Total subscription revenue grew 16% in the quarter, the largest year-on-year subscription revenue gain in more than a decade.
The combined strength in these two revenue streams more than offset cost growth, and as a result, we recorded $93 million in adjusted operating profit, a 78% improvement compared to the same quarter in 2020.
We added 142,000 net digital subscriptions with roughly half in News and the balance in Cooking and Games.
We continue to expect that our total annual net subscription additions will be in the range of 2019, although that remains difficult to predict with precision.
Our advertising performance was better than expected, with total revenue up 66% year-on-year.
As with subscriptions, the biggest factor in the gain in advertising amortize up nearly 80% year-on-year and more than 22% over the same period in 2019.
More than 1,000 journalists contributed to our coronavirus reporting, as did many others across the company, including engineers, data scientists, product designers and product managers.
With sustained strength relative to 2019 and prior years in overall audience and with more than 100 million registered users, we are also experimenting more aggressively and we believe more successfully on our customer journey and access model.
Given the opportunity we see, an addressable market of at least 100 million people who are expected to pay for English language journalism and a unique moment in which daily habits are up for grabs, we are continuing to invest in the value of our individual products and the broader bundle.
Adjusted diluted earnings per share was $0.36 in the quarter, $0.18 higher than the prior year.
We reported adjusted operating profit of approximately $93 million, higher than the same period in 2020 by $41 million and higher than 2019 by $37 million which is an important comparison point given the impact that the pandemic had on our 2020 results.
We added 77,000 net new subscriptions to our core digital news product and 65,000 net new subscriptions to our stand-alone digital products for a total of 142,000 net new digital-only subscriptions.
As of the end of the quarter, we had approximately 930,000 Games subscriptions and approximately 830,000 Cooking subscriptions.
The international share of total new subscriptions remained at 18% as of the end of the quarter.
Total subscription revenues increased 15.7% in the quarter.
As Meredith said, this is the highest rate of subscription revenue growth in well over a decade, with digital-only subscription revenue growing more than 30% to $190 million.
Digital-only subscription revenue grew as a result of the large number of new subscriptions we have added in the past year, continued strength and retention of the $1 per week promotional subscriptions who graduated to higher prices, and finally, the positive impact from our digital subscription price increase, which began late in the first quarter of 2020.
ARPU related solely to domestic news subscriptions increased approximately 1.5 percentage points versus the prior year and nearly five percentage points versus the prior quarter.
Print subscription revenues increased more than 1% as home delivery revenues benefited from the first quarter price increase, which more than offset declines in subscription volume.
Total daily circulation declined 4.5% in the quarter compared with prior year, while Sunday circulation declined approximately 1%, which represents a significant improvement in the recent trend following the steep declines experienced as a result of the widespread business closures and a decrease in commuting of travel as a result of the pandemic.
As compared with 2019, print subscription revenues declined 5.5%, as single-copy and international bulk sale copy declined, while revenue from domestic home delivery subscriptions was flat.
Total advertising revenues increased more than 66% in the quarter as digital advertising grew nearly 80%, while print advertising increased by 48%, largely as a result of the impact of the comparison to weak advertising revenues in the second quarter of 2020 caused by reduced advertising spending during the COVID-19 pandemic.
Versus 2019, digital advertising grew 22% as a result of higher direct sold advertising, including traditional display and audio.
Meanwhile, print advertising increased 48% as compared with 2020, primarily driven by growth in the luxury, media, technology and entertainment categories.
Despite this impressive level of year-on-year growth, print advertising revenue lagged 2019 by 33%.
Other revenues increased nearly 9% compared with the prior year to $47 million, primarily as a result of an increase in Wirecutter affiliate referral revenue.
Adjusted operating costs were higher in the quarter by approximately 15% as compared with 2020 and 6.5% higher than 2019.
Cost of revenue increased approximately 9% as a result of growth in the number of newsrooms, games, cooking and audio employees, other costs associated with audio content, a higher incentive compensation accrual and higher subscriber servicing and digital content delivery costs.
Sales and marketing costs increased approximately 35%, driven primarily by higher media expenses, which has been reduced dramatically last year in light of the historically strong organic subscription demand experienced in the early months of the COVID-19 pandemic.
When compared to 2019, sales and marketing costs decreased 14% as a result of lower advertising sales costs, partially attributable to a workforce reduction that we enacted in the second quarter of 2020, as well as lower media expenses.
Media expenses in 2021 was 14% lower than in 2019.
Product development costs increased by approximately 28%, largely due to growth in the number of engineers employed and a higher incentive compensation accrual than we had recorded in the second quarter of 2020.
General and administrative costs increased by 6%.
And when you control for severance and multiemployer pension withdrawal obligation costs, G&A costs would have increased by 19%, largely due to increased head count in support of employee growth in other areas, higher outside services and a higher incentive compensation accrual.
We had one special item in the quarter and nearly $4 million charge resulting from the early termination of one of our tenant's leases in our headquarters building, as we add space to accommodate growing head count to support our growth initiatives.
Our effective tax rate for the second quarter was approximately 25%.
As we've said previously, we expect our tax rate to be approximately 27% on every dollar of marginal income we record with significant variability around the quarterly effective rate.
Moving to the balance sheet, our cash and marketable securities balance ended the quarter at $947 million, an increase of $56 million compared to the first quarter of 2021.
Company remains debt-free with a $250 million revolving line of credit available.
Total subscription revenues are expected to increase approximately 13% to 15% compared with the third quarter of 2020 with digital-only subscription revenue expected to increase approximately 25% to 30%.
Overall advertising revenues are expected to increase approximately 30% to 35% compared with the third quarter of 2020 and digital advertising revenues are expected to increase approximately 40% to 45%.
Other revenues are expected to increase approximately 5%.
Both operating costs and adjusted operating costs are expected to increase approximately 18% to 20% compared with the third quarter of 2020 as we continue investment into the drivers of digital subscription growth and comp against another quarter of low spending last year as a result of actions taken during the first year of the pandemic.

We continue to expect that our total annual net subscription additions will be in the range of 2019, although that remains difficult to predict with precision.
Adjusted diluted earnings per share was $0.36 in the quarter, $0.18 higher than the prior year.
We added 77,000 net new subscriptions to our core digital news product and 65,000 net new subscriptions to our stand-alone digital products for a total of 142,000 net new digital-only subscriptions.
Total subscription revenues are expected to increase approximately 13% to 15% compared with the third quarter of 2020 with digital-only subscription revenue expected to increase approximately 25% to 30%.
Overall advertising revenues are expected to increase approximately 30% to 35% compared with the third quarter of 2020 and digital advertising revenues are expected to increase approximately 40% to 45%.
Other revenues are expected to increase approximately 5%.


Based on this quarter's credit performance and the improving economic outlook, we reduced our allowance for credit losses by $142 million more than net charge-offs, while still maintaining one of the strongest allowance to loan ratios in the industry at 2.44%.
Average and ending adjusted loans declined 1% from the prior quarter.
New and renewed commercial loan production increased 5% compared to the prior quarter.
As of quarter end commercial line utilization was 39% compared to our historical average of 45%.
Just a reminder, each 1% of line utilization equates to approximately $600 million of loan growth.
Net interest income decreased 4% on a reported basis or 1% excluding the impact from day count and PPP.
PPP related NII declined $14 million from the prior quarter, as the benefits from round two were offset by slower round one forgiveness.
Two fewer days also reduced NII by $12 million.
Net interest margin declined during the quarter to 3.02%.
Cash averaged over $16 billion during the quarter.
And when combined with PPP reduced first quarter margin by 38 basis points.
Excluding excess cash and PPP, our normalized net interest margin remained stable at 3.40% evidencing our proactive balance sheet management despite the near zero short term rate environment.
Cash management, mostly in the form of a December long term debt call contributed $6 million and 1 basis point of margin.
Interest bearing deposit costs fell 2 basis points in the quarter to 11 basis points contributing $4 million and 1 basis point of margin.
Loan hedges added $102 million to NII and 31 basis points to the margin.
Higher average hedge notional values drove a $3 million increase compared to the fourth quarter.
At current rate levels, we expect a little over $100 million of hedge related interest income each quarter until the hedges begin to mature in 2023.
Within the quarter, we repositioned a total of $4.3 billion of cash flow swaps and floors targeting less protection in 2023 and 2024.
Adjusted non-interest income decreased 2% from the prior quarter, but reflects a 32% increase compared to the first quarter of 2020.
Looking ahead, we expect capital markets to generate quarterly revenue in the $55 million to $65 million range on average.
Mortgage income increased 20% over the prior quarter, driven primarily by agency gain on sale and favorable MSR valuation.
Production for the quarter was up 89% over the prior year, setting the stage for another strong year of mortgage income.
Although, we expect the impact of these changes will be partially offset by continued account growth, we estimate 2021 service charges will grow compared to 2020, but remain approximately 10% to 15% below 2019 levels.
Card and ATM fees have recovered, up 10% compared to the prior year, driven primarily by increased debit card spend.
Adjusted non-interest expenses decreased 1% in the quarter, driven by lower incentive compensation, primarily related to capital markets and mortgage, which was partially offset by a seasonal increase in payroll taxes.
Of note, paid salaries were 4% lower compared to the fourth quarter, as we remain focused on our continuous improvement process.
Associate headcount decreased 2% quarter-over-quarter and 4% year-over-year.
And excluding the impact of our Ascentium Capital acquisition that closed April 1st, 2020, headcount was down 6%.
In 2021, we expect adjusted non-interest expenses to remain stable compared to 2020 with quarterly adjusted non-interest expenses in the $880 million to $890 million range.
Annualized net charge-offs were 40 basis points, a three basis point improvement over the prior quarter, reflecting broad-based improvement across most portfolios.
Our allowance for credit losses declined 25 basis points to 2.44% of total loans and 280% of total non-accrual loans.
Excluding PPP loans, our allowance for credit losses was 2.57%.
The decline in the allowance reflects charge-offs previously provided for, stabilization in our economic outlook and improved credit performance, including the impact of the $1.9 trillion stimulus bill approved in March.
The allowance reduction resulted in a net $142 million benefit to the provision.
Based on current expectations, we believe the peak is behind us, and we expect full year 2021 net charge-offs to range from 40 basis points to 50 basis points.
With respect to capital, our common equity Tier 1 ratio increased approximately 50 basis points to an estimated 10.3% this quarter.
Based on our internal stress testing framework and amount of capital we need to run our business, we are updating our operating range for common equity Tier 1 to 9.25% to 9.75% with a goal of managing to the midpoint over time.

