Good morning. I am Bill Cunningham, the Chairman of the Board of Lincoln National Corporation, and I will be chairing today's meeting. On behalf of the board, our management team, and employees, we are delighted that you have come to the 45th annual meeting of the shareholders of Lincoln National Corporation. I would also like to acknowledge those listening via webcast. I'm pleased to convene the meeting. If you did not register or receive an agenda as you entered, would you please raise your hand? Has anyone been missed? The agenda sets forth the rules and procedures for today's meeting. As provided in the agenda, we will first conduct the formal business of the annual meeting as set forth in our notice of meeting and proxy statement, and the notice of internet availability of those materials. After we adjourn the formal business of the meeting, Dennis R.
Glass, President and Chief Executive Officer, will make a few remarks, after which there will be a question and answer period. At that time, we invite you to ask questions on the matters relating to the operations of Lincoln National Corporation. Today's meeting is being webcast and recorded. The audio recording of today's meeting will be available for replay through Monday, June 25th, 2012. Should you need assistance during or after the meeting, please see one of the people at the registration desk. I would like to introduce the other members of our board of directors sitting in the audience today. Will each director please stand when your name is called? William J. Avery. Dennis R. Glass. George W. Henderson III. Eric G. Johnson. Gary C. Kelly. M. Leanne Lachman. Michael F. Mee. William Porter Payne. Patrick S. Pittard, and Isaiah Tidwell. These are our directors.
Will you please give them a hand? Representatives from our independent registered public accounting firm, Ernst & Young LLP, are also in attendance. Although they have declined to make a statement, they will be available to answer appropriate questions regarding the 2011 audit during the question and answer session later this morning. The Inspector of Elections for this meeting, Computershare Investor Services, has in its possession an affidavit of mailing, attesting to the mailing of the notice of meeting, proxy statement, proxy card, notice of internet availability, and annual report to shareholders. The Inspector of Elections has also reported that more than a majority of shares required for quorum, as specified in the bylaws, are present, either in person or by proxy. Accordingly, a quorum is present, and the meeting is in order to proceed.
I ask Charlie Brawley, Secretary of the Corporation, to serve as Secretary of this meeting. The list of shareholders entitled to notice of this annual meeting, as well as the minutes of our last annual meeting held May 26th, 2011, are available for inspection by shareholders. As set forth in the meeting notice, there are three items to be voted on at this meeting. The first item to be considered today is the election of directors. The board has nominated George W. Henderson, Eric G. Johnson, and M. Leanne Lachman, and Isaiah Tidwell as directors to serve for three years, terms to expire at the 2015 annual meeting, or until their successors shall be elected and shall qualify. No other written notice of nomination was received by the corporate secretary in accordance with the bylaws. Mr. Brawley, do you have a motion relating to the election of directors?
Yes, Mr. Chairman. I move that Ms. Lachman and Messrs. Henderson, Johnson, and Tidwell be nominated as members of the Board of Directors of Lincoln National Corporation for the term specified in the proxy statement.
Is there a second?
I second.
The names of such persons have been placed in nomination, because the Secretary has not received any notice of shareholder nominees, I declare the nominations are closed. The second item to be considered today is the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2012. Mr. Brawley, do you have a motion relating to the ratification appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2012?
Yes, Mr. Chairman. I move that the ratification of the appointment of Ernst & Young be approved.
Is there a second?
Second.
The last item to be considered today is the non-binding advisory resolution seeking approval of the 2011 compensation for our named executive officers as described in the proxy statement. Mr. Brawley, would you introduce the motion?
Yes, Mr. Chairman. I move that the following resolution be adopted. Resolved, that the shareholders approve the compensation of executives of the company as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables regarding named executive officer compensation, together with the accompanying narrative disclosure in the proxy statement for the 2012 annual meeting of shareholders.
Is there a second?
Second.
Are there any questions relating specifically to the three items presented? Seeing no questions, let's proceed with the voting. If you have already sent in your proxy, you do not have to take any further action as your proxy card will be voted on in the manner you directed. If you wish to vote in person, please raise your hand and keep it raised until an attendant has provided you a ballot. Remember to vote at this meeting or change your vote, you must have been a shareholder of record on March 19th, 2012, or a beneficial owner on such date with an appointment of an agent or proxy from the record owner. You should complete and sign the ballot. When you have marked and signed the ballot, please raise your hand so that it may be collected. I see no one is wishing to vote by ballot.
As there's no further business to come before the meeting, the polls will now close. Mr. Brawley, do you have the preliminary results of the voting?
Yes, Mr. Chairman. The Inspector of Elections has determined that based on the votes cast and received, that each of the directors has been elected, the appointment of Ernst & Young has been ratified, and the non-binding resolution approving the compensation of the named executive officers has been approved.
