       |   |  |  |       |  
|-------------------------------------------- |  | ------------- | ----- | - | ------------- |  | ----- | ---- |  |  | ----- | - |  |  | ----- | -
|                                             |  | Three Months  |       |   | Nine Months   | 
|                                             |  | Ended         |       |   | Ended         | 
|                                             |  | September 30, |       |   | September 30, | 
|                                             |  |               |       |   |               | 
|                                             |  | 2005          |       |   | 2004          |  |       | 2005 |  |  | 2004  |  
|                                             |  |               |       |   |               |  |       |      |  |  |       |  
|Premium revenue                              |  |               | 99.2  | % |               |  | 99.4  | %    |  |  | 99.3  | % |  |  | 99.5  | %
|Investment income and other                  |  |               | 0.8   |   |               |  | 0.6   |      |  |  | 0.7   |   |  |  | 0.5   |  
|                                             |  |               |       |   |               |  |       |      |  |  |       |  
|Total revenues                               |  |               | 100.0 | % |               |  | 100.0 | %    |  |  | 100.0 | % |  |  | 100.0 | %
|                                             |  |               |       |   |               |  |       |      |  |  |       |  
|Health benefits(1)                           |  |               | 89.3  | % |               |  | 79.9  | %    |  |  | 84.7  | % |  |  | 80.7  | %
|Selling, general and administrative expenses |  |               | 10.8  | % |               |  | 11.1  | %    |  |  | 10.7  | % |  |  | 10.6  | %
|(Loss) income before income taxes            |  |               | (0.5) | % |               |  | 8.4   | %    |  |  | 4.0   | % |  |  | 7.9   | %
|Net (loss) income                            |  |               | (0.4) | % |               |  | 5.2   | %    |  |  | 2.4   | % |  |  | 4.8   | %






|    |                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The HBR is shown as a percentage of premium revenue because
    there is a direct relationship between the premium received and
    the health benefits provided.

Three and Nine Month Periods Ended September 30, 2005
Compared to Three and Nine Month Periods Ended
September 30, 2004




| |         
| | --------
| | Revenues







| |                
| | ---------------
| | Health benefits





| |   |                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | An increase in health benefits expenses related to services
    performed in prior periods, of approximately $20.0 million,
    of which $18.0 million relates to the second quarter of
    2005.              
|
| |  | An increase in membership for the three months ended
    September 30, 2005 compared to three months ended
    September 30, 2004, accounted for $67.0 million of the
    increase in health benefits expenses.

20



---



##### 





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Our cost variance, or our trend increase, for the three months
    ended September 30, 2005 compared to the same period in
    2004, is approximately $59.0 million. We estimate that half
    of the increase, or $31.0 million, is consistent with
    underlying Medicaid market-wide trend. This trend reflects
    changes in our market and product mix and medical cost increases
    comprised of unit cost and utilization. The balance of the
    increase is primarily due to a higher incidence of illness, OB
    and related costs such as NICU and other services, and higher
    utilization and unit costs for network changes and other new
    contract terms.





| |                                             
| | --------------------------------------------
| | Selling, general and administrative expenses









| |                 
| | ----------------
| | Interest expense





| |                           
| | --------------------------
| | Provision for income taxes





| |                                
| | -------------------------------
| | Liquidity and capital resources



21



---



##### 





















| |   |                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an increase in the change in unearned revenue of
    $45.3 million due to accruals for overpayments received
    from the states of Texas and Florida and early payment of future
    revenues in Ohio; and
|
| |  | an increase in the change in claims payable of
    $21.5 million primarily due to increased medical costs in
    2005 compared to 2004.                                                                    





| |   |                                           
| | - | ------------------------------------------
| |  | a decrease in net income of $22.9 million;

22



---



##### 





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a decrease in the change in premium receivables of
    $18.2 million primarily due to the timing of payment for
    our new market, New York, where premium is billed by our New
    York subsidiary and collected approximately four weeks
    later; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | a decrease in the change in accounts payable, accrued expenses
    and other liabilities of $36.6 million primarily as a
    result of the decrease in the contingent liability accrued for
    the Maryland market which was accrued in the comparative 2004
    period and released in the 2005 period ($12.2 million of
    the decrease); payment of 2004 incentive compensation in 2005,
    with no corresponding accrual in 2005 ($11.0 million of the
    decrease); change in income taxes payable to a prepaid as a
    result of timing of payments ($5.7 million of the
    decrease); and payment of premium taxes net of accruals as a
    result of timing of payments ($11.2 million). Remaining
    change is a result of individually insignificant items.