New and renewed commercial loan production increased 5% compared to the prior quarter.
Interest bearing deposit costs fell 2 basis points in the quarter to 11 basis points contributing $4 million and 1 basis point of margin.
Adjusted non-interest income decreased 2% from the prior quarter, but reflects a 32% increase compared to the first quarter of 2020.
Associate headcount decreased 2% quarter-over-quarter and 4% year-over-year.


About 90% of our net sales are generated by proprietary products and over three quarters of our net sales come from products, which we believe we are the sole source provider.
In our business, we saw another quarter of sequential improvement in our commercial markets, with total commercial aftermarket revenues up 10% over Q4 of fiscal 2021 and bookings up more than 15% compared to Q4.
Commercial OEM bookings came in even stronger with almost 20% sequential improvement over Q4.
I am also very pleased that despite the challenging commercial environment, our EBITDA as defined margin was 47.3% in the quarter.
We had strong operating cash flow generation of almost $280 million and closed the quarter with a little over $4.8 billion of cash.
We are now at a decision point with regard to our sizable cash balance, which is now approaching $5 billion.
All three options are on the table each individually, but then also potentially in some combination over the next 12 months.
To reiterate what we said on the Q4 earnings call, our teams are still planning for our commercial aftermarket revenue to grow in the 20% to 30% range.
We now expect full year fiscal 2022 EBITDA margin to be slightly north of 47% due to the rate of commercial aftermarket recovery.
As a final note, this margin guidance includes the unfavorable headwind of our Cobham acquisition of about 0.5%.
The report asked for a purely voluntary refund of approximately $21 million.
At this time, we are engaged directly with the DLA and do not have any further update on whether or not we expect to pay all or a portion of the $21 million voluntary refund request.
Bob has been a key member of the TransDigm management team for over 25 years and a significant partner in the company's growth during the entire period.
In the commercial market, which typically makes up close to 65% of our revenue, we will split our discussion into OEM and aftermarket.
Our total commercial OEM revenue increased approximately 13% in Q1 compared with the prior year period.
Sequentially, the bookings improved almost 20% compared to Q4.
Total commercial aftermarket revenue increased by approximately 49% in Q1 when compared with prior year period.
Sequentially, total commercial aftermarket revenues grew approximately 10% and bookings grew more than 15%.
IATA currently forecasts a 39% decrease in revenue passenger miles in calendar year 2022 compared to pre-pandemic levels.
Within IATA's estimate is the expectation that domestic travel will be back to 93% of pre-pandemic levels in calendar year 2022.
Domestic air traffic for calendar 2021 was only down 28% compared to pre-pandemic versus international, which was still down 75%.
Now, let me speak about our defense market, which traditionally is at or below 35% of our total revenue.
The defense market revenue, which includes both OEM and aftermarket revenues, decreased by approximately 12% in Q1 when compared with the prior year period.
First, in regard to profitability for the quarter, EBITDA as defined of about $565 million for Q1 was up 19% versus our prior Q1.
EBITDA as defined margin in the quarter was approximately 47.3%.
This represents year-over-year improvement in our EBITDA as defined margin of about 450 basis points versus Q1 of last year.
Sequentially, EBITDA as defined margin declined slightly by about 200 basis points during Q1 versus Q4 of last fiscal year.
Organic growth was 9%, driven by the rebound in our commercial OEM and aftermarket end markets.
Free cash flow, which we traditionally defined at TransDigm as EBITDA less cash interest payments, capex and cash taxes, was roughly $250 million.
We ended the quarter with about $4.8 billion of cash.
During Q1, we also paid down our $200 million revolver balance, which was drawn at the onset of COVID in March of 2020 out of an abundance of caution.
The $200 million revolver paydown is the primary reason that our cash balance ticked up much less than the $250 million of free cash flow we generated in Q1.
Our net debt-to-EBITDA ratio is now at 6.7 times.
This ratio is down from 8.2 times, at its peak.


Sales of $283.7 million increased 9.4% over the first quarter of 2019 and were driven by higher sales volume in North America.
Our gross profit margin was strong at 45.7%, an improvement of 320 basis points year-over-year.
Our gross margin coupled with the relatively flat operating expenses, help generate operating income of $49.4 million, up 64.4% year-over-year and strong earnings of $0.83 per diluted share, up 66% year-over-year.
If you look back to 2008 and 2009 during the financial crisis, which was accompanied by a drastic decline in US housing starts and a simultaneous 28% drop in sales.
We ended the quarter with $305.8 million in cash on hand, after drawing down $150 million on our revolving credit facility as a precautionary measure to preserve financial flexibility and ensure our working capital needs will be met in light of the current uncertainty, stemming from the COVID-19 pandemic.
Importantly, following the 2009 crisis, we made significant strategic changes to our business, to ensure our foundation will be even stronger in the event of a future recession.
We've been able to operate more efficiently, as evidenced by our 250 basis point improvement in our total operating expenses as a percent of sales for the first quarter of 2020 compared to the first quarter of 2019.
In regard to stockholder return activities, year-to-date as of April 25, we paid over $20 million in dividends to our shareholders and repurchased more than 900,000 shares of our common stock at an average price of $69.46 per share for a total of $62.7 million.
As Karen highlighted, our consolidated sales were strong, increasing 9.4% to $283.7 million.
Within the North American segment, sales increased 12.5% to $249.1 million due to higher sales volume supported by stronger housing starts compared to the wet winter, weather conditions we experienced a year ago.
US housing starts grew 22% in the first quarter versus the comparable period last year, notably in the west and south where we provide a meaningful amount of content in the home starts grew 27% and 19%, respectively year-over-year.
In Europe, sales decreased 8.5% to $32.7 million, mainly due to lower sales volume in our concrete business.
Europe sales were further negatively impacted by $1.0 million from foreign currency translations, resulting from Europe currencies weakening against the United States dollar.
In local currency, Europe sales were down approximately 5.5% for the quarter.
Wood Construction products represented 86% of total sales compared to 84% and Concrete Construction products represented 14% of total sales compared to 16%.
Gross profit increased by 18% to $129.7 million, resulting in a gross margin of 45.7%.
Gross margin increased by 320 basis points, primarily due to lower material and factory and overhead costs as a percent of sales on increased production, offset partially by higher labor, warehouse and shipping costs.
On a segment basis, our gross margin in North America improved to 47.7% compared to 44.4%, while in Europe, our gross margin improved slightly to 32.7% compared to 32.3%.
From a product perspective, our first quarter gross margin on wood products was 45.4%, compared to 42.3% in the prior year quarter, and was 42.5% for concrete products compared to 39% in the prior year quarter.
Research and development and engineering expenses increased 9% to $13.4 million, primarily due to increased personnel costs and cash profit sharing expense.
Selling expenses increased nearly 2% to $28.5 million, primarily due to increased personnel costs and commissions in cash profit sharing, partially offset by lower stock-based compensation and advertising and promotion expenses.
On a segment basis, selling expenses in North America were up 2% and in Europe they increased nearly 2%.
General and administrative expenses decreased 3% to $38.5 million, primarily due to decreases in professional and legal fees and stock-based compensation.
On a segment level, general and administrative expenses in North America decreased 5%.
In Europe, G&A increased by nearly 6%.
Total operating expenses were $80.4 million, a slight increase of $0.5 million or approximately 1%.
As a percentage of sales, total operating expenses were 28.3%, an improvement of 250 basis points compared to 30.8%.
Included in our first quarter operating expenses were SAP implementation and support costs of $3.4 million compared to $2.4 million in the prior year quarter.
Since the project inception, we've capitalized $19.7 million and expense $29.3 million in total, as of March 31, 2020.
Our strong gross margins helped drive a 64% increase in consolidated income from operations to $49.4 million compared to $30 million.
In North America, income from operations increased 63% to $53.6 million due to higher sales and lower operating expenses.
In Europe, loss from operations was $1.7 million compared to a loss of $0.4 million due to lower sales and higher severance and amortization expense.
On a consolidated basis, our operating income margin of 17.4% increased by approximately 580 basis points.
The effective tax rate decreased to 21.3% from 22.5%.
Accordingly, net income totaled $36.8 million or $0.83 per fully diluted share compared to $22.7 million or $0.50 per fully diluted share.
At March 31, 2020, cash and cash equivalents were $305.8 million, an increase of $192.4 million compared to our levels at March 31, 2019 largely due to the aforementioned decision to draw down $150 million on our revolving credit facility.
We have approximately $150 million of remaining borrowing capacity under our revolving credit facility.
We generated cash flow from operations of $16.8 million for the first quarter of 2020, an increase of $7.1 million or 74%.
We used approximately $6.8 million for capital expenditures, which included a minimal amount for our ongoing SAP implementation project.
We also spent $10.2 million in dividend payments to our stockholders.
And on March -- excuse me, on April 23, our Board of Directors declared a quarterly cash dividend of $0.23 per share which will be payable on July 23 to stockholders of record as of July 2.
Based on these factors, we have chosen to withdraw our previously provided full year 2020 outlook as well as the financial targets associated with our 2020 plan.