Thank you. This now concludes the formal business of the meeting. Therefore, I declare the meeting is adjourned. I would like to now turn to Dennis Glass, President and Chief Executive Officer of the Corporation, to give his remarks about the performance of the Corporation since our last annual meeting. Dennis?
Thank you, Bill, and good morning. Let me add my thanks to you for joining us today at Lincoln National Corporation's 2012 Annual Meeting of Shareholders. I would like to extend a special welcome to the shareholders joining us here in the audience, as well as everyone participating via webcast. Thank you for your investment and confidence in our company. Companies draw on many sources to achieve success. One of the most important of these is a board of directors that dedicates itself to the singular mission of helping a company and its employees achieve their goals. On behalf of the employees of Lincoln, as well as on behalf of the shareholders, I offer my sincere appreciation to each of our directors for their many contributions throughout the year. I cannot talk about our company's progress without acknowledging our senior management team and all of our employees.
These individuals work tirelessly to ensure that Lincoln continues to deliver value to our clients and our shareholders. I know that the board of directors joins me in thanking our employees for their contributions. As I begin my remarks, let me remind you that my comments today may contain forward-looking statements and references to non-GAAP measures. Please refer to the investor relations section of our website for cautionary statements and GAAP reconciliation. I will focus most of my time with you today on sharing a state of the company that includes why I believe Lincoln remains well-positioned for further growth. First, given we released earnings only three weeks ago, I'd like to share some highlights from our latest reports. Our performance in the first quarter was very strong, with all of our businesses delivering good results.
We continued to execute our strategy to protect our core strengths and offer greater returns to our shareholders. We ended the first quarter with operating return on equity north of 11%, on book value per share growth of 4.5%. We grew our revenue by more than 3%. Our strong capital development from earnings enabled us to accelerate share buybacks, as well as continue to invest for the long-term growth of the company. Our performance in the latest quarter followed our success in 2011, where we increased operating revenue by 5%, increased income from operations by 29%, and closed the year with consolidated deposits of approximately $22 billion with positive net flows of more than $6 billion. Despite this performance, it is my belief that our share price remains undervalued.
That being said, I firmly believe that over time, the actions we are and have taken and the results that we are experiencing will be reflected in a higher share price. That's because our five core strengths remain unchanged. We continue to serve growing market segments. We maintain industry-leading positions. We maintain industry-leading distribution. We offer a comprehensive solutions portfolio. We actively manage our capital, and we continue to make smart investments. I will turn my attention to the state of the company. Two weeks ago, we held day-long meetings with the rating agencies. Our discussions centered on three key themes. One, we are operating from a position of strength. We are growing the franchise, and we are protecting our margins. Let me touch on each of these, starting with our position of strength. Lincoln remains a very strong franchise.
We have industry-leading positions in each of our business segments with our strength underpinned by strong distribution networks delivering innovative products to the marketplace. Our sound balance sheet and strong capital position are designed to allow us to withstand the stresses of a still uncertain environment as well as enable us to continue to invest for the long term. The second theme is that we are growing the franchise. We are sharply focused on expanding all of our business lines, with the end result being accelerated returns to our shareholders. One example of our strategic approach is the multi-year plan that is underway in both Group Protection and Retirement Plan Services. By the end of 2014, our anticipated investment of more than $300 million on technology enhancement and distribution expansion should yield increased net flows and greater annualized sales in both segments.
In fact, the preliminary investments that we are making are already showing good results. The final theme, we are protecting our margins. We continue to apply a disciplined approach to all of our businesses. As I have said before, we are more interested in offering products on our terms using sound pricing assumptions than we are on taking market share. One example of this is our life business, where we have repriced products and shifted our sales solutions that are not only good for consumers, but also developing strong returns to help drive shareholder value. Where do we go from here? It's clear that we are in a slow-growth U.S. economy, and that international concerns continue to weigh on the minds of both consumers and investors.
I fully expect that this unsettled environment will result in continued slow economic growth and low interest rate for some time, posing challenges to Lincoln and other companies. At Lincoln, we refuse to be immobilized by macroeconomic conditions. As we have done through good times and bad times, our response is to take action. As I have just outlined, we start from a foundation of a strong franchise and sound balance sheet, we are also taking thoughtful and assertive steps to mitigate the macroeconomic challenges. We are confident that we have the pieces in place to execute all of our strategies. We believe our approach is sound, and our commitment to delivering on our goals and objectives is unwavering. Our efforts will translate into enhanced value created for you, our shareholders.
In closing, let me thank you again for your confidence and commitment to Lincoln, and I will now turn the meeting back over to Bill.
Thank you, Dennis. I would like to encourage you to ask questions about matters relating to the operations of the corporation. Please proceed to the microphone to ask your question, and please identify yourself before your comment or question, and well indicate if you're a shareholder. If there are no questions or comments, we thank you for attending today's meeting, and we wish you well as we go through the next year. Thank you very much. We stand adjourned.