Regulatory Capital and Dividend Restrictions









|        |                                                               
|------- | --------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures About Market
    Risk



23



---



##### 










|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures








Part II. Other
Information







|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings





24



---



##### 














|        |                                                                
|------- | ---------------------------------------------------------------
|Item 2. | Unregistered Sales of Equity Securities and Use of
    Proceeds








|        |                                
|------- | -------------------------------
|Item 3. | Defaults Upon Senior Securities








|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders



25



---



##### 








|        |                  
|------- | -----------------
|Item 5. | Other Information













26



---



##### 








|        |         
|------- | --------
|Item 6. | Exhibits

|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                    
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 3  | .1          |  | Amended and Restated Certificate of Incorporation of the Company
    (incorporated by reference to Exhibit 3.1 to our
    Registration Statement on Form S-3 (No. 333-108831)).                                                                                                                                                                    
|        | 3  | .2          |  | By-Laws of the Company (incorporated by reference to
    Exhibit 3.2 to our Registration Statement on Form S-3
    (No. 333-108831)).                                                                                                                                                                                                              
|        | 4  | .1          |  | Form of share certificate for common stock (incorporated by
    reference to Exhibit 4.1 to our Registration Statement on
    Form S-1 (No. 333-347410)).                                                                                                                                                                                          
|        | 4  | .2          |  | AMERIGROUP Corporation Second Restated Investor Rights
    Agreement, dated July 28, 1998 (incorporated by reference
    to Exhibit 4.2 to our Registration Statement on
    Form S-1 (No. 333-347410)).                                                                                                                                           
|        | 10 | .6.9        |  | Amendment to Amended and Restated Contract between State of New
    Jersey, Department of Human Services, Division of Medical
    Assistance and Health Services and AMERIGROUP New Jersey, Inc.
    dated July 1, 2005 (incorporated by reference to our
    Quarterly Report on Form 10-Q filed on August 3, 2005).                              
|        | 10 | .6.10       |  | Amendment to Amended and Restated Contract between State of New
    Jersey, Department of Human Services, Division of Medical
    Assistance and Health Services and AMERIGROUP New Jersey, Inc.
    dated July 1, 2005 regarding Dental Services (incorporated
    by reference to our Quarterly Report on Form 10-Q filed on
    August 3, 2005).
|        | 10 | .7.8        |  | Amendment 2, dated August 1, 2005, to the State of
    Illinois Department of Healthcare and Family Services Contract
    for Furnishing Health Services by a Health Maintenance
    Organization.                                                                                                                                                 
|        | 10 | .11         |  | Form 2005 Equity Incentive Plan (incorporated by reference
    to our Definitive Proxy Statement Pursuant to Schedule 14a
    of the Securities Exchange Act of 1934, filed on April 4,
    2005).                                                                                                                                                 
|        | 10 | .17.8       |  | Amendment No. 2 to the Amended Restated Credit Agreement
    dated October 22, 2003, among AMERIGROUP Corporation, the
    Guarantors and the Lenders, named therein, dated May 10,
    2005 (incorporated by reference to Exhibit 10.1 to our
    Current Report on Form 8-K, filed on May 13, 2005).                                             
|        | 10 | .18         |  | Form of Incentive Stock Option Agreement (incorporated by
    reference to Exhibit 10.1 to our Current Report on
    Form 8-K, filed on May 13, 2005).                                                                                                                                                                                             
|        | 10 | .19         |  | Form of Nonqualified Stock Option Agreement (incorporated by
    referenced to Exhibit 10.2 to our Current Report on
    Form 8-K, filed on May 13, 2005).                                                                                                                                                                                         
|        | 10 | .20         |  | Form of Stock Appreciation Rights Agreement (incorporated by
    reference to Exhibit 10.3 to our Current Report on
    Form 8-K, filed on May 13, 2005).                                                                                                                                                                                          
|        | 10 | .21         |  | Form of Nonqualified Stock Option Agreement (incorporated by
    reference to Exhibit 10.1 to our Current Report on
    Form 8-K, filed on November 3, 2005).                                                                                                                                                                                      
|        | 10 | .22.7       |  | Amendment No. 00017, dated March 1, 2005, to the
    District of Columbia Healthy Families Programs, Department of
    Health Medical Assistance Administration, Prepaid, Capital Risk
    Contract (POHC-2002-D-2003) (incorporated by reference to
    Exhibit 22.7 to our Current Report on Form 8-K, filed
    on May 5, 2005).                
|        | 10 | .23.3       |  | Amendment No. 13, dated August 31, 2004, to the
    September 1, 2002 Contract for Services between the HHS and
    HMO (Childrens Health Insurance Program Agreement
    (No. 52-00-139-M)) (incorporated by reference to
    Exhibit 23.3 to our Current Report on Form 8-K, filed
    on May 5, 2005).                                          
|        | 10 | .25.3       |  | Amendment No. 4, dated February 28, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 25.3 to our Current Report on
    Form 8-K, filed on May 5, 2005).                 
|        | 10 | .25.4       |  | Amendment No. 5, dated March 31, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 25.4 to our Current Report on
    Form 8-K, filed on May 5, 2005).                    