Our gross margin coupled with the relatively flat operating expenses, help generate operating income of $49.4 million, up 64.4% year-over-year and strong earnings of $0.83 per diluted share, up 66% year-over-year.
As Karen highlighted, our consolidated sales were strong, increasing 9.4% to $283.7 million.
Selling expenses increased nearly 2% to $28.5 million, primarily due to increased personnel costs and commissions in cash profit sharing, partially offset by lower stock-based compensation and advertising and promotion expenses.
On a segment basis, selling expenses in North America were up 2% and in Europe they increased nearly 2%.
Accordingly, net income totaled $36.8 million or $0.83 per fully diluted share compared to $22.7 million or $0.50 per fully diluted share.
At March 31, 2020, cash and cash equivalents were $305.8 million, an increase of $192.4 million compared to our levels at March 31, 2019 largely due to the aforementioned decision to draw down $150 million on our revolving credit facility.
Based on these factors, we have chosen to withdraw our previously provided full year 2020 outlook as well as the financial targets associated with our 2020 plan.


Our third quarter adjusted earnings per share were $0.05.
EPS improve to $0.35 per share when you factor in the net positive impacts from settling our recent labor strike, including the benefits from our new collective bargaining agreement, and the lingering strike-related costs as well as the gain from the Flowform Products divestiture.
We sold our Flowform business for $55 million, resulting in a gain on sale of nearly $14 million.
At the same time, we added new notes due in 2029 and 2031.
As a result of these third quarter actions, annual interest expense will decrease by about $6 million and pension funding levels improve.
In July, we reached agreement with Specialty Rolled Products union representative employees, ending their 3.5-month strike.
Our Q3 results included initial LEAP-1B volume increases to support the expected 737 MAX production ramp.
We expect this market to continue at low levels in Q4 and into 2022 as international travel rates recover more slowly and 787 deliveries remain on hold.
Overall, Q3 revenue increased to $726 million, up 18% sequentially and 21% year-over-year.
Q3-adjusted EBITDA grew to $80 million, up 49% sequentially and up 381% year-over-year.
Q3 performance suggests a revenue run rate approaching $3 billion and an adjusted EBITDA run rate of $320 million.
On a reported basis, ATI earned $0.35 per share in the third quarter.
We earned $0.05 per share in the quarter after adjusting for a net $43 million of special items.
Starting with AA&S, sales grew by 35% sequentially and EBITDA by nearly 60% versus the prior quarter.
Revenue increased $49 million, and EBITDA increased $46 million.
Late in the third quarter, we issued two debt tranches totaling $675 million.
$325 million of the notes are due in 2029 and bear interest at 4.875%.
$350 million of the notes are due in 2031 and bear interest at 5.125%.
Proceeds from these notes were largely used to redeem $500 million of notes due in 2023, bearing a 7.875% interest rate.
The financing brings several benefits, including $6 million in annual cash interest savings, significantly lower interest rates and a much improved debt maturity schedule.
Excess proceeds from the financing were largely used to support a $50 million voluntary pension contribution in the quarter.
After redeeming the 2023 notes in mid-October, we had more than $800 million of liquidity, including approximately $440 million of cash on hand.
We expect significant reductions in managed working capital levels, well below 40% of revenue across the company in Q4.
Our $50 million voluntary contribution is the latest action in our plan to improve pension funding levels and reduce related expenses and contributions over time.
This lowers overall participation by nearly 1,000 people and shifts approximately $70 million of assets and liabilities to a third party.
Additionally, we expect to recognize a $7 million benefit in the fourth quarter from a retroactive 2021 tax credit in China.
We expect to report adjusted earnings between $0.07 and $0.13 per share in the fourth quarter, despite the SRP strategic outage costs.

Our third quarter adjusted earnings per share were $0.05.
EPS improve to $0.35 per share when you factor in the net positive impacts from settling our recent labor strike, including the benefits from our new collective bargaining agreement, and the lingering strike-related costs as well as the gain from the Flowform Products divestiture.
Overall, Q3 revenue increased to $726 million, up 18% sequentially and 21% year-over-year.
On a reported basis, ATI earned $0.35 per share in the third quarter.
We earned $0.05 per share in the quarter after adjusting for a net $43 million of special items.


In the second quarter, we delivered 13% total revenue growth.
This includes 11% growth for NCR stand-alone and an incremental 2% growth for the 10 days following the close of the Cardtronics transaction.
NCR stand-alone recurring revenue growth grew 11% over second quarter of 2020.
Adjusted EBITDA increased 40%, while adjusted EBITDA margin expanded 330 basis points to 16.8%.
We generated $142 million of free cash flow in the quarter.
We remain very excited about the transaction as the addition of Cardtronics will accelerate our NCR-as-a-Service strategy and is expected to be accretive to non-GAAP earnings per share for the first full year by 20% to 25%.
It will enhance our scale and cash flow generation while advancing our 80/60/20 strategic target by roughly two years.
In the second quarter, Cardtronics contributed $32 million of revenue and $8 million of adjusted EBITDA to NCR results for the 10 days following the close of the transaction.
In banking, our digital banking platform signed eight new deals in the second quarter, including a long-term agreement with TruMark Financial, a leader in the credit union industry with $2.7 billion in assets.
During the quarter, we signed 13 contracts where our digital-first retail front-end app, Freshop, which we also acquired in the first quarter of this year.
During the second quarter, we increased the number of restaurant payment processing sites by 50% from the first quarter.
Our strategy to run the restaurants saw a significant win with Firehouse Subs recently entering into a five-year contract for NCR support Firehouse Subs across 1,100 locations with subscription-based point-of-sale software, consumer marketing software and end-to-end managed services.
We In the 10 days that followed, Cardtronics contributed $32 million of revenue and $8 million of adjusted EBITDA that is included in our Banking segment.
While our financial results will only include those 10 days for context, where Cardtronics have reported a stand-alone second quarter on their historical basis, they would have described a very successful quarter with approximately 26% revenue growth and 77% EBITDA growth year over year.
They would have reported gross margin of more than 40% and record EBITDA margins of 28%.
Consolidated revenue was $1.68 billion, up $193 million or 13% versus the 2020 second quarter, driven by very strong growth in both our retail and Hospitality segments and more modest growth in Banking.
Revenue was up $133 million or 9% sequentially.
On an NCR stand-alone basis, revenue increased 11% year over year and 7% sequentially.
Recurring revenue was up 11%, calculated on a stand-alone basis, and comprised 55% of our revenue in the quarter.
In the top right, adjusted EBITDA increased $80 million or 40% year over year to $281 million, including $8 million from Cardtronics.
Adjusted EBITDA margin rate expanded 330 basis points to 16.8%.
This improvement is a direct result of the more than $150 million in recurring cost savings executed at the end of 2020.
Adjusted EBITDA was up 9% sequentially and adjusted EBITDA margin expanded 10 basis points.
In the bottom left, non-GAAP earnings per share was $0.62, up $0.35 or 130% from the prior-year second quarter.
NCR's stand-alone non-GAAP earnings per share was $0.02 higher at $0.64.
The tax rate of 26.6% is in line with our full-year guidance of 26%.
And finally, and maybe most importantly, we delivered another strong quarter of free cash flow with generation of $142 million adjusted for the effects of the closing process.
This compares to $160 million in the second quarter of 2020, which benefited from the cash preservation actions we put in place at the beginning of the pandemic and an insurance payment from the Nashville tornado last year.
Consistent with our goal to drive modest sequential improvement and more linear free cash flow production, our free cash flow was up from $93 million in the first quarter of '21.
And free cash flow during the first six months of 2021 is up more than 60% over 2020 results.
Moving to Slide 8 for our Banking segment results, which includes 10 days of Cardtronics operations.
Banking revenue increased $46 million or 6% year over year, with Cardtronics comprising $32 million or 4% of that increase.
Banking adjusted EBITDA increased $21 million or 16% year over year with Cardtronics adding $8 million.
Adjusted EBITDA margin rate expanded by 170 basis points to 18.7%.
On a sequential basis, revenue was up 7%, while adjusted EBITDA decreased 2%, and the adjusted EBITDA margin rate declined 170 basis points against the extremely strong Q1.
On the left, while current-quarter wins have a typical lag to conversion and eventual revenue generation, prior-period wins at Digital Banking drove an 8% year-over-year growth rate in the second quarter.
We expect Digital Banking to generate roughly 8% revenue growth in the second half of 2021 and to exit the year at double-digit revenue growth rates as we lap most of the attrition caused by the 2019 customer losses.
Digital Banking registered users increased 11% compared to Q2 of 2020, and we are seeing commensurate growth in recurring revenue, which increased 12% year over year and 4% sequentially.
Retail revenue increased $93 million or 19% year over year, driven by strong self-checkout and point-of-sale solutions revenue.
Retail adjusted EBITDA increased $43 million or 88% year over year, while adjusted EBITDA margin rate expanded by 590 basis points to 16%.
Incremental EBITDA conversion was $0.46 on every dollar.
Self-checkout revenue increased 42% year over year to $273 million, with particular strength in hardware due to a customer request to accelerate an order that would otherwise have been delivered in Q3.
Platform lanes increased 63% compared to the prior-year second quarter, and we expect this rate of growth to continue to accelerate in the second half.
And importantly, recurring revenue in this business increased 14% versus the second quarter of last year.
Hospitality revenue increased $55 million or 34% as restaurants reopen, rework existing locations and expand.
Second-quarter adjusted EBITDA increased $30 million, double from the second quarter of last year.
While adjusted EBITDA margin rate expanded by 460 basis points to 14%, this improved profitability was driven by higher revenue and lower operating expenses.
Aloha Essentials sites grew 88% when compared to the prior-year second quarter and grew 18% sequentially.
In the graph at the bottom right, recurring revenue increased 7% from last year and 5% sequentially.
We provide our second-quarter results for 80/60/20 strategic targets.
First, we strive to generate 80% of our revenue from software and services or less than 20% of our revenue from discrete hardware sales.
In the second quarter, software and services represented 69% of our revenue, which is a modest decrease from the 72% in the year ago driven by SCO and POS hardware revenue this year.
We aim for 60% of our revenues to be recurring to drive more resilient, more predictable and more valuable revenue.
Recurring revenue represented 55% of total revenue this quarter, flat compared to last year's second quarter.
And we aspire to a 20% adjusted EBITDA margin rate.
We made significant progress in this metric with an adjusted EBITDA margin of 16.6%, compared to 13.5% in the second quarter of 2020.
We generated total free cash flow of $142 million, including 10 days from Cardtronics and excluding the items associated with the closing of that transaction.
From a working capital perspective, versus Q2 of 2020, all categories of inventory were down in aggregate 11%, with days on hand down 11 days.
NCR stand-alone receivables were down 5%, with an eight-point improvement in those longer than 90 days, and days sales outstanding improved by 11 full days to 65 days.
This slide also shows our net debt to adjusted EBITDA metric with a pro forma leverage ratio of 4.2 times.
We are pleased to report that our pro forma leverage is well below the 4.5 we estimated when we announced the Cardtronics transaction due to higher-than-forecasted cash generation by both companies.
We ended the second quarter with $449 million of cash and remain well within our debt covenants, which include a maximum pro forma leverage ratio of 5.5 times.
We have significant liquidity with over $1 billion available under our revolving credit facility.
For revenue, we expect NCR stand-alone of $3.43 billion to $3.48 billion, representing 6.5% to 7.5% year-over-year growth.
Cardtronics operations are expected to generate revenue of about $600 million, representing approximately 8% year-over-year growth for them.
Total company revenue then is expected to be $4 billion to $4.1 billion, including intercompany eliminations.
For adjusted EBITDA margin, we expect NCR stand-alone rate of approximately 16%, slightly below the rate we demonstrated from our very hot start to the first half, anticipating higher second-half supply chain costs.
And we expect Cardtronics rate of approximately 28%, very similar to their historically high Q2 level.
Total company adjusted EBITDA is then expected to be between $700 million and $750 million.
For EPS, we expect a range of $1.30 to $1.50, which includes the immediate accretion for Cardtronics of more than 10%.
That accretion will increase to our targeted 20% to 25% within the first full year of the combination.
We expect strong free cash flow generation in the range of $325 million to $375 million.
First, OIE of approximately $150 million, a tax rate of 26%, and a share count of 148 million shares.
While we absorbed about $20 million of premium costs in the first half, we were able to meet customer commitments or even accelerate delivery on request.
We expect $40 million of further escalation in these same costs in the second half as we continue to maintain availability and meet customer needs.

