Good morning. My name's Kevin Kabat. I am the Chairman of the Board of Directors of Unum Group. On behalf of the entire board, I'd like to welcome you to the 2018 annual meeting of shareholders. We are pleased to see all of you here in Chattanooga, Tennessee, and also welcome those joining us on the webcast. Our agenda for today includes the business portion of the meeting and management presentations by CEO Rick McKenney and CFO Jack McGarry, as well as a dedicated Q&A session. Please hold questions until that time. By almost any measure, 2017 was an outstanding year for Unum. In fact, it was one of the best years in our company's history. We delivered strong operational and financial results, including record net income.
We achieved these results by remaining focused on what we do best, providing benefits that protect the livelihoods of workers and their families throughout the U.S. and the U.K. In short, we've built a business model that allows us to thrive despite an ever-changing external environment. We've an integral part of the safety net of more than 35 million people. Our disciplined approach to running our business is why people have counted on us for 170 years. Clearly, none of this would be possible without the dedication and commitment of Unum's outstanding employees, as well as the leadership of both the senior management team and the Board of Directors, past and present. On that note, I would like to introduce our board. Before going through the current nominees, I'd like to take a moment to recognize a former member of our board who is here with us today.
Tom Kinser retired at the end of 2015 and was a significant contributor on our board. Tom, we're thrilled that you're here with us today. Please stand up and be applauded. For the current director nominees. In addition to myself, the director nominees are as follows. I'll ask that they please stand and remain standing as I read their names. Theo Bunting, former Group President of Utility Operations at Entergy Corporation. Michael Caulfield, former President of Mercer Human Resource Consulting. Susan DeVore, President and CEO of Premier Inc. Susan's our newest director, and this is actually her first annual meeting with Unum. Joe Echevarria, former CEO of Deloitte LLP. Cynthia Egan, former President of T. Rowe Price Retirement Plan Services. Tim Keaney, former Vice Chairman of The Bank of New York Mellon Corporation. Gloria Larson, President of Bentley University. Rick McKenney, President and CEO of Unum Group.
Ron O'Hanley, President and COO of State Street Corporation. Fran Shammo, former CFO of Verizon Communications Inc. That is your current board. We thank you, ladies and gentlemen. I would also like to recognize one director, Pam Godwin, who will be retiring from our board. Ms. Godwin has served the company and its shareholders for over 13 years, including serving as the chair of the governance committee for several of those. Her insight and experience has always been appreciated. We are thankful for her valuable contributions and dedication. Pam's here with us today. I'd like for her to please stand and be recognized for her long service to this company. Thank you, Pam. I would like to call the meeting to order. The polls are open for voting on the items of business.
I've asked Lisa Iglesias, our general counsel, to assist with conducting this meeting to serve as parliamentarian. Lisa?
Thank you, Kevin. I'd like to remind everyone that the annual meeting rules are printed on the back of the agenda for this meeting, which was made available to you at the registration desk when you entered. Later, I'll highlight some of those rules before we take questions from shareholders at the end of today's presentation. A representative of our transfer agent, Computershare Trust Company, is present and serving as the inspector of election. Any shareholder who has not already voted in person or by proxy is invited to do so now. If you need a ballot, please raise your hand and we'll give one to you. If you're voting in person, please deliver your completed ballot to the inspector of election prior to the conclusion of the meeting.
If you hold your shares in street name and wish to vote, you must submit a legal proxy provided to you by your broker with your ballot. At this time, I'd like to present an affidavit establishing that notice of this meeting was duly given and a proxy statement or notice of internet availability of proxy materials was furnished on or about April 12th, 2018, to each of our shareholders as of the record date, March 26th, 2018. I also report that the inspector of election has filed with me an oath of office and certificate stating that a majority of outstanding shares of common stock of the company are represented in person or by proxy at this meeting, and therefore, a quorum is present. Now on to the voting items. We have four voting items to cover today.