27



---



##### 



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                            
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .25.5       |  | Amendment No. 6, dated May 1, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 10.1 to our Current Report on
    Form 8-K, filed on May 5, 2005).               
|        | 10 | .25.6       |  | Amendment No. 7, dated June 1, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 10.1 to our Current Report on
    Form 8-K, filed on June 15, 2005).            
|        | 10 | .25.7       |  | Amendment No. 8, dated July 1, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 10.2 to our Current Report on
    Form 8-K, filed on July 26, 2005).            
|        | 10 | .25.8       |  | Amendment No. 9, dated July 1, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 10.3 to our Current Report on
    Form 8-K, filed on July 26, 2005).            
|        | 10 | .25.9       |  | Medical Services Contract by and between Florida Healthy Kids
    Corporation and AMERIGROUP Florida, Inc., dated October 1,
    2005.                                                                                                                                                                                                     
|        | 10 | .46         |  | Form 2003 Cash Incentive Plan of the Company (incorporated
    by reference to exhibit 10.38 to our Quarterly Report of
    Form 10-Q for the last quarter ended June 30, 2003,
    filed on August 11, 2003).                                                                                                                             
|        | 10 | .47         |  | Closing Agreement dated January 3, 2005, between CarePlus,
    LLC and AMERIGROUP Corporation (incorporated by reference to
    Exhibit 10.47 to our Current Report on Form 8-K, filed
    on January 6, 2005).                                                                                                                            
|        | 10 | .48         |  | Medicaid Contract between New York City Department of Health and
    Mental Hygiene and CarePlus, L.L.C. date October 1, 2004
    (incorporated by reference to Exhibit 10.48 to our Current
    Report on Form 8-K, filed on May 5, 2005).                                                                                                
|        | 10 | .48.1       |  | Contract Amendment, dated January 1, 2005, to the Medicaid
    Managed Care Model Contract between New York City Department of
    Health and Mental Hygiene and CarePlus LLC. Dated
    October 1, 2004 (incorporated by reference to
    Exhibit 10.48.1 to our Current Report on Form 8-K,
    filed on May 5, 2005.)                   
|        | 10 | .49         |  | Child Health Plus Contract by and between The State of New York
    Department of Health and Care Plus Health Plan is effective for
    the period July 1, 1998 through June 30, 2005
    (Contract No. C-015473) (incorporated by reference to
    Exhibit 10.49 to our Current Report on Form 8-K, filed
    on May 5, 2005).            
|        | 10 | .49.1       |  | Contract Amendment  Appendix X, dated
    September 10, 2005, to the Child Health Plus Contract by
    and between The State of New York Department of Health and Care
    Plus Health Plan is effective for the period June 30, 2005
    through December 31, 2005 ((Contract No. C-015473).                                             
|        | 10 | .49.2       |  | Contract Amendment  Appendix X, dated
    September 10, 2005, to the Child Health Plus by and between
    The State of New York Department of Health and Care Plus Health
    Plan is effective for the period January 1, 2006 through
    December 31, 2006 ((Contract No. C-015473).                                                    
|        | 10 | .50         |  | Family Health Plus Model Contract by and between The City of New
    York through the State of New York Department of Health and
    CarePlus LLC is effective for the period October 1, 2005
    through September 30, 2007.                                                                                                              
|        | 10 | .51         |  | Medicaid Managed Care Model Contract by The State of New York
    Department of Health and CarePlus LLC effective for the period
    October 1, 2005 through September 30, 2007.                                                                                                                                                           
|        | 10 | .60         |  | Contract dated July 19, 2005 between Georgia Department of
    Community Health and AMGP Georgia Managed Care Company, Inc. for
    the period from July 1, 2005 through June 30, 2006
    with six optional renewal periods (incorporated by reference to
    Exhibit 10.1 to our Current Report on Form 8-K, filed
    on July 26, 2005).