In the bottom left, non-GAAP earnings per share was $0.62, up $0.35 or 130% from the prior-year second quarter.
Total company revenue then is expected to be $4 billion to $4.1 billion, including intercompany eliminations.
For EPS, we expect a range of $1.30 to $1.50, which includes the immediate accretion for Cardtronics of more than 10%.


Vishay reported revenues for Q2 of $819 million, a quarterly record.
Our earnings per share was $0.64 for the quarter, adjusted earnings per share was $0.61 for the quarter.
Revenues in the quarter were $819 million, up by 7.1% from previous quarter and up by 40.8% compared to prior year.
Gross margin was 28%.
Operating margin was 15.3% There were no reconciling items to arrive at adjusted operating margin.
Adjusted earnings per share was $0.61.
EBITDA was $163 million or 19.9%.
Reconciling versus prior quarter, operating income quarter two 2021 compared to operating income for prior quarter based on $54 million higher sales or $55 million higher excluding exchange rate impacts, operating income increased by $28 million to $125 million in Q2 2021 from $97 million in Q1 2021.
The main elements were; average selling prices had a positive impact of $8 million, representing 1.0 ASP increase.
The volume increased with a positive impact of $22 million, equivalent to a 6.1% increase in volume.
Reconciling versus prior year, operating income quarter two 2021 compared to adjusted operating income in quarter two 2020 based on $237 million higher sales or $215 million excluding exchange rate impacts, adjusted operating income increased by $84 million to $125 million in Q2 2021 from $42 million in Q2 2020.
The main elements were: average selling prices had a negative impact of $2 million, representing a 0.3% ASP decline; volume increased with a positive impact of $101 million, representing a 36.4% increase.
Variable costs decreased with a positive impact of $6 million, primarily due to volume-related increased manufacturing efficiencies and cost reduction efforts, which more than offset higher metal prices, annual wage increases and higher tariffs.
Fixed costs increased with a negative impact of $19 million, primarily due to annual wage increases and higher incentive compensation partially offset by our restructuring programs.
Inventory impacts had a positive impact of $5 million, exchange rates had a negative impact of $6 million.
Selling, general and administrative expenses for the quarter were $104 million, in line with expectations.
For quarter three 2021, our expectations are approximately $104 million of SG&A expenses.
For the full year, our expectations are approximately $420 million at the exchange rates of quarter two.
We had total liquidity of $1.6 billion at quarter end.
Cash and short-term investments comprised $856 million and there were no amounts outstanding on our $750 million credit facility.
Total shares outstanding at quarter end were 145 million.
The expected share count for earnings per share purposes for the third quarter 2021 is approximately 145.5 million.
Our US GAAP tax rate year-to-date was approximately 19%, which mathematically yields a rate of 20% for Q2.
We recorded benefits of $3.9 million for the quarter and $8.3 million year-to-date due to changes in tax regulations.
Our normalized effective tax rate, which excludes the unusual tax items, was approximately 24% for the quarter and 23% for the year-to-date periods.
We expect our normalized effective tax rate for the full year 2021 to be between 22% and 24%.
Cash from operations for the quarter was $117 million.
Capital expenditures for the quarter were $32 million.
Free cash for the quarter was $85 million.
For the trailing 12 months, cash from operations was $365 million.
Capital expenditures were $135 million, split approximately for expansion $86 million, for cost reduction $9 million, for maintenance of business $40 million.
Free cash generation for the trailing 12-month period was $230 million.
The trailing 12-month period includes $30 million in cash taxes paid for both the 2020 and 2021 installment of the US Tax Reform Transition Tax.
Vishay has consistently generated in excess of $100 million in cash flows from operations in each of the past 26 years and greater than $200 million for the past 19 years.
Backlog at the end of Q2 was $2.050 billion or 7.5 months of sales.
Inventories increased quarter-over-quarter by $31 million, excluding the exchange rate impacts.
Days of inventory outstanding were 76 days.
Days of sales outstanding for the quarter are 43 days.
Days payables outstanding for the quarter were 33 days, resulting in a cash conversion cycle of 86 days.
Vishay in the second quarter achieved a gross margin of 28% of sales and operating margin of 15.3% of sales, earnings per share of $1.64 and adjusted earnings per share of $1.61.
We, in the second quarter, generated $85 million of free cash and we do expect another solid year of cash generation.
We see a record high since at least 15 years.
POS in the second quarter was 5% over prior quarter and a remarkable 45% over prior year.
After massive increases in the first quarter, POS increased further in all regions; by 3% in the Americas, by 6% in Asia and by 5% in Europe.
Inventory turns of global distribution increased to quite extreme 4.4 from 4.3 in prior quarter; in the Americas, 2.1 after 1.9 in Q1 and 1.4 in prior year; in Asia, 7.4 turns after 6.7 in Q1 and 4.1 in prior year; 4.6 turns in Europe after 4.4 in Q1 and 3.0 in prior year.
Still expect previously forecasted growth of 10% versus prior year in terms of vehicles.
We achieved sales of $819 million versus $765 million in prior quarter and $582 million in prior year.
Excluding exchange rate effects, sales in Q2 were up by $55 million or by 7% versus prior quarter and up by $215 million or 36% versus prior year.
Book-to-bill in the second quarter remained on a very high level of 1.38 after 1.67 in prior quarter, 1.41 for distribution after 1.89 in quarter one, 1.34 for OEMs after 1.41, 1.41 for semiconductors after 1.86 in Q1, 1.35 for passives after 1.50 in quarter one, 1.33 for the Americas after 1.42 in the first quarter, 1.29 for Asia after 1.86 in Q1, 1.54 for Europe after 1.62 in Q1.
Backlog in the second quarter climbed to another record high of 7.5 months after 6.8 months in Q1, 8.4 months in semis after 7.7 months in quarter one and 6.7 months in passives after 5.9 months last quarter.
Vis-a-vis prior quarter, we saw a price increase of 1% and versus prior year a slight loss of 0.3%.
In semis, these numbers were an increase of 1.5% versus prior quarter and a slight decrease of 0.7% versus prior year.
For passives, price increases plus 0.4% versus prior quarter and plus 0.1% versus prior year.
SG&A costs in the second quarter came in at $104 million according to expectations when excluding exchange rate effects.
Manufacturing fixed costs in the second quarter came in at $141 million and according to expectation without ex tax rate effects.
Total employment at the end of the second quarter was 22,500, 2% up from prior quarter at 22,060.
Excluding exchange rate impacts, inventories in the quarter increased by $31 million, $11 million in raw materials and $20 million in way-in-process and finished goods.
Inventory turns in the second quarter remained at a very high level of 4.8.
Capital spending in Q2 was $32 million versus $25 million in prior year, $20 million for expansion, $2 million for cost reduction and $10 million for the maintenance of business.
We now expect for the year '21 capex of approximately $250 million.
We generated in the second quarter cash from operations of $365 million on a trailing 12-month basis.
We generated in the second quarter free cash of $230 million, again on a trailing 12-month basis.
Sales in the quarter were $195 million, up by $8 million or 4% versus prior quarter and up by $47 million or 32% versus prior year, all excluding exchange rate impacts.
Book-to-bill ratio in the second quarter continued strong at 1.39 after 1.50 in prior quarter.
Backlog increased further to 6.6 months from 5.6 months in prior quarter.
Due to higher volume and quite excellent efficiencies in the plants, gross margin in the second quarter increased further to 30% of sales from 29% in prior quarter.
Inventory turns in the quarter remained at a very high level of 5.1.
Selling prices are increasing plus 0.5% versus prior quarter and plus 0.6% versus prior year.
Sales of inductors in the second quarter were $86 million, up by $2 million or 3% versus prior quarter and up by $19 million or 29% versus prior year, all excluding exchange rate effects.
Book-to-bill ratio in the second quarter increased to 1.21 after 1.13 in prior quarter, backlog grew to 5.1 months from 4.5 in Q1.
Gross margin reached a quite excellent level of 34% of sales after 33% in the first quarter.
Inventory turns normalized to a level of 4.7, down from 5.1 in the first quarter.
We see price increases of 0.8% versus prior quarter and a decline of 2.2% versus prior year.
Sales in the second quarter were $120 million, 13% above prior quarter and 36% above prior year without exchange rate effects.
Book-to-bill ratio in the second quarter remained at a high level of 1.37 after 1.73 in prior quarter.
Backlog increased to a record level of 7.7 months from 7.4 months in Q1.
Gross margin in the quarter improved further to 24% of sales coming from 23% in Q1.
Inventory turns in the quarter remained at 3.9.
Selling prices are increasing, plus 0.2% versus prior quarter, plus 1% versus prior year.
Sales in the quarter were $76 million, 3% below prior quarter, but 47% above prior year without exchange rate impacts.
Book-to-bill in the second quarter remained at a very high level of 1.69 after 1.66 in the first quarter.
Backlog continued to grow to an extreme high of 9.3 months after 7 months in Q1, partially due to COVID-related restrictions of manufacturing capacities in Malaysia.
Gross margin in the second quarter remained at an excellent level of 32% of sales after 33% in the first quarter.
We see more normal inventory turns of 5.8 in the quarter after 6.4 in Q1.
Also in the case of opto, selling prices are going up, plus 1.7% in prior quarter and plus 1.5% versus prior year.
Sales in the quarter were $175 million, up by $18 million or by 11% versus prior quarter and up by $47 million or 36% versus prior year without exchange rate effects.
There is a continued strong book-to-bill ratio of 1.45 in the quarter after 1.85 in the first quarter.
Backlog climbed to an extreme high of 8.9 months from 7.9 months in prior quarter.
Gross margin continued to improve to now 24% of sales as compared to 22% in Q1.
Inventory turns were at 4.7 after 4.8 in prior quarter.
Also for diode, selling prices are increasing by 1.7% versus prior quarter and by 0.2% versus prior year.
Sales in the quarter were $168 million, a record level, 10% above prior quarter and 39% above prior year excluding exchange rate effects.
Book-to-bill ratio for MOSFETs in the quarter was 1.26 after 1.97 in the first quarter.
Backlog remained at an extreme level of 7.9 months as compared to 7.8 in Q1.
Due to a combination of higher volume, better prices and even better efficiencies, gross margin in the quarter increased noticeably to 28% of sales, up from 24% in prior quarter.
Inventory turns in the quarter increased further to 5.0 from 4.7 in Q1.
We have indeed increases of prices reasonably prior quarter of 1.2% and minus 2.5% versus prior year, much lower than normal.
We guide to a sales range between $810 million and $850 million at a gross margin of 28.3%, plus/minus 15 basis points.

