In October 2016, we recognized a formerly revealed net tax benefit of about $511.0 million, or $0.81 per diluted share, related to the disposition of PolyMedica Corporation (Liberty). Following receipt of the tax benefit proceeds, the Board of Directors authorized the use of $41.2 million, about 8%, or $0.04 per share net of tax, of the PolyMedica tax benefit proceeds to reward employees for the noteworthycontribution this multi-year effort offered the Company and its shareholders. This special, one-time, payment is excluded from our fourth quarter and full year 2016 adjusted SG&A, which impacts adjusted EBITDA and adjusted earnings per diluted share.
Fourth Quarter and Full Year 2016 Review
The following compares fourth quarter 2016 and 2015 operating results:
- Adjusted claims of 354.9 million, down 6%, mostly because of roll-off of the Coventry business
- GAAP net income of $1,434.7 million, up 85%
- GAAP earnings per diluted share of $2.34, up 107%
- Adjusted EBITDA of $2,054.2 million, up 6% from 2015 adjusted EBITDA
- Adjusted EBITDA per adjusted claim of $5.79, up 14% from 2015 adjusted EBITDA per adjusted claim
- Adjusted net income of $1,153.0 million, up 8% and 5A
- Adjusted earnings per diluted share of $1.88, up 21%
- Net cash flow offered by operating activities of $2,248.9 million, down 22%
The following compares full year 2016 and 2015 operating results:
- Adjusted claims of 1,407.6 million, down 2%
- Apart From the impact of the Coventry roll off, adjusted claims were up 3%
- GAAP net income of $3,404.4 million, up 37%
- GAAP earnings per diluted share of $5.39, up 51%
- Adjusted EBITDA of $7,260.4 million, up 3% from 2015 adjusted EBITDA
- Adjusted EBITDA per adjusted claim of $5.16, up 6% from 2015 adjusted EBITDA per adjusted claim
- Adjusted net income of $4,034.7 million, up 5% –
- Adjusted earnings per diluted share of $6.39, up 16% –
- Net cash flow offered by operating activities of $4,919.4 million, up 1%
Counting shares received under our accelerated share repurchase agreements (executed in February 2016 and April 2015), the Company repurchased a total of 74.4 million shares under our share repurchase program for $5,571.9 million during 2016. In December 2016, the Board of Directors of the Company approved a boost in the authorized number of shares that may be repurchased under the share repurchase program by an additional 65.0 million shares.
As talked about publicly in December 2016, the Company revised its methodology for reporting adjusted network claims starting with the year ending December 31, 2016. Specifically, the revised methodology includes an adjustment to reflect non-specialty network claims filled through our 90-day programs. These claims are now multiplied by three, as these claims, on average, typically cover a time period three times longer than other network claims. The change was made retrospectively for the three months and year ended December 31, 2016 and for the three months and year ended December 31, 2015, to facilitate a year-over-year comparison.