2017 was a good year for Eaton, in large part because we did what we said we would and then some.
We increased revenues in the majority of our businesses and total organic revenues grew three percent over the prior year. We also delivered record segment operating margins of 15.8 percent. And our net income and adjusted earnings per share were $6.68. Excluding the gain from the formation of the joint venture with Cummins Inc., and income from the new U.S. tax bill, our adjusted earnings per share were $4.65, 20 cents higher than the mid-point of our guidance. We also completed the largest restructuring program in our company’s history, significantly improving our competitiveness.
In addition, we achieved record cash flow, making it possible to reinvest in our businesses and return more than $1.9 billion to shareholders through a combination of share buybacks and dividends. Our board of directors increased the quarterly cash dividend, maintaining our attractive yield, and we deployed additional capital into our pension plan.
In all of our businesses, we continued to invest in technology leadership and innovation, build on our channel and aftermarket strengths, and delivered superior value for our customers. Here are a few examples from the year that show how these strategies came to life.
Investing in our businesses and delivering on our financial commitments are both important, but there’s so much more to Eaton. Every day we are taking steps to make the company a great place to work, and the world a little better. Here, too, we made progress last year.
First, we made good on our pledge to be active stewards of the environment – exceeding our greenhouse gas, water use and waste reduction goals. And, while we’re reducing our environmental footprint in a major way, we are not stopping there. We’re compounding the benefits by helping our customers reduce theirs as well.
Second, we made progress with our employees – improving safety, reducing voluntary turnover across the organization, and increasing the diversity of our workforce. In fact, Forbes magazine recently recognised us as one of America’s Best Employers for Diversity and Fortune magazine named us one of the World’s Most Admired Companies – an indication that we’re not just saying the right things, we’re doing them, too.
Third, we helped strengthen our communities by investing more than $11.4 million in local community organisations. We also established the Eaton Qualified Disaster Relief Fund at our employees’ request to help colleagues who lost or suffered significant damage to their homes as a result of hurricanes Harvey and Maria. Nothing made me prouder during the year than seeing our employees respond to these disasters.
The passion our employees have for doing what’s right is one of the reasons why I’m so proud to lead this organisation.
Our corporate strategy for creating long-term value has not changed.
On growth, we are very excited about the significant role we can play in creating a better tomorrow by innovating and investing in Intelligent Power solutions. And, we can already see how our products are making a difference in the world.
But that’s not all. We’re also looking forward to participating in the ever-increasing trend of electrification of mobile vehicles – cars, lorries, construction and agricultural equipment, and aeroplanes to name a few. Almost everything we do in our Electrical business today is applicable to the emerging opportunity we see in mobile vehicles. Our pedigree in serving these markets, when added to our proven electrical technologies, creates a powerful combination. And, as a result, we are creating a new segment that we call eMobility.
And we’re not stopping there. We are continuing on our journey to become a world-class manufacturing company. In addition to improving the way we execute in our factories, we are investing in new technologies like additive manufacturing. We have created a shared technology centre for additive manufacturing and are already developing new components that have better performance, reduced weight and lower costs. In other words, we’re helping our customers solve some of their most important problems.
A few years ago, we introduced a new vision for our company – to improve the quality of life and the environment through our power management products and services. This vision felt right then and it feels even better today as we see the difference we are making in the world.
On behalf of Eaton employees and partners, and those around the world who benefit from your confidence in us, thank you. Our strategy is working. Our commitments are real. Our future is promising.