Vishay reported revenues for Q2 of $819 million, a quarterly record.
Our earnings per share was $0.64 for the quarter, adjusted earnings per share was $0.61 for the quarter.
Adjusted earnings per share was $0.61.
We guide to a sales range between $810 million and $850 million at a gross margin of 28.3%, plus/minus 15 basis points.


In the second quarter, we delivered 61% growth in core FFO per share to $1.80 as compared to the second quarter of 2020 exceeding the high end of our guidance of $1.63 as our ongoing momentum accelerated beyond our forecasted expectations.
Comparing to a non-COVID impact quarter our second quarter FFO per share was 53% greater than the second quarter of 2019.
This outperformance, along with a positive outlook for the third and fourth quarters once again led us to raise our core 2021 FFO guidance range by $0.31 at the midpoint to $6.25 to $6.37 per share.
We issued $600 million of senior notes in an oversubscribed offering in mid June.
For the quarter, same community NOI grew 21.6% over last year, reflecting the continued demand in each of our segments and our favorable strategic positioning to capture that demand.
We entered the quarter with same community occupancy of 98.8%, a 160 basis point improvement over the second quarter of 2020 with manufactured housing same community NOI growing by 5.4% and RV same community NOI growing by 85.1%.
Year-to-date we have filled more than 1,000 revenue producing manufactured housing and annual RV sites and have delivered more than 580 ground-up and expansion sites that will continue providing the runway for growth over subsequent quarters.
As of quarter end we had approximately 9,400 sites available for development that we anticipate delivering over time.
We have also remained active in growing our portfolio, adding 18 properties in the second quarter and through this earnings call deploying over $719 million of capital and adding more than 5,000 sites, wet slips and dry storage spaces.
This brings year-to-date acquisition volume to over $853 million across 28 properties.
We sold these assets at a 4.3 cap rate, which we believe is a very positive indicator of the value and quality of our core portfolio.
For the second quarter, combined same community manufactured housing and RV NOI increased 21.6% from the second quarter of 2020.
The growth in NOI was driven by a 22.5% revenue gain supported by a 160 basis point increase in occupancy to 98.8% and a 3.3% weighted average rent increase.
This was offset by a 24.7% expense increase compared to the second quarter of last year when we had implemented expense saving measures including furloughs of properties impacted by COVID-related closures.
Same community manufactured housing NOI increased by 5.4% from 2020 and same community RV NOI increased by 85.1%.
The RV growth reflects both the impact from the COVID-related delayed opening of 44 of our resorts on last year's results, as well as the incredibly strong transient demand this year.
For all of our comparisons to 2019 we're utilizing last year's same community pool of 367 communities.
Compared to 2019, the portfolio's NOI CAGR was 9.7% and the CAGR for revenues and expenses were 8.5% and 5.9% respectively.
The RV NOI CAGR was up by 18.6%, including a 19.6% increase in transient RV revenues.
For Memorial Day weekend RV revenue was up 39% compared to 2019.
Similarly, for July 4 weekend revenue improved 35% compared to 2019 and 36.5% compared to 2020 driven by a 10.5% increase in occupancy and a 19% increase in average daily rate.
Traffic to our Sun RV resorts website was incredibly strong in the first half of 2021, up almost 80% from the first half of 2020 and 158% compared to 2019.
Within this growth, we are seeing a shift to a younger audience with significant increase in guests aged 18 to 34.
Our social media efforts are attracting the largest following and engagement in the industry with over 1.3 million followers on three of the largest social media platforms Instagram, TikTok and Facebook.
From the same community perspective, first time guests to our resorts increased 80% during the first half of the year compared to 2019.
As we look to the back half of the year, our transient forecast is trending 15.2% ahead of our original 2021 budget.
According to the RV Industry Association, 2021 RV unit sales are projected to be 34% higher than in 2020 and reach a new industry record.
With respect to the total MH and RV portfolio, in the second quarter we gained 583 revenue producing sites.
Of our revenue producing site gains over 350 transient RV sites were converted to annual leases with the balance being added to our manufactured housing expansion communities.
With the increase in RV guests we are able to realize the opportunity to convert transient sites to annual leases and achieve an average 50% increase in site revenues during the first year of conversions.
Moving on to new construction, in the second quarter we delivered approximately 220 new sites, 100 of which were ground-up developments and 120 were expansion sites.
Total sales volume was up approximately 90% year-over-year as we sold more than 1,100 homes in the quarter.
Compared to 2019, this sales volume represents an increase of 25%.
Average home prices during the quarter for new and pre-owned homes rose 11.6% and 23.3%, respectively, underscoring the overall geographic mix as well as sustained demand for our product and the strong desire to live in a high-quality Sun community.
This favorable demand environment helped support attractive gross margin results for both new and pre-owned home sales, which expanded 50 basis points and 14.6 percentage points, respectively, compared to the prior year period.
Additionally, brokered home sales volume was up 113% compared to the second quarter of 2020 with the average home value increasing by 26%.
Applications to live in a Sun Community were up more than 20% compared to 2020 in the second quarter and year-to-date.
Turning to the Marina business, we ended the quarter with 114 properties comprising nearly 41,300 wet slips and dry storage spaces, which includes the acquisition of four properties for approximately $423 million completed in the second quarter.
Same marina rental revenue growth for the portfolio of 75 properties owned and operated by Safe Harbor since the start of 2019 was almost 17% for the first half of 2021 over 2019.
This is a CAGR increase in rental revenue of 9.7% for the quarter and 8% for the first half of 2021.
New boat sales reached a 13-year high in 2020, and they remain at elevated levels with most recent reported sales data through March 2021, up 30% compared to the 2020 average.
For the second quarter, Sun reported core FFO per share of $1.80, 60.7% above the prior year and $0.17 ahead of the top end of our second quarter guidance range.
During the quarter and subsequent to quarter end, we acquired over $719 million of operating properties, bringing our year-to-date total to over $853 million, adding 28 properties totaling over 7,600 manufactured housing and RV sites, marina wet slips and dry storage spaces.
We followed this news with a successful $600 million inaugural bond offering in mid-June.
We settled 4 million shares with net proceeds of $540 million, the majority of which was used to fund our acquisitions and pay down our line of credit.
We replaced the prior $750 million line and Safe Harbor's prior $1.8 billion line with a combined $2 billion revolver with a $1 billion expansion option.
We ended the second quarter with $4.3 billion of debt outstanding at a 3.5% weighted average rate and a weighted average maturity of 10.4 years.
As of June 30, we had $104 million of unrestricted cash on hand and a net debt to trailing 12-month recurring EBITDA ratio of 5.1 times.
We are raising our full year 2021 core FFO guidance to a range of $6.25 to $6.37 per share, a $0.31 increase at the midpoint from our prior range, which represents year-over-year growth of 24% at the midpoint.
Approximately $0.17 of the increase is due to our outperformance in the second quarter with the remainder due to contributions from our recent acquisitions and increased expectations across each of our businesses, particularly transient RV.
This is offset by approximately $8 million of property level proactive wage increases for the remainder of the year, which Gary previously discussed, of which approximately half had been included in prior issued guidance.
Additionally, we estimate an impact of $0.11 per share for the remainder of the year from the settlement of the forward equity offering completed in the second quarter.
We expect core FFO for the third quarter to be in the range of $2 to $2.06 per share representing 27% year-over-year growth at the midpoint on top of the 10% growth we delivered in 2020 over 2019.
We are also revising full year same community NOI growth guidance to a range of 9.9% to 10.7%, up 230 basis points from the previous midpoint of guidance of 8%.