28



---



##### 



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .60.1       |  | Contract rates to contract dated July 19, 2005 between
    Georgia Department of Community Health and AMGP Georgia Managed
    Care Company, Inc. for the period from July 1, 2005 through
    June 30, 2006 with six optional renewal periods
    (incorporated by reference to Exhibit 10.1.1 to our Current
    Report on Form 8-K, filed on July 26, 2005).
|        | 10 | .61         |  | Contract with Eligible Medicare Advantage (MA) Organization
    Pursuant to Sections 1851 through 1859 of the Social
    Security Act for the Operation of a Medicare Advantage
    Coordinated Care Plan(s) (incorporated by reference to
    Exhibit 10.1 to our Current Report on Form 8-K, filed
    September 29, 2005).                                  
|        | 10 | .61.1       |  | Addendum To Medicare Managed Care Contract Pursuant To
    Sections 1860D-1 Through 1860D-42 Of The Social Security
    Act For The Operation of a Voluntary Medicare Prescription Drug
    Plan (incorporated by reference to Exhibit 10.2 to our
    Current Report on Form 8-K, filed September 29, 2005).                                                  
|        | 31 | .1          |  | Certification of Chief Executive Officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 2002, dated
    November 4, 2005.                                                                                                                                                                                                                                
|        | 31 | .2          |  | Certification of Chief Financial Officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 2002, dated
    November 4, 2005.                                                                                                                                                                                                                                
|        | 32 | .1          |  | Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of Sarbanes-Oxley Act of
    2002, dated November 4, 2005.                                                                                                                                                                                                    

29



---



##### 



Signatures


Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned thereunto duly authorized.




| |                       
| | ----------------------
| | AMERIGROUP Corporation



| |     |                        
| | --- | -----------------------
| | By: | /s/ Jeffrey L. McWaters

| |                                     
| | ------------------------------------
| |                                     
| | Jeffrey L. McWaters                 
| | Chairman and Chief Executive Officer





| |     |                      
| | --- | ---------------------
| | By: | /s/ E. Paul Dunn, Jr.

| |                                      
| | -------------------------------------
| |                                      
| | E. Paul Dunn, Jr.                    
| | Executive Vice President,            
| | Chief Financial Officer and Treasurer