We have the preliminary results from the inspector of election, which I'll provide today. Voting item one is the election of 11 director nominees listed in our proxy statement. I can confirm that there were no other nominations made in accordance with our bylaws. The inspector of election reports that each of the 11 director nominees has been elected by more than a majority of the total number of votes cast. Item two is the advisory vote on executive compensation, commonly known as say on pay. The Inspector of Election reports that the say on pay resolution was approved by more than a majority of the shares represented and entitled to vote at the meeting. Item three is the ratification of the appointment of Ernst & Young LLP as the company's independent auditor for 2018.
The Inspector of Election reports that the appointment of Ernst & Young LLP as the company's independent auditor was ratified by more than a majority of the shares represented and entitled to vote at this meeting. I'd ask that the representatives of Ernst & Young LLP who are here with us today, Mark Thomas and Sean Devine, to please stand. They are prepared to answer any relevant questions you may have during the question and answer period. Our final voting item is the approval of an amended and restated certificate of incorporation, which among other things, eliminates super majority voting provisions. The Inspector of Elections reports that the Unum amended and restated certificate of incorporation was approved by more than a majority of the shares outstanding and entitled to vote at the meeting.
We will publish the final vote results on Form 8-K within four business days after the Inspector of Election certifies the final vote results. The final results will include any shares properly voted in person at this meeting. If you're voting in person today and have not already submitted your completed ballot to the Inspector of Elections, please raise your hand and we will collect it now. Kevin, that completes my report.
Thank you, Lisa. The polls are now closed. This now concludes the business portion of today's meeting, and the annual meeting of shareholders of Unum Group is now adjourned. For the next agenda item, our management report, I'll now turn things over to our President and Chief Executive Officer, Rick McKenney. Rick.
Thank you. Good morning, everyone, and thanks for all of you for being here today, for our board of directors, many of the employees and stakeholders who share our commitment to this company and our passion for its mission. It's a privilege to talk to you today about what we've achieved together and the ways we are growing to protect the families, finances, and futures of even more people. By any measure, 2017 was an outstanding year for Unum. It was a continuation of many of the solid trends that we have seen over the last decade as we again accomplished what we set out to do. Our performance is rooted in sound underlying fundamentals and in a solid balance sheet that has positioned us to execute on our plans and on our capital management strategy.
That strategy has increasingly featured strategic growth-focused acquisitions as well as traditional methods of returning capital to our shareholders through stock buybacks and dividend increases. That consistent, solid performance in our core businesses and our relentless focus on customer service is what led us to become one of the world's leading providers of financial protection benefits at the workplace. Through our three principal businesses, Unum US, Unum UK, and Colonial Life, we help protect more than 35 million workers and their families in the event of illness or injury through our Disability Insurance, life insurance, accident, and critical illness coverages. Through the acquisition over the last few years of the National Dental Plan in the U.K. and Starmount Life here in the U.S., we've built the foundation to meet the growing demand for dental and vision insurance, a key component of our growth strategy.
That strategy, along with two keys to our past success, our people and the focused and disciplined execution of our plans, led to another strong year for the enterprise. Earnings per share growth of more than 10% took our net income to nearly $1 billion. We also saw steady top-line growth with record revenues of $11.3 billion. Combined with this growth, we returned nearly $600 million in capital to shareholders. During the year, we continued to seek out opportunities to expand our footprint and provide financial protection benefits to more people, primarily through the strategic expansion of our portfolio. Our leave management capabilities were bolstered by our early 2018 acquisition of LeaveLogic, which dramatically streamlines the leave experience for employees and employers.
We also expanded our geographic reach in the U.S. through Colonial Life's accelerated growth program and globally through the pending acquisition of Polish financial protection provider, Pramerica. We achieved this growth while still running our core operations with a 15.9% return on equity. Through 2017, we continued to outperform our peers in the broader market in total shareholder returns. Over the last decade, Unum has been an excellent long-term investment during one of the worst financial crises in memory, with a 10.8% compound annual return for shareholders. For the most recent three, five, and 10-year periods, in fact, we exceeded the total shareholder return of our peer group, the Life and Health Index, and the broader S&P 500. We attribute this strong performance to our market-leading positions, disciplined underwriting and risk management, and effective capital management.