In the second quarter, we delivered 61% growth in core FFO per share to $1.80 as compared to the second quarter of 2020 exceeding the high end of our guidance of $1.63 as our ongoing momentum accelerated beyond our forecasted expectations.
This outperformance, along with a positive outlook for the third and fourth quarters once again led us to raise our core 2021 FFO guidance range by $0.31 at the midpoint to $6.25 to $6.37 per share.
For the second quarter, Sun reported core FFO per share of $1.80, 60.7% above the prior year and $0.17 ahead of the top end of our second quarter guidance range.
We are raising our full year 2021 core FFO guidance to a range of $6.25 to $6.37 per share, a $0.31 increase at the midpoint from our prior range, which represents year-over-year growth of 24% at the midpoint.


We executed with discipline to deliver record quarterly adjusted EBITDA of $238 million and adjusted class A earnings per share of $1.93, fueled by strong volumes and ongoing strategic pricing actions as we continue to experience strong demand across our global portfolio.
Our leverage ratio fell at 2.8 times, and our board approved a $0.02 and a $0.03 increase to our class A and class B quarterly dividend, respectively, payable on October 1.
Our global steel drum volume increased by 8% per day.
Our global rigid IBCs and large plastic drum volumes both rose by more than 25% per day.
In Latin America, steel drum volumes rose by 15% on a per day basis versus the prior year and benefited from improved industrial trends and a strong agricultural and citrus season.
In EMEA, third-quarter steel drum and rigid IBC volumes increased by roughly 5% and 28% per day, respectively, with strong improvement across most key end markets.
And finally, in APAC, steel drum volumes rose by 7% per day versus the prior year.
GIP's third-quarter adjusted EBITDA was a record and rose by roughly $62 million due to higher sales, partially offset by higher SG&A expense, mainly attributed to higher incentive accruals.
The business also benefited from a $9 million operating tax recovery in Brazil and an $8 million FX tailwind.
Please recall that GIP's Q3 2020 results included an opportunistic sourcing benefit of $5 million that did not recur.
Paper packaging's third-quarter sales rose by roughly $120 million versus the prior year, attributed to stronger volumes and higher selling prices due to increases in published containerboard and boxboard prices.
Adjusted EBITDA rose by roughly $18 million versus the prior year due to higher sales, partially offset by higher transportation and raw material headwinds, including a $24 million OCC drag.
Since early June, we've announced five price increases, including a total of $100 a ton on CRB, $120 a ton in total on URB, and $70 a ton on containerboard.
As of August, the published indexes recognized $50 a ton on the CRB increases, $50 a ton on the URB increases, and a $50 and $60 a ton on linerboard and medium, respectively.
Third-quarter volumes in CorrChoice, our corrugated sheet feeder system, were up roughly 27% per day versus the prior year and are anticipated to stay strong through the fiscal fourth quarter.
Third-quarter specialty sales, which includes litho-laminate, triple-wall bulk packaging, and coatings, were up more than 38% versus the prior year.
Third-quarter net sales, excluding the impact of foreign exchange, rose 34% versus the prior-year quarter due to stronger volumes and higher selling prices and were a record.
Adjusted EBITDA rose by $78 million and was also a record.
As Pete mentioned, EBITDA results include a $9 million Brazilian tax refund from overpayment of revenue-based taxes to the government that occurred in prior periods and were wrongly levied.
Keep in mind, our adjusted EBITDA result overcame more than $50 million of combined OCC and incentive headwinds versus the prior year, making our performance that much more impressive.
Interest expense fell by roughly $6 million versus the prior-year quarter due to lower debt balances, lower interest rates and a lower interest rate tier on our credit facility as a result of our substantial debt repayment.
Our third-quarter GAAP and non-GAAP tax rate were both 22% and were flat to prior year.
Third-quarter adjusted class A earnings per share more than doubled to $1.93 per share.
Finally, third-quarter adjusted cash flow fell by roughly $43 million versus the prior year.
That said, our team is executing with discipline and controlling what it can with superb results as trailing fourth-quarter working capital as a percentage of sales improved by 190 basis points year over year to 10.7%.
At the midpoint, we anticipate generating Class A earnings per share of $5.20, which is $0.50 per share more than our guide at Q2.
With our anticipated fiscal '21 result, we will more -- have more than doubled earnings per share since 2015 despite COVID-19's negative impact, the closure and/or divestiture of nearly 90 non-core or suboptimal plants and without any share repurchase benefit.
Also keep in mind that we currently have 600,000 more shares outstanding now versus the end of 2015.
We now anticipate generating between $335 million and $365 million in adjusted free cash flow, with a bias to the upside of that range.
At the midpoint, adjusted free cash flow has improved by $45 million relative to our Q2 guide due to improved earnings, slightly lower capital expenditures and cash tax savings, partially offset by higher working capital usage commensurate with our announced price increases to offset cost inflation.
We have executed on an aggressive deleveraging plan and repaid $370 million in total debt since Q3 2020.
Given the dramatic improvement in our leverage profile and confidence in strong future cash generation, the Board approved a 4.5% increase to our quarterly dividend effective this year.

We executed with discipline to deliver record quarterly adjusted EBITDA of $238 million and adjusted class A earnings per share of $1.93, fueled by strong volumes and ongoing strategic pricing actions as we continue to experience strong demand across our global portfolio.
Third-quarter adjusted class A earnings per share more than doubled to $1.93 per share.
We now anticipate generating between $335 million and $365 million in adjusted free cash flow, with a bias to the upside of that range.


We ended the year with a record of more than $1.5 billion of premium now in force.
All told, we had a bit over 10,000 claims in the fourth quarter from named 2020 storms and other PCS events.
Despite the weather in 2020, we continued our focus on underwriting increasing our primary rates in Florida, close to 20% for the full year, including 7% in the 4th quarter for 2020 reinsurance costs as well as increases in some of our other states.
We continue to be backed by our great reinsurance program and partners with close to 75% of our first event reinsurance capacity for June 1, 2021 secured already.
We ended 2020 with total revenue up 14.2% to $1.1 billion, driven primarily by growth in net premiums earned, realized gains on investments and increases in service revenue, partially offset by decreases in net investment income and increased reinsurance costs.
EPS for the quarter was a loss of $0.57 on a GAAP basis and a loss of $0.84 on a non-GAAP adjusted basis.
For the year, we generated earnings per share of $0.60 on a GAAP basis and a loss of $0.90 on a non-GAAP adjusted basis.
Our direct premiums written grew by 21.9% in Q4 compared to the prior year's quarter led by the impact of rate increases in Florida and other states taking effect as well as strong direct premium growth in Q4 of 18.9% in states outside of Florida.
For the full year, direct premiums written were up 7% led by rate increases and increased volume as well as strong direct premium written growth of 17.7% in other states and slightly improve policy retention.
On the expense side, the combined ratio decreased 18.9 points for the quarter to 124% but increased 9.7 points for the full year to 113.6%.
The full year increases were driven primarily by an increase of 13 points for increased weather in 2020.
The increases were partially offset by a lower level of prior years reserve development on prior year's losses in LAE reserves, which accounted for 4.1 loss ratio points.
A benefit from our claims adjusting business and a 90 basis point improvement in the expense ratio, net investment income decreased 62.7% for the quarter and 33.7% for the full year primarily due to lower yields on cash and fixed income investments during 2020 when compared to 2019.
In regards to capital deployment, during the fourth quarter, the company repurchased approximately 193,000 shares at an aggregate cost of $2.4 million, for the full year, the company repurchased approximately 1.6 million shares at an aggregate cost of 28.9 million.
For 2021 guidance, we expect a GAAP and non-GAAP adjusted earnings per share range of between $2.75 and $3 assuming no extraordinary weather events in 2021 and a return on average equity of between 17% to 19%.

EPS for the quarter was a loss of $0.57 on a GAAP basis and a loss of $0.84 on a non-GAAP adjusted basis.
For 2021 guidance, we expect a GAAP and non-GAAP adjusted earnings per share range of between $2.75 and $3 assuming no extraordinary weather events in 2021 and a return on average equity of between 17% to 19%.