30



---



##### 



Exhibits


|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                    
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 3  | .1          |  | Amended and Restated Certificate of Incorporation of the Company
    (incorporated by reference to Exhibit 3.1 to our
    Registration Statement on Form S-3 (No. 333-108831)).                                                                                                                                                                    
|        | 3  | .2          |  | By-Laws of the Company (incorporated by reference to
    Exhibit 3.2 to our Registration Statement on Form S-3
    (No. 333-108831)).                                                                                                                                                                                                              
|        | 4  | .1          |  | Form of share certificate for common stock (incorporated by
    reference to Exhibit 4.1 to our Registration Statement on
    Form S-1 (No. 333-347410)).                                                                                                                                                                                          
|        | 4  | .2          |  | AMERIGROUP Corporation Second Restated Investor Rights
    Agreement, dated July 28, 1998 (incorporated by reference
    to Exhibit 4.2 to our Registration Statement on
    Form S-1 (No. 333-347410)).                                                                                                                                           
|        | 10 | .6.9        |  | Amendment to Amended and Restated Contract between State of New
    Jersey, Department of Human Services, Division of Medical
    Assistance and Health Services and AMERIGROUP New Jersey, Inc.
    dated July 1, 2005 (incorporated by reference to our
    Quarterly Report on Form 10-Q filed on August 3, 2005).                              
|        | 10 | .6.10       |  | Amendment to Amended and Restated Contract between State of New
    Jersey, Department of Human Services, Division of Medical
    Assistance and Health Services and AMERIGROUP New Jersey, Inc.
    dated July 1, 2005 regarding Dental Services (incorporated
    by reference to our Quarterly Report on Form 10-Q filed on
    August 3, 2005).
|        | 10 | .7.8        |  | Amendment, dated August 1, 2005, to the State of Illinois
    Department of Health Care and Family Services Contract for
    Furnishing Health Services by a Health Maintenance Organization.                                                                                                                                                      
|        | 10 | .11         |  | Form 2005 Equity Incentive Plan (incorporated by reference
    to our Definitive Proxy Statement Pursuant to Schedule 14a
    of the Securities Exchange Act of 1934, filed on April 4,
    2005).                                                                                                                                                 
|        | 10 | .17.8       |  | Amendment No. 2 to the Amended Restated Credit Agreement
    dated October 22, 2003, among AMERIGROUP Corporation, the
    Guarantors and the Lenders, named therein, dated May 10,
    2005 (incorporated by reference to Exhibit 10.1 to our
    Current Report on Form 8-K, filed on May 13, 2005).                                             
|        | 10 | .18         |  | Form of Incentive Stock Option Agreement (incorporated by
    reference to Exhibit 10.1 to our Current Report on
    Form 8-K, filed on May 13, 2005).                                                                                                                                                                                             
|        | 10 | .19         |  | Form of Nonqualified Stock Option Agreement (incorporated by
    referenced to Exhibit 10.2 to our Current Report on
    Form 8-K, filed on May 13, 2005).                                                                                                                                                                                         
|        | 10 | .20         |  | Form of Stock Appreciation Rights Agreement (incorporated by
    reference to Exhibit 10.3 to our Current Report on
    Form 8-K, filed on May 13, 2005).                                                                                                                                                                                          
|        | 10 | .21         |  | Form of Nonqualified Stock Option Agreement (incorporated by
    reference to Exhibit 10.1 to our Current Report on
    Form 8-K, filed on November 3, 2005).                                                                                                                                                                                      
|        | 10 | .22.7       |  | Amendment No. 00017, dated March 1, 2005, to the
    District of Columbia Healthy Families Programs, Department of
    Health Medical Assistance Administration, Prepaid, Capital Risk
    Contract (POHC-2002-D-2003) (incorporated by reference to
    Exhibit 22.7 to our Current Report on Form 8-K, filed
    on May 5, 2005).                
|        | 10 | .23.3       |  | Amendment No. 13, dated August 31, 2004, to the
    September 1, 2002 Contract for Services between the HHS and
    HMO (Childrens Health Insurance Program Agreement
    (No. 52-00-139-M)) (incorporated by reference to
    Exhibit 23.3 to our Current Report on Form 8-K, filed
    on May 5, 2005).                                          
|        | 10 | .25.3       |  | Amendment No. 4, dated February 28, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 25.3 to our Current Report on
    Form 8-K, filed on May 5, 2005).                 
|        | 10 | .25.4       |  | Amendment No. 5, dated March 31, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 25.4 to our Current Report on
    Form 8-K, filed on May 5, 2005).                    

