reportedfirst-quarter net income of $703.0 million, or $2.63 per share, down from$865.2 million, or $3.09 per share, in the year-ago quarter.
Results forthe recent quarter included net negative adjustment items of 83 cents pershare. First-quarter 2015 results included net negative adjustment items of 5cents per share. Excluding the items noted in each period, adjusted net incomewas $3.46 per share in the first quarter, up from $3.14 per share in theprior-year quarter.
The S&PCapital IQ consensus normalized EPS estimate for the first quarter was $3.35.
Totaloperating revenue rose to $20.31 billion in the first quarter from $18.85billion in the year-ago period. The growth reflected premium increases to coveroverall cost trends and higher enrollment in the Medicaid and commercialself-funded businesses. These increases were partially offset by a decline inlocal group fully insured enrollment.
Total medicalmembership stood at approximately 39.6 million members at March 31, up 2.8%from 38.5 million members at March 31, 2015. Commercial and specialty businessenrollment increased by 639,000 medical members as the company experiencedgrowth in the national market, partially offset by a slight decrease in thelocal group business. Enrollment also grew in the Medicaid business.
Medicalenrollment increased by 1.0 million members, or 2.6%, sequentially during thefirst quarter. The increase reflected enrollment gains in the national,individual and Medicaid businesses, partially offset by a decline in enrollmentin the local group business.
The benefitexpense ratio was 81.8% in the first quarter, up 160 basis points from 80.2% inthe prior-year quarter. The increase was largely driven by the extra calendarday in the quarter, a higher ratio in the Medicaid and individual businessesand higher membership in the Medicaid business, which carries a higher benefitexpense ratio than the consolidated company average. The increase was partiallyoffset by improved medical cost performance in the Medicare business.
Theselling, general and administrative expense ratio was 15.8% in the firstquarter, down 90 basis points from 16.7% in the first quarter of 2015. Thedecrease was primarily driven by the impact of lower administrative costsresulting from expense efficiency initiatives and higher membership in theMedicaid business, which carries a lower selling, general and administrativeexpense ratio than the consolidated company average.
Anthem didnot repurchase any shares of its common stock during the first quarter due tothe pendingacquisition of CignaCorp. As of March 31, Anthem had nearly $4.2 billion ofboard-approved share repurchase authorization remaining.
Inaddition, Anthem updated its 2016outlook. Net income is now expected to be greater than $9.65 pershare, including greater than $1.15 per share of net unfavorable items. Thecompany previously expected net income to be greater than $10.35 per share,including greater than 45 cents per share of amortization of other intangibleassets. Excluding these items, adjusted net income is still expected to begreater than $10.80 per share.
The S&PCapital IQ consensus normalized EPS estimate for the year is $10.92.
Medicalmembership is now expected to be in the range of 39.3 million to 39.5 million.Fully insured membership is now expected to be between 14.9 million and 15.0million, and self-funded membership is now expected to be in the range of 24.5million to 24.6 million. The company previously expected medical membership ofbetween 38.8 million and 39 million, fully insured membership of between 14.6million to 14.7 million and self-funded membership of between 24.2 million and24.3 million.
Operatingrevenue is now expected to be between $81.0 billion to $82.0 billion, comparedto $80.0 billion to $81.0 billion previously expected.
The companystill expects benefit expense ratio to be in the range of 83.6% plus or minus30 basis points.
Theselling, general and administrative expense ratio is now expected to be in therange of 15.5% plus or minus 30 basis points, versus previous expectations of15.4% plus or minus 30 basis points.
Operatingcash flow is still expected to be greater than $3.0 billion.