In the fourth quarter, Capital One earned $2.6 billion or $5.35 per common share.
For the full year, Capital One earned $2.7 billion or $5.18 per share.
Net of these adjusting items, earnings per share for the quarter was $5.29.
Full-year 2020 adjusted earnings per share was $5.79.
In addition to the adjusting items in the quarter, we recorded an equity investment gain of $60 million or $0.10 per share related to our equity stake in Snowflake.
For the full year, the investment gain was $535 million or around $0.89 per share.
In the fourth quarter, we released $593 million of allowance, primarily in our card business.
Economic assumptions underlying our allowance included unemployment of around 8% at the end of 2021 and the impacts of the $900 billion stimulus package passed in December.
Our Domestic Card coverage is now at 10.8%, while our branded card portfolio coverage is 12.7%.
Coverage in our consumer and commercial businesses also remained elevated at 3.9% and 2.2%, respectively.
You can see our preliminary average liquidity coverage ratio during the fourth quarter was 145%, well above the 100% regulatory requirement.
Our liquidity reserves from cash, securities and Federal Home Loan Bank capacity declined slightly from the third quarter to end the year at approximately $144 billion, including about $41 billion in cash driven by continued strong deposits.
You can see that our net interest margin increased 37 basis points quarter over quarter to 6.05%.
Our Common Equity Tier 1 capital ratio was 13.7% at the end of the fourth quarter, up 70 basis points from the third quarter and 150 basis points higher than a year ago.
We continue to estimate that our CET1 capital need is around 11%, which includes a buffer over our capital requirements under the SCB framework of 10.1%.
As we close out 2020, we have approximately 270 basis points or around $8 billion of capital in excess of our CET1 target.
Following the latest stress test results released by the Federal Reserve last month and in light of the strong capital position I just described, we expect to restore our quarterly dividend back to $0.40 per share in the first quarter, pending board approval.
Our board of directors has also authorized the repurchase of up to $7.5 billion of the company's common stock inclusive of share repurchase capacity of up to approximately $500 million in the first quarter based on the Fed's current trailing four-quarter average earnings rule.
The Domestic Card charge-off rate for the quarter was 2.69%, a 163-basis-point improvement year over year and a 95-basis-point improvement from the sequential quarter.
The 30-plus delinquency rate at quarter end was 2.42%, 151 basis points better than the prior year.
The delinquency rate was up 21 basis points from the linked quarter, consistent with typical seasonal patterns.
Fourth-quarter provision for credit losses improved by $1.1 billion year over year, driven by the allowance release that Scott discussed and lower charge-offs.
At the end of the fourth quarter, Domestic Card ending loan balances were down $20.1 billion or 17% year over year, driven by three factors: cautious consumer behavior, reduced spending and demand for new credit, and drove payment rates to historically high levels.
Excluding the impact of the move to held-for-sale, ending loans declined about 15%.
Fourth-quarter average loans declined 16% year over year.
On a linked quarter basis, the expected seasonal ramp drove ending loans up by about 3%.
For the full year, purchase volume was down 2% in 2020.
That compares to a year-over-year decline of about 30% in the first weeks of the pandemic.
Quarterly purchase volume increased 10% from the sequential quarter, consistent with the expected seasonality and the continued rebound.
Fourth-quarter revenue declined 7% year over year as a result of the decrease in average loans, partially offset by higher revenue margin.
The revenue margin was up 121 basis points year over year to 16.91%, largely driven by two factors: strong credit drove lower revenue suppression; and year over year, net interchange revenue in the numerator of the margin is essentially flat, while average loan balances, the denominator of the margin calculation, are down 16%.
Noninterest expense was down $186 million or 8% from the fourth quarter of last year, largely driven by our choice to pull back on Domestic Card marketing when the pandemic hit.
Fourth-quarter marketing for the total company was down 21% year over year.
Driven by our auto business, ending loans increased 9% year over year.
Average loans grew 10% for the fourth quarter and 9% for the full year.
Fourth-quarter auto originations were down 2% year over year.
Fourth-quarter ending deposits in the consumer bank were up $36.7 billion or 17% year over year, driven by the stimulus-driven surge in deposits in the second quarter.
Average deposits were up 19% for the fourth quarter and up 15% for the full year.
Our average deposit interest rate decreased 73 basis points year over year and 19 basis points from the linked quarter as we reduced deposit pricing in response to the market interest rate environment and competitive dynamics.
Fourth-quarter Consumer Banking revenue increased 18% from the prior-year quarter.
Annual revenue was up 4%.
Noninterest expense in Consumer Banking was up 1% year over year.
Fourth-quarter provision for credit losses improved by $275 million year over year, driven by lower charge-offs and a modest allowance release in our auto business.
Fourth-quarter credit results in our auto business remain unusually strong even after seasonal linked quarter increases in 24 basis points in the auto charge-off rate and 102 basis points in the delinquency rate.
Year over year, the charge-off rate improved 143 basis points to 0.47% and the delinquency rate improved 210 basis points to 4.78%.
Fourth-quarter ending loan balances were up 2% year over year, driven by growth in selected C&I and CRE specialties.
Average loans were also up 2% for the fourth quarter and 6% for the full year.
Quarterly average deposits increased 21% from the fourth quarter of 2019, and average -- annual average deposits grew 14% in 2020 as middle market customers continued to bolster their liquidity.
Fourth-quarter revenue was up 10% from the prior-year quarter.
Annual revenue was up 6% for the year.
Noninterest expense for the quarter increased by 1% year over year.
Provision for credit losses improved by $90 million compared to the fourth quarter of 2019.
The Commercial Banking annualized charge-off rate for the quarter was 0.45%.
The criticized performing loan rate for the quarter increased compared to both the prior year and linked quarters to 9.5%, driven by downgrades in our commercial real estate portfolio.
The criticized nonperforming loan rate rose modestly from the prior-year quarter to 0.9%.
For the full year, total company loan balances declined 5%.
Annual revenue was essentially flat, including $535 million in gains on our Snowflake investment.
Noninterest expense was down 3%, with a decline in marketing and relatively flat operating expense.
Provision for credit losses increased by $4 billion.
And earnings per share rebounded from negative territory early in the year to $5.18 for the full year, down significantly from 2019.
The operating efficiency ratio net of adjustments was 46%.
It was 46.9%, excluding Snowflake gains.
And strong second-half earnings, coupled with a smaller balance sheet, enabled us to increase our CET1 ratio to 13.7%.
Today, we've announced our intent to raise the quarterly dividend to its prior level of $0.40 per share subject to board approval, and we've also discussed our plan -- we also discussed our plan for up to $7.5 billion of share repurchases, which our board has already approved.

In the fourth quarter, Capital One earned $2.6 billion or $5.35 per common share.
Net of these adjusting items, earnings per share for the quarter was $5.29.
You can see that our net interest margin increased 37 basis points quarter over quarter to 6.05%.
Our Common Equity Tier 1 capital ratio was 13.7% at the end of the fourth quarter, up 70 basis points from the third quarter and 150 basis points higher than a year ago.
Our board of directors has also authorized the repurchase of up to $7.5 billion of the company's common stock inclusive of share repurchase capacity of up to approximately $500 million in the first quarter based on the Fed's current trailing four-quarter average earnings rule.
Today, we've announced our intent to raise the quarterly dividend to its prior level of $0.40 per share subject to board approval, and we've also discussed our plan -- we also discussed our plan for up to $7.5 billion of share repurchases, which our board has already approved.