31



---



##### 



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                            
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .25.5       |  | Amendment No. 6, dated May 1, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 10.1 to our Current Report on
    Form 8-K, filed on May 5, 2005).               
|        | 10 | .25.6       |  | Amendment No. 7, dated June 1, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 10.1 to our Current Report on
    Form 8-K, filed on June 15, 2005).            
|        | 10 | .25.7       |  | Amendment No. 8, dated July 1, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 10.2 to our Current Report on
    Form 8-K, filed on July 26, 2005).            
|        | 10 | .25.8       |  | Amendment No. 9, dated July 1, 2005, to the
    June 28, 2002 Medical Contract between the State of
    Florida, Agency for Health Care Administration and AMERIGROUP
    Florida Inc. (AHCA Contract No. FA523) (incorporated by
    reference to Exhibit 10.3 to our Current Report on
    Form 8-K, filed on July 26, 2005).            
|        | 10 | .25.9       |  | Medical Services Contract by and between Florida Healthy Kids
    Corporation and AMERIGROUP Florida, Inc., dated October 1,
    2005.                                                                                                                                                                                                     
|        | 10 | .46         |  | Form 2003 Cash Incentive Plan of the Company (incorporated
    by reference to exhibit 10.38 to our Quarterly Report of
    Form 10-Q for the last quarter ended June 30, 2003,
    filed on August 11, 2003).                                                                                                                             
|        | 10 | .47         |  | Closing Agreement dated January 3, 2005, between CarePlus,
    LLC and AMERIGROUP Corporation (incorporated by reference to
    Exhibit 10.47 to our Current Report on Form 8-K, filed
    on January 6, 2005).                                                                                                                            
|        | 10 | .48         |  | Medicaid Contract between New York City Department of Health and
    Mental Hygiene and CarePlus, L.L.C. date October 1, 2004
    (incorporated by reference to Exhibit 10.48 to our Current
    Report on Form 8-K, filed on May 5, 2005).                                                                                                
|        | 10 | .48.1       |  | Contract Amendment, dated January 1, 2005, to the Medicaid
    Managed Care Model Contract between New York City Department of
    Health and Mental Hygiene and CarePlus LLC. Dated
    October 1, 2004 (incorporated by reference to
    Exhibit 10.48.1 to our Current Report on Form 8-K,
    filed on May 5, 2005.)                   
|        | 10 | .49         |  | Child Health Plus Contract by and between The State of New York
    Department of Health and Care Plus Health Plan is effective for
    the period July 1, 1998 through June 30, 2005
    (Contract No. C-015473) (incorporated by reference to
    Exhibit 10.49 to our Current Report on Form 8-K, filed
    on May 5, 2005).            
|        | 10 | .49.1       |  | Contract Amendment  Appendix X, dated
    September 10, 2005, to the Child Health Plus Contract by
    and between The State of New York Department of Health and Care
    Plus Health Plan is effective for the period June 30, 2005
    through December 31, 2005 ((Contract No. C-015473).                                             
|        | 10 | .49.2       |  | Contract Amendment  Appendix X, dated
    September 10, 2005, to the Child Health Plus by and between
    The State of New York Department of Health and Care Plus Health
    Plan is effective for the period January 1, 2006 through
    December 31, 2006 ((Contract No. C-015473.                                                     
|        | 10 | .50         |  | Family Health Plus Model Contract by and between The City of New
    York through the State Department of Health and CarePlus LLC is
    effective for the period October 1, 2005 through
    September 30, 2007.                                                                                                                          
|        | 10 | .51         |  | Medicaid Managed Care Model Contract by The State of New York
    Department of Health and CarePlus LLC effective for the period
    October 1, 2005 through September 30, 2007.                                                                                                                                                           
|        | 10 | .60         |  | Contract dated July 19, 2005 between Georgia Department of
    Community Health and AMGP Georgia Managed Care Company, Inc. for
    the period from July 1, 2005 through June 30, 2006
    with six optional renewal periods (incorporated by reference to
    Exhibit 10.1 to our Current Report on Form 8-K, filed
    on July 26, 2005).

32



---



##### 



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .60.1       |  | Contract rates to contract dated July 19, 2005 between
    Georgia Department of Community Health and AMGP Georgia Managed
    Care Company, Inc. for the period from July 1, 2005 through
    June 30, 2006 with six optional renewal periods
    (incorporated by reference to Exhibit 10.1.1 to our Current
    Report on Form 8-K, filed on July 26, 2005).
|        | 10 | .61         |  | Contract with Eligible Medicare Advantage (MA) Organization
    Pursuant to Sections 1851 through 1859 of the Social
    Security Act for the Operation of a Medicare Advantage
    Coordinated Care Plan(s) (incorporated by reference to
    Exhibit 10.1 to our Current Report on Form 8-K, filed
    September 29, 2005).                                  
|        | 10 | .61.1       |  | Addendum To Medicare Managed Care Contract Pursuant To
    Sections 1860D-1 Through 1860D-42 Of The Social Security
    Act For The Operation of a Voluntary Medicare Prescription Drug
    Plan (incorporated by reference to Exhibit 10.2 to our
    Current Report on Form 8-K, filed September 29, 2005).                                                  
|        | 31 | .1          |  | Certification of Chief Executive Officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 2002, dated
    November 4, 2005.                                                                                                                                                                                                                                
|        | 31 | .2          |  | Certification of Chief Financial Officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 2002, dated
    November 4, 2005.                                                                                                                                                                                                                                
|        | 32 | .1          |  | Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of Sarbanes-Oxley Act of
    2002, dated November 4, 2005.                                                                                                                                                                                                    

33