Now let me take a moment to address the recent stock decline in 2018. Across the insurance industry, investors are focused on the performance of long-term care portfolios, and this has clearly impacted our own stock performance. I'll let Jack McGarry, our CFO, provide more context in a moment, but it's important for you to know, as owners of this company, long-term care is a line of business we have been focused on for many years, going back to when we closed the individual long-term care business a decade ago. We've always been vocal about how we're managing our closed block of legacy long-term care policies, and we've been very active in optimizing performance of this block over time. Let's be clear, this is a challenging business.
We have been taking the actions necessary to ensure that it does not detract from the solid operating performance of our core businesses, which continue to grow profitably. While the outstanding results generated by our core businesses in 2017, we entered 2018 better positioned than ever for the long term. We began the year with leadership positions in each of our markets. We made steady progress towards growing our business organically through our offerings and our distribution channels. Our expertise in delivering benefits through the workplace remains a key differentiator. Industry-wide, for instance, more than 90% of Disability Insurance is acquired in the workplace. That's because employees can get the information they need and access to affordable protection that likely wouldn't be available to them anywhere else.
We believe our focus on the workplace is the best way to protect people's financial stability. We do that with products and services that are increasingly important to workers at every stage of their lives. We look to the future with optimism because the need for what we do has never been greater. The statistics behind this reality are sobering. One in four of those entering the workforce today will be disabled at some point in their careers. More than half of American households would struggle to make ends meet after an unexpected expense of just $2,000. According to recent research, nearly one in three millennials has no money in a savings account. Many of the people who received disability payments last year told us they would have faced financial catastrophe had it not been for their Disability coverage.
Some would have even been forced to give up their homes or declare bankruptcy. More financial responsibility is shifting to individuals in other ways, too. In 2006, 4% of employees were in high deductible health plans. Today, 29% are. That will continue to increase. To fill the void, we have invested heavily in understanding the best potential coverage options for employees in different life stages, as well as educational tools and resources to help reach these individuals as they make decisions about benefits. At the heart of our business is the social value of our commitment to protecting the finances and futures of millions of working people. Last year alone, we paid nearly $7 billion in benefits and helped hundreds of thousands of people return to work. Behind every one of these people is a story.
They motivate us, they inspire us, while providing a steady reminder that our business delivers value that goes well beyond the bottom line. As we look forward, we want to be there for more employers and their employees. A key to being there when they need us most is the depth and breadth and expertise in employee benefits. With the support of 10,000 of the best and most innovative employees in our industry, our strategy for 2018 and beyond is straightforward. First, growing our business by deepening relationships with existing customers and reaching underserved markets. Second, by making the right investments to anticipate and respond to the evolving needs of our customers. Finally, by expanding our reach into new geographies and through new products and distribution channels similar to the path we followed in 2017. There is still tremendous opportunity to grow our company.
More broadly, we strive to be a company viewed not just for its financial performance, but seen as a thought leader in our industry, as a good corporate citizen, and as an employer of choice. Embedded in our culture is a commitment to making a positive contribution to society. We advocate for public policies that help employees build a robust financial safety net. In our locations, we help in investing in our communities become better places to live, work, and learn. We're committed to minimizing our impact on the environment. Making a positive impact on society is at the core of what we do. In the communities we call home, we dedicate significant resources to improving public education, wellness, arts, and culture. Last year, we contributed more than $12.8 million, and importantly, our employees volunteered more than 77,000 hours to causes most important to them.
On the heels of our 2017 success, we began 2018 by committing an additional $1 million in charitable contributions for 2018. We've also invested in our workforce by offering new parental paid leave benefits for both new mothers and fathers in the U.S. and enhanced our compensation program so that no U.S. employee will earn less than $15 an hour. We launched a $100 million redesign of our workspaces to create a more contemporary environment that encourages collaboration and flexibility to better serve our customers. We're also strengthening our focus on diversity and inclusion across the company. It's not only the right thing to do, it's good business, particularly when you consider that those we protect represent a very diverse population.