During the fourth quarter, our total balance of loans on payment deferrals decreased significantly and was down to 3% of total loans, excluding PPP loans at year-end.
Finally, our Board of Directors declared a quarterly cash dividend of $0.23 per share and approved a new share repurchase authorization.
The daily visitor arrival counts have recently been in the 5,000 to 8,000 range per day, but is still significantly down compared to a year ago.
In the fourth quarter, excluding PPP loan pay-offs of $112 million, the bank grew its loan portfolio by $46 million, driven by growth in commercial, construction, residential mortgages, HELOC and commercial mortgages.
Our residential lending team continues to outperform with record levels of production, resulting in $5.4 million in mortgage banking income for the quarter.
For the 2020-year, mortgage banking income was $13.7 million, which was more than double the income from the previous year, augmented by over $1 billion in loan production.
During the fourth quarter, we received and processed a significant amount of PPP forgiveness applications, which resulted in the recognition of $5.4 million in fee income.
Core deposits during the fourth quarter increased by $132 million, which is consistent with year-end seasonal inflows augmented by our front-line business development efforts.
For the 2020 year, core deposits increased by $787 million.
Additionally, our cost of total deposits declined by 4 basis points from the prior quarter and is now down to 9 basis points.
At year-end, the loan portfolio totaled $4.96 billion with 55% consumer and 45% commercial.
At quarter-end, the total balance of loans on payment deferrals declined to $120 million or 3% of the total loan portfolio, excluding PPP balances.
Our redeferral rate was 15% and was primarily driven by residential loans where payment deferrals were extended to nine months.
Of the approximately 4,200 consumer loans that returned to payments, only 7% are granted a short-term loan modifications with 93% resuming payment at contractual terms.
In the commercial and commercial real estate loan portfolios, the total balance of loans on payments deferrals declined to $47 million or 1% of the total loan portfolio, excluding PPP balances.
The highest exposure by industry continues to be Real Estate and Rental & Leasing totaling $33 million, a decline of $14 million sequential quarter.
Loan payment deferrals for our high-risk industries totaled $12 million or 0.3% of the total loan portfolio, excluding PPP balances.
As of January 20th, our total balance of loans on payment deferrals decreased further to $101 million or 3% of total loans, excluding PPP balances.
Additional details on our loan payment deferrals can be found on Slides 20 and 21.
During the quarter, criticized loans declined by $4.5 million sequential quarter to $192 million or 4.2% of the total loan portfolio, excluding PPP balances.
Special mention loans declined by $6.3 million to $142 million or 3.1% of the total loan portfolio, excluding PPP balances and classified loans increased by $1.7 million to $50 million or 1.1% of the total loan portfolios, excluding PPP balances.
We sold a classified and non-accrual commercial real estate loan at par of $4.2 million and settled a payoff of another classified and non-accruals commercial real estate and commercial loan at 92 [Phonetic] or $2.9 million.
Approximately 32% of special mention balances and 10% of classified balances also received PPP loans.
Additional details on loans rated special mention and classified can be found on Slides 22 and 23.
Net income for the fourth quarter of 2020 was $12.2 million or $0.43 per diluted share.
Return on average assets in the fourth quarter was 74 basis points and return on average equity was 8.87%.
For the full 2020 year, net income was $37.3 million or $1.32 per diluted share.
Return on average assets was 0.58% and return on average equity was 6.85%.
Pre-tax pre-provision earnings for 2020 was $88.2 million compared to $84.2 million in 2019.
Additionally, in the fourth quarter, there were several one-time expenses which totaled $5.9 million.
Net interest income for the fourth quarter was $51.5 million, which increased from the prior quarter due to accelerated recognition of PPP's fee income as PPP loans were forgiven by the SBA.
Net interest income included $6.3 million in PPP net interest income and net loan fees compared to $3.4 million in the prior quarter.
The net interest margin increased to 3.32% in the fourth quarter compared to 3.19% in the prior quarter.
The NIM normalized for PPP was 3.17 in the fourth quarter compared to 3.26 in the prior quarter.
Fourth quarter other operating income totaled $14.1 million compared $11.6 million in the prior quarter.
The increase was primarily due to higher mortgage banking income of $1.1 million sequential quarter.
Additionally, in the current quarter, we realized a gain on sale of securities of $0.2 million compared to a loss on sale of securities of $0.4 million in the prior quarter.
Other operating expense for the fourth quarter was $45.1 million, which was an increase of $8.1 million compared to the prior quarter.
The increase was largely driven by one-time expenses totaling $5.9 million which related to employee incentives and benefits, branch consolidation costs, litigation settlement, debt prepayment fees, and other one-time expense accruals.
The efficiency ratio increased to 68.8% in the fourth quarter compared to 60.9% in the previous quarter, primarily due to the one-time expenses.
Excluding one-time expenses of $5.9 million, the fourth quarter efficiency ratio would have been 59.8%.
Net charge-offs in the fourth quarter totalled $1.8 million compared to net charge-offs of $1.3 million in the prior quarter.
At December 31st, our allowance for credit losses was $83.3 million or 1.83% of outstanding loans, excluding PPP loans.
This compares to 1.79% coverage as of the prior quarter-end.
The effective tax rate was 23.7% in the fourth quarter.
And going forward, we expect the ETR to continue to be in the 24% to 26% range.
With the $55 million subordinated note offering we completed in the fourth quarter, our CPF total risk-based capital ratio increased to 15.2% as of December 31st.

Net income for the fourth quarter of 2020 was $12.2 million or $0.43 per diluted share.
Net interest income for the fourth quarter was $51.5 million, which increased from the prior quarter due to accelerated recognition of PPP's fee income as PPP loans were forgiven by the SBA.


We delivered broad-based market outgrowth and share gains in each of our segments and business units, with total enterprise organic revenues up 11%, while at the same time delivering more than 400 basis points of margin expansion in every segment and for the enterprise as a whole.
We delivered double-digit bookings growth in all segments, growing our backlog over 30% sequentially versus December 2020 and up more than 30% versus our already strong backlog at the end of 2019 heading into 2020.
Adjusted earnings growth was also exceptional, up 135%.
Although it's still early in the year and overall visibility remains limited, our strong quarter 1 performance, growing backlog, improving markets and asterism for improved vaccination rates gives us confidence to raise our full year 2021 guidance for both revenue and adjusted earnings per share above the high end of the prior ranges.
We also continue to make excellent progress toward our transformation savings goal of $300 million by 2023 and expect to realize approximately $190 million in total savings in 2021.
That's up from $100 million in 2020.
We've raised our capital deployment expectations for 2021 by $500 million from approximately $2 billion to $2.5 billion to continue our commitment of deploying 100% effective cash overtime.
We also have revised our annual incentive compensation plan for approximately 2,300 leaders beginning this year to link directly to ESG metrics, including both carbon emission reduction, and advancing diversity and inclusion.
In addition, all salaried employees must now include at least 1 sustainability-related goal in their annual performance plans.
We delivered robust organic bookings growth of 31% in the first quarter.
Our Americas segment delivered growth in both bookings and revenue, up 36% and 9%, respectively.
The residential HVAC markets remain robust and our residential HVAC team delivered strong revenue growth, well in excess of 30% in the quarter as they once again grew market share.
Turning to EMEA, our team's delivered 18% bookings growth in the quarter, with strong growth in both commercial HVAC and transport refrigeration.
Revenues were also strong, up 12%.
EMEA transport bookings were up over 20% in the quarter and revenues are up high single digits, outperforming the broader transport markets.
Our Asia Pacific team delivered bookings growth of 14% and revenue growth of 34% in the quarter, laughing a soft Q1 2020 that was heavily impacted by the COVID-19 pandemic.
Adjusted EBITDA margins were strong up 460 basis points, driving adjusted earnings per share growth of 135%.
In the Americas region, market outgrowth, cost containment, productivity and price drove solid EBITDA margin expansion of 400 basis points.
Likewise, the EMEA and Asia Pacific regions delivered strong market outgrowth, productivity and cost containment to improve EBITDA margins by 540 basis points, and 1,160 basis points, respectively versus 2020.
To-date we've engaged with many of our K-12 customers to perform indoor air quality assessments in anticipation of the time when Federal stimulus funds will be made available.
End market indicators are improving with ABI over 50 and both February and March, both positives for the road ahead.
All-in, we expect 26% weighted average market growth for the year, reiterating our prior outlook.
Transport markets, in particular, are expecting approximately 8% market growth, given the current rates of economic improvement, reiterating our prior outlook.
As Mike indicated earlier, we expect to deliver a strong organic financial performance with organic revenue growth of approximately 9%, up from our previous guidance of between 5% in 7%.
We expect to deliver strong organic leverage over 35% for the full year, with organic leverage of approximately 30% for the balance of the year.
We continue to see about 1.5 points of revenue growth from the channel acquisitions, we announced last quarter, which will carry about five points of operating margin and deliver earnings per share accretion of about $0.05.
All-in, total revenue growth is expected to be approximately 10.5%, and adjusted earnings per share is expected to be approximately $6, which translates to approximately 35% earnings growth versus 2020.
We expect free cash flow to remain strong and equal to or greater than 100% of adjusted net income.
Net each point from FX would translate into about $0.05 of EPS.
Please go to slide number 10.
As we outlined during our investor event in December, by transforming Trane Technologies, we initially identified $100 million of fixed cost reductions by 2021.
We've exceeded our initial cost reduction expectations, delivering $100 million of savings in 2020, a full year early.
And we expect to deliver a $90 million of incremental savings for a total of $190 million in savings in 2021.
We are now targeting and are on track to deliver $300 million of run rate savings by 2023.
Third, we invest another significant portion of the savings into an improved cost structure, which drives the fourth element, improved and sustainable incremental margins at or above 25% over the mid to long term.
Please go to slide number 11.
All in, we expect to consistently deploy a 100% of excess cash over time.
And have increased our capital deployment target to approximately $2.5 billion, a $500 million increase to our prior guidance.
We anticipate deploying the additional $500 million between value accretive M&A and share repurchases, taking the total target for M&A and share repurchases to approximately $1.5 billion for the year.
In the first quarter, we raised our dividend by 11%, deployed $174 million to M&A and share repurchases and paid down $300 million of debt.
We plan to retire an additional $125 million in debt as it reaches maturity in the third quarter of 2021, taking the total debt retirement to $425 million for the year.
This guidance increase reflects our strong balance sheet and liquidity position, our commitment to deploying 100% of excess cash over time and our continued confidence in our ability to deliver powerful free cash flow to execute our balanced capital allocation strategy.
Please go to slide number 14.
Please go to slide number 15.
The net takeaway is that our outlook for 2021 is largely unchanged from our prior outlook, where we highlighted that we expect to see approximately 26% weighted average market growth for transport Americas, and approximately 8% weighted average market growth for transport EMEA.
While ACT has raised their outlook slightly on North America trailers, about 1% from 39% growth to 40% growth, they modestly lowered their outlook for truck, which nets out to be a wash on total growth.
The other element I wanted to highlight for transport North America is that, ACT has increased their trailer forecast for fiscal year 2022 to 51,100 units, which represents an increase of about 13% over their 2021 forecast.
The North America trailer market took a step-up in 2015 and has been above 40,000 units ever since with only one exception, 2020.
The driver logs, driver shortage and added economic activity appears to have fundamentally shifted the market to new levels above 40,000 units, excluding economic disruption.
ACT's forecast for 2023 is also at the mid-40,000 unit level.
If they are correct in their forecast for 2021 through 2023, it will be eight of nine years where the North America trailer market has been in the mid-40,000 unit range, plus or minus 10%.
We are on track to deliver $300 million in savings that will continue to improve the cost structure of the company and enable additional reinvestment to expand margins and further strengthen our ability to outgrow our end markets.
When combined with the long-term sustainability megatrends underpinning our end markets, our exceptional ability to generate free cash flow and balanced capital deployment of 100% of excess cash over time, we are well positioned to continue to drive differentiated shareholder returns.