I'm also a firm believer that diverse teams make better decisions. We see competitive advantages that come with tapping the expertise, skills, and unique perspectives from people from a full range of backgrounds and experiences. Clearly, my colleagues agree, as their words demonstrate in the following video. Please roll.
Hi, I'm LaTonya.
I'm Miles.
Hi, I'm Laura.
Hi, I'm Maya.
I'm George.
My name is Beth.
Hi, I'm Jimmy, and I come from a family of immigrants.
Hi, my name is Kavin, and I'm Kenyan.
Hi, I'm Teresa, and I'm proud to be a Filipino American.
Hi, I'm Victoria. I'm a proud Muslim.
Hi, my name is Tyler. I'm an Afghanistan veteran.
I'm an introvert.
I like classical music and foreign films. I love college basketball. Go Villanova.
My husband of 15 years also works at Unum.
Hi, I'm Elvis. I wish I wasn't judged by my appearance.
I'm Kay, and I'm a transgender woman.
Hi, I'm Ken.
I have a brain injury that changed my life.
Hi, I'm Rupa, and I wish people won't assume where I'm from. Hi, I'm Becky, and I don't think my age should matter.
I am gay.
When I started working at Unum, to be honest, I wasn't sure if I would fit in. The best way to fit in is just to be who you are.
As an African American, I often feel like people can't relate to me.
I don't sound like you.
English is not my first language.
I want to be able to hold my partner's hand without fear.
Everyone should have a voice.
I wish people would be more open-minded. Just because I don't sound like you doesn't mean I'm not intelligent.
A woman, a mother, a Black person.
There exists a common misconception that gender transition is a choice. To be clear about it, I did not choose to be transgender. Transgender chose me.
People may not realize it, but it's hard for me to always be involved in conversation. I'm functionally one-handed, so little things like a paper towel dispenser that suggests you use two hands, and even air quotes are kind of big deals for me.
We should accept others with open arms.
There's a place for everyone at Unum.
The Marines taught me to stand up for myself and others.
I am Unum.
I am Unum. I am Unum.
I am Unum.
I am Unum.
I am Unum.
I am Unum.
I am Unum.
I am Unum.
I am Unum.
I am Unum.
Incredibly well said by our team. We are Unum. In summary, as we look ahead, I'm confident we're positioned to meet the pressing need for what we do. Our businesses continue to perform well. We are in good operating businesses with strong market positions, and we aim to further our momentum through continued top-line growth while maintaining solid operating margins and significant financial flexibility. We see plenty of opportunities to grow our business, and we intend to capitalize on them, and we remain committed to closely managing the closed block. Each day, more and more people are counting on us to help protect their livelihoods, and we're committed to being there when they need us. It's taken a team effort to put in a leadership position in our industry, and I'm grateful to our employees, management team, and board of directors for their role in our continued success.
Thank you for the trust and confidence you place in our company and for your attendance today. I'd now like to turn things over to Jack McGarry to talk about the financial picture. Jack?
Thank you, Rick. Good morning, everyone. I'll cover our 2017 and first quarter 2018 financial results, as well as discuss issues that recently impacted the performance of our stock. I'll also discuss the quality of our core franchise, which in my opinion, has been somewhat overshadowed in the recent weeks. In a nutshell, our 2017 financial performance was excellent. We reported after-tax adjusted operating earnings per share of $4.29, an increase of 10.6% from 2016. This was well ahead of our growth expectations of 3%-6%. Our operating trends were strong in our core operations comprised of Unum US, Colonial Life, and Unum UK. Year-over-year, these segments collectively grew premiums by 4.3%, sales by 14.7%, and achieved adjusted operating return on equity of 15.9%. Including the closed block, overall adjusted operating return on equity was 11.6% for the year.
The majority of these favorable trends continued into the first quarter of 2018. Our after-tax adjusted operating earnings per share increased 21.6%. We are a clear beneficiary of tax reform as our tax rate for the quarter declined to 19.9% from 30.5% a year ago. In addition, premium income for our core businesses increased 6.5%, and sales increased by 4.2%. In spite of the solid operating performance from our core businesses, we saw higher new claims incidence in the long-term care block, which led to a higher benefit ratio. That, along with the nervous market sentiment surrounding the long-term care industry, resulted in significant selling pressure in our stock. Without question, the performance of our stock price so far in 2018 has been disappointing. One of the primary drivers of our underperformance is the negative news surrounding long-term care.
In January, GE announced it expects to make statutory reserve contributions of approximately $15 billion over the next seven years for its long-term care business. These contributions were significantly higher than the market expected and sent a shockwave across the long-term care industry. In fact, for the four-week period after GE's surprise announcement, Unum stock traded off approximately 15% from our recent high price of $58.59 a share. Subsequently, when we announced a three percentage point deterioration in our long-term care benefit ratio during the first quarter report, our stock price decreased an additional 20% to its current level of $38.51 a share. In addition to the negative sentiment surrounding long-term care, other insurance stocks have underperformed the broader market in 2018 as well, with the Life and Health Index down 9%, while the S&P 500 is up 1.5%.
While it's frustrating that the market is currently solely focused on our long-term care exposure, it's our core franchise that really drives the value of our company. Our core businesses have produced excellent results over the past decade. In these segments collectively, we've seen healthy growth in every key metric. Premium income has grown 20% during that time, while sales have grown by nearly half. Return on equity in these segments has also improved. Together, this growth has driven a 71% rise in adjusted operating earnings per share. These are healthy trends during some very challenging economic times. These strong operating trends have helped to generate a significant amount of free cash flow for Unum in the past 10 years. We've put that cash to work in a number of ways.
We've been able to invest in our growth of our company through several strategic acquisitions that expand our product offerings and geographic footprint. We purchased over 40% of our outstanding stock while increasing our common stock dividend by 250%. We are also aggressively managing our long-term care block, which is part of our closed block. In addition to long-term care, the closed block also includes older individual disability policies that we sold through the late 1990s and have been winding down ever since. After closing this disability block in 2004, we were able to execute a securitization transaction three years later, replacing approximately $1 billion of capital backing the block with non-recourse debt. This debt has been paid down on schedule and should be retired over the next three to four years, at which time these cash flows will be a source of additional funds for Unum Group.
The closed block is a good reminder that these long-duration businesses take time and patience to manage, but quite often they will stabilize as they mature. While our closed disability block is older and more seasoned, our long-term care block is relatively young and therefore more volatile. Keep in mind, we hold over $10 billion in reserves for this product line, and it only takes $1.5 million of quarterly changes in benefits and reserves to result in a 1% change in the benefit ratio. In a nervous market environment, each movement of the benefit ratio draws significant scrutiny. Though we've not sold any new individual policies since 2008 and no new group policies since 2011, we are actively managing this block. We increased reserves in both 2011 and 2014, at which time we updated many assumptions included in our reserves, including emerging claim trends in the low interest rate environment.
Our team has also been actively pursuing rate increases on the $671 million of in-force annual premium, which further manages our exposures. Finally, our capital plans anticipate continued cash contributions to support long-term care. While dealing with the closed block, and especially long-term care, is a significant effort and can distract the market's focus from the real value of our franchise, I'm confident we are effectively managing this business. We have stayed on top of it with in-force rate increases, cash contributions as appropriate, and updated liability assumptions. At the same time, we are extremely confident in our ability to profitably grow our core businesses in a focused and deliberate way. These are attractive and growing businesses that give us the financial flexibility we need to continue returning capital to shareholders and investing in our future growth.
Over the last decade, our capital plans have created significant value for shareholders, and we believe that we will continue to be able to do so in the future. Thank you, and now I'd like to turn the podium back to Rick.
That concludes our prepared remarks this morning. I do want to open up the floor to anybody here in the audience for any questions and answers, and we have microphones that will be coming around. Are there any questions from the floor? Well, not seeing anybody, we actually appreciate very much you attending this morning